For many years, HMRC has been happy to treat Associate dentists as self-employed when assessing them for tax. However, from 6th April 2023, its guidance is changing bringing dentistry into line with all other professions. From the start of the tax year 2023/24, each case is likely to be assessed individually and so Associate dentists, if asked, will need to be able to provide evidence that they are truly self-employed and not workers or employees of the practice in which they work.
To help Associates and Principal dentists navigate their way through this new landscape, we asked Sarah Buxton, HR and Employment Law Solicitor to help us produce a set of Qs and As to guide you.
Q: Does your Associate still want to be considered as self-employed or would they rather have worker/employee status?
A: Attitudes towards self-employment amongst some Associates have changed over recent years. The pandemic saw a global trend of people reassessing goals, aspirations and priorities and, for many, work slipped down the list of what they deemed important in their lives.
Anecdotally, there seems to be a growing number of Associates who find the idea of paid holidays, sick leave and maternity leave attractive. For them, worker status might be appealing. So, before dealing with any of the other questions about self-employment, the first question to be answered is whether your Associate still wants that status.
If they still want to be considered self-employed, then they need to be able to answer ‘yes’ to the following questions.
Q: Is your contract a true reflection of your Associate’s working practices? If required, could you provide evidence to support this?
A: It’s important that the written contract between the practice owner and Associate is not treated merely as a piece of admin. Whether you have chosen to use a solicitor to draw up a bespoke contract or have chosen to adopt the BDA’s template contract, now, more than ever it’s essential this reflects what really happens in the practice.
From now on, there will be greater scrutiny of whether the contract really does describe the reality of how an Associate works within a practice. Whilst a contract may contain many of the self-employment indicators in its clauses, unless this is what happens in reality, and is adhered to, it could be viewed as a sham, and will not help your cause.
Q: Does your Associate have autonomy to decide their own working arrangements? For example, when they work, how they work, how they dress etc.
A: Is your Associate free to choose the colour of the scrubs they wear, or do you require them to wear ones that are branded to your practice? Are they free to choose when they take time off? Can they choose the hours they work? Are they free to work in another practice? Do you insist that they comply with practice policies regarding behaviour, dress etc?
These are things which could indicate that your Associate is employed by you, rather than being self-employed. It’s common courtesy for an Associate to let you know when they will be away from the practice on holiday, but a truly self-employed Associate should have the right to choose when they take their holidays, the hours they work and what scrubs they wear. Making a request that they wear certain coloured scrubs need not invalidate their self-employed status as long as they have the right to choose another colour.
They should also have the ability to choose to work at another practice without needing to gain the permission of the practice owner.
Q: Can your Associate choose their own substitutes (locums)?
A: One of the most important indicators of self-employment is the ability to provide a substitute. Does the Associate have an unfettered right to provide a locum to cover their absence? Associates should not be obliged to carry out any dental services personally and should have the freedom to arrange for locum cover for whenever they choose.
If a self-employed Associate needs to provide a locum to cover their absence, then they would need to cover the cost of that person. Our colleagues at Wesleyan can help advise on ways to ensure you’re prepared should the need for a locum arise.
Locum provision can be a tricky subject in NHS practices due to the need to be able to provide a performer number etc. However, insisting that the locum has a performer number, is registered with the GDC and has appropriate insurance should not be seen as restricting the Associate’s right to provide a substitute of their choosing, as they are legal requirements for a dentist to be able to work within an NHS practice.
However, to insist on a specific number of years’ experience or being able to have a right of veto over the substitute may be deemed to be restricting (fettering) the Associate’s right to choose their own substitute and may suggest they have the status of a worker or an employee.
Q: Does your Associate cover the costs of their own equipment and lab fees?
A: Associates should be free to choose and purchase their own equipment. Lab fees, equipment and supplies should all be paid for by the Associate for them to be deemed self-employed.
Q: Does your Associate receive any of the benefits offered to practice employees?
A: If you include your Associate in any bonus or health care schemes or if they are paid overtime, then they could be considered to be workers/employees.
An Associate could similarly be at risk of being considered an employee if they have a defined role and are seen as being fully integrated at the practice. So, if they have a practice e-mail address, or have a practice business card this could indicate they are an integral part of the practice. Therefore, it is essential that they do not perform services similar to, or substantially the same as those of an employee.
Q: Is your Associate given clinical freedom or do you supervise their work?
A: To be considered self-employed, associates should have clinical freedom. They should be free to choose the techniques and methods they want to employ and should have autonomy over their own work. They should also have their own indemnity as they would be liable for any financial losses incurred as a result of the dentistry they have performed and should be responsible for correcting their own mistakes in their own time and at their own expense. They should be responsible for their own financial risk.
If you’d like to get a broad idea of whether you are likely to be considered as self-employed for tax purposes, you can use HMRC’s online Check employment status for tax tool, commonly referred to as CEST. However, the test is not 100% accurate, as HMRC itself admits, so if you are in any doubt as to your employment status, it may be safest to seek advice from an accountant or specialist tax adviser.
Sarah Buxton specialises in acting exclusively for dentists, dental managers and dental practice owners in all aspects of HR and employment law and is a director at FTA Law. Sarah advises dental practices on managing and motivating their staff, dealing with sickness absence, assisting with making changes to employment contracts and, if needed, how to bring the employment relationship to an end.