There are two important changes that all practice owners should be aware of:
NHS Pensions recently issued new guidance surrounding dental practice contracts with associates and whether or not the associate is entitled to NHS pension.
We have known for a number of years now that dental associates operating through a limited company can’t pension their earnings. However, it’s not always been overly clear what the situation is where there is a subcontract involved at practice level and/or a hybrid structure (where the private work is operated through a limited company and the NHS work remains personal). The new guidance now makes this very clear – the contract with the associate MUST be with the NHS contract holder or their earnings are not pensionable.
The full guidance can be found here.
Dental associates have traditionally been self employed and there was a HMRC notice (ESM4030) supporting this. HMRC have now announced that they will be withdrawing this notice on 6th April 2023. All practices will be expected to assess whether or not their associates are employed or self employed using the HMRC CEST tool in the same way other industries have to.
To be clear HMRC have not changed their view on the employment status of associates and in most cases we do still expect them to be self employed. However, each associate should be assessed separately based on the terms in their contract and what happens in practice.
If you would like to check your associates’ employment status using the CEST tool you can do this here.
With these two changes there has never been a better time to revisit your associate agreements and ensure they are in the right name and achieving what you want them to achieve.
For help and advice contact heidi@doddaccountants.co.uk.
