Dental businesses have warned of a “catastrophe” if a tax investigation into thousands of their staff determines that dentists who claim to be self-employed are actually full-time employees.
In a move which could cost the industry millions of pounds, HM Revenue & Customs (HMRC) has written to a number of dentists, as part of an examination of the employment status of “dental associates”.
If the Revenue decides that associates are not independent contractors but employees, it would force dental practices to start paying National Insurance Contributions (NICs) that would hit large corporate businesses, which are already struggling to make money, the hardest.
Commenting on the situation, a spokesperson for the industry says: “What HMRC is doing is dangerous. NHS dental profits have been falling since 2009 and if dental associates were deemed to be employees, the employers’ NIC contributions would be huge and the extra costs that would be landed at a stroke would not be recoverable – and that would be a disaster.”
Big corporate dental businesses generally rely on using self-employed staff, often recruited from overseas, saving the companies millions of pounds in NICs. But despite their size, their margins have been shrunk by a combination of rising costs and the decreasing value of NHS work.
At Beavis Morgan, we understand the challenges faced by business owners. We work with businesses across a wide range of industry sectors, guiding them though the various stages of business life from start up to exit and all the challenges in between.
If you require a review of your business’ payroll records and any contracts with self-employed consultants, please get in touch with us. Our employment experts will provide guidance on whether or not we feel your company is at risk of challenge by HMRC under the employment regulations.
In turn, if you are concerned about a tax enquiry into your affairs, our tax specialists, some of whom are former HMRC Inspector of Taxes, are well versed in dealing with all types of tax issues. We are also readily available to oversee HMRC disputes on your behalf, as well as to represent clients in appeal proceedings before the Tax Tribunal. In some situations we can also offer professional fee protection insurance, so the costs are covered in whole or in part.
Don’t delay! Contact your usual Beavis Morgan Partner and we will advise on the best course of action for you and your business.