Covering associate absences? Why you shouldn’t take the risk

dental associate absence from workNeil Richardson shares insights into what financial vulnerabilities this common practise causes for practice owners and associates and how to mitigate them.

Following on from the recent HMRC announcement in regard to the change in guidance on status of associate dentists, the employment status of associates continues to take centre stage.

Previously, we’ve been hearing about this from the cases of vicarious liability of dental practices for malpractice of associate dentists. Now however, we’re looking more at the threat of self-employed status itself. For both principal dentists and associates.

And it could seriously impact both parties.

What is the change in guidance?

The official HMRC statement is that there is a withdrawal of specific guidance from 6 April 2023.

Status should instead be considered by dentists in line with the Check Employment Status for Tax (CEST) tool.

I’ve completed a run through of the new tool with some of my clients. There is one point that comes up as a key indicator of self-employment which is worth noting. This is specific questioning surrounding substitution and enforcement of the locum clause within the associate contract.

What is the locum clause?

Should the associate within a practice be unable to perform their duties as per their contract, this clause obliges the associate to provide a locum in their absence.

Something that has become somewhat of a standard practice from my interactions with dental clients is the expectation that the remainder of the dental team will absorb the absent performer’s workload rather than enforcing the locum clause.

What are the risks for associates and principals?

As a principal, not enforcing the locum clause will flag up on the CEST test. The Revenue will question it when they come to visit.

Principals and associates will be interviewed separately and if their stories don’t tally, then it could be bad news for the status of the associate.

For practice owners, should your associates be considered employed, you will be required as an employer to pay employer National Insurance contributions. As well as provide a standard basket of employee benefits.

For many practices the impact on profitability is considerable.

Based on ‘average’ associate pay, then employer National Insurance contributions alone are £10,500 per associate. And HMRC could backdate six years.

If you have four associates, then the liability on your practice ranges from £42,000 to £252,000.

For associates, in many cases self-employed is the favourable position. This helps maximise their income when taking taxes into account. The hit on income is not a welcome change with employed status.

The alternative ‘risk’ is to enforce the clause. But this could risk losing your associate as the hit on their income is substantial.

How to mitigate the substitution risk

The optimal way forward for both parties is for the associate to obtain locum cover. They should protect themselves for when they are potentially unable to work without having the big hit on income by paying for the locum out of their own pocket.

You could support this change in approach to associate absence by paying 10 to 15p per UDA more. Or equivalent in other areas of the UK.

If an associate is doing 6,000 UDAs then that’s an extra £600 to £900 per annum. But that should cover the cost of the locum cover in most circumstances.

The question you need to ask yourself as a principal is, which ‘risk’ would you rather have. Is it £900, or a figure somewhere between £42,000 and £252,000, depending on HMRC’s leniency?

For associates, it’s weighing up the substantial tax benefits of self-employment, alongside more freedom over working hours, against the benefits of employment.

If your preference is the former, locum cover is a solution to help ease any financial risk.

Speak to a specialist

If you’d like further advice in this area, you can speak to a specialist dental Wesleyan Financial Services consultant as part of a no obligation financial review. Visit or call 0800 316 3784.

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