As we enter a new year after a financially challenging time for many, Iain Stevenson advises dentists to check their employment status before the HMRC makes changes to the guidance.
As we start a new year – after arguably the most financially challenging time our country and indeed the world has had to face in recent history – we reflect on where it leaves us and prepare for what might be next.
Working in the world of financial planning, looking ahead never stops. We must remain vigilant to future challenges and opportunities and adjust plans accordingly. To this end, my curious mind turns to the overlooked or hidden financial planning areas.
Employment status
We are all living through and responding to cost of living challenges – rising energy bills, high inflation, rising interest rates etc that often take precedence.
But is there a financial threat to dentists and dental practices that might be going under the radar? A somewhat murky issue that raises its head from time to time, the employment status of associate dentists has gone quiet in the news in recent months.
However, I sense a growing undercurrent of uncertainty around what 2023’s changes will mean.
In April 2023, HMRC is making an adjustment to the guidance around the self-employed status of associates.
To be clear, this does not in itself mean there will be an immediate impact or that anything will necessarily change for dentists. Still, it’s worth having a discussion with your accountant and financial adviser. That goes for associates and principals as it could affect both parties.
It’s time to have a look at your agreements and consider whether HMRC could continue to view dentists as employed or self-employed.
It’s also worth considering what might have to change if you or your associates are found to be employed. There are potentially significant financial implications.
Get informed
A firm understanding of the rules, using the check employment status for tax (CEST) tool and how HMRC will test whether one is self-employed or not is an advantage. It can also help you make informed discussions with your accountant.
As a starting point, you can access helpful guidance and support on the HMRC and BDA websites to understand this area better.
While you might not find yourself impacted by these changes, it’s best to check your position ahead of when they come into effect. This is so that adjustments can be made if necessary to protect you or your associate’s tax status.
Please note tax treatment depends on individual circumstances and may be subject to change in future.
Read more Money Talks columns
- To be private or not to be private?
- Analysing business risks for your practice
- Cost of living crisis and retirement
- Is now the time to invest
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