Revised HMRC rules for Dental Associates could bring about return to formal employment

Updated rules relating to the employment status of Dental Associates could see a return to the old regime of formal employment contracts, it has been warned.

The news comes after HM Revenue & Customs (HMRC) updated its Employment Status Manual in April this year, outlining how tax and National Insurance (NI) deductions should be dealt with.

According to the latest advice from HMRC, where the legislation applies, it has the following effect:

  • The fee-payer is responsible for the deduction of tax and NI from the gross payment, exclusive of VAT, and will account for these amounts to HMRC via Real Time Information (RTI) in the same way as for direct employees. For NICs purposes the fee-payer is also therefore treated as the secondary contributor.
  • The intermediary receives the chain payment from the person lowest in the chain, this is not necessarily the fee-payer.
  • The worker receives a payment treated as earnings from an employment which has had tax and NICs deducted from it at source by the fee-payer.

The revisions have sparked much confusion in the industry. However, simply put, anyone caught by the Freedom of Information Act (FOIA) will be expected to comply with the new rules, experts have noted.

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