DENTISTRY AND IR35

Jonathan Jacobs, specialist dental solicitor at Nexa Law, looks at the implications for IR35 on the dental profession.

IR35 has been around since 2017 and only now is it to apply to the dental profession. In order to appreciate the implications for dentists, it is first necessary to have a quick run through the principles laid down by HMRC.


The off-payroll working rules


The off-payroll working rules make sure that a worker (sometimes known as a contractor) pays broadly the same Income Tax and National Insurance as an employee would.

The rules apply if the worker who provides services to a client through their own intermediary would have been an employee if they were providing their services directly to that client.


Who the rules apply to


You may be affected by these rules if you are:

  • a worker who provides their services through their own intermediary to a client
  • a client who receives services from a worker through their intermediary
  • an agency or other supplier providing workers’ services through their intermediary


The client is the person who is or will be receiving the services of a worker.

A worker affected by the rules may provide their services through:

  • a limited company, usually known as a personal service company (PSC)
  • a partnership
  • another individual


A PSC is not defined in law but typically is a limited company that a worker controls and has some interest in, through which the worker provides their services.


When the rules apply


The off-payroll working rules apply if a worker provides their services through their own intermediary (usually a limited company, often known as a PSC).

The person responsible for determining whether the worker is employed for tax purposes, depends on if the client is:

  • in the public sector
  • in the private and voluntary sectors
  • is a small business


In most cases, the client will be responsible for determining the employment status of the worker. However, if a worker provides services to a small client outside the public sector, the worker’s intermediary is responsible for deciding the worker’s employment status and if the rules apply.

Principal vs. Associate-Led Dental Practices: A Financial Analysis

20 September 2024
Understanding the Leadership Structure The leadership structure of a dental practice can significantly impact its financial performance. There are two primary models: Principal-led and Associate-led. Principal-led: In this model, the principal dentist owns and operates the practice, assuming full financial and management responsibility. Associate-led: Here, the dentist is a self-employed contractor to the practice, the principal dentist having the responsibility to provide patients and where necessary, to offer assistance and advice. Financial Implications Income Distribution: Principal-led: The principal dentist retains all profits after expenses, potentially leading to higher income but also greater financial risk. Associate-led : Associates receive a percentage of the fees that they generate as income, providing more financial stability but limiting earning potential. Overhead Costs: Principal-led: The principal dentist is responsible for all overhead costs, which can be substantial. Associate-led: The Associate is responsible for a share of the lab expenses that they generate Debt and Risk: Principal-led: The principal dentist is personally liable for any debts or financial obligations incurred by the practice. Associate-led: The associate is not responsible for the practice’s debts and liabilities. Succession Planning: Principal-led: Succession planning can be more complex, as the principal dentist must find a suitable successor or sell the practice. Associate-led: Succession planning can be easier, as associates may have an option to purchase the practice or continue working under new ownership. Financial Considerations When evaluating the financial implications of a Principal vs. Associate-led practice, consider the following factors: Personal financial goals: Are you seeking higher income potential or a more stable income stream? Risk tolerance: How comfortable are you with assuming personal financial risk? Long-term goals: What are your plans for the future of your dental career? Local market trends: Are there any trends that favour one model over the other in your opinion and experience? Conclusion The choice between a Principal-led or Associate-led dental practice sale and purchase depends on your individual circumstances and financial goals. By carefully considering the financial implications of each model, you can make an informed decision that aligns with your professional aspirations and long-term success. Feel free to contact us for more help and advice.

Purchase Completed in York

19 August 2024
Congratulations to Joanne Nurse on the acquisition of a share in Adventurers Day Nursery in York. Joanne now becomes co-owner of the nursery with Helen Nurse. Many thanks to everyone involved in the transaction, especially Amardeep Nangla for his work done on the property side and all those at Barclays Bank who helped facilitate this transaction. All at Jacobs Legal wish Helen and Joanne all the best for the future and much success in the years to come.
Share by: