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Future changes to the taxation of Associate Dentists

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Are you an Associate Dentist, or do you engage Associate Dentists? HMRC are changing their guidance on employment status, effective from 6 April 2023.

Current position

Currently Associate Dentists and their principals have been able to rely on ESM4030, which states that provided an Associate Dentist works under a standard contract, approved by the British Dental Association (BDA) and the Dental Practitioners Association (DPA), the Associate Dentist is treated as self-employed for tax purposes.

An Associate Dentist’s current responsibilities:

  • Complete self-assessment tax returns to calculate their tax liability, and pay class 2 and 4 National Insurance contributions, instead of class 1 contributions paid by employees and their employers
  • Responsible for paying their share of laboratory fees for work relating to their patients
  • Comply with the terms of the standard contract

Where an Associate Dentist has moved practice, they would be treated as continuing their self-employment, provided they continued to work under the BDA/DPA standard contract.

Changes announced

HMRC have announced that with effect from 6 April 2023, the guidance set out in ESM4030 is to be withdrawn, and instead all new and ongoing Associate Dentist engagements need to be considered using ESM0500 and CEST (Check Employment Status for Tax tool).

The rules set out in ESM0500 and CEST look at the following:

  • Does the principal have the right to reject an appropriately qualified substitute sent to undertake the Associate Dentist’s role in their place?
  • Does the principal have the right to decide how the work is undertaken?
  • Who decides working hours?
  • Who decides where the work is undertaken?
  • Who provides equipment, for example, dental chairs or X-ray machines?
  • Would the Associate be responsible for correcting any work, at their own cost?
  • Could the Associate work at another practice simultaneously?

HMRC’s online tool; CEST, looks at each of the above points to confirm whether the individual is employed or self-employed.

The NHS has emphasised that although ESM4030 is being withdrawn, there’s no change to the tax legislation and that their view on the employment status of Associate Dentists has not changed. However, the withdrawal of ESM4030 may herald change in HMRC’s approach to Dental Associates.

If HMRC argue that Associate Dentists are employees, this will result in additional costs for dental practices who’ll need to consider class 1 National Insurance, sick pay, and holiday pay costs, which would have a significant impact on profitability. Associates’ income may also be under pressure, as the engaging practices factor in the additional costs into Associates' remuneration packages.

Any change in HMRC’s approach could also lead to unintended implications, with a possible increase in the number of dentists retiring early, therefore impacting on the availability of already stretched NHS Dental Services.

We would recommend reviewing the status of all Dental Associates to ensure both principals and associates are clear on their responsibilities. We have an expert team able to assist with this review and advise on all other aspects of operating in the dental sector. For more information please get in touch with your usual Larking Gowen contact. You can find contact details on the Our People section of the Larking Gowen website. Alternatively, call 0330 024 0888 or email

Melanie Garrett


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Larking Gowen


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