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Published: Friday, 26 February 2021 09:52

Written by Chris Tapper

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Fears that the Supreme Court’s  ruling that Uber drivers must be treated as workers rather than self-employed would have an effect on the tax status of dental associates, have been allayed.

The National Association of Specialist Dental Accountants and Lawyers (NASDAL) has now released its opinion on the Supreme Court decision.

In the view of NASDAL, providing associates are working under, and following the terms of standard form of agreement for associate dentists approved by the British Dental Association and the Dental Practitioner’s Association (DPA), the tax status of such dentists shouldn’t change.

NASDAL’s opinion  is that the status of dental associates hasn’t changed since 2006, the last time the self-employed status of dental associates appeared to be threatened.  At that time, the new UDA-based contract temporarily threw doubt on the tax status of associates.

HMRC  wrote in 2006 “Where these agreements are used and the terms are followed, the income of the associate dentist is assessable under trading income rules and not as employment income. In these circumstances the dentist is liable for Class 2/4 NICs and not Class 1 NICs.”

“The NHS General Dental Services Contract, which came into force from April 1, 2006, provides for less fluctuation in associate dentist’s income. However, providing the associate dentist continues to be responsible for paying their share of laboratory fees etc. for work relating to their patients and other terms of the standard agreement are followed, the above guidance will still apply.”

The ruling on the Uber drivers surrounded the fact that renumeration and refunds to passengers  was controlled by the company and drivers had no ability to negotiate their contract terms or the terms on which they transport passengers. 

The court also considered that drivers had limited power over their operations once they had logged in to Uber and the company exercised significant control over the service provided to passengers, including  monitoring.

Drivers were also prevented from establishing a relationship  with passengers which would benefit the driver’s ‘business.’

Alan Suggett, specialist dental accountant and partner in UNW LLP said, “What is perhaps less clear now is that arguably an Associate could be considered self-employed by HMRC and yet be a ‘worker’ from an employment law perspective. Perhaps where the Associates are different to most Uber drivers is that they want to be self-employed.”

He went on “Some have expressed concern that these potential employment rights could have an effect on the vicarious liability of the Associate as well as worker benefits.”

“If Principals became liable for maternity leave and holidays, this could drive Associate pay down and employment might actually be a more attractive option for all moving forward.”

“However, one of the key factors in the judgement is that the Uber drivers could not substitute or send a locum in to do their work. They had to perform it personally.  This is not always the case for dentists. They usually have the right to substitute in their contract and this is why it is key that contracts are abided by and not changed without expert advice.”

UNW employment tax partner Lee Muter added, “The Uber case is more to do with employment rights obtained for the individual drivers as being “workers” which is a separate category within employment law, probably a hybrid between an employee and self-employed, rather than affecting the status for tax purposes.

One of the quirky things about this is that the driver could still potentially be classed as self-employed for tax purposes but a worker for employment law purposes, so having potentially the best of both world in that they could obtain some valuable employment rights such as holiday pay, etc but also have the flexibility and other benefits associated with being self-employed for tax.”

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