Multiple counting
The results presented in this report reflect earnings and expenses as recorded by dentists on their Self Assessment tax returns. The majority of payments for NHS dentistry are made to Providing-Performer/Principal dentists. In some cases, the dental work is performed by an Associate dentist working in the Providing-Performer/Principal’s practice and some of that payment will be passed on to the Associate. This means that the same sum of money may be declared as gross earnings by both the Providing-Performer/Principal and Associate and again as an expense by the Providing-Performer/Principal. This is known as ‘multiple counting’ and its extent is difficult to quantify. However, where multiple counting does occur, it will inflate only gross earnings and total expenses values; the resulting taxable income values are not affected. Where a dentist is single-handed, i.e. is the only dentist working in the practice, no multiple counting can occur.
Incorporation
This report considers only those primary care dentists who have earnings from self-employment which has traditionally been the employment status of the majority of primary care dentists (both Providing-Performer/Principal and Associate). These dentists complete Self Assessment tax returns which, subject to certain exclusion criteria, are used to inform the analyses presented in the Dental Earnings and Expenses Estimates series of reports. Since the introduction of the Dentists Act 1984 (Amendment) Order 2005, it has been possible for both Providing-Performer/Principal and Associate dentists to incorporate their business(es) and to become a director and/or an employee of a limited company (Dental Body Corporate), with the potential to operate in a more tax-efficient manner. In the case of Providing-Performer/Principal dentists, the incorporated business tends to be a dental practice, whereas for Associate dentists, the business is the service they provide as a subcontractor. It is not currently known how many dentists have incorporated their business(es) nor what the precise consequences of incorporation may be for the results presented in this report.
NHS/Health Service and private dentistry earnings
It is not possible to determine, using HMRC data, how dentists divide their dental work between NHS/Health Service and private practice. However, as an approximation of this division, dentists who completed the Dental Working Patterns Survey have provided an estimate of how they allocated their time. These responses have been used to inform analyses in the ‘Percentage of Time Spent on NHS/Health Service Dentistry’ sections of the report, which examine average earnings and expenses as a function of the percentage of dental time spent on NHS/Health Service dentistry.
England & Wales only – clawback
Providers in England & Wales have a contract to deliver a certain, pre-agreed, number of Units of Dental Activity (UDAs) and Units of Orthodontic Activity (UOAs) per year. In the event that the provider does not, for whatever reason, deliver at least 96 per cent of the number of UDAs and UOAs set out in their contract, the NHS England (Region)/Local Health Board (LHB) determine how this is to be managed. The handling of undelivered UDAs and UOAs varies by NHS England (Region)/LHB, and includes rolling forward the undelivered activity to the next year, or in some cases requiring repayment of the earnings received for the undelivered activity. The latter is often referred to as clawback, and the extent to which this is used is extremely difficult to quantify. When a provider does deliver at least 96 per cent of the activity in their contract, they have a contractual entitlement to carry forward any under-delivered activity into the next contract year. Where clawback is utilised, it operates on an annual cycle that matches that of the contract year. Values shown within this publication are after any clawback by NHS England and NHS Improvement (Region)/LHB for the previous year’s activity.
Dental allowances – Northern Ireland and Scotland
Due to inconsistencies in handling the allowances paid to dentists, reported expenses to earnings ratio (EER) and gross earnings may be affected. For example, some Principals receive the payments for dental services provided by the Associate on their behalf and forward this payment to the Associate. In other cases, the Associate receives the payment directly and then makes a payment to the Principal. However, regardless of the method used to handle these payments, there should be no impact on the taxable income presented in report.
Changing populations
Changes in the composition of the dental population (as well as the sample used to produce Dental Earnings and Expenses Estimates) need to be kept in mind when viewing and making comparisons between results for different financial years. The report population in the current report is not the same as that in the previous year, for example dentists may retire, change working arrangements (i.e. dental type), fail HMRC validations or may not be matched to their Self Assessment tax returns.
Over the last few years there has been a greater change in the workforce, with a continued shift away from Providing-Performer/Principal dentists towards Associate dentists. Changes in the distribution of the population across dental and/or contract type will invariably have some effect on the estimates of earnings and expenses and it is important to keep this in mind when looking at percentage changes or making year-on-year comparisons.
In England & Wales a longitudinal study is made that attempts to control for this, including only those dentists who have performed some primary care NHS dentistry in each of the last three years, but have not changed their dental or contract type during this period. Additionally, in England & Wales, to control for sampling fluctuation, only those dentists who have been used in the sample for the main enquiry for each of the three years have been included in the sample for the longitudinal study.
For a more detailed discussion of the methodology used to produce this report, please see the separate Dental Earnings and Expenses Estimates Methodology document, published alongside this report https://digital.nhs.uk/data-and-information/publications/statistical/dental-earnings-and-expenses-estimates/2017-18.