Dental Earnings and Expenses Estimates 2018/19

Data used to produce Dental Earnings and Expenses Estimates are taken from five different sources:

• year end dental activity data provided by the NHS Business Services Authority (NHS BSA) Information Services for England and Wales;
• year end dental activity data provided by the Northern Ireland Health and Social Care Business Services Organisation (BSO) for Northern Ireland;
• year end dental activity data provided by the NHS National Services Scotland Information Services Division (ISD) for Scotland;
• the biennial Dental Working Patterns Survey produced by NHS Digital
• data from Self Assessment tax returns held and analysed by HM Revenue and Customs (HMRC) statisticians.

Dental activity data from NHS BSA Information Services, BSO and ISD are used to derive the self-employed NHS/Health Service dental population as well as levels of activity and demographic information for dentists. The Dental Working Patterns Survey responses are used to produce further analyses on weekly working hours, percentage of dental time spent on NHS dentistry, business arrangements and dentists’ motivation and morale.

Dental population data (NHS BSA Information Services, BSO and ISD information) and the survey responses are matched with tax data by HMRC statisticians, and an anonymised data set is created to produce earnings and expenses estimates that are weighted up to the dental population.

The tax data cover income from all dental sources, including from private dental practice. As a result, the earnings and expenses estimates presented in Dental Earnings and Expenses Estimates cover both NHS/Health Service and private dentistry. It is not possible to analyse separately earnings and expenses from NHS and private practice. When considering the results presented in the reports it is important to keep in mind some of the key differences between sources of income in the NHS/Health Service and private dental systems. These include:

• In England and Wales, NHS earnings originate from a contract between the dental provider and the NHS England/LHB. At the end of the financial year the amount of activity performed by an NHS provider is compared to their contract. If the provider has not delivered at least 96% of contracted activity, some practice income could be claimed back by NHS England/LHB; this is knows as clawback. No such function exists in the private sector.
• In Northern Ireland, Health Service earnings originate from a commissioning arrangement between the Health and Social Care Board and the dental provider.
• In Scotland, NHS earnings originate from an arrangement between the dental provider and an NHS Board.
• These NHS/Health Service earnings are largely based on the amount of NHS/Health Service activity delivered.
• Private earnings are determined by the amount of demand from individual patients who chose to receive private dental care, which may be in addition to the receipt of NHS care.

It is not possible to determine with absolute certainty how any dentist allocates 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 provide an estimate of how they spend their time. These responses have been used to inform analyses by working patterns, which examine average earnings and expenses against the percentage of dental time spent on NHS/Health Service dentistry.

The NHS BSA Information Services, BSO and ISD data along with findings from the Dental Working Patterns Survey are also used to produce the Dentists' Working Patterns, Motivation and Morale (formerly known as Dental Working Hours) series of reports published by NHS Digital. However, Dental Earnings and Expenses Estimates, excludes dentists with no self-employment income, some of whom may be included in the Dentists' Working Patterns, Motivation and Morale publications. As a result, the dental populations in the two reports are not comparable.

Deriving the Dental Population for Analysis

The dental population for the earnings and expenses data sets are derived from year end NHS BSA Information Services, BSO and ISD dental activity data for England and Wales, Northern Ireland and Scotland respectively.

The data sets do not consider, nor contain data on, dentists who performed only private dentistry in the relevant year.

England and Wales

Changes to the dental type methodology

There have been unavoidable changes made to the IT system at the NHS BSA which has resulted in a new dental type methodology to identify dentists in England and Wales. The change in methodology has resulted in a large number of dentists being reclassified as Providing-Performer and hence a decrease in the counts of Associate dentists. However, when compared to the old methodology, the self-declared results by dentists in the Dental Working Patterns Survey show closer alignment to the new dental type.

• In England and Wales only those self-employed dentists who had recorded at least one NHS Unit of Dental Activity (UDA) or one NHS Unit of Orthodontic Activity (UOA) in the relevant year are included.

• Dentists work under a variety of contract types:

  • General Dental Services (GDS)
  • Personal Dental Services (PDS)
  • Community/Salaried Dental services (formerly Trust-led Dental Services (TDS)). Dentists working solely under a Community/Salaried Dental services (formerly Trust-led Dental Services (TDS)) are excluded
  • as well as a combination of these contracts

• Dentists working under mixed GDS/Community/Salaried or PDS/ Community/Salaried contracts are likely to receive the bulk of their income from their GDS or PDS contract and are coded in the data set as operating under a GDS or PDS contract only
• Dentists working under a combination of GDS/PDS or GDS/PDS/ Community/Salaried contracts were coded as working under mixed GDS/PDS contracts.
• NHS England/LHBs hold contracts with dentists who deliver an agreed level of dental services. A dentist who sub-contracts all of the dental activity under their primary contract with the NHS England /LHB is termed a Provider Only and is excluded.
• A provider who holds a contact and also performs primary care dental activity under that contract is termed a Providing-Performer.
• Dentists who perform primary care dental activity but do not hold a contract, are termed Associate dentists. Providing-Performer and Associate dentists are identified within the data provided by NHS BSA Information Services.
• Results are presented by two dental types – Providing-Performer and Associate. A dentist listed within the data at least once as a Providing-Performer, regardless of any other arrangements as a Provider Only or an Associate under other contracts, is identified as a Providing-Performer.
• ‘Other’ dentists were coded as Associate. While most ‘other’ dentists are likely to be salaried, and are therefore removed as part of the exclusion criteria employed by HMRC statisticians, some may remain in the self-employed NHS dental population.
• Table 1 provides a description of the dental types used under the 2018/19 contractual system in England and Wales, the equivalent terms used under the previous contractual arrangements, and other equivalent terms used by dentists.

_{^{Notes: 1. Most of these dentists are likely to be salaried and therefore removed as part of the exclusion criteria employed by HMRC some, however, may remain in the population.}}

Northern Ireland

• In Northern Ireland only those self-employed primary care GDS dentists who were registered to provide Health Service dentistry are included.
• Assistant Dentists, Foundation Dentists/Vocational Dental Practitioners (VDPs), and General Professional Trainees (GPTs) are excluded as they are still in training, and are likely to have employment income but no self-employment income.

Scotland

In Scotland only those self-employed dentists who had an arrangement with an NHS Board to provide general dental services in the relevant year are included.

Comparison with previous Dental Earnings and Expenses Estimates publications

Due to a change in methodology  used to determine dental type, for dentists in England and Wales, figures in this publication are not comparable to previously published results. 

To allow comparisons to be made with 2017/18, HMRC were commissioned to calculate separate England and Wales figures for that financial year using the new methodology used to determine dental type. This means there are now new time series figures starting at 2017/18 for both England and Wales. Please refer to the methodological change notice for further details.

Comparison with other dental populations

The dental populations differ from those published elsewhere including NHS Digital’s Dentists' Working Patterns, Motivation and Morale series of Official Statistics

NHS Dental Statistics for England should be considered the definitive source for population numbers and workforce changes in England for the period. The definitive workforce figures for Wales are provided in NHS BSA Information Services, available via the StatsWales website.

Details of the overall dental populations are available as follows:

• England – https://digital.nhs.uk/data-and-information/publications/statistical/nhs-dental-statistics
• Wales – https://statswales.gov.wales
• Northern Ireland – http://www.health-ni.gov.uk/articles/staff-numbers
• Scotland – http://www.isdscotland.org/Health-Topics/Workforce/Publications/data-tables.asp

Treatment of Associate Dentists within the Dental Earnings and Expenses Estimates Report

Associate dentists could be described as sub-contractors (delivering dental activity on behalf of the contract holder) as they do not hold contracts with service commissioners and do not directly receive payments from them. Rather, Associate dentists receive their earnings from the contract holding dentist. This means that their Self Assessment tax returns will reflect payments received for work performed under an NHS contract in one of two ways:

• the Associate dentist can receive a gross payment from the contract holder, from which the expenses due to the contract holder will be deducted by the Associate dentist. Dentists receiving gross payments are likely to record higher earnings and expenses than those who receive payments that are net of expenses, and are also likely to have a higher Expenses to Earnings Ratio. The level of taxable income is not, however, affected by the way in which payments are received.
• the Associate dentist can receive a net payment per UDA or UOA provided from the contract holder, from which expenses due to the contract holder have already been deducted.

When considering the detailed expenses breakdown, it is important to note that some Associate dentists have no expenditure in one or more of the expense categories which will affect the average expenses figures in these categories. For example, an Associate dentist may employ a part time assistant to deal with administrative matters, thereby incurring some employee expenses while other Associate dentists will do their own administrative work.

Dental Earnings and Expenses Estimates time series presents results for Associate dentists as a single cohort in each country. However, in recognising the differing methods of completing Self Assessment tax returns, for the purposes of the main findings and the detailed expenses breakdowns, results for Associate dentists are also presented by two cohorts (Associate dentists with Expenses to Earnings Ratios between 0.0 and 50.0 per cent, and above 50.0 per cent). This differential is used to distinguish between the two cohorts and is reviewed annually to ensure the Expenses to Earnings Ratio percentage limit is appropriate.

Determining Dental Type in Northern Ireland and Scotland

The data provided by BSO and ISD do not include dental type classifications to enable Principal and Associate dentists to be identified. NHS Digital and the Dental Working Group (DWG) agreed a two-step method for deriving dental type for the Dental Earnings and Expenses Estimates publication although it is important to note that the methodology differs from that used in the Dentists' Working Patterns, Motivation and Morale series which uses responses to the Dental Working Patterns Survey.

• The distribution of Expenses to Earnings Ratios (EER) produced by HMRC identifies two discernible cohorts of dentists in each of Northern Ireland and Scotland.
• HMRC identifies the number of dentists in each EER band in increments of five percentage points. The lowest point is used to determine the dental type split.

• The figure illustrates the how the EER split is used to assign dental type in Scotland and Northern Ireland. The EER is plotted in increments of five percentage points and the lowest point is chosen. Dentists with and EER equal to and above the lowest point are identified as Principal dentists while those with an EER below the lowest point are Associate dentists.
• In 2017/18 there was a shift in dental population and an EER of 35 and 45 percent were used to identify dentists in Scotland and Northern Ireland, respectively.

However, in common with their colleagues in England and Wales, Associate dentists in Scotland and Northern Ireland can receive payments in two ways and those Associate dentists receiving gross payments with a correspondingly higher Expenses to Earnings Ratio than other Associate dentists could wrongly be identified as Principal Dentists if only Expenses to Earnings Ratio was considered.

As a result, following the initial classification described, any dentists identified as Principals but with reported employee expenses of £0 were re-classified as Associates, since the latter are unlikely to incur this expenses type.

The methodology for Scotland is therefore:

• Principal: Expenses to Earnings Ratio > 40% and employee expenses > £0
• Associate: Expenses to Earnings Ratio ≤ 40%
  or Expenses to Earnings Ratio > 40% and employee expenses = £0.

It is important to note that following the same methodology this year, in 2018/19, there has again been a shift in dental population and so the EER has been set to 40 per cent. The reclassification of dentists should be considered when making any comparisons.

For Northern Ireland, there is an additional step as the data supplied by BSO includes information on the size of the practice in which each dentist works. If a dentist works in a practice by themselves (a single hander) they are classified as a Principal dentist.
The methodology for determining dental type in Northern Ireland is:

• Principal dentists: Expenses to Earnings Ratio > 50% and employee expenses > £0, or practice size is a single hander
• Associate dentists: Expenses to Earnings Ratio ≤ 50% or Expenses to Earnings Ratio >50% and employee expenses = £0.

Like Scotland, there has again been a shift in dental population in Northern Ireland and so the EER has been set to 50 per cent. Further work has been undertaken to see if the shift in EER used to identify dentists has had a significant impact on the taxable income of dentists. However, results show that this was not the case.

The accuracy of this methodology has been assessed by comparing responses to the optional Dental Working Patterns Survey which asks dentists to identify themselves as Principal or Associate; very few respondents classify themselves differently. However, as participation in the survey is not mandatory and not all dentists respond, it cannot be used as the data source for dental type.

More information in the Dental Working Patterns Survey is available on the Dentists' Working Patterns, Motivation and Morale series.

Stratification of the Population and Weighting of the Results

Earnings and expenses estimates are published by a range of characteristics including dental type, contract type, gender and age band. These figures are based on a sample and are weighted according to the entire self-employed NHS dental population for the country and dentist type in question.

Results by weekly hours and percentage of dental time spent on NHS/Health Service dentistry (derived from the survey data) are based on a survey sample and are weighted according to the self-employed primary care NHS dental population.

Results by business arrangement (also derived from the survey data) are based on a sub-set (those Providing-Performers/Principal dentists that answered the business arrangement question) but are weighted according to the self-employed Providing-Performer/Principal population as applicable. These results are now no longer available in the main report but can be found in the time series and CSV,

As the results throughout the report are estimates based upon samples that have been weighted to the full self-employed NHS dental populations, they are subject to sampling error. Differences between groups and sub-groups of dentists or between reporting years may not be statistically significant and where significance has been tested this is noted in the report.

To weight the population as needed, dentists are allocated to strata according to their characteristics.

Stratification – England and Wales

Until 2017/18, figures for England and Wales were presented as a combined average, and the self-employed NHS dental population in England and Wales were allocated to one of 32 strata according to:

• dental type (Providing-Performer or Associate);
• contract type (GDS, PDS or Mixed GDS/PDS);
• gender (male or female);
• and age (under 35, 35 to 44, 45 to 54 or 55 and over).
  • Full stratification of all four variables would lead to a possible of 48 strata, but the low numbers of mixed contract dentists do not allow for this cohort to be split by gender or age.
  • As the PDS population is small and reducing, the two age bands of <35 and 35-44 years for Providing-Performer and Associate dentists were combined.

However, this year separate figures for England and Wales have been made available and the combined averages are no longer available.The changes have also led to a review, and revision, of the stratification and weighting methodologies used in England and Wales.

Due to a continued decline in the number of PDS or mixed (GDS/PDS) contract holders, contract type is no longer included in the strata for England.

This means that the dental population in England is now allocated to one of 16 strata according to: 

• dental type (Providing-Performer or Associate);
• gender (male or female);
• and age (under 35, 35 to 44, 45 to 54 or 55 and over).

Due to a much smaller dental population in Wales, it is not possible to stratify dentists using the same breakdowns as used in England. Instead, the strata in Wales now matches that of Northern Ireland and Scotland and six strata are used to weight the figures: 

• gender (male or female);
• and age (under 35, 35 to 44 or 45 and over).

This is consistent with the stratification methodology used within the Dentists' Working Patterns, Motivation and Morale - 2018/19 and 2019/20 report. These changes, alongside the change in methodology mentioned above, mean that the England and Wales figures for 2018/19 are not comparable to those of earlier publications and should not be compared with earlier figures. Separate England and Wales figures for 2017/18 have been recalculated using the new methodology. Please refer to the methodological change notice for further details.

Due to the low population of dentists who perform more orthodontic work than non-orthodontic work (units of orthodontic activity > units of dental activity), a different system of weighting was employed and the age variable was replaced by a variable flagging the dentists who primarily undertake majority of orthodontic work and those who do not. These results can be found in the Excel time series and the weighted average taxable income estimates for all self-employed primary care dentists in that section differ slightly from the averages shown in the rest of the report.

The Expenses to Earnings Ratio (EER) figures presented in report tables are calculated by dividing average expenses by average gross income for the applicable grouping which is not the same as the weighted average EER for that group.

Stratification - Northern Ireland, Scotland 

Because of the smaller sample sizes in Northern Ireland and Scotland, the self-employed primary care NHS/Health Service dental population is allocated to one of six strata according to:

• gender (male or female);
• age (under 35, 35 to 44, 45 and over).

Due to the low population of dentists who were classified as ‘Orthodontic Items/Courses ≥ 30%’, a different system of weighting was employed for the analyses presented in the applicable sections of the report. In these cases, a variable for dentists classified as ‘Orthodontic Items/Courses ≥ 30%’ and ‘Orthodontic Items/Courses < 30%’ was added as an additional stratum to the variables described above (thus resulting in 12 strata). This means that the weighted average taxable income estimates for all self-employed GDS dentists in these sections differ slightly from the averages shown in the rest of the report.

In Northern Ireland only, for analyses by percentage of dental time spent on Health Service dentistry, the groupings used to analyse this variable (≤25%, >25<75%, ≥75%, and no survey response) are added as an additional stratum resulting in 24 strata. This means that the weighted average taxable income estimates for all self-employed GDS dentists for these analyses will differ slightly to the average shown in the rest of the report.

Calculating the Percentage of Earnings from Health Service Dentistry in Northern Ireland

To derive the measure of “Percentage of Gross Earnings from Health Service Dentistry” in Northern Ireland gross earnings from Health Service dentistry (supplied by BSO) is divided by total gross earnings provided by HMRC to produce a percentage of a dentists’ total gross earnings from Health Service work. This estimated measure but is subject to caveats:

• BSO reports Health Service earnings for Associate as well as Principal dentists. However, in some cases, part of the Associates’ payment for this work will be given to the contract holder. Thus there will be some cases where BSO’s reported Health Service gross earnings will be higher than the total gross earnings reported by the Associate on their Self Assessment tax form. This is because total gross earnings will be net of the payment made to the Principal in whose practice they work.
• Similarly, the corresponding Principals’ Health Service earnings may be subject to some under-counting.

Principal dentists in Northern Ireland may also receive income from the Heath Service for providing education to dentists in training (Assistants, Foundation Dentists/VDPs and GPTs). Where the Self Assessment tax return has been completed correctly, this income will not be declared as gross earnings, but used to ‘offset’ the expenses incurred for providing such services. However, this income is included as earnings in the BSO Health Service figures which means that the percentage of earnings from Health Service activity will be overstated for many Principal dentists providing such education services.

It is not possible to quantify the extent to which the issues described in this section affect the results of the analyses, but to some extent the effects will be negated for results shown for all dentists, and will only affect those dentists near the boundaries of the three Health Service percentage bands (>0≤25 per cent, >25 to <75 per cent, ≥75 per cent).

This measure is fundamentally different to the measure of percentage of time spent on Health Service dentistry used in the Dentists' Working Patterns, Motivation and Morale report, and the two cannot be compared.

Following validation of the responses to the Dental Working Patterns Survey and the population data sets provided by NHS BSA Information Services, BSO and ISD, the data sets are merged to produce a final population data set which is sent to HM Revenue and Customs (HMRC), Knowledge, Analysis and Intelligence (KAI) division to be matched to Self Assessment tax returns.

Only those dentists with accounting years ending during the fourth quarter of the financial year (i.e. 1 January to 5 April) are included.

Dentists with employment income but no self-employment income are excluded.

During validation activity, HMRC statisticians apply exclusion criteria to the data set in order to derive the sample upon which to perform their earnings and expenses analyses as follows:

• dentists not found or no Self Assessment tax return when data set created
• dentists with accounting period not in the relevant year or not 12 months (as part-year dentists are likely to earn less than the full-year cohort, and their income could distort the figures)
• dentists with inconsistent/incomplete earnings and expenses information
• dentists with non-dental income reported
• Providing-Performer/Principal dentists with Expenses to Earnings Ratios <10% or >90%
• Associate dentists with Expenses to Earnings Ratios <0.1% or >90%
• dentists with employment income but no self-employment income
• dentists with no accounting period in quarter four

These exclusions may not be exhaustive and the sample may include a small number of dentists with non-dental income. While this would not affect high-level results, figures for groups with low sample and population counts may be affected by any extreme values.

As figures are estimates and to acknowledge a degree of sampling error, population counts are rounded to the nearest 50 and monetary values are rounded to the nearest £100.

To maintain taxpayer confidentiality, HMRC suppresses results for any analyses that would produce results for subgroups with low sample numbers and footnotes are provided as necessary.

HMRC provide standard error information for taxable income which is used to calculate statistical significance at the 5% level in the Key Findings and where those values are shown throughout the report.

The tax data cover income from all dental sources, including private dental practice.

Since the introduction of the Dentists Act 1984 (Amendment) Order 2005 (SI 2005/2011), it has been possible for dentists to incorporate their business(es) and 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. Both types of dentists considered in the report are able to incorporate their businesses; for Providing-Performer/Principal dentists, the business tends to be a dental practice while for Associate dentists, the business is the service that they provide as a sub-contractor.

It is not currently possible to determine how many dentists have incorporated their business(es) and what the precise consequences of incorporation may be for the earnings and expenses estimates. Some example potential arrangements and their likely effects include:

a dentist is a director of a limited company and extracts a basic salary along with dividend payments in lieu of self-employment income. This is thought to be the most tax efficient method for incorporated dentists to take payment. Since dentists with employment income but no self-employment income are excluded from the population data set, they and their dental earnings would not be accounted for in the report;

in England a dentist is a director of a limited company and takes all payment as self-employment income. As this dentist has self-employment income, they is likely to be included in the report, but since the limited company held the contract with an NHS England rather than the individual, they are likely to be classified as an Associate dentist. However, their earnings are likely to be closer to the higher Providing-Performer dentist results than those of typical Associate dentists;

in England a practice-owning dentist is a director of a limited company but also a self-employed Associate at another practice. A basic salary and dividend payments are taken from the limited company, and self-employment income is taken from the second practice. As the dentist has self-employment income, they are likely to be included in the report (subject to other exclusion criteria), but may have lower than average levels of self-employment income. This dentist is likely to be classed as an Associate in this report as they do not hold a contract with an NHS England for their self-employment income and the other contract is held by the limited company.

Although it was previously thought that the take-up of dental incorporation was increasing, substantial reductions in tax efficiencies for corporate dentists suggests a reversal in trend; however, there is currently little or no evidence to substantiate this position.

Results from the following analyses are no longer included in the main report but can be found in the accompanying time series and CSV documents. 

Cash and Real Terms

In the Excel time series, data have been presented in both cash terms and real terms using the most recent Gross Domestic Product (GDP) deflators published by Her Majesty’s (HM) Treasury. The GDP deflator data is as at June of the reporting year. Other common indices (Retail Price Index (RPI), Retail Price Index excluding mortgage interest payments (RPIX) and Consumer Price Index (CPI) are also included.

Since the year of the publication is used as the base year, the cash and real terms amounts in that year are identical.

Scottish Index of Multiple Deprivation (SIMD)

Results by deprivation, using the most recently available Scottish Index of Multiple Deprivation (SIMD)  breakdowns are available for dentists in Scotland. These are reported in quintiles and can be found in both the accompanying Excel time series and CSV files.

Dentists have been given a deprivation score in quintiles based on the area in which their practice postcode falls, with 1 being the most deprived and 5 being the least deprived. It is important to note that ‘deprived’ does not necessarily mean ‘poor’ or ‘low income’. It can also mean having fewer opportunities and resources, for example in terms of education or health.

NHS England and NHS Improvement Regional Splits

Earnings and Expenses estimates by NHS England and NHS Improvement Commissioning regions can  be found in the accompany Excel time series and CSV documents.