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 and Wales only – clawback
Providers in England and 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 or change working arrangements (i.e. dental type). In addition, not all dentists can be matched to their Self Assessment tax returns while some matched records are excluded by HMRC in accordance with their data validation criteria.
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.
Last year a new system was used to extract dental type information for dentists in England and Wales. The new methodology resulted in a large increase in Providing-Performer dentists who are believed to have been previously misclassified as Associate dentists. The change in methodology means that the figures published in this report are not comparable to anything published prior to 2020. To add context and allow comparisons to be made HMRC reran the figures for 2017/18 using the new methodology
In previous years a longitudinal study was made for dentists in England and Wales to attempt to control changing populations, which only included 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. However, due to the break in time series it was not possible to publish the longitudinal study for 2018/19. As there is now enough data to do so, the longitudinal section of the report has been reinstated.
For a more detailed discussion of the methodology used to produce this report, please see the methodology.
COVID-19
The first cases of COVID-19 in the UK were confirmed late January 2020 and the first UK-wide lockdown was announced on 23 March. This was followed by an announcement from the chief dental officer for England on 25 March 2020 of the temporary suspension of all routine dentistry and many dental practices were able to offer little or no NHS treatment for some or much of the 2020/21 financial year. However, given the timing of the introduction of emergency lockdown measures, we have little evidence that the earnings and expenses estimates of NHS/Health Service primary care dentists were greatly affected by the COVID-19 pandemic during the 2019/20 financial year.