Where is the money coming from?

In April this year it was reported in the dental press that, Her Majesty’s Revenue and Customs (HMRC) has written to associate dentists advising them it is reviewing the employment status of associates. This has come hard on the heels of court decisions who found against, Pimlico plumbers, City Sprint and Uber, stating that those working for these companies were workers and not self-employed. When looking at the judgements, there are similarities to the relationships between many if not most, associates, self-employed hygienists and therapists, and their practices. If associates* were to be considered as workers, they would have rights such as the national living wage, holiday pay, statutory sick pay and the right to pension auto enrolment, whilst still retaining the flexibility of a self-employed person. 

 The employment rights of workers have a cost, and many commentators say this equates to 20% of an associates’ remuneration, where is this money going to come from?

The options are;

·      The associates.                    The associates are the people who are going to benefit from, pad holiday, sick-pay, etc, is it not appropriate that their remuneration package is reorganised so that they are paying for the benefits, even though as an associate this could mean a 20% drop in your take home pay.

·      The patients.                       All payments that the practice makes to suppliers come directly or indirectly from the patients. Those practices outside the NHS could, in theory, put up the fees to cover the increased costs. This would be potentially catastrophic to patient numbers as I suspect most patients would not be prepared to swallow the large fee increase required.  If you are heavily dependent on the NHS, you can change the fees, all that you could do is reduce the time spent with each patient and use cheaper materials in an attempt to recoup the extra expenses. This of course is potentially a breach of GDC standards compromise patient care and make decisions based on your personal /practice financial situation.

·      The practice.                       Many practices are strapped for cash and have very little money available in their profit margins to fund the tax and national insurance contributions of their associates, protecting their associates from drop-in earnings whilst they benefit from the rights of a worker status. If these costs were borne by the practice, what impact would it have on investment in training, DCP salaries, materials, equipment etc?

·      The principal                        Many associates view their principal as a “fat cat” who is supping of the cream of a large associate percentage. The truth is principals do not themselves as high a percentage of gross for clinical work as they pay their associates. Yes, you read that correctly most principals pay their associates more than they pay themselves and seldom take any drawings in respect of the leadership or management roles they fulfil. Is it appropriate that the principal takes drop-in earnings to subsidise and protect their associate earnings?

When treating our patients’, we often use the mantra “prevention is better than cure”. I believe that the same is true with the employment status of team members and the time has come where we, as a profession need to have an open and honest conversation about how we work together and what it means as to how we get paid. I meet many associates who have an ‘employee mindset’ and really enjoy working in a practice, where the come in, do their work and go home, where the principal makes all the decisions and they don’t have any of the responsibilities. And there are other associates who love to be engaged with the practice, how it runs and are keen to be involved in discussions and decision making and want the responsibility and risk of being self-employed. It is a long-established expectation that if a dentist opted to go into the salaried service or hospital sector that they would earn less than their general practice colleagues. A recent document** specifies these figures as a minimum of £38,361.00 to a maximum of £83,118.00 Has the time come for us to question the self-employed model in practice and move towards a salary structure with a significantly lower take home pay for associates?

*the term associates in this article also encompasses all other self-employed dental team members such as hygienists, therapists etc.

** source information http://www.nhsemployers.org/-/media/Employers/Documents/Pay-and-reward/FINAL-Pay-and-Conditions-Circular-MD-12017.pdf

The Institute of Dental Business will help you find the right remuneration package for you. Call us today on 07989 757 884 or e mail Jane@IODB.co.uk.