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How the new dentistry regulations affect you
Update.The impact on practices of recent amendments
Regulations update On 24 September 2010, the Scottish Government released a memo notifying NHS boards of further amendments to the new NHS dentistry regulations. These revisions were made after our comments in the August/September 2010 issue of this magazine, which covered the impact of these new regula- tions on NHS practitioners operating their practice as a Dental Body Corporate. We have reviewed the new
guidance and our opinion remains the same as previously set out: due to changes in the way NHS practitioners register on the NHS dental list, practi- tioners registered as a Dental Body Corporate (DBC) lose entitlement to income under several determinations as set out in the Statement of Dental Remuneration. These include vocational training allowances, grants, seniority payments,
long-term sickness payments and maternity leave payments. The new guidance does, how-
ever, clarify the issue of multiple list registrations where practi- tioners serve different patients in different practices – it is pos- sible to be registered on the first list and the second list if one treats patients via a DBC and also as a sole-practitioner. We do not believe there is a
cost-effective way in which this could be taken advantage of to retain full entitlement to grants and allowances while trading as a Dental Body Corporate and benefiting from the favourable tax rates companies pay in com- parison to individuals via income tax. Patients must be registered with one practice only and the choice must be made whether this is the practitioner as an individual, or via his or her company. A possibility may be to split
your patient book by registering some with your DBC, and the remainder with you as an individual. The patients would appear on one practice list only, but entitlement to grants and allowances is reopened. However, this would also mean more complex administration work and the preparation of
two sets of financial statements (one for the unincorporated practice and another for the company).
Tax update More than four months have passed since the new chancel- lor delivered the emergency budget. Among the measures announced were some key revisions to the tax system, both positive and negative. The personal tax-free
allowance for income tax will be increased by £1,000 up to £7,475 from 6 April next year, with a target of £10,000 by the end of 2015. However, there will be no benefit for higher-rate taxpay- ers because the starting point of the higher-rate tax band will be reduced accordingly. The bad news for higher-rate
taxpayers continues: the rate of capital gains tax increased from 18 per cent to 28 per cent com- mencing midnight on the day the emergency budget was delivered. The positive, howev- er, is the first £5 million of gains, if applicable for entrepreneurs relief, is only taxed at 10 per cent. The lifetime limit was previous- ly £2 million, so this is good news for people in business who may have capital gains over their lifetime at this level. The employers’ rate of
“A possibility may be to split your patient book by registering some with your Dental Body Corporate and the
remainder with you as an individual” Stephen Neville
Right: Stephen Neville, Partner, Martin Aitken & Co
58 Scottish Dental magazine
national insurance (NI) has been increased by 1 per cent, bringing the rate to a total of 13.8 per cent from April 2011. To compensate employers for the effects of this increase, the threshold at which employees’ earnings start to be taxed will be increased by £21 per week above
inflation, also from April 2011. A positive provision in the
emergency budget for new practices is the regional employer NI contribution holi- day. The revenue will waive the employer’s NI contributions for the first ten employees in a new business, to a maximum of £5,000 per employee. This applies to new businesses for the period from 22 June 2010 to 5 September 2013. Employer’s NI is an addition-
al cost that each business must bear. Therefore, the above con- cession represents a reasonable saving for a new business. This saving is only available
for new practices, however, and the practice must be based in an eligible area. The whole of Scotland is eligible. If you com- mence trading as a practitioner for the first time during the eli- gible period of 22 June 2010 to 5 September 2013, you are clas- sified as a new business for the purpose of these rules. Opening a new practice as
part of an existing chain is mere- ly an extension of an existing business and this would be inel- igible for relief. There are also a number of anti-avoidance rules to stop claims, which the rev- enue considers to be against the spirit of the new concession.
® Stephen Neville is a Partner at Martin Aitken & Co and has advised many dentist clients, including in the NHS and private sectors, for more than 20 years. Stephen can be contacted at
scn@maco.co.uk and on 0141 272 0000. Visit
www.maco.co.uk This is our understanding of the law at this time and we advise you to seek professional advice prior to taking any actions based on the above. This article is not intended as professional advice – it is for information purposes only.
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