Jonathan Jacobs, specialist dental solicitor at Nexa Law, looks at the implications for IR35 on the dental profession.

IR35 has been around since 2017 and only now is it to apply to the dental profession. In order to appreciate the implications for dentists, it is first necessary to have a quick run through the principles laid down by HMRC.

The off-payroll working rules

The off-payroll working rules make sure that a worker (sometimes known as a contractor) pays broadly the same Income Tax and National Insurance as an employee would.

The rules apply if the worker who provides services to a client through their own intermediary would have been an employee if they were providing their services directly to that client.

Who the rules apply to

You may be affected by these rules if you are:

  • a worker who provides their services through their own intermediary to a client
  • a client who receives services from a worker through their intermediary
  • an agency or other supplier providing workers’ services through their intermediary

The client is the person who is or will be receiving the services of a worker.

A worker affected by the rules may provide their services through:

  • a limited company, usually known as a personal service company (PSC)
  • a partnership
  • another individual

A PSC is not defined in law but typically is a limited company that a worker controls and has some interest in, through which the worker provides their services.

When the rules apply

The off-payroll working rules apply if a worker provides their services through their own intermediary (usually a limited company, often known as a PSC).

The person responsible for determining whether the worker is employed for tax purposes, depends on if the client is:

  • in the public sector
  • in the private and voluntary sectors
  • is a small business

In most cases, the client will be responsible for determining the employment status of the worker. However, if a worker provides services to a small client outside the public sector, the worker’s intermediary is responsible for deciding the worker’s employment status and if the rules apply.