We have identified the following financial advice and help points for coronavirus affected associate dentists.
This article is checked and updated regularly. Where you see an updated date below, this is the last time there was any change to the government’s help/advice in this area.
1 – Extended time to pay your next tax bills
UPDATED 9 July 2021
Income tax payments due for 31 July 2021 can be paid in 12 monthly instalments. To do this, you must have already filed your tax returns on time, owe less than £30,000 and have no other plans or debts with HMRC. You will need to contact HMRC before 29 September 2021 to make what is known as a time to pay (TTP) arrangement.
For dentists trading as a limited company, there is no specific announcement about deferring Corporation Tax or other tax payments like PAYE. However, if you can’t pay your tax bill, you can still request a time to pay arrangement.
The HMRC COVID helpline is available on 0800 0159 559 for businesses and self-employed people who are concerned about paying their tax due to COVID-19. You can either defer upcoming tax payments by a couple of months or make an arrangement to pay over a period of time. HMRC will ask you why you want to defer the tax payment and how long you want to pay. I suggest you ask to pay monthly over a period of up to 36 months.
Call them a week before your tax is due. You will need your tax references to hand for making the first payment and be prepared to set up a direct debit for the rest. The phone line is open daily from 9-6 Monday to Friday. I suggested you call between 4 and 6 to avoid queuing.
2 – Coronavirus Statutory Sick Pay Rebate Scheme (CSSPRS) for dentists who are company directors
UPDATED 9 July 2021
If you can’t work because you are sick, self-isolating, shielding or been notified you have come into contact with some with coronavirus and you are a director in a limited company with an average salary of at least £6,240 a year, then you can recover two weeks of statutory sick pay (SSP) of up to £193.
SSP claims for any other coronavirus affected directors, company secretaries, and employees earning at least £6,240 per year can also be made.
You should inform the person responsible for the payroll calculations of any sickness and self-isolation. HMRC have an online claim system.
Payments are made to the employer (Ltd company).
3 – Employment and Support Allowance (ESA) if you’re employed, self-employed or unemployed
Updated 9 July 2021
If you can’t work or work reduced hours due to sickness and you are self-isolating or ‘shielding’ because of coronavirus (COVID-19), you might be able to claim Employment and Support Allowance (ESA) it’s worth £74.70 a week if you are over 25 and £59.20 if you are under. A claim does require a lot of paperwork and may not be worth it. You will need 2 full years of national insurance contributions to qualify. The payment is not means-tested.
You can not claim if you are entitled to Statutory Sick Pay (SSP) which you could be if you are a director in your company. Speak to your accountant about SSP entitlement prior to making any applications
4 – NHS long term sick leave and pay for self-employed dentists
NHS practices will pay 22 weeks of long term sickness payments. You’ll have to incur 4 weeks of no work before the payments start. The payment is calculated using your estimated NHS monthly pensionable earnings and seniority payment. Your monthly payment 34 schedule has your monthly earnings. The total is multiplied by 12 and then divided by 52, to give the total payment before any relevant deductions or limits are applied.
You must have opted into the superannuation scheme and been a performer for two years or one year if you have just completed DF1. You will not qualify for any payments if you’re trading through a limited company.
The maximum payments for sickness leave from NHS England are £1,660pw up to a total of £36,520 for a dental performer and £3,630pw up to a total of £79,860 for an orthodontic performer. NHS Wales, Scotland and Northern Ireland will have similar payment terms.
The payments are liable to income tax and national insurance and last for 5 months. They form part of your qualifying pensionable earnings.
There is no payment to cover any lost private income.
5 – Private insurances for sickness
UPDATED 25 March 2020
If you become sick due to coronavirus you should consider making a claim on any private insurance policies you have. If your practice has closed, an insurance claim should still be made, despite you not being able to get into work.
All insurance policies will have different terms and conditions. We advise you to contact your insurance agent or insurer directly to see if a claim can be made. Payments made from these policies will be free from income tax and national insurance.
The common types of policies include:-
- Critical Illness is often sold with a mortgage and will pay you a lump sum for a specific illness
- *Income Protection will pay you an agreed income
- *Payment Protection Insurance (PPI) will cover mortgage, credit card, and personal loan payments
- *Mortgage Payment Protection covers your mortgage payments only
* These policies usually have a waiting period before the first payment is made. The payments are for an agreed period only.
6 – Mortgage possession proceedings
UPDATED 9 July 2021
Since 1 June 2021 lenders are able to take possession of properties in mortgage arrears.
7 – Rent possession proceedings
UPDATED 9 July 2021
Your landlord is required to help you remain in your home, but you are responsible for the rent payments under the term of your tenancy agreement.
Since 1 June 2021 landlords are required to give 4 months’ notice including if you have more than 4 months of rental arrears.
From 1 August 2021, the notice period for cases where there are less than 4 months of unpaid rent, will further reduce to 2 months’ notice.
Notice periods for the most serious cases, as set out above, are lower with most requiring 2 or 4 weeks’ notice. The notice period for ‘serious arrears’ is 4 weeks’ notice and the threshold for what constitutes ‘serious arrears’ is ‘arrears equivalent to 4 or more months’ rent.
8 – Make a claim for child benefit payments
UPDATED 9 July 2020
If you haven’t claimed child benefit because you or your spouse earn over *£60,000, and you think your income will reduce below this, then you might want to make a new claim as you will be able to retain all or part of your child benefits
The payments are £21.15 weekly for the first child and £14 for all further children. You normally qualify for Child Benefit if you’re responsible for a child under 16 (or under 20 if they stay in approved education or training). Fill in Child Benefit claim form CH2 and send it to the Child Benefit Office. Payments are received weekly or 4 weekly and backdated for 3 months.
*If you or your partner’s total taxable income at the end of the tax year is between £50,000 and £60,000, a % of the benefit paid in the tax year will need to be repaid. It’s 1% of the child benefit received for every £100 over £50,099 If it’s over £60,000, then 100% of the benefits will be repaid. You will need to prepare and file a tax return to calculate your income and the amount you will need to repay. The repayments are made to HMRC each year, with your January tax payment.
9 – Extend/shorten the year-end of your Limited Company to save on your tax bills
Consider a change to your accounting year. You can prepare accounts for a period of between 1 and 18 months, rather than the usual 12.
It can be useful to make an extension to your yearend when profits are falling. Having a longer accounting period will lower the average monthly profits meaning you will delay paying some of your tax.
Shortening a trading period to recognise losses will allow the losses to be offset against the profits of the earlier accounting year for a refund of the tax paid.
Losses incurred up to 31 March 2022 can now be offset against any profits from the preceding 36 months rather than the usual 12.
10 – Self Employed dentists’ cash in overlap relief
If the yearend date of your accounts is anything else other than 31 March or 5 April, you will have an entitlement to overlap relief. Provided your current profits or losses are at a lower rate than when the overlap profits arose, it would be a good time to cash in the relief for a tax refund. Rather than waiting until you file your next tax return, you may be able to refile your last tax return to claim the relief and refund.
Your accountant should be able to advise you on claiming this relief.
11 – Coronavirus job retention scheme (furloughed wage grants for dentists with a company)
Updated 8 March 2021
A taxable government grant will cover 80% of the monthly salary of employees and directors none working hours because of Coronavirus until July 2021. The grant then falls to 70% in July and 60% in August and September.
All workers in employment and on payroll and paid up to 2 March 2021 can be included.
It’s possible to be furloughed full or part (Flexi) time. Flexi furloughed workers need to establish the total number of hours they usually worked pre COVID and then record the hours they are actually working. Claims are apportioned between working hours and furloughed hours for the month.
Dentists who are directors in a limited company
Most dentists with a limited company will operate payroll for their directors and maybe a company secretary’s salary payments. For tax efficiency, these salaries are monthly amounts of £1,047 or £736 and do not have any employer’s national insurance or statutory pension payments. The company profits are then paid out as dividends to the shareholders who are usually the same people. Salaries for directors and company secretaries are to be included within the grant. Shareholders’ dividends are not covered under this scheme nor the statutory self-employment pay scheme (see #13 below) either.
For a dentist director to claim furlough, you can’t do any work clinical work or provide any services to your practice and patients. However, you can continue to carry out directors’ duties such as preparing accounts and signing documents and foster the company’s business relationships with suppliers, customers, and others.
To claim under the scheme, you will need to:-
- Prepare meeting minutes to identify directors to be furloughed and agree on dates
- Ensure the only work they perform are their directors’ duties
- Submit information to HMRC about their earnings through a new online portal
- Continue to pay and report the payroll as usual under PAYE
After you submit a claim, the payment will be made to your company bank account within 6 working days. Claims must be made within 14 days after the payroll date.
There is the option to reduce salary payments by 20% for any furloughed workers. Our advice is to continue processing the director’s salary payments as usual for maximum tax efficiency.
Dental companies with a furloughed company secretary
If you have appointed a salaried company secretary (who is typically your spouse) with very limited duties, they can also be furloughed until the scheme ends. We suggest that your spouse’s furlough claims mirror your own. e.g. if you are back to work at 50% of pre covid levels you should only claim for 50% of your spouses time as furloughed time.
12 – Benevolent fund for all Dentists and budget planner
Updated 4 February 2021
If you can’t meet essential household expenditures, you can apply for financial support from the benevolent fund for all dentists. You can also access a free budget planner to help you assess your finances and make plans for the future.
13 – Help for self-employed/partnership dentists earning less than £50,000 (Self-Employed Income Support Scheme)
Updated 9 July 2021
The fifth grant covers May to September 2021.
Due to the £50,000 income ceiling, this grant payment won’t be available to all self-employed dentists
The 5th grant has a different payment structure to the previous 4:-
- The grant value will be determined based on a turnover test in the year April 2020 to April 2021
- Traders whose turnover has decreased by 30% or more will receive the full grant worth 80% of three months average trading profits, capped at £7,500 in total
- Traders whose turnover has decreased by less than 30% will receive a 30% grant, capped at £2,850
- Claims can be made from late July 2021
To qualify you must:
- Have submitted your Income Tax Self Assessment tax return for the tax year 2019-20 on or by 2 March 2021
- Have traded in the tax year 2019 to 2020 and 2020-21
- Are trading and impacted by COVID-19 when you apply or would be except for COVID-19
- Intend to continue to trade
- Have lost significant trading/partnership trading profits due to COVID-19. You should keep records to support this
- Average self-employed trading profits between £0 – £50,000
- Have more than half of your total income from self-employment profits
- You can check online with HMRC to find out if you’re eligible to make a claim, you’ll need your Self Assessment Unique Taxpayer Reference (UTR) number and your National Insurance number
The same eligibility conditions apply to both rounds of grant funding.
How to claim?
- You must make the claim yourself. Your tax agent or adviser must not claim on your behalf as this will trigger a fraud alert, and you will have to contact HMRC. This will cause a significant delay in you receiving your payment.
- You can claim online with HMRC using your Government Gateway user ID and password – if you do not have a user ID, you can create one when you make your claim.
The grant payments form part of your self-employment income and are included for working out your income tax and national insurance.
This scheme does not cover directors or shareholders trading as a limited company. They have a different “furlough” grant claim scheme.
14 – Stamp duty saving on home purchases of up to £2,500 to 30 September 2021
Updated 9 July 2021
If you’re purchasing a new home before 30 September 2021 you won’t pay stamp duty up to the first £250,000 of the property’s purchase price. From 1 October 2021 you pay won’t pay any stamp duty on the first £125,000 and 2% on the next £125,000. 2% on the next £125,000 = £2,500.
15 – Wellbeing support for the dental team
Added 9 February 2021
A free guide has been created by a group of individuals from dental charities and within the dental profession called Wellbeing Support for the Dental Team to help detail the types of support available for all dental team members, including students and non-clinical roles.
16 – Free counselling
Updated 4 February 2021
Free counselling and emotional support is available through the Health Assured service for all dental students, dentists and their dependents via the BDA benevolent fund for none BDA members or directly through the BDA for its members.
17 – Recovery loan scheme
Added 9 July 2021
From 6 April 2021 to 31 December 2021 loans and overdrafts are available from £25,001 and asset and invoice finance from £1,000 up to £10 million.
There is no personal security needed up to £250,000. The government will guarantee up to 80% of the finance and no home can be provided as security.
Loans and assets finance is up to 6 years terms and up to 2 years for invoice finance and overdrafts.