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 February 2021
Income tax payments due in July 2020 under self-assessment were automatically deferred until 31 January 2021. There were no penalties or late interest charges for the deferral period. The 31 January 2021 payment can be paid in 12 monthly instalments. To do this, you must have already filed your tax return. You will need to contact HMRC before 1 April 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 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 8-6 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 26 May 2020
From 13 March if your sick or self-isolating and from 16 April if your shielding and your a director in a limited company with an average salary of at least £6,136 a year can recover two weeks statutory sick pay (SSP) of up to £190. SSP claims for any other directors, company secretaries, and employees earning at least £6,136 per year can also be made.
You should inform the person responsible for the payroll calculations of any sickness and self-isolation. HMRC have a claims online claim system to use.
3 – Employment and Support Allowance (ESA) if you’re employed, self-employed or unemployed
If you can’t work or work reduce 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 £74.35 a week. 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 earnings and seniority payment. Your month 34 payment schedule has your monthly earnings. There is no payment to cover any lost private income.
You must have opted into the superannuation scheme and been a have performer for two years or one year if you have just completed DF1. You will not qualify for any payments if your trading through a limited company.
The maximum payments for sickness leave 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.
The payments are liable to income tax and national insurance and last for 5 months and form part of your qualifying pensionable earnings.
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, This is 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 form 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 – Mortage payment holiday for up to 6 months to 31 March 2021
UPDATED 10 February 2021
Saving cash is going to be important with reduced or no income. You might want to consider making a claim for a mortgage payment holiday. There is no specific scheme for this. You’ll need to contact your mortgage provider to request it. They will want to know the details of your finances, but it is expected that you won’t need to provide many documents to be granted the holiday.
Payment holidays also apply to buy to let mortgages if the tenants can’t afford to pay you.
Your payment holiday can be up to a maximum of six months. So, if you have already taken the full six-month payment holiday, you cannot apply for another one. However, your lender might be able to help you in other ways.
7 – Rent payment holiday
UPDATED 10 February 2021
You can apply for a three-month payment holiday from your landlord. Your landlord is required to help you remain in your home. There is a ban on repossessions until 21 February 2021. Since 29 August 2021 landlords are required to give 6 months’ notice unless you have more than 6 months rental arrears or you’re facing eviction for antisocial behaviour.
8 – Access to your savings
Many banks are offering penalty-free access to fixed-term savings accounts. If you need quick access to your savings, ask your provider if they will be charging any penalties.
9 – Using your personal bank account overdraft
Watch out for your overdraft rate. New regulations from 6 April 2020 mean that while there are no separate fees for overdrafts, interest rates are rising sharply with most providers charging around 40%.
10 – Make a claim for child benefit
UPDATED 4 June 2020
If you haven’t claimed or stopped claiming 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.
The payments are £21.05 weekly for the first child and £13.95 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 will need to be repaid. If it’s over £60,000 all 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.
11- Apply for a coronavirus bounce back loan before 31 March 2021
UPDATED 10 February 2021
These easy to get loans are available for business expenditure, not personal expenses. They are the best funding we have seen so far for small and micro-businesses needing cash flow assistance from £2,000 to £50,0000. Remember this loan is a debt, not a grant. It may not be suitable for you if you can’t afford the repayments.
12 – Check your associate agreements
See how you can limit any drop in your income. Some associate agreements may well place the risk on associates for failure to reach UDA targets. However, we feel it would be unfair, in most cases, for practice owners simply to claw back all the money from associates where the failure to perform UDAs is as a result of COVID-19.
13 – Free critical worker childcare for dentists and their staff
You will be designated as a critical worker by the Government. This means you will be able to continue to send your children to school.
14 – Extend/shorten the year-end of your Limited company to save on your tax bills
If you are unable to work due to practice closures consider a change to your accounting year. You can prepare accounts for a period of up between 1 to 18 months, rather than the usual 12.
It is good 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 pay less 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.
15 – 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.
16 – Associate payments from NHS Dental practices and private capitation schemes
Updated 5 May 2020
NHS England has said they will pay 1/12th monthly of the 2020-2021 NHS contract. There will be an agreed and fair reduction for any variable costs associated with service delivery (e.g. in recognition of reduced consumable costs). Practices will pass payments on to associates. The contract value and reconciliation in 2020-21 will take into account the difficulties of delivery for the period of the COVID-19 pandemic. The NHS may need to redeploy associates within the NHS during the crisis to provide emergency dental and other care. We understand the redeployment is voluntary with exceptions for anyone at risk or with, or caring for anyone with an underlying health condition. If practices are struggling to meet their commitment to demonstrate support for NHS care, one option for practices is, to withhold some money due to associates under the terms of the NHS help until it is clear whether there will be any such clawback.
Most private patients will likely continue to pay into their private capitation schemes. Some may stop. Practices will continue to get the capitation money. In many cases, practices will continue to pay associates their share of the capitation money they receive. Associates receiving capitation money in respect of private capitation schemes should discuss with practices what happens if the associateship ends before the associate can do the relevant routine dental work.
Disputes over payments
If your practice isn’t paying over what you believe they should, the BDA has launched a pay dispute service for its members working within the NHS. The aim is to help associates and practice owners reach a fair agreement on NHS pay that is based on the NHS conditions for continued contract payments.
If you are not a BDA member then you should seek legal advice to recover any funds owing to you with the terms of your associate’s agreement.
17 – 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 £1,041 or £732 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 #20 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 can be made within 14 days of the upcoming payroll date and must be made with 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.
18 – Local authority discretionary cash grants of £934 per 28 days for non-rate paying business
Updated 10 February 2021
If you have been severely impacted by restrictions and have a fixed ongoing dental cost that is the responsibility of your associate business such as equipment or software leases you can apply to your local authority for a discretionary grant.
This scheme is a finite pot and therefore will be prioritised based on the level of financial hardship faced as a result of the national or local restrictions. If the limited funding for the scheme is oversubscribed, awards will be prioritised based on their relative levels of ongoing fixed property-related costs, the number of employees and relevance to your local economy.
19 – 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.
20 – Help for self-employed/partnership dentists earning less than £50,000 (Self-Employed Income Support Scheme)
Updated 8 March 2021
The Government has already announced that there will be a fourth grant covering February 2021 to April 2021 to be claimed by 31 May 2021. With the fifth grant from May to September claim deadline to be announced.
Due to the £50,000 income ceiling, this grant payment is only likely to benefit part-time self-employed dentists or trainee dentists on a lower income.
This taxable 4th grant allows payments to be made for:-
- A quarterly grant of 80% of average monthly taxable profits over the three years to 5 April 2021
- Capped at a total of £7,500
- Payable as a lump sum and administered by HMRC
The 5th grant has a different payment structure:-
- 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:-
The same eligibility conditions apply to both rounds of grant funding.
- 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
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 “furloughing” grant claim scheme.
21 – 3 month extension to companies house filing deadlines for company accounts
Updated 14 July 2020
Company directors now have 12 months rather than the usual 9 to present their accounts to Companies House before a late penalty for filing is issued.
The filing date for confirmation statements has increased to 42 days from 14 days and the striking off of a company from the register has been suspended until 10 September 2020. Check for more guidance from Companies House.
22 – Stamp duty saving
Added 31 July 2020
If you purchasing a new home you won’t pay stamp duty on the first £500,000 of a property’s purchase price (until 31st March 2021 – £250,000 available in Scotland and Wales).
23 – 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.
24 – 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.