Dental Earnings and Expenses Estimates, 2021/22

Dental Earnings and Expenses Estimates, 2021/22, provides a detailed study of the earnings and expenses of self-employed primary care dentists who undertook some NHS/Health Service work during the financial year. Figures relate to both NHS/Health Service and private dentistry and are shown for full-time and part-time Providing-Performer/Principal and Associate dentists.

The analyses throughout this report are based on anonymised tax data for dentists with accounting periods ending in the fourth quarter of 2021/22 and effective as at the end of March 2022. The tax data cover self-employed dental income from all sources, including from private dental practice. Data on earnings from employment or for those dentists in private practice only are not included.

The Dental Working Patterns Survey was not carried out in 2020/21 and 2021/22 due to the impact on working hours during the COVID-19 pandemic. Additional analyses based on data usually collected by the survey such as weekly working hours, percentage of time spent on NHS dentistry and business arrangement are therefore not available for the 2021/22 report. 

The report presents analysis for England, Wales, Northern Ireland and Scotland. However, values are not directly comparable between countries due to differing contractual arrangements and the use of different methods to determine dental type (Providing-Performer/Principal and associate dentist) in each country.

This is the fourth time that figures have been published separately for England and Wales; prior to this, findings have been published for England and Wales combined. In addition to publishing these England and Wales figures separately, there has also been an unavoidable methodological change in the way we determine dental type in these countries. Please refer to the methodological change notice for more information. These two changes mean that the figures in this report are not comparable with any figures published prior to 2018/19.

This report was produced by NHS England, in consultation with the  Dental Working Group (DWG) which includes representatives from Department of Health and Social Care (DHSC), NHS England, the Welsh Government, the Department of Health Northern Ireland, the Northern Ireland Health and Social Care Business Services Organisation, Scottish Government, NHS National Services Scotland: Information Services Division, the Secretariat for the Review Body on Doctors’ and Dentists’ Remuneration, the NHS Business Services Authority Information Services (NHSBSA), HM Revenue and Customs (HMRC): Knowledge, Analysis and Intelligence Division, the National Association of Specialist Dental Accountants and Lawyers (NASDAL) and the British Dental Association, which represents the views and interests of dentists.

NHS England welcomes feedback on the methodology, commentary, tables and charts within this publication. Please contact NHS England with your comments and suggestions by telephone on 0300 303 5678 or by email to [email protected] stating ‘Dental Earnings and Expenses Estimates’ in the subject heading.

Important definitions

The report uses the following terms:

• gross earnings – self-employment income from NHS/Health Service and private dentistry before the deduction of total expenses.
• total expenses – business expenses from NHS/Health Service and private dentistry allowable for tax purposes.
• taxable income – income before tax or pension contributions are deducted, made up of gross earnings less total expenses, also known as net income.
• expenses to earnings ratio (EER) – the proportion of gross earnings that is taken up by total expenses.

Earnings

The earnings and expenses estimates presented in this report are based on tax data covering both NHS/Health Service and private dentistry. It is not possible to distinguish between NHS and private earnings and expenses, and to analyse them separately. Dentists with only private earnings and expenses are excluded from this report.
As a part of their arrangements to provide Health Service/NHS dentistry, dentists in Northern Ireland and Scotland receive additional allowances to assist with costs (for example non-domestic rates allowance and allowances for the salaries of training dentists under supervision). These additional allowances are paid as gross remuneration and should be recorded on dentists’ Self Assessment tax returns.

Expenses

Expenses are split into the following categories on the tax returns:

• Office and General Business
• Premises
• Employee
• Car and Travel
• Interest
• Other, which includes the following:
  • ‘Advertising and business entertainment costs’ (which were classified as business expenses up to 2006/07)
  • Interest for businesses where turnover is <£85,000 and interest is not reported separately
  • Expenses for businesses (where turnover is low) and detailed expense breakdown not available
• Net Capital Allowance.

Populations and samples in the report

• Report Population – the number of dentists from the NHS BSA Information Services, BSO and ISD information, who qualify for inclusion in the report.
• HMRC Sample – the number of dentists’ records that HMRC traced and was able to match to a Self Assessment tax return. These records must pass validation checks which include removing those with other non-dental self-employment income, and ensuring they have an end-date in quarter four. For more information on the validation, please refer to the accompanying methodology.

COVID-19

The first cases of COVID-19 in the UK were confirmed late January 2020 and the first UK-wide lockdown was announced in March 2020. Most routine dentistry was paused between April and June 2020. This was followed by a period of recovery and restoration of services throughout the remainder of 2020/21 and 2021/22. Differing but similar arrangements were put in place across England, Scotland, Wales and Northern Ireland to support dental practice income during this period. In addition, Self-Employment Income Support Scheme (SEISS) payments were made by the government to eligible businesses that had been adversely affected by the coronavirus pandemic. The pandemic is also likely to have impacted on expenses incurred during this period. Details can be found in the results chapters for each country.

Self-employment Income Support Scheme (SEISS)

2020/21 saw the introduction of Self-Employment Income Support Scheme (SEISS) payments that were made by the government to eligible businesses that had been adversely affected by the coronavirus pandemic. These are subject to income tax and self-employed National Insurance contributions. As this is classed as taxable income these payments have been included in the dental earnings data for 2020/21 and 2021/22. A table showing the number of SEISS claimants and the average amount claimed for each country for 2021/22 can be found in Table 1.

Table 1: Number of SEISS claimants and average amount of SEISS claimed, by dental type and country, 2021/22 

^_Notes:  

^{_{1. These figures are unweighted and as such do not follow the methodology referred to in the stratification section of the Methodology page}}

^{_{2. Figures are based on valid sample in both NHS England and HMRC database}}

^{_{3. Counts are rounded to the nearest 50. Counts<30 are suppressed and shown as c. Amounts are rounded to the nearest 100}}

^{_{4. Average SEISS amount claimed is based on SEISS grants available in the tax year (SEISS4 & SEISS5)}}

^{_{5. The final date to claim SEISS4 was 1 June 2021; SEISS5 was 30 September 2021}}

The Report Population is not the same as the workforce statistics published across the four countries, which are based on a count of unique General Dental Council (GDC) numbers. This is due to certain types of dentist being excluded from this report (see above). Others are subsequently excluded from the HMRC sample for data quality reasons. Figures relating to dental populations, shown in Table 2, are available from NHS England, Stats Wales and Health and Social Care Northern Ireland.

Table 2: Dental populations and HMRC sample sizes 2021/22

^_Notes:

^{_{1. Includes some dentists working in the Emergency Dental Services and some Community Dental Service staff working on a PDS contract}}

^{_{2. All Non-salaried GDS dentists excluding Assistants and Vocational Dental Practitioners}}

^{_{3. Dental population used in the report and the HMRC sample have both been rounded to the nearest 50, therefore totals may not sum}}

The results presented in this report are estimates based on samples. To give a more accurate estimate, HMRC weights the sample up to the Report Population when calculating averages.

Values are subject to sampling error. Differences between groups and subgroups of dentists may not be statistically significant; neither may differences in results as compared to the previous year.

Results for mean income before tax have been tested for statistical significance at a 95 per cent level, but gross earnings and total expenses have not because standard errors are not currently available. Throughout the rest of the report, results and comparisons have not been tested for statistical significance. If statistical significance is not mentioned next to the result, it has not been tested.

In addition, small populations for some subgroups mean that extreme values can have noticeable effects on the averages. In such cases, results may be subject to more uncertainty. Footnotes identify results based on a sample size of fewer than 125, which should be treated with caution.

Averages, rounding and suppression

All averages are means unless otherwise stated.

Earnings and expenses estimates have been rounded to the nearest £100. This means that in some tables and figures, the rounded values presented for taxable income may not equal gross earnings minus total expenses. As the population estimates provided in this report are not intended to be definitive, these are rounded to the nearest 50, unless otherwise stated. In expenses tables, the percentage of total expenses for each category is displayed in parentheses.

Calculations such as percentage change and estimates of the expenses to earnings ratio (EER) are performed on data that have not been rounded.

The majority of values within tables are rounded and therefore totals may not sum.

In order to maintain taxpayer confidentiality, HMRC suppresses results for any analyses that would produce results for subgroups with low sample numbers. Footnotes are provided in these cases.

Symbols used in tables

c = confidential
Results have been suppressed by HMRC due to low sample numbers

z = not applicable
Used when an observation is not applicable

: = not available
Data unavailable for reasons other than those already specified

Multiple counting

The results presented in this report reflect earnings and expenses as recorded by dentists on their Self Assessment tax returns. The majority of payments for NHS dentistry are made to Providing-Performer/Principal dentists. In some cases, the dental work is performed by an Associate dentist working in the Providing-Performer/Principal’s practice and some of that payment will be passed on to the Associate. This means that the same sum of money may be declared as gross earnings by both the Providing-Performer/Principal and Associate and again as an expense by the Providing-Performer/Principal. This is known as ‘multiple counting’ and its extent is difficult to quantify. However, where multiple counting does occur, it will inflate only gross earnings and total expenses values; the resulting taxable income values are not affected. Where a dentist is single-handed, i.e. is the only dentist working in the practice, no multiple counting can occur.

Incorporation

This report considers only those primary care dentists who have earnings from self-employment which has traditionally been the employment status of the majority of primary care dentists (both Providing-Performer/Principal and Associate). These dentists complete Self Assessment tax returns which, subject to certain exclusion criteria, are used to inform the analyses presented in the Dental Earnings and Expenses Estimates series of reports. Since the introduction of the Dentists Act 1984 (Amendment) Order 2005, it has been possible for both Providing-Performer/Principal and Associate dentists to incorporate their business(es) and to become a director and/or an employee of a limited company (Dental Body Corporate), with the potential to operate in a more tax-efficient manner. In the case of Providing-Performer/Principal dentists, the incorporated business tends to be a dental practice, whereas for Associate dentists, the business is the service they provide as a subcontractor. It is not currently known how many dentists have incorporated their business(es) nor what the precise consequences of incorporation may be for the results presented in this report.

NHS/Health Service and private dentistry earnings

It is not possible to determine, using HMRC data, how dentists divide their dental work between NHS/Health Service and private practice. 

England and Wales only – clawback

Providers in England and Wales have a contract to deliver a certain, pre-agreed, number of Units of Dental Activity (UDAs) and Units of Orthodontic Activity (UOAs) per year. In the event that the provider does not, for whatever reason, deliver at least 96 per cent of the number of UDAs and UOAs set out in their contract, the NHS England (Region)/Local Health Board (LHB) determine how this is to be managed. The handling of undelivered UDAs and UOAs varies by NHS England (Region)/LHB, and includes rolling forward the undelivered activity to the next year, or in some cases requiring repayment of the earnings received for the undelivered activity. The latter is often referred to as clawback, and the extent to which this is used is extremely difficult to quantify. When a provider does deliver at least 96 per cent of the activity in their contract, they have a contractual entitlement to carry forward any under-delivered activity into the next contract year. Where clawback is utilised, it operates on an annual cycle that matches that of the contract year. Values shown within this publication are after any clawback by NHS England (Region)/LHB for the previous year’s activity.

Dental allowances – Northern Ireland and Scotland

Due to inconsistencies in handling the allowances paid to dentists, reported expenses to earnings ratio (EER) and gross earnings may be affected. For example, some Principals receive the payments for dental services provided by the Associate on their behalf and forward this payment to the Associate. In other cases, the Associate receives the payment directly and then makes a payment to the Principal. However, regardless of the method used to handle these payments, there should be no impact on the taxable income presented in report.

Changing populations

Changes in the composition of the dental population (as well as the sample used to produce Dental Earnings and Expenses Estimates) need to be kept in mind when viewing and making comparisons between results for different financial years. The report population in the current report is not the same as that in the previous year, for example dentists may retire or change working arrangements (i.e. dental type). In addition, not all dentists can be matched to their Self Assessment tax returns while some matched records are excluded by HMRC in accordance with their data validation criteria.

Over the last few years there has been a greater change in the workforce, with a continued shift away from Providing-Performer/Principal dentists towards Associate dentists. Changes in the distribution of the population across dental and/or contract type will invariably have some effect on the estimates of earnings and expenses and it is important to keep this in mind when looking at percentage changes or making year-on-year comparisons.

The 2018/19 report used a new system to extract dental type information for dentists in England and Wales. The new methodology resulted in a large increase in Providing-Performer dentists who are believed to have been previously misclassified as Associate dentists. The change in methodology means that the figures published in this report are not comparable to anything published prior to 2020. To add context and allow comparisons to be made HMRC reran the figures for 2017/18 using the new methodology

For a more detailed discussion of the methodology used to produce this report, please see the methodology.