Will your dental practice benefit from new employment allowance?
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- Published: Monday, 31 March 2014 07:38
- Written by News Editor
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A new Employment Allowance, which could reduce practice-owners’ employer Class 1 National Insurance Contributions (NICs) by up to £2k each tax year, is due to be introduced from 6 April 2014. NASDAL member Alan Suggett says guidance on the new Employment Allowance has been published which states that a business that pays employer Class 1 NICs on employees’ or directors’ earnings can claim the allowance. But there are some restrictions, he warns, and a need for clarification.
One of the key exclusions for a dental practice according to the guidance is if its work is wholly or mainly of a public nature. This suggests that if more than 50% of your work is for the NHS you are not eligible. But so much depends, says Alan, on the interpretation of “50%”. For instance, the majority of your working hours may be for the NHS but if only 49% of your patients are NHS then you might still be eligible. Said Alan: “Whether ‘50% of your work’ is based on turnover, profit, time spent, number of patients or a combination of all of these factors will need to be clarified. We will have to wait for the legislation for the exact definition of ‘wholly or mainly’ and what this means for dental practices.”
Alan said that legislation for the allowance is contained in the National Insurance Contributions Bill currently before Parliament so clarification should be available soon. Eligible dental practices can make a claim for Employment Allowance via their payroll software or by using HMRC’s Basic PAYE Tools. Alan advised: “You should ensure you keep adequate records of why you were entitled to claim the allowance. These records should be retained for a minimum period of 3 years following the tax year in which you make the claim.”
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