We have been eagerly awaiting announcement of further detailed guidance from NHS England in respect of financial support for Dental practices but, other than some very brief comments last week, nothing has materialised.
We thought it may be helpful to summarise the position as it currently stands.
The following financial support is available for dentists
Self-employed Income Support scheme
This is intended to support individuals or members of partnerships who have lost income as a result of Covid-19 disruption. To be eligible for this, the individual must have a trading profit of less than £50,000 in 2018/19, or an average of less than £50,000 in the three years to 2018/19. The support is in the form of a grant of 80% of profits and is capped at £2,500 per month. HMRC will contact eligible individuals directly.
Due to the £50,000 profit limit, this support is likely to be unavailable to most self-employed dentists. The BDA continues to lobby the government on this point.
Deferral of July 20 tax payment
All self-employed dentists can delay making their July 20 tax payment to allow them to use this cash as a resource where necessary. If you choose to delay, no interest or penalties will arise as long as payment is made by 31st January 2021.
HMRC Time To Pay arrangements
A dedicated Time-to-Pay (TTP) helpline has been set up for businesses who have difficulty paying their tax due to Covid-19. PAYE, National Insurance, Corporation Tax and VAT can be deferred, where applicable. HMRC must be able to see that the tax is due on their systems before they can defer payment. The helpline number is 0800 024 1222.
Local Authority Grants
Cash grants of £10,000 are available for small businesses which operate from property and are entitled to small business rate relief. No application is required, the Local Authority will contact you directly if you are entitled to this. A number of businesses have already received these grants.
Dentists are specifically excluded from the retail business rates relief scheme which provides exemption from business rates payments for 12 months.
Business Interruption Loans
Loans of between £1,000 and £5million are available with the first 12 months of interest covered by the government. The government will guarantee 80% of the debt and no personal guarantees should be requested by banks on loans up to £250,000. Available loan terms are between 3 months and 6 years.
Coronavirus Job Retention Scheme
Both private and mixed dental practices (practices with both NHS and private income) are able to claim additional government support by furloughing staff in relation to the private proportion of their income.
NHS England has advised contractors to use the proportion of gross income that relates to PDS/GDS contact value as NHS revenue, the balance being private share. Dentists who claim business rates reimbursements will have this data readily available. The BHP healthcare team prepare this information each year for many dental clients.
For mixed practices the decision surrounding which staff to furlough, while maintaining sufficient staff to deal with urgent care, may be a difficult one particularly in small practices. It is important to remember that you cannot furlough part of a member of staff – each staff member must be furloughed or non-furloughed. You can, however, rotate staff between furloughed and non-furloughed every three weeks.
Any purely NHS staff should not be furloughed. Non-furloughed staff should be available for redeployment where possible. Directors of limited company practices who receive a salary may also be furloughed but bear in mind that furloughed staff should not be involved in any work which brings in income.
Paying staff and associates
NHS England have not confirmed precisely how the funding for 2020/21 will be allocated to practices other than to say that cash payments for March to June will be made in line with 2019/20.
One of the conditions of continued funding is that NHSE dental associates continue to be paid at previous levels (which should include the usual deductions for lab fees etc.) The financial health of the practice should be the overriding concern for practice owners and consideration should be given to likely clawbacks of NHS contract payments in the future. It seems reasonable to hold back some funds from NHS associates, with their agreement, until we receive further clarity from NHS England. An 80% cash payment may be fair and would put NHS associates in line with furloughed employees. Mixed practices may also consider, with agreement, sharing NHS contract payments between both NHS and private associates, where private associates earn above the £50k earnings threshold for the self-employed income support scheme and are therefore unable to claim the government grant.
The position continues to evolve and we will continue to update you with future changes.
If you have any questions please speak to your usual BHP contact or a member of the Healthcare team
