Dental industry: another ‘self-employed’ scam

Privatisation has led to massive concentration in dentistry, with employees rebranded as ‘associates’.

For a long time, large-scale corporate dental businesses have been dodging paying National Insurance contributions for their employees by rebranding them as self-employed ‘associates’. By this scam, operators like Mydentist and Southern Dental have avoided paying millions of pounds.

Now, however, the taxman has stirred in his sleep. “Tax authorities have written to about 50 dentists, mainly in the north of England, as part of an examination of the employment status of ‘dental associates’ who perform much of the work in practices across the country. If Revenue & Customs decides that associates are not independent contractors but employees, it would force dental practices to start making national insurance contributions.”

Now the dental industry giants are pointing to dipping profit levels and wailing that, without this hidden subsidy from the public purse, some may go under.(Dentists fear tax status inquiry will lead to catastrophe by Harry Wilson, The Times, 30 July 2018)

The Times’ account of the rise of Mydentist helps explain how it is that the dental industry finds itself on such thin ice in the first place. The article recounts how Integrated Dental Holdings (the less cosy title of the outfit) “has grown nationwide in a dozen years of debt-fuelled buying that has made it the biggest dental services company not merely in Britain but Europe. In the past seven years alone, Mydentist has acquired 237 dental practices, increasing its network to more than 600.”

This works a treat so long as the market continues to expand, but when market-saturation nears, the rate of profit declines and competition becomes deadly for some. (Why the dental business became more and more like pulling teeth by Harry Wilson, The Times, 30 July 2018)