The UK dental workforce has increasingly relied on locum dentists to maintain service continuity amid staffing shortages. However, tax legislation known as IR35 has significantly influenced how locum dentists work and how dental practices recruit temporary clinicians.
For practice owners, recruiters, and locum dentists themselves, understanding IR35 rules for dentists is essential. The legislation affects how locum contracts are structured, how dentists are taxed, and whether a clinician is considered self-employed or effectively working as an employee.
This article explains IR35 for dentists, its implications for locum recruitment, and how UK dental practices can remain compliant while maintaining workforce flexibility.
What Is IR35?
IR35 is UK tax legislation introduced to prevent “disguised employment.” It ensures that individuals who work like employees but operate through a limited company pay broadly similar taxes to employees.
The rules apply to contractors working through intermediaries such as personal service companies. For dentists working as locums through their own limited companies, IR35 determines whether their contract is treated as inside IR35 (employee-like taxation) or outside IR35 (self-employed contractor taxation).
IR35 is overseen by HM Revenue & Customs, which enforces tax compliance across sectors including healthcare.
Why IR35 Matters for Locum Dentists
Locum dentists have traditionally worked on a self-employed basis, often through limited companies. However, IR35 rules assess whether the working relationship resembles employment.
If a contract falls inside IR35, the dentist may need to pay income tax and National Insurance similar to an employee. If it falls outside IR35, the dentist retains the tax advantages associated with contractor status.
This distinction affects:
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Net earnings for locum dentists
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Recruitment structures used by practices
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Contract design and compliance requirements
As a result, IR35 has become an important factor in locum dentist recruitment in the UK.
Key Factors Used to Determine IR35 Status
IR35 status is assessed based on the nature of the working relationship rather than simply the contract wording.
Three key principles are typically examined.
Control
If the practice controls how, when, and where the dentist works in a manner similar to employment, the contract may fall inside IR35.
Substitution
True contractors can usually provide a substitute clinician if they are unavailable. If substitution is not allowed, it may indicate employment-like conditions.
Mutuality of Obligation
If the practice is obligated to offer work and the dentist is obligated to accept it, this resembles an employment relationship.
These factors are evaluated by HM Revenue & Customs when determining compliance.
IR35 and Dental Locum Recruitment
The introduction and tightening of IR35 enforcement have changed how many UK dental practices approach locum recruitment.
Previously, many locum dentists operated comfortably through limited companies. With increased scrutiny, practices and agencies now review contract structures more carefully.
For some locum dentists, IR35 has reduced the financial advantages of contractor work. This has led some clinicians to prefer associate roles or fixed contracts instead of temporary placements.
For employers, IR35 means greater responsibility in ensuring recruitment practices remain compliant with UK tax law.
Impact on NHS and Private Dental Practices
The impact of IR35 can vary depending on the type of practice.
In practices delivering services under the National Health Service, locum dentists are often used to maintain NHS contract delivery during recruitment gaps or staff absences. Because NHS workloads can involve structured schedules and defined responsibilities, IR35 status assessments may require careful contract design.
Private dental practices may have slightly more flexibility in structuring temporary contracts. However, IR35 considerations still apply whenever a dentist operates through a limited company.
In both settings, compliance remains essential.
Challenges IR35 Creates for Dental Recruitment
IR35 has introduced additional complexity to dental locum recruitment.
Some of the key challenges include reduced contractor flexibility, increased administrative responsibilities, and the need for careful contract assessment. Practices must ensure that locum arrangements reflect genuine contractor relationships where applicable.
Recruitment agencies specialising in dental staffing often assist practices with compliant contract structures, helping reduce legal and tax risks.
Opportunities for Practices and Recruiters
Despite these challenges, IR35 has also encouraged greater professionalism in recruitment processes.
Many practices now take a more structured approach to temporary staffing. Clear contracts, proper governance, and transparent expectations benefit both employers and locum dentists.
For recruiters, understanding IR35 rules for dentists has become an important part of delivering ethical and compliant staffing solutions.
Best Practices for IR35-Compliant Locum Recruitment
Dental practices can reduce risk by taking a careful and structured approach to locum hiring. Contracts should accurately reflect working arrangements, and practices should avoid treating locum dentists as employees while classifying them as contractors.
Maintaining clear documentation, seeking professional tax advice where needed, and working with experienced recruitment partners can help ensure compliance.
By planning recruitment carefully, practices can still benefit from the flexibility locum dentists provide.
The Future of Locum Dentistry in the UK
Locum dentists remain an important part of the UK dental workforce, particularly as practices navigate the ongoing dentist shortage across many regions.
However, IR35 means that both employers and dentists must understand the legal framework surrounding contractor work. Practices that adapt their recruitment strategies to reflect current regulations will be better positioned to maintain staffing stability.
Final Thoughts
IR35 has reshaped how locum dentists work and how UK dental practices recruit temporary clinicians. While the legislation introduces additional complexity, it also promotes greater transparency and compliance in contractor relationships.
For dental practices, the key is understanding the rules, structuring contracts appropriately, and ensuring recruitment processes align with UK tax regulations. By doing so, practices can continue to benefit from the flexibility of locum dentists while maintaining full compliance with IR35.
