Dentists Targeted for Investigation

It is understood that Inland Revenue investigations into the affairs of some very high earning dentists in London and Manchester have revealed substantial evasion of tax. As is always the case when this happens, the Revenue learns more about that particular business sector and the opportunities for evasion and then uses that knowledge to carry out further investigations into other businesses in that sector.

Remuneration for National Health work is so tightly controlled that it is unusual for this source of income to be under-declared. If a dentist does only National Health work, the Revenue will look very closely at the expenses claimed in the profit and loss account. If there is private practice work, as well as looking at the expenses, the Revenue will also consider the possibility that income from that source has been understated.

When deciding whether to select a dentist for investigation, the inspector will look at the proportion of gross fees which is absorbed by:

• total practice expenses; and by
  
• lab costs and dental consumables.

To carry out the investigation, the inspector will be able to call for all the extensive records which the dentist must keep and from these will seek to match treatments with income.