Associate Sick Days After ESM4030: Why Who Books the Locum Matters

When an associate dentist goes off sick, the practice manager usually books the cover. It is the operationally sensible thing to do: the manager knows the list, knows the software, and the associate is in bed with a fever. For years, nobody thought twice about it.

Since April 2023, that small operational habit has carried a tax dimension that dental groups can no longer ignore. This piece sets out what changed, why the question of who engages and pays for a locum has become part of the self-employment picture for associates, and what questions group leadership should be putting to their advisers. It is not tax advice, and it does not need to be to make the point: the sick-day workflow most groups run today may not match the contracts they have just rewritten.

What changed in April 2023

For decades, HMRC guidance known as ESM4030 treated associate dentists as self-employed provided they were engaged on a standard BDA or DPA agreement and followed its terms. That guidance was withdrawn on 6 April 2023. HMRC has been clear that the withdrawal is not, in itself, a change to anyone’s status. But it removed the shortcut: each associate’s status now has to stand on the normal employment tests, assessed with the help of HMRC’s Check Employment Status for Tax (CEST) tool, rebuilt in April 2025, and HMRC has said it will look at the substantive working relationship rather than the wording of the contract alone.

Associate status is now considered under HMRC’s general employment status guidance at ESM0500, with ESM0515 summarising the full set of factors weighed in deciding whether someone is self-employed or employed.

The financial stake sits with the engager, and it is larger than many owners assume. If an associate treated as self-employed is later found to be an employee, the practice owner can be assessed for the income tax and employee’s National Insurance that should have been deducted from the amounts paid, on top of employer’s National Insurance at 15%. For an independent practice with two associates, that is painful. For a corporate group with several hundred, it is a board-level number.

A separate change: the Employment Rights

This area is now often discussed alongside the Employment Rights Act, so it is worth being precise about what that Act does and does not touch. The Employment Rights Act received Royal Assent on 18 December 2025. Its zero-hours provisions, covering guaranteed hours, reasonable notice of shifts, and payment for shifts cancelled or cut short at little notice, attach to workers and agency workers as the Act defines them. The genuinely self-employed fall outside those definitions in the primary legislation itself.

None of those provisions is yet in force. The government’s implementation roadmap places them in 2027, and a consultation on the detail, opened on 2 June 2026, runs until 25 August 2026. Employment status for tax and employment rights are assessed under separate legal frameworks, and this article is concerned with the first. But the direction of travel in both is the same: the label on the contract matters less than the facts of the working relationship.

Why the locum question sits at the centre of it

Among the factors ESM0515 sets out, one of the strongest indicators of self-employment is a genuine right of substitution: the ability of the associate to send a suitably qualified replacement to do their work, at their own expense, rather than the work simply not happening when they are unavailable. And HMRC does not take the paperwork’s word for it: it will establish the facts of what actually happens, and those facts override the contract wording.

The sector has noticed. Commentary from ICAEW following the ESM4030 withdrawal observed that larger dental corporates had already begun writing to their dentists to update older contracts, with particular emphasis on strengthening the right of substitution through locum provisions. In other words, the clause that says an associate may engage a locum is being rewritten across the industry right now, precisely because it matters more than it used to.

The gap between the clause and the sick day

Here is the uncomfortable part. A right of substitution that exists on paper but is never exercised by the associate is a weaker fact than one with a record behind it. And in most groups, the reality of a sick day looks nothing like the clause.

None of this means the associate’s status is wrong. Status is judged in the round, and substitution is one factor among several. But a group that has just strengthened its locum provisions on paper, while running a sick-day workflow in which the associate plays no part in the substitution, has opened a gap between what its contracts say and what its records would show. Substance over wording is exactly the lens HMRC has said it will apply.

Lisa Dickinson, Partner, Darnells Chartered Accountants

What an evidenced substitution trail would look like

If the right of substitution matters, the practical question for a group is what evidence of it exercising would look like. The elements are straightforward: a record of the associate requesting or initiating the cover, a record of who the substitute was and how they were selected, and clarity over who bore the cost. A dated, timestamped trail showing the associate arranged their own cover is a different fact from a practice invoice and a manager’s phone log.

Direct-booking platforms make this kind of trail easier to produce than the agency phone call ever did, because every request, acceptance and payment is recorded against a named account. Whether the booking should originate from the associate, and how the cost should flow, are questions for each group’s advisers, because contracts and arrangements differ. The point of this piece is narrower: the question is now worth asking, and most groups have not asked it.

Three questions for your advisers

If you sit in procurement, finance or operations at a dental group, these are the questions worth taking to whoever advises you on associate status.

First: do our associate agreements include a locum or substitution provision, and does our actual sick-day process match it? If the contract says the associate engages the locum and the records show the practice always does, that mismatch is worth understanding.

Second: what evidence could we produce today that any associate has ever exercised their right of substitution? A right never exercised is not fatal, but an exercised and documented one is a stronger fact.

Third: if we wanted the substitution trail to exist, what would need to change in how cover is requested and paid for? That is an operational design question as much as a legal one, and it is cheaper to answer deliberately than after an enquiry letter arrives.

The short version

The ESM4030 withdrawal did not change anyone’s status overnight. It removed the assumption, put the substantive relationship under the lens, and left the engager holding the financial risk. Groups have responded by rewriting locum clauses into associate agreements. The next step, which fewer have taken, is making the sick-day workflow produce the evidence those clauses now depend on. Speak to your tax adviser about what that should look like for your group. The one thing not worth doing is assuming the old habits still carry no weight.

This article describes regulatory changes and industry commentary. It is not tax, legal or accounting advice. Dental groups should take professional advice on associate status and locum arrangements specific to their own contracts and circumstances.

Airlocum records every locum request, acceptance and payment against named accounts, giving groups a timestamped booking trail across all their sites. Learn more at airlocum.co.uk.