As Dental Foundation year Practitioners are employees of their Educational Supervisors practice, they must have Income Tax and National Insurance deducted.
1. Income Tax
As an employee you will pay Income Tax under the PAYE (Pay As You Earn) scheme. If you have been in employment in this tax year (after 6 April) you should have been given a P45 by your previous employer, which shows the tax you have paid and your tax code. You should pass this on to your Educational Supervisor.
If you have not been in employment in this tax year, your employer will ask you to fill in form P46 in which you will have three separate statements to consider and you must select one option.
If you have not had any earnings during the current Tax Year (from 6th April) your employer will apply the emergency tax code on what is called a ‘cumulative basis’ and you will not pay tax for the first month or two as your total income will not yet have reached the tax free allowance for those months. You will probably start paying tax in December.
If you have had earnings during the current tax year, then your employer will deduct tax at the full ‘non cumulative’ rate from the start until HMRC send a coding notice amendment and you will then probably receive a refund of tax paid.
2. National Insurance
Your Educational Supervisor will need your NI number. If you do not have an NI number, contact the Contributions Agency (see local telephone directory or Inland Revenue website for their phone number).
You will pay Class 1 National Insurance Contributions.
You will be included in the NHS pension scheme and contributions towards your NHS Pension will be deducted at source by the Business Services Authority. If you think you may wish to opt out of this you MUST take full and proper professional advice.
By law your employer must give you an itemised payslip each month, showing all the deductions.
These are the payments that are set out in the NHS Statement of Financial Entitlements from 1st April 2020
4. Student Loans
Normally repayment of a Student Loan commences in the April following your start of employment in practice, but if your Dental Degree is a second or subsequent degree, repayment of your Student Loan will commence straightway. The repayment can not begin until your employer has received an SL1 notice from HMRC, and the amount deducted is usually just over £100 per month.