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How important is it to have a dental accountant?
Mike Blenkharn FCCA partner at UNW LLP, an accountancy/audit firm based in Newcastle upon Tyne, outlines the benefits of working with an experienced dental accountant.
Read time: 3 mins Added: 08/12/25
Issues a dental accountant can help with include:
NHS contract rules
There are many rules in relation to NHS contracts, which impact on accounting and tax calculations.
For example, for NHS practice owners, the basis of being paid under General Dental Services and Personal Dental Services contracts, is for 100% of the contract value to be paid during the contract year. With any ‘clawback’ being repaid 6 months after the contract year end. Some non-dental accountants are unaware of this and may prepare year-end accounts including all the money received and not taking into account the clawback, hence overstating profits for the year.
NHS incorporations
NHS England incorporation policy is complex and as a consequence, some non-dental accountants unknowingly create ‘short cut’ incorporation plans, which can cause the following serious problems:
- breaching the NHS contract
- creating a VAT liability
- excluding dentists from the NHS Pension Scheme
- making the practice impossible to sell.
NHS pension issues - associates
The most common NHS Pensions problem which requires specialist knowledge is calculating the annual pension entitlement Net Pensionable Earnings (NPE).
When the current NHS contract was introduced in 2006, the calculation basis wasn’t communicated well. As a result, most practitioners mistakenly thought that the old 43.9% basis continued to apply, a significant minority of associates have had their NPE calculated incorrectly (and at too low a level) since then.
Also, associates who carry out NHS work through a limited company cannot be members of the NHS Pension Scheme.
The Dentists Act impact on partnerships
To operate a private or mixed practice as a partnership, both partners must be dentists or another type of GDC registrant. Non-dental accountants may be unaware of this and recommend operating as a partnership to save tax, when one partner isn’t eligible to do so. This creates an illegal structure.
Profit & Loss account benchmarking
Practice owners can benefit from comparing their practice Profit & Loss account with averages for a similar type of practice.
Doing this enables them to review on a P&L line-by-line basis, identifying where their practice is good, bad or average. National Association of Specialist Dental Accountants and Lawyers (NASDAL) can offer this service. Every year, NASDAL accountants collate P&L data from hundreds of clients (on an anonymous basis) and prepare three benchmarking reports (NHS, Private and Mixed practices).
Many NASDAL clients use this annual comparison exercise as a way to increase profits by fine-tuning their future performance.
Practice sales/purchases and goodwill valuations
An experienced dental accountant will have helped many clients buy and sell practices and will therefore be aware of potential opportunities and pitfalls to watch out for.
Likewise, it should be possible for a dental accountant to give a ballpark goodwill value for most practices. This is no substitute for a properly prepared professional valuation, but very useful to practice owners who would like an approximate idea of their sale value, or for buyers who would like a flavour of how much they will have to pay for a suitable practice.
Dentists who may not benefit from a dental accountant
There are a few dentists who may not benefit from a dental specific accountant, those can include dentists who:
- work on a PAYE basis
- don’t work under PAYE, but deal exclusively with private patients
- will neither buy, nor sell a dental practice
- will not engage a dental associate to work for them
- won’t retire with an NHS pension.
Mike Blenkharn FCCA, leads the UNW Dental team which looks after approximately 500 dentist clients ranging from part-time associates to large corporate groups, spread throughout most of the UK. Mike is a member of NASDAL and ASPD (Association of Specialist Providers to Dentists).