Why Do You Need A Dental Accountant

What I Wish You Knew

A good dental accountant has spent years studying the unique financial quirks of the industry – from GDS & PDS contracts to UDA income and NHS pension schemes that can drive dentists to distraction. They know this stuff backwards and forwards.
A specialist dental accountant can give you the peace of mind of knowing that your tax returns are in order and that you’re on top of HMRC compliance, even as the UK’s Making Tax Digital requirements change and the cost of running a practice continues to go up.
Working with a dental accountant can take a huge weight off – they’ll support you through every stage of your career, from the early days of foundation training through buying, growing and selling a practice.
In short, a good dental accountant can help you save time and money – freeing you up to focus on what really matters: treating patients.

What is a Dental Accountant?

A dental accountant is a qualified accountant with expertise in the financial, tax and business side of running a dental practice. They’re not just a generalist who does a bit of everything – they’re specialists who know the unique complexities of dental business management.

And it makes a big difference because the world of dentistry in the UK has a whole set of rules and regulations that don’t apply to other industries. General accountants might know the basics but they won’t have a clue about the intricacies of NHS contracts, UDA values or the financial side of running a mixed practice.

Some examples of the things a dental accountant needs to know include:

NHS contracts: They need to understand how UDA values work, how GDS & PDS contracts differ and how under or over performance affects both income and tax.
Dental expense structures: This includes everything from lab fees and materials costs to associate pay splits and chair time utilisation – all of which can impact profit and cashflow.
Complex revenue streams: Most dental practices have a combination of NHS income, private fee per item work and capitation plans – all of which need to be allocated accurately for tax and decision making purposes.

What Does a Dental Accountant Do?

Dental accountants are often members of specialist bodies like NASDAL or ASPD and have a deep understanding of GDS/PDS structures and private fee arrangements. They’ll work with associates, practice owners and dental corporates across the entire UK – from England to Northern Ireland.

Their services are tailored to the needs of the individual practice – whether you’re a sole trader filing your first tax return or a group owner getting ready to sell your practice to a private equity firm.

Why Do Dentists Need Specialist Advice?

The UK dental industry is complex and ever-changing – NHS contract reforms, rising staff and materials costs and workforce shortages all add up to create a perfect storm of uncertainty. Here’s why specialist advice is essential:

Mixed income streams: Most practices now operate with a mix of NHS UDAs, capitation plans and private fee per item work – accurate allocation of this income is vital for tax efficiency and understanding which services drive profit.
Regulatory and compliance pressure: There are a lot of regulatory bodies to keep onside – CQC, GDC, HMRC – and making tax digital requirements mean quarterly submissions are now mandatory for more and more dentists. Get it wrong and you risk penalties that could have been avoided.
Preventing costly errors: A specialist can help prevent common mistakes that can cost you dearly – from incorrect NHS pensionable earnings calculations to partnership structures that breach the Dentists Act.
Benchmarking against the sector: A good dental accountant will be able to compare your practice’s performance against the national average for NHS, private and mixed practices – helping you to see where you can make improvements.
Time savings for clinical work: By taking care of HMRC queries, Companies House filings and bookkeeping, they’ll free you up to focus on what really matters: treating patients.

What Services Does a Dental Accountant Offer?

Dental accountants offer a whole range of services – from everyday bookkeeping to strategic tax planning. They’ll work with you to:

Annual compliance

Year-end accounts, personal and corporation tax returns, self-assessment for associates, Companies House filings

Tax planning

Capital allowances on dental equipment, pension contributions strategy, profit extraction optimisation, timing advice for equipment investment

Management accounts

Monthly or quarterly reports, cashflow forecasting, chair utilisation analysis, practice performance tracking

Payroll and pensions

Running payroll for the dental team, managing auto-enrolment pensions, National Insurance calculations, minimum wage compliance

Practice transactions

Valuations, financial due diligence, tax-efficient structuring for practice acquisitions and sales, goodwill and capital gains planning

Digital accounting support

Xero or QuickBooks setup, bank feeds configuration, Making Tax Digital compliance for VAT and income taxProactive tax planning is where specialist dental accountants can make a real difference. Knowing the ins and outs of capital allowances on different types of dental equipment – everything from chairs and scanners to CBCT machines – can mean huge tax savings that many general accountants just don’t spot.

Getting the Right Support for All Stages of Your Dental Career

As a dental accountant, you’re working with clients who are at different stages of their careers – from foundation training right through to retirement and beyond. The kind of guidance you need will change as your practice grows and your situation shifts.

Student and foundation dentists:

Help with that first self-assessment return, and sorting out locum work arrangements
Some budgeting advice to make sure you’re prepared for those tax bills coming up on 31st January and 31st July
Early guidance to avoid some of the common pitfalls that can cause problems later on

Associate dentists:

Advice on whether to stay self-employed or become a limited company
Understanding what a typical fee split looks like with your principal
Guidance on claiming expenses you’re entitled to, such as courses, indemnity insurance, and equipment

First-time buyers:

Assessing how affordable it is, and preparing for lenders
Navigating goodwill valuations, a common thing in UK practice sales
Structures to get the most tax efficiency out of the purchase

Established practice owners:

Regular management accounts and partner drawings planning
Keeping an eye on profitability per associate to spot if anyone is underperforming
Planning ahead for refurbs, new surgeries or expanding the practice

Dental groups and DSOs:

Group structuring advice, along with VAT considerations for larger businesses
EBITDA improvement strategies to boost value ahead of a sale
Preparing for deals with private equity firms

Retirement and exit:

Timing a sale to avoid Capital Gains Tax
Using Business Asset Disposal Relief when you can
Planning your income in retirement, alongside NHS pension, and any private pensions

How Dental Accountants Add Value

Dental accountants bring a level of expertise that general accountants might miss or not even be aware of. Here are some specialist areas where their knowledge really counts:

NHS dental contracts and income:

Understanding how different contract arrangements (GDS, PDS, UDA rates by region) work
Managing the risk of clawback, and the tax implications of under- or over-performing
The financial implications of any changes to the contract

NHS Pension Scheme issues:

Dealing with the impact of the McCloud Remedy (covering 2015-2022)
Calculating annual allowance charges, and the latest on lifetime allowances
Making sure you get NHS Compass statements right, and avoiding mistakes on pensionable earnings

Dentists Act and practice structures:

The legal requirements on practice ownership and partnerships
Identifying some of the tax structures that are often suggested but are actually unlawful for dental practices
Balancing compliance with tax efficiency

VAT considerations:

What is exempt, and what’s standard-rated in dental services
How VAT interacts with lab and product sales
Planning for VAT registration thresholds as income grows

Benchmarking and practice performance:

Using sector data to compare costs, labs, materials, and occupancy with national averages
Spotting areas where costs might be out of line, and giving advice on improvements
Tracking performance metrics specific to dental practices

Technology and digital dentistry:

Understanding investments in scanners, CBCT machines and software subscriptions
Tax relief on digital equipment and capital expenditures
Advice on software choices and Making Tax Digital compliance

Choosing the Right Dental Accountant

Not all accountants have as much dental expertise as they need, so it’s worth doing your research to find the right one for your practice. Here are some things to look out for:

Sector experience: Ask how many dental clients they’ve got, what sort of practices they work with, and how long they’ve been advising dentists. A firm with 50+ dental clients will have seen most situations before.
Professional memberships: Look for involvement with NASDAL, ASPD, or regular speaking at dental events and conferences. This shows a genuine commitment to the dental profession.
Service scope and responsiveness: Confirm if you’ll have a dedicated dental team or point of contact. Ask about typical response times – a good firm should get back to you within 48 hours. Check if they handle HMRC enquiries for you.
Fee structures: Compare fixed-fee packages for associates and practices. Understand what’s included in annual or monthly retainers, and ask about any extra charges for complex advice or transactions like practice acquisitions.
Tech and reporting: Check if they use cloud accounting platforms like Xero or QuickBooks. Make sure they give you regular management reports and offer dashboards that are tailored to your specific needs.
Client feedback: Ask for testimonials or case studies from other dentists. Ideally, these should be from practices similar to your own in size, location, and NHS/private mix.

The right price isn’t always the best price – what you’re looking for is value, not just a low fee.

Working with a Dental Accountant: What to ExpectUnderstanding the Process from Initial Contact to Ongoing Support

Initial Discovery Call
This is a free consultation where you get to know us and we get to know you. We discuss your role in the dental practice, your current bookkeeping setup and any financial concerns you have. This is the chance to see if we truly understand your situation

Getting Organised : Information Gathering & Onboarding
Next, we get everything we need from you. This includes signing some letters of engagement, sharing your previous accounts, tax returns, NHS schedules, practice management reports and bank statements. The better you are organised from the start the smoother this process will be

Setup and Getting Tidy
If you are changing from another bookkeeper or starting from scratch we will get your books in order. This includes migrating to our preferred accounting software like Xero, tidying up any old data and setting up your chart of accounts so you can easily see income from labs, staff, materials and clinical income.

Regular Support
Every month or quarter we’ll do your bookkeeping then meet to go over your management accounts. We’ll also do a review of your tax planning before the 5th April (or your practice year end) to make sure you get the most out of your planning.

Beyond Compliance
But its not just about filling out tax returns. We’ll have regular conversations about reviewing profitability, associate pay structures, equipment investment and if you’re ready to look at things like incorporation or maybe taking on additional locations.

Communication
We’ll usually use a secure portal, email and video calls. Some of our clients get to see us in person when we visit major UK cities like London Manchester and Edinburgh. We’ll make sure we’re using the communication method that works best for you.

Frequently Asked Questions

Do I really need a specialist dental accountant or can I just use a general accountant?

While a general accountant can sort out the basics, they just don’t have the same level of knowledge about NHS contracts, UDA tracking, dental expense structures and all the complexities of NHS pensions. A specialist dental accountant on the other hand will be able to spot tax savings and get you out of trouble that a generalist would never even see. For example, most general accountants don’t know about the treatment of associate income or capital allowances on dental equipment to name just a couple of things.

When should an associate dentist form a limited company?

Its really down to your income level and personal circumstances. Usually if you are earning above £80,000 to £100,000 its likely to work out better for you to form a limited company, but its not a hard and fast rule. We’ll be able to model different scenarios and let you know if its worth the extra hassle for the tax savings.

How do dental accountants charge for their services?

Most of us just charge an annual or monthly retainer for routine work and support. This can range from £1,000 to £2,500 a year for associates right up to £3,000 to £8,000 plus for practice owners depending on how complicated things get. We’ll always make sure you understand what you are getting for your money when you commit to our services.

What records and software should I have in place before I come to a dental accountant?

Ideally you’d have your bank statements, tax returns, practice management system reports and NHS schedules etc sorted out in a nice tidy folder somewhere. But if you don’t have any of that in place dont worry – we can help set up Xero or Quickbooks and get you sorted out from scratch.

How can dental accountants help with NHS pension issues?

We review your pension earnings calculations, check for any unexpected tax bills, help you make sense of those McCloud Remedy letters and even advise on whether voluntary contributions or any other scheme changes make sense for you.

About The Author

Lizz Dwyer

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