Survey Shows Dental Earnings Slipping Back

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Published: Monday, 25 March 2024 10:51
Written by Peter Ingle
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Survey Shows Dental Earnings Slipping Back

The National Association of Specialist Dental Accountants and Lawyers (NASDAL) publish annual benchmarking statistics that provide a unique picture of the dental market. Their latest figures have now been released for the period 2022- 2023.

They follow a period in which private practices had appeared to be moving ahead in performance, in part as they benefitted from post pandemic demand and the ‘Zoom boom.’

The annual NASDAL statistics are gathered from their accountant members across the UK who together act for more than a quarter of self-employed dentists. They are intended to provide average ‘state-of-the-nation’ figures so NASDAL accountants can benchmark their clients’ earnings and expenditure. The basis of the survey figures is 2023 tax returns and accounts with year ends up to 5 April 2023.

Key findings are that:

  • Average Associate remuneration has risen for the second year in a row from £75,488 to £80,554 - a 6.71% increase
  • There was a smaller increase in typical practice profits (from £172,291 in 2022 to £175,063 in 2023)
  • Private practice profits fell - a drop from £178,513 in 2022 to £175,800 - but still returning to expected levels (2022 was higher due to the impact of the pandemic)
  • A differential of profitability between NHS and Private practices – £17,893
  • Practices with Associates still show much higher average net profit per Principal - £181,170 versus £146,843 single-handed, in this year’s figures

Ian Simpson, Chartered Accountant and a partner in Humphrey and Co, which conducts the statistical exercise commented, “This year’s figures did fulfil our expectations. We had expected a small rise in practice profits overall and to also see private practices fall back somewhat.” He added that there was still a big gap in profits between NHS and mixed and private practices. He found it difficult to see the gap closing, since NHS practices cannot pass on increased material and wage costs.

The continued growth of Associates’ income will be welcomed but can be viewed as a ‘market correction’ since their incomes have been static for the last 15 years or so. Looking forward to the 2024 figures, Ian Simpson expects to see a continuation of growth, possibly across all sectors. It will be an election year and an incoming government may spend more on NHS dentistry. Nonetheless as the UK is in a recession, he commented: “both private and mixed practices will have to work hard to grow their businesses, and at the same time keep costs under control.”

Heidi Marshall, of Dodd & Co, Specialist Dental Accountants, Chair of NASDAL, made an observation that may add to the sense of impending doom around NHS dental access. This was that the 2022-23 figures saw a reduction in the number of NHS practices and an increase in the number of mixed and private practices in the sample. Wondering aloud if this was a statistical anomaly or change in the market, she commented that, “Time will tell…”

NASDAL’s designation of practices as either private or NHS reflects that 80% of business income comes from that source. The sample size is 650 principals and limited companies, and 600 associates. Figures published by the Public Health England’s Information Centre later in the year will reflect the income of NHS dentists only.

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