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Dental accountants for associates and practice owners

HCA Accountants prepares Self Assessment returns for associate dentists, and looks after accounts, VAT returns, payroll and auto enrolment for dental practice owners across the UK, from Park House in Leeds. Figures are for 2026/27; the Autumn Budget on 28 October 2026 may change later years.

Talk to HCACall 0113 460 1786

How are associate dentists taxed?

A self-employed associate pays Income Tax and Class 4 National Insurance on profit through Self Assessment. Profit is your share of fees less costs incurred wholly for the work, such as lab bills, indemnity, subscriptions and refresher training.

Self-employment is not automatic. HMRC withdrew its dentist-specific status guidance from 6 April 2023, so your agreement is judged on its general employment status tests.

Your 2025/26 online return and balance are due by 31 January 2027, with your first payment on account (an advance towards your 2026/27 bill); the second is due on 31 July 2027. Neither applies if your last bill was under £1,000 or over 80% of it was taxed at source.

Scottish taxpayers pay Scottish Income Tax rates on this profit (19% to 48% in 2026/27); Class 4 is UK-wide.

When does Making Tax Digital for Income Tax start for dentists?

Making Tax Digital for Income Tax (digital records and quarterly updates through software) has applied since 6 April 2026 if your self-employment and property income before expenses was over £50,000 in 2024/25.

It starts on 6 April 2027 for over £30,000 in 2025/26, and HMRC's published start for over £20,000 in 2026/27 is 6 April 2028.

The test uses fees before costs, so £60,000 of fees and £15,000 of costs is over £50,000. Updates are cumulative: the one covering 6 April to 5 October 2026 is due by 7 November 2026, then 7 February and 7 May 2027. Partnership profit shares do not count yet.

How does the NHS Pension Scheme work for associates?

Dentists under an NHS dental contract (GDS or PDS) are automatically opted in if eligible. Each year you declare net pensionable earnings on Compass, the NHS Business Services Authority's dental portal.

From 1 April 2026, what you pay in (member contributions) runs from 5.2% if your pensionable pay is up to £13,259 to 12.5% if it is £67,669 or more. NHS England, or the Local Health Board in Wales, pays the employer share.

You are not on a payroll, so you claim tax relief through your Self Assessment return. It reduces the income you pay Income Tax on, not the profit used for Class 4.

Pension growth counts towards the £60,000 annual allowance for 2026/27, with unused allowance carried forward from the previous 3 tax years. Scotland and Northern Ireland have their own NHS and HSC schemes.

How does a dental accountant work out an associate's tax bill?

Amira (hypothetical) is a self-employed associate in England with £60,000 of NHS fees, £40,000 of private fees and £12,000 of costs. Her net pensionable earnings, as declared on Compass, are £50,000, which sets her member contributions at 9.8%, or £4,900.

The table takes her bill to £23,688.60. Without the pension claim, her Income Tax would be £1,960 higher.

Her 2026/27 online return and balance are due by 31 January 2028. If her 2027/28 payments on account are based on this bill, each is £11,844.30, due on 31 January 2028 and 31 July 2028. Our payments on account calculator does the same sum for your own bill.

Amira (hypothetical), England, 2026/27
StepAmount
Fees (NHS and private)£100,000
Less lab bills, indemnity, subscriptions and training£12,000
Profit£88,000
Less NHS pension contributions (Income Tax only)£4,900
Less Personal Allowance£12,570
Taxable income£70,530
Income Tax: £37,700 at 20%£7,540
Income Tax: £32,830 at 40%£13,132
Class 4: £37,700 at 6%£2,262
Class 4: £37,730 at 2%£754.60
Total Income Tax and Class 4£23,688.60

What should a dental accountant check on NHS income and VAT?

In England, NHS income is measured in units of dental activity (UDAs). Deliver under 96% and the commissioner (the NHS body holding your contract) recovers the money for the shortfall. Between 96% and 100%, it takes no financial action if you agree to deliver the missing units in the first 60 days of the next year.

Since 1 April 2026, most contracts in England also set a yearly number of urgent treatments, checked alongside UDAs. Your accounts should reflect the income you expect to keep.

Dental care is VAT exempt, NHS or private (VAT Notice 701/57, section 10.1). Fees associates pay you for the surgery, staff and equipment are normally exempt too.

Purely cosmetic treatment is standard-rated, and HMRC judges cosmetic dentistry case by case. Toothbrushes, toothpaste and floss sold to patients, and reports for insurers or courts, are usually standard-rated too.

Only taxable income counts towards the £90,000 VAT registration threshold. A registered practice making both taxable and exempt sales is partly exempt, and usually cannot reclaim VAT on costs linked to exempt dental care.

What payroll and auto enrolment duties does a dental practice have?

Staff are paid through payroll (PAYE), with a Full Payment Submission sent to HMRC on or before each payday. For 2026/27, employer National Insurance is 15% above £5,000 a year and Employment Allowance is up to £10,500. From 1 April 2026, the National Living Wage (21 and over) is £12.71 an hour.

Nurses, hygienists, therapists and practice managers cannot join the NHS Pension Scheme, so staff you employ need auto enrolment (a workplace pension). For 2026/27, enrol those aged 22 to State Pension age earning over £10,000, paying at least 8% on earnings between £6,240 and £50,270, at least 3% from you.

Declare compliance to The Pensions Regulator within 5 months of your duties start date, and re-enrol certain staff every 3 years.

Can I incorporate my dental practice?

Yes, if most of the company's directors are registered dentists or registered dental care professionals (Dentists Act 1984, section 43).

In England, moving an NHS contract to a company is a novation (a new contract with a new party). It is at the commissioner's discretion, should depend on the company being registered with the Care Quality Commission (CQC), and can lead to the contract going out to tender.

If the company holds the NHS contract, NHS Pensions says its dentist shareholders keep scheme access, pensioning the salary and dividends they draw within a cap set from the contract value (the pensionable earnings ceiling). Any shortfall cannot be carried forward.

Since 7 November 2011, an associate or locum working through their own company cannot pay in. Weigh this against Corporation Tax: since 1 April 2023, 19% on profits up to £50,000 and 25% above £250,000, with Marginal Relief between.

Wales, Scotland and Northern Ireland have their own dental regulations.

Common questions

Do I need a dental accountant?

No law says you must use one. If you do, choose one who knows how NHS pension relief is claimed, which income is VAT exempt and how UDA reconciliation affects your accounts. HCA works with associate dentists and practice owners across the UK by phone and email.

Your next step

Send us your role (associate or practice owner), your 2025/26 NHS and private fees and any Making Tax Digital start date. Call 0113 460 1786, email ask@hca-accountants.com or use our contact page.

Related pages

Official sources

Sources

Rules can change. Review the official page before making a decision.

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