Accountants for UK dental practice principals

How we work with principals

Common questions

When does incorporation make sense for a dental practice principal?

Most often above £80,000-£100,000 of sustainable practice profit (post-principal-cost), and where the principal does not need all the post-tax profit for immediate personal spending. Corporation tax at 19% or 25% can beat income tax + NI at 40%+ on retained profits, but you have to actually retain or invest those profits to benefit. If you draw everything as dividends, the NI saving disappears and the structure adds admin without payback. We model your numbers before recommending.

What's Section 162 incorporation relief and when do I use it?

When an unincorporated dental practice transfers to a limited company in exchange for shares, the CGT that would otherwise arise on the goodwill can be deferred into the share base cost (Section 162 TCGA 1992). It applies when the whole business transfers, not just part of it. Useful when a principal wants to incorporate before a 2-5 year exit horizon, because it defers the CGT until the share sale, where BADR may then apply. Not always the right call; we model the alternatives.

How does the McCloud remedy affect my NHS Pension as a principal?

McCloud remedy applies to NHS Pension scheme members who had benefits in legacy 1995 or 2008 sections during the period 1 April 2015 to 31 March 2022. At retirement, affected members get a choice between legacy section rules and 2015 CARE section rules for that remedy period. The choice can be worth tens of thousands depending on career-earnings profile. We model the financial impact of each choice; we work with an FCA IFA for the regulated advice on the actual selection.

I'm two partners in an expense-share arrangement. Are we a partnership for tax?

Maybe, maybe not. An expense-share arrangement where each principal bills patients independently and just shares premises and staff costs is not a partnership; each principal files as a sole trader and the shared costs are split. A true partnership exists where the principals share profits as well as costs. HMRC look at the substance of the arrangement, not the label on the door. We review the documentation and the actual cash flows to confirm which you actually have.

How do I switch accountant without disrupting payroll?

Payroll is the highest-risk handover because RTI submissions run continuously. We schedule the switch for the first day of a new payroll period, take over the PAYE scheme via HMRC's online services, and run the first month in parallel with your previous accountant's records to catch any reconciliation gaps. Most switches happen seamlessly; the few that have had hiccups were when the previous accountant delayed releasing data. We have a process for that.