A small number of NHS contract holders could be in ‘real trouble’ if changes are not made to the targets, reports NASDAL.
This is according to Alan Suggett at the National Association of Specialist Dental Accountants and Lawyers (NASDAL).
Assessing quarter four and the target requirements, he identified two key concerns that affect practices.
- That ‘a small but significant’ number of practices are unable to reach the 45% threshold and the subsequent impact of this ‘cliff edge’
- Pay cuts of more than 65% for some self-employed associates who carry out NHS work.
‘I feel that a fair compromise is quite simple – remove the “cliff edge” at 36%,’ he said.
‘I worry that without this change, a small percentage of the total NHS contract holders could be in real trouble. In addition, the associates who work in those practices could suffer a pay cut in excess of 65%.’
He added that for some practices that are not meeting the 36%, they are financially better off not treating any patients at all.
NASDAL reports fall in profits
NASDAL also presented the statistics for the year 2019-2020. Some key findings included:
- A slight drop in net profit across the market as a whole
- A continued decrease in NHS practice profits
- An increase in fee income for associates (3%) and an increase in net profit (2%)
- Consistency in practice expense ratios.
The data reveals the net profit of a typical dental practice fell back to £129,178 from £134,387 in 2019.
Additionally, both NHS and private practices saw a reduction in profit. For example, NHS profits stood at £116,284 in 19/20, down from £124,475 in 18/19.
Similarly, private practice profits were £133,192 in 19/20, a fall from £140,591 in 18/19.
However, mixed practices saw a small rise from £132,940 in 18/19 to £134,342.
‘What the figures will show for the year of the pandemic is conjecture at this point, but we certainly find ourselves in a very different landscape now from a little over a year ago,’ said Ian Simpson, chartered accountant and a partner in Humphrey and Co.
Heidi Marshall is NASDAL honorary secretary and also heads up the dental team at Dodd & Co Chartered Accountants. She said the end of the furlough scheme in September 2021 will see a ‘real reckoning’ in many sectors.
She said: ‘I think that we will see the true impact of what the end of furlough will mean for our economy.
‘Potentially hundreds of thousands of people could find themselves out of work and that will certainly mean a reduction in enquiries for elective dentistry. But perhaps even the more regular dental care too.’
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