The latest National Association of Specialist Dental Accountants and Lawyers (NASDAL) Benchmarking Report for 2017-18 has now been released.
The findings of the report suggest that there has been an average decrease in net profits for a typical dental practice of 3 per cent.
Whilst income for NHS and private practices has increased, there has been an increase in expenses, most notably associates costs and wages.
NHS practices have suffered the most over the past year according to the report, having seen an average total fee income per dentist drop from £181,804 in 2017 to £169,615 in this 2018 report. The average net profit per principal in NHS practices also dropped, by around 10 per cent, from £139,698 to £126,269 for the year ending March 2018.
In the private sector, the figures remained stable for private practice principals. However, all practice types saw an increase in expenses hit an average of 70.1 per cent of fees for the year.
The report has also shown the first real rise in associate profitability for many years. Associates have been used to their earnings struggling for more than a decade but 2017-18 has seen that turnaround.
Income has increased by more than 6 per cent for associates but this has only translated into a small net profit rise of just under £2,000 per annum as outgoing expenses have increased for associates similar to how they have for practices.
Associate fees in 2018 rose from £4,596 to £86,310 during the year, but this translated into an increase in profits of less than £2,000, up from £66,318 to £68,155 as costs increased.
Nick Ledingham, Chairman of NASDAL said: “It seems that the costs of running a dental practice are on the rise and that revenues have not yet increased to keep pace. It is important that dental practices take specialist advice so that they can understand and react to changes in their business situation.”
David Jacobs, Partner at Milsted Langdon said: “The report has revealed that many dental practices and associates have found themselves having to cope with an increase in expenses during the last year.
“If you are concerned about the impact these increase in costs are having on your practice then it is important that you seek specialist advice to discuss the options available to you.”
Our specialist Healthcare team provides professional accountancy and tax advice to dentists. To find out how we can help, call David on 0117 945 2500 or send him an email today.