Rising costs a factor for dentists in latest NASDAL benchmarking statistics

This is from the most recent newsletter from the UNW Business Team and as usual makes interesting reading. Thanks to Alan Suggett and his team for sharing the information.

The annual benchmarking statistics just issued by NASDAL show that dental practices have been contending with a significant increase in costs. In the tax returns of dentists in the year ending March 2012, the total average costs of running a dental practice equated to 67.6% of practice income. As a result, profits are almost back to the levels in the 2004-2005 NASDAL survey.

While fee income has risen on average by £21k in NHS practices included in the survey, profit is down. In the private sector, fee income is down and profits static. Larger practices, with associates, have seen the greatest reduction in profit. In the year ending 2010 the average net profit per princi- pal in a practice with associates was £148,408, in the year ending March 2011 it was £129,000 and the year ended March 2012 it was £125,000.

Other indicative findings on income are:

• The average net profit for a typical dental practice in 10/11 was £125,000 and by the end of March 2012 it was down to £122,000
• An NHS principal’s net profit is down by nearly 3% to £130,000 while a Private practice principal’s net profit is static at £117,000

Other key findings of the statistical exercise are:

• Most dentists are still sole traders
• Associates continue to experience a fall in income and profit, with average net profit reducing
• from £68,000 in 2011 to £67,000 in 2012
• Lab and material costs are static
• The average practice UDA rate is £26.02
• Dentists appear to be working harder for less.

The statistics are gathered from a sample of practices across the UK to provide average ‘state-of- the-nation’ figures. They are used by NASDAL accountants to help dentists and dental practices benchmark their figures.

The statistics reflect the fee income of practices with up to 80 per cent NHS commitment while a private practice is deemed to have up to 80 per cent of its income derived from private fees.

The NASDAL stats are published annually in March and reflect the finances of dental practices and dentists for the most recent tax year. The latest to be released are for the year ending March 2012, and are taken from the tax returns of NASDAL clients submitted by January 31st 2013.The NASDAL figures provide a detailed picture of dental practice finances, sourced directly from dentists working in the NHS and privately. The figures published by the NHS Information Centre later in the year reflect the income of dentists working within an NHS contract only.