The 2014 NASDAL benchmarking survey of practice Profit & Loss information was published last month.
A report of the findings appears later in this UNW Dental Bulletin.
Each year the UNW Dental team extends the NASDAL survey results by recalculating average practice profits to include the cost of the work carried out by practice principals (ie as if they were working as associates in their practice), in order to calculate a true practice “business” profit (ie where the market rate for carrying out all dental work is offset against profits.
Historically, on this measurement basis, average NHS practice profits per principal have been far in excess of those earned in private practices.
However, the gap is closing!
Average profits per principal in an NHS practice were £29,458, and in Mixed practices £16,173.
Private dental practice profits creep ahead of NHS practices in NASDAL survey
A strong performance from private dental practices in the financial year 2013-14 has led to them record- ing higher profits than their NHS counterparts in the latest benchmarking statistics from the National Association of Specialist Dental Accountants and Lawyers (NASDAL).
It’s the first time in a decade that private practice has overtaken NHS practice although there were early positive signs of a recovery in the previous financial year. The profit differential is small with an average NHS practice making a profit of £129,000 compared to £131,000 in a private practice.
Overall the picture for dental practices is improving, Income and profits are up across the board with all types of practice seeing increased profit and relatively static costs. Fee income is up by £7k in a typical NHS practice and by £21k in a typical private practice.
Private practices suffered in the years following the 2008 slump but have gradually picked up. This is thought to be partly due to private practices having greater control over their income than NHS practices, and hence having a greater ability to recover from poor trading results in the recession. The survey shows that the average profit per principal in an NHS practice was £129k whilst in private practices it was £130k.
In 2013/14, the average fee income generated by a dentist of a private practice was £248,000 compared to £180,000 for a dentist of an NHS practice. It should be borne in mind that these are figures are dramatically reduced when costs and expenses are extracted. Meanwhile, practice expenses have remained relatively unchanged, equating to 65% of fee income for a NHS practice compared to 68% for a private practices.
Calculated annually, 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 – who work for 27% of the dental profession – to benchmark their clients’ earnings and expenditure and to help them run their practices more profitably.
A variety of key components had remained unchanged: UDA rates are almost identical as well as business structures with 58% of the profession being sole traders and the rest either partnerships or Limited companies. The number of incorporations increased by only 3%. Earnings for associates have gone up by just a small amount, with around an average £700 per individual.