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News UK & Ireland

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0 Comments Mar 30, 2017 | News UK & Ireland

NASDAL figures signal trouble for single-handed practices

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LONDON, UK: Profits of single-handed practices in the UK have slumped by almost 12 per cent in the last two years, indicating that the model may be a thing of the past. According to figures released in the latest Benchmarking Report by the National Association of Specialist Dental Accountants and Lawyers (NASDAL), the average profit per principal in a single-handed practice was only slightly above £105,000 in 2016, compared with £119,732 in 2014.

In contrast, practices with associates achieved a net average profit per principal of £138,511 last year.

The problems, according to Ian Simpson, a chartered accountant and a partner in Humphrey & Co., which carries out the statistical analysis on behalf of NASDAL, could be linked to increasing costs in compliance and a general feeling among sole practitioners that they are unable to increase their fees. “As a ‘compliance culture’ continues unabated, the future will be difficult for those going it alone,” he commented regarding the figures.

“Whilst it is good news to see success for the majority of the sector, the increasing cost of compliance is a cause for concern,” added Nick Ledingham of Morris & Co. specialist dental accountants and Chairman of NASDAL. “The arrival of Making Tax Digital will do nothing to allay dentists’ fears that they are victims of a system that doesn’t understand how they do business.”

Reflecting the finances of dental practices and dentists for the most recent tax year, NASDAL’s annual benchmarking statistics are gathered from its accountant members across the UK, who together act for more than a quarter of self-employed dentists. The findings also included an increase of average net profit per principal at NHS practices from £129,265 in 2015 to £134,102 in 2016 and a slight drop of average profits of associates from £68,024 to £67,389 in the same period.

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