NASDAL figures show costs up and profits down
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- Published: Wednesday, 20 March 2019 07:32
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The latest NASDAL (National Association of Specialist Dental Accountants and Lawyers) Benchmarking Report for 2017-18 shows a decrease of 3% in net profits for a typical dental practice. Whilst income for NHS and private practices has increased, there has been an increase in most expenses – notably Associates’ costs and wages, possibly the cost of Brexit
NHS practices have fared the worst having seen average total fee income per dentist drop from £181,804 in 2017 to £169,615 in this 2018 report.
Ian Simpson, Chartered Accountant and a partner in Humphrey and Co, which carries out the statistical exercise commented, “Although profits are down across all types of practices, it is clear that there is a big divide between private practices and those that are NHS and mixed. Private practices saw a reduction in profit of just 0.5% whereas both NHS and mixed practices saw reductions of around 10%. Interestingly, mixed practices typically have the highest level of fee income, but they also have the highest cost ratios.”
Associates – the Brexit effect?
The report has also seen the first real rise in Associate profitability for many years. Associates have been used to their earnings flatlining for more than a decade but 2017-18 has seen that turn around. In some areas of the country (e.g. Cumbria and the North East) this will have been caused by Associates being in more short supply and thus their bargaining power increasing. There are a number of causes of this but it cannot be ignored that many EU qualified dentists have either returned home or retreated to the major conurbations.
Income has increased by more than 6% 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 in the same way that they did for practices.
Nick Ledingham, Chairman of NASDAL observed, “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.”
The annual Benchmarking Survey statistics are gathered from the accountant members of NASDAL across the UK who together act for more than a quarter of self-employed dentists. The statistics provide average ‘state-of-the-nation’ figures so NASDAL accountants can benchmark their clients’ earnings and expenditure and help them run their practices more profitably. The basis of the survey figures is 2018 tax returns and accounts with year ends up to 5 April 2018.
Alan Suggett, NASDAL Media Officer added, “The NASDAL annual profit and loss benchmarking report is a unique and valuable tool which enables NASDAL accountant members to compare their practice owning clients with industry norms. It means that we help our clients really understand what is happening in their dental business.”
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