For dental practice owners, the NHS/private question is increasingly a financial one. Changes to the NHS dental contract in England, continued growth in private dentistry and pressure on practice costs make 2026 a sensible time to revisit the economics of the current model, particularly as planning begins for 2027.

The answer is not necessarily to move in one direction or the other. It is to understand what each part of the practice contributes after the true cost of delivering that dentistry is taken into account.

The NHS contract is changing

From April 2026, NHS dental contractors within the scope of the new requirements must deliver a specified level of urgent and unscheduled care. This is equivalent to 11 urgent courses of treatment for every £10,000 of relevant contract value, with each course remunerated at £75.

The UDA system has not been abolished. Instead, the reforms introduce additional payment and delivery measures alongside the existing contract framework, including new complex care pathways and funded quality and appraisal measures.

These reforms have implications beyond clinical delivery. They can affect diary capacity, staffing and, ultimately, the economics of delivering NHS dentistry.

For practice owners, the question should not just be: what is our NHS contract worth?

It should also be: what does it cost us to deliver it?

Private dentistry is a significant part of the market

The Competition and Markets Authority reported that the UK private dentistry market was valued at approximately £8.4 billion in 2023/24, with private services accounting for around 69% of the overall dental market in 2025.

In March 2026, the CMA launched a market study into private dentistry. The review includes pricing transparency, consumer choice, access to private dental services and how effectively patients can compare providers.

For practice owners considering increasing private activity, the scale of that market is relevant. However, greater private revenue does not automatically mean greater profit. Private treatment may provide more flexibility over pricing and treatment mix, but practices also need to consider patient demand, clinician capacity, investment and the cost of delivering each treatment.

Look beyond turnover

Two practices with the same NHS/private split can have very different levels of profitability. Owners should understand what sits beneath headline turnover: chair utilisation, clinician costs, laboratory fees, materials, staffing and the fixed overheads required to operate the practice.

A treatment with a higher fee is not necessarily more profitable once clinician time, nursing support, laboratory work and materials are taken into account.

“The NHS versus private conversation should not start with a target percentage. It should start with the numbers. Practice owners need to understand what each part of the practice contributes after clinician costs, laboratory fees, materials and surgery time are taken into account. That provides a much stronger basis for decisions about capacity, staffing, investment and growth.”

Poonam Madani, Associate Director at RA Accountants

Model the change before making it

For owners considering changing the balance, scenario modelling can turn a broad ambition into a financial decision. What happens if a practice moves 10% more activity towards private dentistry? How much NHS income could be displaced? What private revenue and contribution would be needed to replace it? Is there sufficient patient demand? Which overheads remain even if NHS activity reduces?

This simple example shows why replacing £100,000 of NHS income with £100,000 of private fees does not automatically improve profit. The practice must compare clinician time, laboratory fees, materials, nursing support and surgery capacity.

Accurate and timely management accounts should help answer these questions, allowing owners to understand margins, cash flow and costs throughout the year, rather than simply reporting what happened after year-end.

As 2027 planning begins, these assumptions can also be built into budgets and forecasts before significant changes are made.

Do not overlook the tax position

Reviewing profitability should also include considering whether the practice is making appropriate use of available tax reliefs.

One area owners can overlook is capital allowances on qualifying fixtures and integral features, particularly when investing in, fitting out or refurbishing practice premises. Depending on the expenditure and circumstances, qualifying items can extend beyond dental equipment to certain electrical, lighting, heating, air-conditioning and water systems.

The Annual Investment Allowance can provide 100% relief on up to £1 million of qualifying plant and machinery expenditure, including qualifying integral features. From 1 January 2026, a separate 40% first-year allowance is also available for qualifying new main-rate plant and machinery. The 40% allowance may be relevant where the Annual Investment Allowance, full expensing or another first-year allowance is unavailable, has been exhausted or is not the preferred claim.

Poonam adds:

“We encourage dental practice owners to look beyond the obvious equipment purchases when reviewing capital expenditure. Fixtures and integral features can be overlooked, particularly during a refurbishment or expansion. Reviewing the tax position at the outset can help identify available reliefs, accelerate tax relief and potentially reduce the tax liability, depending on the business structure and circumstances.”

Where an existing practice or property is acquired, the treatment of fixtures may depend on the transaction documentation, historic claims and whether appropriate capital allowance elections and information are obtained as part of the purchase process. Tax advice should therefore form part of the planning and due diligence process.

The takeaway

The 2026 reforms have not resolved the NHS/private debate. If anything, they have made it more important for owners to understand the financial contribution made by each part of the practice.

The right mix will depend on the individual practice’s cost base, capacity, clinician arrangements and patient demand. It should not be determined by a general sector benchmark or turnover percentage.

As practice owners begin planning for 2027, this is an opportunity to examine margins, model alternative scenarios, review planned investment and ensure that available tax reliefs are properly considered.

At RA Accountants, we help dental practice owners understand the financial performance behind their NHS, private and mixed income streams. We can model proposed changes to activity, assess their effect on profit and cash flow, and consider the tax implications of planned investment.

Thinking about changing your NHS/private dental mix?

Speak to our dental team about a profitability and scenario review before decisions are made.

Disclaimer

This article is for general information purposes only and does not constitute accounting, tax, financial or professional advice. Tax treatment and the availability of reliefs depend on individual circumstances and may change. Professional advice should be sought before taking, or refraining from taking, action based on the information contained in this article.