Principals in NHS and mixed practices in Scotland saw an increase in profits last year, new statistics suggest.
According to the latest statistics from NASDAL Scotland, the average net profit per NHS principal grew from £120,666 in 2020-21 to £134,594 in 2021-22.
Additionally, the average net profit per mixed practice principal jumped from £160,343 to £178,802
However, private practices in Scotland saw a significant drop in average net profit per principal in 2022.
In the financial period of 2021-22, the average net profit per principal in private practice dropped to £207,575 from £237,442 in 2020-21.
Findings include:
- Overall, increased net profit for NHS and mixed practices when compared to 2020-21. This may have been expected as practices operated at reduced levels of activity during the previous year due to lockdown
- An increase in average net profit per NHS principal from £120,666 to £134,594
- An increase in average net profit per mixed practice principal from £160,343 to £178,802
- Private practices see a big drop in average net profit per principal: £237,442 to £207,575
- Associate average remuneration sees profit up from £53,327 to £65,393.
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Greater impact
Roy Hogg, chartered accountant and partner in Johnston Carmichael, said: ‘The increase in profits for NHS and mixed practices was perhaps to be expected due to lockdown restrictions which had a greater impact during the previous year.
‘It must also be noted, however, that Scottish government support for NHS dentistry has been very generous across the entire pandemic period.
‘It will be interesting to look at NHS and mixed practices going forward. NHS practices cannot readily pass on increased material and wage costs and this may worsen over the next year – for instance, these figures have not taken into account inflation of over 10% and the energy price increases that have occurred more recently.
‘In the absence of external government financial support, private practices have been slower to return to pre-pandemic levels of profitability. But I expect that the 2023 figures will see them returning to normality. However, because of their typically higher fee income levels, they have continued to operate with noticeably lower wage costs as a percentage of turnover.
‘The increase in associates’ income is welcome but, in reality, only reflects their greater levels of private activity when compared with the previous year as lockdown restrictions eased.’
Johnny Minford, principal of Minford Chartered Accountants and 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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