NASDAL Annual Benchmarking Statistics – ‘increases not the whole story’
Today has seen NASDAL (National Association of Specialist Dental Accountants and Lawyers) publish their annual Benchmarking Report for the financial period, 2021-22. This has shown:
- Overall, increased net profit across the board. This was to be expected as practices were closed for two to three months of the previous year due to lockdown
- An increase in average net profit per principal from £152,414 to £168,826 for a typical dental practice
- Private practices see a big jump increase in average net profit per principal: £143,418 to £178,513
- Mixed practices see an increase in average net profit per principal: £168,326 to £177,072
- NHS practices see a small increase in average net profit per principal: £145,498 to £150,894
- Associate average remuneration is up for the first time in a number of years from £63,304 to £75,488
Ian Simpson, Chartered Accountant and a partner in Humphrey and Co, which conducts the statistical exercise commented: “The increase in profits was to be expected due to lockdown in the previous year. The increase was seen by all practices but NHS practices only saw a marginal increase compared with those experienced by mixed and private practices.
“In fact there was a differential of more than £25,000 in both cases. NHS practices cannot 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 massive energy price increases that have occurred more recently.
“The increase in Associates’ income is welcome but in reality only reflects their earning of private income over a full twelve months rather than nine or ten of the previous year. As we look forward to the 2023 figures, we might expect to see NHS practice profits fall back further and a possible slowdown in the growth in private practice profitability.”
Heidi Marshall, of Dodd & Co, Specialist Dental Accountants and Chair of NASDAL, added: “It is important, I think, to view the 2022 figures in a wider context. Whilst there have been increases in the profitability of all practices, it is worth noting that NHS profits are still at a similar level to that of 15 years ago.”
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 2022 tax returns and accounts with year ends up to 5 April 2022.
Johnny Minford, Principal of Minford Chartered Accountants and NASDAL Media Officer, said: “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.”