Specialist dentistry has specialist economics — long treatment plans, NHS specialist contracts, referral relationships and high-value private cases. Your accounts should reflect that.
Orthodontic and specialist practices don't behave like general practices. Income arrives across long treatment plans rather than per visit; NHS specialist contracts have their own delivery dynamics; referral flows are the marketing engine; and case values make pricing decisions high-stakes. A general accountant sees none of this. We work with specialists as part of an exclusively dental client base, so the benchmarks and the advice fit the work you actually do.
A general practice does the work and gets paid in the same week. An orthodontic practice takes a deposit today for treatment it will deliver over the next eighteen to twenty-four months. Book that cash as income and your accounts describe your bank statement rather than your business — and every decision downstream is made on the wrong number.
The correct treatment is to recognise fee income as the treatment is delivered, and to carry the rest as deferred income: money received for work not yet done. It is a liability, because if the practice closed tomorrow it would be owed back. Most orthodontic practices we take on have never had it calculated.
The figures here are illustrative, but this is the shape of it. A private orthodontic practice starts 210 fixed-appliance and aligner cases in 2026/27 at an average case fee of £3,650, with plans running around 20 months. Cash collected across new and continuing cases comes to £838,000.
Booked on cash, turnover is £838,000. Now do it properly. Deferred income at the start of the year — treatment paid for but not yet delivered — was £191,000. By the year end it is £268,000, because the practice grew and took more deposits than it worked off.
Recognised income = £838,000 − (£268,000 − £191,000) = £761,000.
So £77,000 of what looked like profit is not profit. It is an obligation to provide £77,000 of clinical time, materials, lab work and chair space that somebody has already paid for. Three things follow, and each of them costs money:
Our practice valuation guide explains what a buyer does to EBITDA, and why the multiple matters far less than the number it is applied to.
Orthodontic contracts are measured in units of orthodontic activity rather than UDAs, and the value per unit is set contract by contract rather than nationally — two practices in the same county can be paid materially different rates for the same clinical work. What is consistent is the consequence of under-delivery: clawback, calculated on activity you did not deliver, landing after the year end and after the money has been spent.
The pension side gets less attention and matters just as much. Superannuable pay flows from the contract, the employer contribution to the NHS Pension Scheme is 23.7% of pensionable pay plus a 0.08% administration levy, and annual allowance charges arrive without warning for principals whose pensionable pay steps up. We reconcile the superannuation and watch the annual allowance before it bites, working alongside your IFA. Our NHS pension guide covers annualisation and the McCloud position in full.
Four numbers tell you more about next year than the whole profit and loss account does:
Our benchmarks guide sets out the ratios, and the staff costs article works through what April 2026's wage and National Insurance changes added to a practice payroll.
Specialist practices trade well, which makes the structure question live earlier here than it does elsewhere. Business Asset Disposal Relief is now 18% on qualifying gains disposed of from 6 April 2026 — up from 14% for disposals between 6 April 2025 and 5 April 2026, and 10% on or before 5 April 2025 — against a £1 million lifetime limit. The relief is worth considerably less than it was, which changes the arithmetic on when and how to sell, and on whether extraction along the way should look different. Corporation tax runs at 19% on profits up to £50,000 and 25% above £250,000, with marginal relief between, so profit level matters as much as legal form. We model the whole picture with your pension in it rather than as an afterthought, and we advise on both sides of specialist practice deals — the selling guide sets out the process end to end.
The tax rules are identical; the economics are not. Long treatment plans, contract-specific orthodontic activity values, referral-driven demand and high individual case values mean a cash-based set of accounts describes your bank rather than your practice. An accountant who has never seen deferred income on an orthodontic ledger will not ask about it, and nothing in the compliance process forces the question. What you want is someone who reconciles your superannuation, restates income to a delivery basis before you make decisions on it, and benchmarks you against specialist practices rather than general ones. Our client base is entirely dental, so those comparisons actually exist.
Match income to the treatment as it is delivered across the plan, and carry the balance as deferred income — a liability for work paid for but not yet done. In practice that means valuing open cases at the year end by stage of completion rather than by instalments received. It reduces reported profit in a growing practice and increases it in a shrinking one, which is precisely the correction you want, because it tells you what the year genuinely earned. It also makes the accounts credible to lenders and to any future buyer — whose due diligence will apply the same restatement whether or not you did it first.
It moves it rather than removing it. Recognising income as treatment is delivered defers the profit, and the corporation tax on it, into the year the work is actually done. On the illustration above, £77,000 of overstated profit carried £19,250 of corporation tax at the 25% main rate, paid roughly a year before the practice had earned it. Getting it right does not avoid tax; it stops you funding a tax bill out of deposits you still owe treatment against. The correction has to be made consistently, with opening and closing deferred income both calculated — otherwise the year of change simply reverses the distortion instead of fixing it.
Four numbers, monthly. Case value by treatment type net of lab and aligner licence costs, because a fixed case and an aligner case at the same fee do not carry the same margin. Refinement and retention cost per case, because that work is delivered against a fee already banked and is where gross margin quietly leaks away. Referral source and start rate — not consultations booked, cases actually started, broken down by referring practice. And chair utilisation set against employed team cost and associate cost as two separate percentages of fee income. Combine those last two and a busy associate month reads as a staffing problem when nothing is wrong.
It depends on what you take out and what you are building towards, and the answer moved in April 2026. Business Asset Disposal Relief is 18% on qualifying gains disposed of from 6 April 2026, against a £1 million lifetime limit — up from 14% in 2025/26 and 10% before April 2025. Corporation tax runs at 19% on profits up to £50,000 and 25% above £250,000, with marginal relief between, so a specialist practice's profit level matters as much as its legal form. Add the NHS pension position for a mixed practice and the comparison is genuinely specific to you. We model extraction, pension and eventual sale together rather than comparing headline rates.
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