The UDA clawback trap in practice purchases

NHS income is the anchor that makes many practice purchases fundable: contracted, predictable, bankable. But the contract carries an obligation — deliver the UDAs — and under-delivery is repaid through clawback. When you buy the practice, you're buying that delivery obligation too.

What to examine before offering

• Delivery history, several years back. Consistent comfortable delivery is what you want. Repeated shortfalls, or delivery rescued by frantic year-end pushes, is a warning.
• Who delivers the UDAs? If a large share sits with the departing principal, you're not just replacing a dentist — you're replacing the contract's engine, at whatever associate UDA rate the market currently charges.
• The rate itself. The contract's UDA value versus what you'll pay associates per UDA defines the margin. A contract that only works if the owner does the dentistry cheaply is worth less to you than to them.
• Any clawback in the accounts? Past clawback should be visible and explained — and reflected in the price. Hidden clawback discovered in due diligence is a renegotiation moment, not a footnote.

None of this makes NHS practices bad buys — the predictability is genuinely valuable. It makes them buys that need the delivery numbers tested with the same rigour as the profit numbers. That test is a standard part of our due diligence — see buying a practice, step by step.