How Dental Practice Owners Can Navigate Tax, Funding, and Growth in 2025

Running a dental practice today involves more than clinical expertise, it requires long-term planning from a business perspective. At DJH, our specialist dental team helps practice owners and associate dentists make informed financial choices that support both day-to-day stability and future value.

Here are key areas every practice owner should consider as they plan for sustained growth and resilience.

1. Understand changing tax status for associate dentists

Recent shifts in tax regulation may affect how you engage associate dentists. As of April 2023, HMRC withdrew previous guidance on self-employment for associates, and now their status must be determined using case-by-case tools such as CEST. (icaew.com)

What this means for your practice:

• Re-assess existing associate contracts to make sure they align with actual working arrangements.

• Use the CEST tool carefully and document the outcome. HMRC is placing more weight on the reality of how associates work.

• If there are changes to status, revisit payroll, tax withholding, and employment liabilities.

Getting ahead on this can prevent surprises with HMRC and ensure your financial structure remains efficient and compliant.

2. Use specialist accounting and advisory support

Not all accountancy firms understand the dental business as well as they should. At DJH, our dental-specialist team provides more than year-end accounts, we offer business planning, forecasting, and tailored advice. (djh.co.uk)

How we help:

• Review the commercial structure of your practice, whether it makes sense to operate via a limited company, partnership, or mixed model.

• Help with capital allowances, letting you invest in equipment such as scanners, chairs, and devices more tax-efficiently.

• Forecast cash flow based on your clinical model, NHS, private, or mixed, and identify growth opportunities.

By partnering with a team that knows dentistry, you can avoid generic advice and get real insight into how to build value in your specific practice.

3. Plan for funding future growth

Growth, whether through upgrading technology, hiring more staff or expanding your site, requires thoughtful financing. With DJH, you can work through the options in a way that protects your cash flow.

Funding considerations:

• Explore financing options like long-term loans or equipment finance to spread costs sensibly.

• Use accounting forecasts to understand how new spending will impact EBITDA, a key metric for business valuation.

• Consider how investments align with your strategic goals, do they support more efficient working or higher-value treatments?

Sound financial planning ensures investment does not put undue strain on your cash flow and sets you up to increase practice value.

4. Prepare for long-term value creation

Beyond day-to-day operations, every practice owner should think ahead about how to make the business attractive to future buyers or partners.

Key steps include:

• Building a broader clinical team including associates, hygienists, and therapists so the practice is less dependent on any one dentist.

• Standardizing systems such as finance, operations, and payroll so it's easy to demonstrate p

• Performance and margins.

• Reviewing your structure and governance, including clear shareholder and partner agreements, succession plans, and exit strategies.

• A well-prepared practice is not just stable, it is valuable.

5. Keep up to date with regulation and market trends

Change in regulation, like the tax status of associates, or shifts in the dental market can materially affect your business. At DJH, we regularly monitor these developments so we can proactively advise our clients.

Things to watch:

• Policy changes that affect clinical income streams such as NHS or private contracts

• Tax rule updates related to capital gains, business structure, or employment status

• Industry growth trends including practice consolidation, dental group formation, or sale opportunities

Staying informed will help you adapt early and make decisions from a place of strength.

Take-Home Message

Dental practices benefit most from advisors who deeply understand their business. Whether it is managing tax, planning for growth or structuring your practice for long-term value, the right financial partner makes a significant difference.

If you want to explore how DJH’s specialist dental team can support your practice, whether you are an owner, associate, or planning to expand, we are here to help.

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