Funding for NHS dental practices
Funding for NHS dental practices
Information that will impact NHS dental practices

Following an announcement by NHS England on 25th March, we now have some more information on measures put in place that will impact NHS practices operating in England.

To summarise the announced measures:

2019/20
This will now end on 29 February 2020, with UDAs reconciled to this date.

Over/underperformance and clawback will be calculated as normal.

2020/21
This will operate as normal, but UDAs will be adjusted to reflect the restricted ability to perform them. This should result in a reduced target and no need to clawback underperformance into 2021/22.

Practices will continue to receive 1/12th of their total contract value, securing cashflow through the crisis. Combined with reduced UDAs, this is of course good news.

However, there is no such thing as a free lunch:

  • Practices must continue to pay their staff (including admin, non-clerical and most significantly in cash terms, associates) at “previous levels”
  • Practices receiving NHS income are not entitled to claim “wider government support that is duplicative”
  • Staff must be made available to support the wider NHS

As with all of the Government’s COVID19 support, there are many unanswered questions.

The BDA have written an open letter to the NHS that succinctly mirrors the questions we, and many practice owners, had.

Mixed Practices
There was initially a lot of uncertainty for mixed practices.

NHS income isn’t itself going to be enough to cover costs that are ordinarily met by private income. Without the ability to furlough workers and recover 80% of wages costs, mixed practices would struggle.

We now know that mixed practices will be able to furlough staff, broadly in line with the split of their income between NHS and private.

The BDA have a helpful guide on how the rules apply but, to illustrate, if your income was 60% private then you can furlough staff costing upto 60% of your wage bill.

There is of course a need to bear in mind which staff may be required to remain available for redeployment in the NHS. These should not be furloughed. Ultimately, there may be a difference in the amount that you can technically furlough and those that you can actually furlough.

The information contained in this article is based on the opinion of Hive Business and does not constitute formal tax advice. Any tax outcomes will be based on individual circumstances, tax legislation and regulation, which are subject to change in the future. You should seek specific advice before embarking on any course of action. Hive Business does not provide regulated Financial Advice, including advice on investment, insurance or lending products or their suitability for you. This article is provided for information only and does not constitute, and should not be interpreted as, investment advice or a recommendation to buy, sell or otherwise transact, or not transact, in any investment including Bitcoin and other crypto. Any use you wish to make of any information contained within this article is, therefore, entirely at your own risk.

By Simon Vincent Senior Tax Accountant
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