How dentists are taxed
Few dentists have one simple source of income. A typical career mixes associate fees, a salaried hospital or community post, NHS and private patients and, later, a share in a practice. Each is taxed differently, and the Income Tax, VAT and NHS pension rules affect one another. Three things set dentistry apart from most self-employed work:
- Status is decided case by case. HMRC withdrew its dentist-specific employment status guidance with effect from 6 April 2023. An associate's status now turns on the general tests, and HMRC's Check Employment Status for Tax (CEST) tool is the place to start.
- Dental care is exempt from VAT, whether it is provided privately or on the NHS. Most practices never charge VAT on treatment, but they also cannot reclaim most of the VAT they pay.
- NHS work can carry an NHS pension, but NHS Pensions does not allow dentists who have set themselves up as a limited company to contribute.
This page is part of our medical accountants hub. For a closer look at associate agreements, see the associate dentist tax guide.
Associate, employed dentist or practice owner
Associate dentists
Most associates work as self-employed sole traders. You register for Self Assessment, keep records of fees, lab bills and expenses, and pay Income Tax and Class 4 National Insurance on your profit. For 2026/27, Class 4 is 6% on profits between £12,570 and £50,270 and 2% above that. If your profits are £7,105 or more, Class 2 is treated as paid, so your State Pension record is protected at no cost.
Making Tax Digital for Income Tax now applies to many associates. If your self-employment and property income before expenses was over £50,000 in 2024/25, you should have been using it since 6 April 2026, keeping digital records and sending quarterly updates. The threshold falls to £30,000 from 6 April 2027 (based on 2025/26) and £20,000 from 6 April 2028. Our Making Tax Digital guide explains the steps.
Employed dentists
Salaried roles are taxed through PAYE. You can still claim tax relief on approved professional fees, such as your General Dental Council registration and subscriptions to bodies on HMRC's approved list. Relief on a British Dental Association subscription is limited to 90% of the fee. Dental hygienists and therapists can be employed or self-employed: HMRC says each case is decided on its own facts.
Practice owners
Owners trade as sole traders, partnerships or limited companies. Running payroll for nurses and reception staff means employer National Insurance at 15% on pay above £5,000 a year, reduced by an Employment Allowance of up to £10,500. A company with only one director cannot claim it if that director is the only employee paying employer National Insurance, so the allowance helps practices with staff rather than one-person companies. When you sell, Business Asset Disposal Relief charges qualifying gains at 18% for disposals from 6 April 2026.
Worked example: sole trader or limited company
Take a fully private associate with a profit of £60,000 in 2026/27, no other income, living in England. The figures ignore pension contributions and student loans. Scotland has different Income Tax bands.
As a sole trader
- Income Tax: £37,700 at 20% is £7,540, plus £9,730 (the profit above £50,270) at 40% is £3,892. Total £11,432.
- Class 4 National Insurance: £37,700 at 6% is £2,262, plus £9,730 at 2% is £194.60. Total £2,456.60.
- Tax and National Insurance £13,888.60, leaving £46,111.40.
Through a limited company
- Salary of £12,570, with no employee National Insurance because it does not exceed the £12,570 primary threshold. Employer National Insurance on the £7,570 above £5,000 at 15% is £1,135.50. There is no Employment Allowance, as the director is the only employee.
- Company profit: £60,000 less £12,570 less £1,135.50 is £46,294.50.
- Corporation Tax at the 19% small profits rate is £8,795.96, leaving £37,498.54 to pay out as dividends.
- Dividend tax: the salary uses the Personal Allowance, the first £500 of dividends is covered by the dividend allowance, and the remaining £36,998.54 sits in the basic rate band at 10.75%, which is £3,977.34.
- Total tax and National Insurance £13,908.80, leaving £46,091.20.
At this level the two routes are within about £20 of each other once all the profit is paid out. A company only pulls ahead if you leave profit in it, and it adds year-end accounts, a Corporation Tax return, payroll and Companies House filings. Try your own figures in our sole trader vs limited company calculator.
If you do NHS work, the pension comes first: incorporating can cost you NHS pension membership on that income. Some dentists consider keeping NHS work in their own name and running only private work through a company. Whether that works depends on your agreements, the practice and NHS Pensions' rules, so have it checked before you form a company.
Expenses dentists can claim
Self-employed dentists can deduct costs incurred wholly for the business. The common ones:
| Expense | How it is treated |
|---|---|
| GDC annual retention fee | Allowable. Employed dentists can claim it as an approved professional fee. |
| Indemnity (Dental Protection, MDU, MPS) | Allowable. All three are on HMRC's approved list for employees too. |
| BDA and other professional memberships | Allowable if related to your work. Employee relief on the BDA subscription is capped at 90%. |
| Lab fees you bear under your agreement | Allowable. |
| Loupes, instruments and equipment | Allowable expenses under the cash basis (the default for sole traders). With traditional accounting, capital allowances apply, and the Annual Investment Allowance covers up to £1 million a year. |
| Courses and CPD | Allowable where they improve skills you already use, keep you up to date, or develop new skills related to your work. Training to start a new, unrelated business is not. |
| Travel between practices | Allowable. The flat rate for cars in 2026/27 is 55p a mile for the first 10,000 business miles and 25p after. Travel between home and your regular practice is not. |
| Scrubs and protective clothing | Allowable. Everyday clothing is not. |
| Accountancy fees | Allowable for business accounts. HMRC does not allow the cost of preparing your personal Self Assessment return. |
VAT for dental practices
Dental care and treatment by dentists, dental care professionals and dental technicians is exempt from VAT, as are drugs and appliances used during treatment and dental prostheses such as crowns, bridges and dentures. HMRC accepts cosmetic work carried out as part of dental treatment as exempt, but cosmetic dentistry performed outside any healthcare is standard-rated, as are separate sales of toothbrushes and toothpaste.
- Exempt income does not count towards the £90,000 VAT registration threshold. Only taxable sales, such as purely cosmetic treatment or retail products, count.
- If taxable sales go over £90,000 in a rolling 12 months, you must register within 30 days of the end of that month.
- The fees a practice owner retains from associates for surgeries, materials, staff and equipment are exempt. Selling dental equipment to an associate is taxable.
- VAT on costs used for exempt treatment normally cannot be reclaimed, so budget for chairs, imaging and fit-outs at the VAT-inclusive price. A registered practice with both kinds of income uses the partial exemption rules.
More on thresholds and registration in our VAT registration guide.
NHS pension for dentists
Dentists working under General Dental Services or Personal Dental Services contracts are automatically opted into the NHS Pension Scheme if they meet the eligibility criteria. Self-employed performers submit their net pensionable earnings each year on Compass, and the Annual Reconciliation Report feeds into pensionable pay, so check it. Locum dentists working occasionally under a GDS or PDS contract can join, but earnings paid through an agency cannot be pensioned. Dental nurses, hygienists, therapists and practice managers employed by a practice cannot pay in.
The annual allowance for 2026/27 is £60,000. For a defined benefit scheme it is the growth in your pension that counts, not what you pay. The allowance is tapered if your threshold income is over £200,000 and your adjusted income is over £260,000. Read more in NHS pension annual allowance explained.
Key dates for 2026/27
| Date | What is due |
|---|---|
| 31 July 2026 | Second payment on account for 2025/26 |
| 7 August 2026 | First MTD quarterly update (6 April to 5 July), if you are in MTD |
| 5 October 2026 | Register for Self Assessment if you started as an associate in 2025/26 |
| 7 November 2026, 7 February 2027, 7 May 2027 | Remaining MTD quarterly updates for 2026/27 |
| 31 January 2027 | 2025/26 online return, balancing payment and first payment on account for 2026/27 |
| 6 April 2027 | MTD starts for qualifying income over £30,000 in 2025/26 |
| 31 July 2027 | Second payment on account for 2026/27 |
| 9 months and 1 day after year end | Corporation Tax payment for a practice company; the return is due 12 months after year end |
How GoForma helps dentists
GoForma is a UK online accountancy practice based in London. We work with clients across the UK by phone, video, email and WhatsApp, our accountants are ACCA and AAT qualified, and FreeAgent accounting software (worth £360 a year) is included in every package.
- Associates: Start Sole Trader at £44 a month, 50% off for the first 3 months, with your Self Assessment return and a dedicated personal accountant. Start Sole Trader + MTD at £68 adds quarterly Making Tax Digital submissions.
- Dentists with a company: Start Bundle at £88 a month, 50% off for the first 3 months, covers year-end accounts, the CT600 and payroll for one director. Operate Bundle at £128 adds VAT returns, your director Self Assessment and the confirmation statement.
Prices exclude VAT and run month to month, so you can cancel anytime. We are rated 4.9 on Google from 72 reviews and 4.8 on Trustpilot from 142 reviews. Compare our packages, or book a free consultation to talk through your mix of NHS and private work before you decide anything.