Dental Earnings and Expenses Estimates 2017/18

This section shows average gross earnings, total expenses, and taxable income estimates by dental type and contract type for dentists in England & Wales. The expenses to earnings ratio (EER) is also shown as a percentage for ease of understanding.

Providing-Performer dentists

Providing-Performer dentists had higher gross earnings, total expenses and taxable income than Associate dentists across all contract types, in keeping with previous years.

For Providing-Performer dentists in 2017/18 average taxable income from NHS and private dentistry was £116,700, compared to £115,800 in 2016/17, a 0.7 per cent increase, which is not statistically significant

Table 1.2: Providing-Performer dentists – average earnings and expenses, by contract type, England & Wales, 2016/17 and 2017/18

^{_{Notes:  1. Small sample (<125)    2. Further explanatory notes can be found in the Introduction}}

Associate Dentists

For Associate dentists in 2017/18 average taxable income from NHS and private dentistry was £59,700, compared to £60,800 in 2016/17, a 1.8 per cent decrease, which is not statistically significant.

Table 1.3: Associate dentists – average earnings and expenses, by contract type, England & Wales, 2016/17 and 2017/18

^{_{Note: Further explanatory notes can be found in the Introduction}}

All self-employed primary care dentists

For all self-employed primary care dentists in 2017/18 average taxable income from NHS and private dentistry was £68,100, a 0.9 per cent decrease from £68,700 in 2016/17, which is not statistically significant.

Earnings and expenses from NHS and private dentistry varied by contract type, whereby those working under GDS arrangements had the lowest average taxable income compared to those working under PDS or Mixed GDS/PDS arrangements.

Changes in the distribution of the population across dental and/or contract type will inevitably have some effect upon the estimates for gross earnings, total expenses, taxable income and earning to expenses ratio (EER).

Table 1.4: All self-employed primary care dentists – average earnings and expenses, by contract type, England & Wales, 2016/17 and 2017/18

^{_{Note: Numbers shown are Earnings and Expenses Estimates Report populations and will not match those found elsewhere}}

Report population changes

Figure 1.4 shows report population numbers by dental type and year and highlights the changing dental population.

It is important to note that this chart represents the changing report population that is used in the annual earnings and expenses estimates series of reports and does not represent the actual dental population. See the Introduction for further explanatory notes.

Earnings and Expenses Estimates by Percentage of Time Spent on NHS dentistry

Results in this section are based on dentists’ responses to the Dental Working Patterns Survey. More details can be found in the Introduction of this report.

For Providing-Performer dentists, dentists spending less than 25 per cent of their time on NHS dentistry earned the highest taxable income of £119,900 compared to £113,400 and £116,000 for those spending between 25 and 50 per cent and over 75 per cent of their time on NHS dentistry, respectively.

For Associate dentists, average taxable income decreased as the percentage of their time spent on NHS dentistry increased. The lowest average taxable income of £57,800 was earned by those who spent at least 75 per cent of their time on NHS dentistry, and the highest taxable income of £79,600 was earned by those spending less than 25 per cent of their time on NHS dentistry. A potential explanation for these findings could be that Associate dentists may retain a higher percentage of the fees generated by performing private dentistry than they do for NHS dentistry as the Providing-Performer dentists might take a lower proportion of the private fees.

Table 2.1: All self-employed primary care dentists – average earnings and expenses from NHS and private dentistry, by percentage of time spent on NHS dentistry and dental type, England & Wales, 2017/18

_{^{Notes: 1. Results are based on responses from The Dental Working Patterns Survey.This survey was only sent to dentists who carried out some NHS work in 2016/17 or 2017/18; therefore, percentage of time spent on NHS dentistry cannot equal zero   2.Small sample (<125)    3. Further explanatory notes can be found in the UK Chapter}}  

Longitudinal Study of Earnings and Expenses Estimates, 2015/16 to 2017/18

This section of the report shows the results of a longitudinal study of the earnings and expenses estimates of self-employed primary care dentists, for the three financial years 2015/16 to 2017/18.

Changes in the composition of the dental population (as well as the sample used to produce Dental Earnings and Expenses Estimates) need to be kept in mind when making comparisons between results for different financial years. Since at least 2008/09, there appear to have been sizeable changes in the dental population in relation to both dental type (with a shift away from Providing-Performer) and contract type (with a shift away from PDS and mixed GDS/PDS contracts).

The longitudinal study controls for this population change by considering those dentists who have performed some primary care NHS dentistry in each of the three years 2015/16, 2016/17 and 2017/18, but have not changed their dental type or contract type during this period. The results found in last year’s longitudinal analysis for the years 2015/16 and 2016/17 will not necessarily be the same as results for the same years in this analysis, because different dentists will make up the population for these three years.

Several known changes occurred during the period of the longitudinal study that are not controlled for, and which may contribute to any change shown over the three-year period:

• Changing capital allowance (Annual Investment Allowance, AIA) – this allowance increased from £50,000 to £100,000 from 6 April 2010 with a reduction to £25,000 from 6 April 2012 This changing AIA may have provided an incentive for small businesses to make large capital purchases in this period (6 April 2010 to 6 April 2012)
• The annual amount of the AIA was temporarily increased from £25,000 to £250,000, for two years, in relation to expenditure incurred on or after 1 January 2013
• The period for the temporary increase in AIA was then further extended to 31 December 2015, with the maximum annual amount of AIA increasing from £250,000 to £500,000 in relation to expenditure incurred on or after 6 April 2014
• From 1 January 2016 the AIA has been permanently increased to £200,000
• The changes in this allowance may have influenced the timing of purchases of items such as dental machines and furniture, as dentists took advantage of the 100% tax allowance on capital expenditure. The increases were introduced as a government incentive, aimed at small and medium-sized businesses, to increase or bring forward their capital expenditure on ‘plant and machinery’, which also benefitted the wider economy
• In 2017/18 two new £1,000 allowances were introduced, for property and trading income
• Each year the value of dentists' contracts is reviewed, and an uplift made to GDS contracts and PDS agreements accordingly. Each uplift will affect the gross earnings of dentists. Uplifts are applied from 1 April in the relevant financial year
• The awards relevant to the period covered by the longitudinal study for England were 1.34 per cent in 2015/16, 0.7 per cent in 2016/17 and 1.14 per cent in 2017/18
• For Wales the dental uplifts were 1.34 per cent in 2015/16, 1.1per cent in 2016/17 and 1.44 per cent in 2017/18

The results of the longitudinal study show that for all self-employed Providing-Performer dentists:

• taxable income from NHS and private dentistry decreased by 0.9 per cent between 2015/16 and 2017/18, from £123,200 to £122,200
• the trend shown differs from those found in the main findings of the report. This highlights the effect that changes to the overall dental population and to contract types has on the earnings and expenses of the entire population

Table 3.1: Self-employed Providing-Performer dentists – longitudinal earnings and expenses from NHS and private dentistry, by contract type, England & Wales, 2015/16 to 2017/18 

^{_{Note: Further explanatory notes can be found in the Introduction}}

Figure 3.1 shows year-on-year (2015/16 to 2017/18) percentage changes in gross earnings and taxable income for Providing-Performer dentists. The figures start with 2015/16 as the base at 100 per cent. Figures 3.2 and 3.3 present figures for Associate and all dentists.

 ^{_{Note: Please see table 3.1 for source data}}

For all self-employed Associate dentists:

• Gross earnings increased by 2.7 per cent, from £104,300 to £107,100; the expenses to earnings ratio rose from 39.7 per cent to 41.1 per cent, reflecting the 6.3 per cent increase in total expenses, from £41,400 to £44,000. As a result of the greater increase in expenses, Associate dentists’ taxable income from NHS and private dentistry increased slightly to £63,100 between 2015/16 and 2017/18, an increase of approximately £100.

Table 3.2: Self-employed Associate dentists – longitudinal earnings and expenses from NHS and private dentistry, by contract type, England & Wales, 2015/16 to 2017/18 

For all self-employed primary care dentists:

• the longitudinal study shows that overall, average taxable income from NHS and private dentistry remained the same between 2015/16 (£72,700) and 2017/18. Both gross earnings and total expenses also increased, rising 2.6 per cent and 5.1 per cent respectively.
• there has been a slight increase in gross earnings between 2015/16 and 2017/18 in all contract types, which, despite larger increases in expenses over the same period, has resulted in no change in taxable income.
• for all self-employed primary care dentists, the trends shown differ from those presented in the main findings of this report. This highlights the effect that changes to the overall dental population and to contract types have on the earnings and expenses estimates of the entire population.

Table 3.3: All self-employed primary care dentists – longitudinal earnings and expenses from NHS and private dentistry, by contract type, England & Wales, 2015/16 to 2017/18 

Earnings and Expenses Estimates by Gender

This section of the report looks in detail at the 2017/18 NHS and private dental earnings and expenses of self-employed primary care dentists by gender.

The results show that:

• regardless of dental type classification, on average in 2017/18, male dentists had higher gross earnings, total expenses and taxable income than their female counterparts
• for all male self-employed primary care dentists, average taxable income was £81,900 compared to £54,700 for all female self-employed primary care dentists, which could be partly explained by the higher proportion of male dentists being Providing-Performers

It is important to note that this report includes both full-time and part-time dental earnings and expenses, and given that on average male dentists tend to work longer weekly hours compared to their female counterparts (Dental Working Hours, 2016/17 and 2017/18), this could be a contributory factor to the differences observed in earnings and expenses by gender.

Table 4.1: All self-employed primary care dentists - average earnings and expenses from NHS and private dentistry, by dental type and gender, England & Wales, 2017/18

Earnings and expenses estimates for dentists by weekly hours devoted to dentistry

Table 5.1 and Figure 5.1 show earnings and expenses estimates for self-employed primary care dentists by the average number of hours per week they devoted to NHS and private dentistry, including clinical and administrative work according to their responses to the Dental Working Patterns Survey. It is important to note that some survey respondents may have also included time spent in employed, as opposed to only self-employed, dental work (such as time spent working in dental schools) and as a result, the measure of weekly working hours is not restricted to self-employed work within a dental practice.

As might be expected, the tables show:

• that average taxable income for self-employed primary care Providing-Performer and Associate dentists increased with the average weekly hours worked
• for all self-employed primary care dentists, it is notable that the expenses to earnings ratio (EER) also increases as the number of hours increase to an average EER of 64.7% for those who worked more than 45 hours per week compared to 48.2% for those who worked fewer than 35 hours per week.

Table 5.1: All self-employed primary care dentists - average earnings and expenses from NHS and private dentistry, by dental type and weekly working hours, England & Wales, 2017/18 

Earnings and expenses estimates by gender and weekly hours devoted to dentistry

Tables and Figures 5.2-5.4 show by dental type, earnings and expenses estimates from NHS and private dentistry by both the average weekly hours worked (including clinical and administrative work for both NHS and private dentistry) and gender.

It is important to note that the small sample size of these subgroups, mean that values are subject to more uncertainty, as extreme values can have noticeable effects on the averages.

As one would expect, male Providing-Performer dentists who work fewer than 30 hours per week have a considerably lower taxable income than those working 45 hours or more (£88,700 and £138,100 respectively).

For female Providing-Performer dentists, those working fewer than 30 hours per week earn a considerably higher average taxable income (£102,400) than those working 30-34 hours, 35-39 hours and 40-44 hours (£98,900, £74,400 and £92,700 respectively). Female Providing-Performer dentists working 45 hours and over had the highest taxable income of £103,900.

The findings for Associate dentists and the all dentists groups are closer to what may be expected, with gross earnings, expenses and taxable income all increasing along with weekly working hours for both male and female dentists.

Table 5.2: Self-employed primary care Providing-Performer dentists - average earnings and expenses from NHS and private dentistry, by gender and weekly working hours, England & Wales, 2017/18

^{_{Notes: 1. Small sample (<125)  2. Further explanatory notes can be found in the UK chapter of this report}}

Table 5.3: Self-employed primary care Associate dentists - average earnings and expenses from NHS and private dentistry, by gender and weekly working hours, England & Wales, 2017/18

Table 5.4: All self-employed primary care dentists - average earnings and expenses from NHS and private dentistry, by gender and weekly working hours, England & Wales, 2017/18

_{^{Notes: 1. Small sample (<125) 2. Further explanatory notes can be found in the UK chapter of this report}}

Earnings and Expenses Estimates by Age

For the purposes of this report, dentists’ ages were calculated as at 30 September 2017 – the mid-point of the 2017/18 financial year.

The results suggest a general trend for dentists to earn their highest taxable income between the ages of 45 and 54. This apparent trend may in part be explained by the characteristics of each age band: for example, those aged under 35 years are more likely to be an Associate than a Providing-Performer dentist, while according to responses to the Dental Working Patterns Survey, on average dentists aged 55 and over work fewer hours than those in the other age bands (Dental Working Hours, 2016/17 and 2017/18).

Table 6.1: All self-employed primary care dentists - average earnings and expenses from NHS and private dentistry, by dental type and age, England & Wales, 2017/18

_{^{Notes: 1. Small sample (<125)  2. Further explanatory notes can be found in the UK Chapter of this report}}

Earnings and Expenses Estimates by Age and Gender

Table 7.1 shows earnings and expenses data for Providing-Performer primary care dentists by gender and age. The results show that:

• for male Providing-Performer dentists those aged 45-54 earned the highest taxable income (£134,400), while those aged 55 and over earned the lowest (£103,200)
• for female Providing-Performer dentists those aged 45-54 earned the highest taxable income (£109,000), while those aged under 35 earned the lowest (£93,100)
• male dentists earned more than their female counterparts in all bands; this will likely be due to a number of factors including female dentists working fewer average weekly hours than their male counterparts

Table 7.1: Self-employed primary care Providing-Performer dentists - average earnings and expenses from NHS and private dentistry, by gender and age England & Wales, 2017/18 

Table 7.2 shows earnings and expenses data for Associate primary care dentists by gender and age. The results show that:

• for both male and female Associate dentists those aged 45-54 earned the highest taxable income (£83,400 and £59,700 respectively), while those aged under 35 earned the lowest (£64,000 and £46,700 respectively)
• female dentists report a lower expenses to earnings ratio (EER) when compared to their male counterparts, with female dentists under 35 years having an EER of 30.6% compared to an EER of 37.3% for male dentists under 35.

Table 7.2 Self-employed primary care Associate dentists - average earnings and expenses from NHS and private dentistry, by gender and age England & Wales, 2017/18 

Table and figure 7.3 show earnings and expenses data for all self-employed primary care dentists by gender and age. The results show that:

• for male and female dentists those aged 45-54 earned the highest taxable income (£103,300 and £68,500 respectively), while those aged under 35 earned the lowest (£65,100 and £46,900 respectively)
• male dentists earned more than their female counterparts in every age band; this will be due to a number of factors including variation in the number of weekly hours worked and the fact that a higher proportion of men are Providing-Performer dentists whilst a higher proportion of female dentists are Associates

Table 7.3: All self-employed primary care dentists - average earnings and expenses from NHS and private dentistry, by gender and age England & Wales, 2017/18 

The detailed expenses breakdowns are shown for:

• Providing-Performer dentists
• Associate dentists
• All self-employed primary care dentists

As described in the UK chapter some Associate dentists may not have any expenditure in one or more of the expense categories. This will affect the average value for expenses in these categories and should be kept in mind when using the averages shown in these tables.

Detailed expenses breakdown by contract type, age, gender and activity demographics

Tables 8.1- 8.3 provide a detailed breakdown of expenses for self-employed dentists, by dental type, contract type, age, gender and weekly working hours for Providing-Performer, Associate and all self-employed primary care dentists respectively.

For Providing-Performer dentists:

• as in 2016/17, as a percentage of all expenses, Other expenses represented the largest cost (47.9 per cent), followed by Employee costs (31.6 per cent), and Premises (8.2 per cent)

For Associate dentists:

• Other expenses accounted for a majority (56.8 per cent) of all expenses, followed by Employee (17.5 per cent) and Office and General Business (11.5 per cent); a trend similar to that shown in 2016/17
• Associate dentists are less likely than their Providing-Performer counterparts to employ staff, and this is reflected in the percentage of all expenses that were Employee costs, at 17.5 per cent (£7,600) and 31.6 per cent (£85,900) respectively

For all self-employed primary care dentists:

• Consistent with the results from 2016/17, the three largest expenses categories in 2017/18 were: Other (52.2 per cent), Employee (24.8 per cent), and Office and General Business (9.7 per cent)

Table 8.1: Self-employed Providing-Performer dentists - detailed expenses breakdown by contract type, age, gender and activity demographics, England & Wales, 2017/18 

_{^{Notes: 1. Further explanatory notes can be found in the UK Chapter of this report  2. Small sample (<125)}}

Table 8.2: Self-employed Associate dentists - detailed expenses breakdown by contract type, age, gender and weekly working hours, England & Wales, 2017/18

^{_{Note: Further explanatory notes can be found in the UK Chapter of this report}}

Table 8.3: All self-employed primary care dentists - detailed expenses breakdown by contract type, age, gender and weekly working hours, England & Wales, 2017/18

Further Expenses Analysis Provided by Accounting Bodies

The 38th Review Body on Doctors’ and Dentists’ Remuneration (DDRB) Report – released on 31 March 2009 – requested detailed information on five different categories of dental expenses in order to provide further evidence in support of subsequent reviews and decisions regarding dental remuneration.

The five categories of dental expenses requested by DDRB are:

• staff costs
• laboratory costs
• material costs
• other non-staffing costs.
• premises costs

This level of detail is not recorded on the Self Assessment tax returns used to produce the results in the main report, nor is it widely available from other data sources. However, expenditure data on these four categories for England and Wales have been provided by the National Association of Specialist Dental Accountants and Lawyers (NASDAL) and Morris & Co Specialist Dental Accountants (Morris & Co).

NASDAL is a grouping of firms of accountants and lawyers, each of which specialises to some degree in acting for dentists. Formed in 1998, its members meet regularly to discuss tax, accounting, legal and business issues relating to dental practices. NASDAL collates a detailed survey each year of various statistics and key operating ratios relating to dental practices.

Morris & Co is a firm of Chartered Accountants that specialises in acting for dentists. It acts for more than 1,400 dentists throughout the country and was one of the founding members of NASDAL.

The dental expenses data included in this Annex are presented for the years 2005/06 to 2017/18. These periods represent the financial years in which accounts ended; almost all of the accounts represented by these results will have ended in the fourth quarter of the respective financial year.

The data are also presented by practice type: NHS practices (those with at least 80 per cent NHS activity) and private practices (those with at least 80 per cent private activity).

Data on non-clinical staff wages, laboratory costs, materials costs and premises costs have been provided by NASDAL; data on other non-staffing overhead costs have been provided by Morris & Co. All data are presented as a percentage of gross income.

It is important to note that because of differences in categories of analysis, NASDAL and Morris & Co data are not necessarily directly comparable with expenses data presented in the main body of the report, particularly in the Detailed Expenses Breakdown section. More information on comparisons is given in Table A.2.

Definitions

Non-Clinical Staff Wages refer to the gross wages (including employer’s National Insurance contributions) paid to all practice staff, including office staff and nurses, but excluding employed and self-employed dentists, hygienists, and therapists.

Laboratory Costs refer to dental laboratory work commissioned by dental practices.

Materials Costs refer to dental surgery consumables such as filling material costs and dental surgery consumables.

Premises costs refer to insurance, repairs and maintenance (of the premises) as well as rent, rates, water, heating and lighting costs, but exclude any borrowing costs if the premises are freehold.

Other Non-Staffing Costs refer to all overheads other than materials, laboratory costs, and costs related to employed and self-employed dentists, hygienists, and therapists.

Methodologies

The methodologies for collecting these dental expenses data differ from the methodology employed in the analyses presented in the main body of the report.

NASDAL data is compiled from member firms’ surveys of their clients throughout England and Wales. Each of approximately 30 member firms randomly select 40 clients, and they submit the information relating to these 40 clients to the NASDAL member responsible for the statistical exercise. This information is reviewed for completeness and errors; bottom-end outliers are excluded (usually relating to part-time practices, errors or incomplete forms), and an aggregate dataset is produced with a sample size of approximately 1,200.

Morris & Co data is based on surveys conducted solely on Morris & Co clients. The sample size is approximately 1,400 and covers England and Wales.

Table A.1 compares the methodologies employed in the collection and handling of the data presented in the main body of the report and this Annex.

_{^{Notes: 1. Excluding dentists with no self-employment gross income and those working solely under a Trust-led Dental Services (TDS) contract.2. Providing-Performers are those dentists who hold a contract or contracts with local health authorities to provide an agreed level of dental services, as well as dentists who perform only private dentistry (and therefore do not hold contracts with a local health authority) A contract holder can be one individual or a group of individuals, and data for a contract holder constitutes data for that particular practice}}

Comparisons with expenses breakdown in the main report

As stated, NASDAL and Morris & Co data are not necessarily comparable with data presented in the main body of the report – particularly the detailed expenses section, which presents an expenses breakdown according to the categories used on HMRC’s Self Assessment tax return. This is not an issue of data quality, but rather different methods of reporting the data, particularly in terms of the dentists considered and the expenses categories employed.

NASDAL and Morris & Co data presented for NHS practices relate to Principals, who are individuals or groups of individuals; in comparison, data in the main report relate to individual self-employed primary care Providing-Performer and Associate dentists. The closest comparison that can be made in terms of dental type is between contract holders (NASDAL and Morris & Co data) and Providing-Performers (main report).

In addition, the NASDAL and Morris & Co categories of expenses and the main report expenses categories do not necessarily map onto each other, making comparisons between the two difficult. Table A.2 shows the mapping between the NASDAL and Morris & Co expenses category, and those found on the Self Assessment tax return.

NASDAL and Morris & Co expenses data

Table A.3 shows Non-Clinical Staffing Costs, Materials Costs, Laboratory Costs, premises costs (as provided by NASDAL) and Other Non-Staffing Costs (as provided by Morris & Co) as a percentage of gross income (before any deductions) for the years 2008/09 to 2017/18.

Similar data to the dental expenses values presented in this Annex have previously been published by NHS Digital, covering the years 2001/02 to 2004/05. A paper presenting NASDAL values on dental expenditure was published with the Dental Earnings and Expenses Report, England & Wales, 2005/06. While these values have not been included in this Annex, they may be used to compare against values in this Annex, though the sample sizes available at that time were considerably lower. These data can be accessed here.

Table A.3: Non-Clinical Staffing Costs, Laboratory Costs, Materials Costs, Premises and Other Non-Staffing Costs, as a percentage of gross income (before any deductions), by practice type, England & Wales, 2007/08 – 2017/18

_{^{Notes: 1. NHS Practices are practices that perform at least 80 per cent NHS dental activity; private practices are practices that perform at least 80 per cent private dental activity. 2. Data collection methods between NASDAL and Morris & Co are similar, but not identical; caution should therefore be exercised when making comparisons between these sets of data. A comparison of the data collection methods underlying these results is provided in the above section. 3. Premises costs data from NASDAL are only available from 2012/13 4. Please see previous publications for a complete data source}}