Dental News
Spring 2025

All providers and performers must complete their Annual Reconciliation Reports and have these submitted to the NHS by 30 June each year. With most providers aiming to complete these in April/May (and performers accepting or rejecting these) we thought it would be of benefit to run through this process and the calculations involved.

In accordance with the GDS requirements, providers are required to complete a Net Pensionable Earnings (NPE) declaration annually. This enables the NHS Business Services Authority to ensure that the correct contributions are paid into everyone’s pensions. For the last few years this has been done on the NHS’s online system, Compass, and there is no longer the facility to complete this on paper.

Whilst it can be an overlooked process by performers, it is important it is completed (as accurately as possible) because net earnings are used to calculated certain benefits, such as sick pay. Ultimately it also feeds into your pension records, which affects what you receive in retirement.

The superannuation deducted on behalf of performers each month is calculated on the actual payments (actual net income) made to each performer. This will initially be based on the performer’s allocated proportion of the contract. Variations may happen during the year - this could be where the contract value is reallocated due to events such as long term sickness. These have to be recorded on the Annual Reconciliation Report (ARR) declaration.

The NPE calculation is decided at practice level and most practices use the generally accepted method of calculation. However, within reason, Principals can make amendments to the generally accepted calculation.  All performers should check their contract to ensure the calculation appears reasonable and in line with the terms agreed – if you are unsure about anything it is always worth asking questions and discussing, even with your accountant.  Generally, NPE is calculated as your actual NHS income, i.e. your UDAs performed at your net UDA rate less lab bills (relating specifically to any NHS work performed).

NPE does not include seniority pay, long term sickness pay, adoption leave pay, maternity and paternity pay, which have to be recorded on the declaration in separate boxes. 

Examples

Practice
The maximum superannuable earnings within a practice is 43.9% of the total NHS contract value. So, if there is a contract in place of £200,000 then the maximum superannuable earnings available (for anyone to have) under that contract is 43.9% x £200,000 = £87,800.

Associate
An Associate’s superannuable earnings are the amount they receive after NHS lab bills and other deductions made in respect of the NHS work. As an example, an Associate performing 6,000 UDAs at £10.00 per UDA and having £4,500 of NHS lab bills deducted from them, would have an NPE of £55,500 ((£10.00 x 6,000) - £4,500). This is the figure that should be agreed on Compass for this contract. Remember, where performers work at multiple practices or on multiple contracts, they will need to agree the NPE for each.

Potential Problems
There are some potential problems that both Associates and Principals should be aware of when completing the ARR:

When working out NPE, only NHS lab fees should be deducted. Not all lab fees shown in the Associate’s pay schedule will relate to only NHS work, therefore Principals will need to ensure these are allocated correctly.

In the above example the Principal (who lets say also does 4,000 UDAs and holds a contract for 10,000 UDAs at £20.00 per UDA) can only get £32,300 of superannuable earnings. This is because with a contract value of £200,000, the superannuation ‘ceiling’ is £87,800. Therefore, if the Associate is getting £55,500 then this only leaves £32,300 available for the Principal.

This does also work the other way –  Principals can benefit from paying the Associate under 43.9% of the Practice’s UDA value (which generally will be in excess of £20.00 per UDA).

You can see from the above there is potential for a Principal to earn a disproportionate sum towards their NPE, even if they are doing a large amount of NHS work. To address this, the Principal would need to adjust the Associates agreed pay rate or alter the NPE calculation at a practice level.

As an Associate, you will be requested to accept or reject the Principal’s NPE calculation within Compass.  This is called the Annual Reconciliation Report (ARR) and needs approval by 30 June each year.  As your NPE is the figure that is used by the NHS to calculate your superannuation contributions and the NHS contributions too (at 20.6% of your NPE) it is crucial this is checked yearly.

If you have any queries or wish to discuss, then please feel free to speak to us. 

We are delighted to announce that Seb Stracey has become a Partner.

Seb has been working for the practice for a number of years and his dedication to providing excellent service for his clients is being recognised with progression to Partner within the firm.

Seb qualified as a Chartered Accountant in 2015 and joined Humphrey & Co in 2016. In 2018 he qualified as a Chartered Tax Adviser, so he can better assist clients with their tax needs. He works with a wide range of clients, mostly providing accounting and taxation advice. As a dental and healthcare specialist accountant for the firm, he also provides lectures across the country to Foundation Dentist, Associates and Practice Owners.

“It’s an enormous privilege to be made a Partner at Humphrey & Co. The firm has an outstanding reputation of providing excellent client service and top level accounting and tax advice, so it is a pleasure to join the other Partners in helping to maintain the firm’s high standards, that clients have come to expect.

I am grateful for the opportunities the Partners have offered me and the level of support I have received along the way. I look forward to my future with Humphrey & Co, particularly continuing to assist in driving forward the well-established Dental & Healthcare team” said Seb.

Anthony Smith, Senior Partner comments “All the partners are delighted that Seb has accepted our offer of partnership within the firm, he has demonstrated diligence and determination to succeed, and he is passionate about delivering a first-class service to our clients. 

I have personally worked with Seb for an extended period during his training, and have every confidence that, at a pivotal point in the profession, he will help ensure Humphrey & Co continues to develop its niche areas and offer a value-added service for clients.

Seb will be heavily involved in developing and rolling out our 2026 Making Tax Digital service for the self-employed & landlords, in addition to supporting his own clients within our Dental & Healthcare team. Exciting times ahead - congratulations Seb from everyone at Humphrey & Co!”