Transferring your NHS dental contract
For a mixed or NHS practice, this is the single part of a sale most likely to set the completion date — or to derail it. The good news is that it is predictable, provided it is started early and the contract-holder position is exactly what everyone assumes it is.
Why the contract cannot simply be sold
An NHS dental contract is not property. It is an agreement between a provider — you, your partnership or your company — and the commissioner, under which you undertake to deliver a certain amount of care. You cannot hand that undertaking to somebody else because you have agreed a price with them. The commissioner has to accept the new provider.
This surprises owners because everything else in a practice sale behaves like property. The chairs, the goodwill, the patient records and the lease can all be dealt with in the usual commercial way. The contract, which is often the largest single driver of the practice's income, cannot.
The route depends on your contract and your structure
A GDS contract, sold as a business
General Dental Services contracts expressly prohibit assignment, but they do contain a workable procedure — the partnership route. The buyer is added to your existing contract as a partner at completion, so for a period you are both parties to it. After an agreed interval, commonly a couple of months, you retire from the partnership and the contract continues with the buyer alone.
It is a sound mechanism, and it is used constantly. Two things to be aware of: the notice requirements and timescales are the commissioner's, not yours, so they cannot be compressed to suit a completion date; and while both of you are named on the contract, each partner is responsible for its delivery. That is why a buyer will want to see your performance position clearly before agreeing to stand behind it.
A PDS contract
Personal Dental Services contracts are personal to the contractor and set out no transfer procedure at all. Any change therefore depends on the commissioner formally agreeing, and there is no guarantee of success. If your income sits under a PDS contract, establish the commissioner's position early — it changes what a sale looks like and what a buyer can responsibly offer.
An incorporated practice, sold by shares
Where the contract is held by a limited company and the buyer acquires that company, the contract does not move at all: the provider is still the same company. This avoids the partnership route entirely and is one of the reasons incorporated practices tend to transact more smoothly. It is not consent-free, though — the commissioner's agreement to the change of control is still required, and your sale agreement should be conditional on it.
The trap to check before you do anything else
A significant number of practices have a structural problem that nobody notices until a buyer looks properly.
Many owners incorporated for tax reasons and transferred the practice into their company — but left the GDS contract in their own personal name, because moving it required consent that was never obtained. Since a GDS contract prohibits assigning its benefit, moving the goodwill while leaving the contract behind can put the contract holder in breach, with termination as the theoretical consequence. A buyer inherits that exposure, so they will either require it to be fixed as a condition, reduce the price to reflect it, or withdraw.
If there is any chance this describes your arrangement, have a specialist dental solicitor confirm who holds the contract and where the goodwill sits. It is far cheaper to establish that now than to discover it three months into a transaction. The equivalent trap catches buyers too: acquiring a contract by the partnership route and then moving the goodwill into a company afterwards reproduces exactly the same breach.
Realistic timescales
Commissioner approval for a contract change generally takes something like six to twelve weeks. If the buyer is not already on the Performers' List for the region, that application can take a further eight to twelve weeks and must be in place before NHS care can be delivered under the contract. Add CQC registration where the structure requires it, lease consent from a landlord, and a lender's conditions, and the reason completions are normally set four to six months after heads of terms becomes obvious.
Owners who assume a faster timetable tend to pay for it — in locum cover, retention payments to keep associates calm, and the general cost of a practice running while its future is public.
What protects you through the process
- Establish the contract-holder position first. Who is named on the contract, which type it is, and where the goodwill sits. Everything else follows from that.
- Make the deal conditional on consent. The sale agreement should say what happens if the commissioner refuses, delays, or uses the moment to revisit contract value.
- Start the regulatory work at heads of terms, not after. The legal and the regulatory tracks run in parallel, and it is the regulatory one that sets the date.
- Know your performance position. Underdelivery, and any clawback exposure that comes with it, is better disclosed and priced than discovered.
- Keep your team steady. A transfer that takes months is a long time for people to speculate. Agree who is told what, and when, before the process starts.
How we approach NHS practices
We work predominantly with private practices, and we welcome mixed and NHS practices too. We would rather look at the contract position honestly at the start than discover it late: it tells us what is deliverable, and it means the offer we make is one we can still stand behind three months later. Because we are the buyer, the commissioner conversation and our own diligence run together rather than in sequence.
Nothing here is legal advice, and NHS contracting rewards specialists — use a solicitor who does dental work regularly rather than general corporate work.
Related reading: share sale or asset sale, how long a sale actually takes, and selling your dental practice.
Where we stand, so you can weigh this
Quantum Medix acquires dental practices, so we are a buyer and not a neutral adviser. We have written this to be accurate and useful whether or not you ever speak to us, including where the honest answer does not suit us. If another dentist buying your practice outright is the better option for you, we will say so.
We should also be clear about what we can buy. Our model needs a practice that is already associate-led, or one that could become associate-led on a sensible timescale with a plan we both believe in. If you are the practice — most of the clinical work is yours and there is no realistic route to that changing — we are not the right buyer, and we would rather tell you that in the first conversation than the fourth.
This is general information rather than legal, tax or financial advice: before you commit to anything, take your own advice from a solicitor and accountant who work in dentistry regularly. If you spot something here you think is wrong, tell us at partners@quantummedix.com and we will correct it.