If you split your week between NHS lists and private patients, your money lands in two very different buckets, and the tax and pension rules treat them differently. That trips up a lot of dentists, especially associates who assume "it all just goes on one tax return".
It does mostly go on one return. But the VAT position, what counts as pensionable, and how your NHS pension contributions get tax relief all hinge on which bucket the income sits in.
This guide walks through how mixed NHS and private income is taxed and pensioned for 2025/26, with a worked example and a deadline calendar. It's written for self-employed associates and principals. If you trade through a limited company the picture changes, and we flag that where it matters.
How is a mixed NHS/private dentist taxed?
If you're a self-employed dentist, your NHS and private income are added together as the profits of one profession and taxed under self-assessment. Only your NHS earnings are pensionable in the NHS Pension Scheme, and your private treatment may or may not be VAT-exempt depending on its purpose.
So there's one tax computation, but three separate questions to get right: your employment status, your VAT position, and what's pensionable. Get those three straight and the rest follows.
The income tax itself is ordinary self-employment tax. For 2025/26 you get a personal allowance of £12,570, then 20% basic rate on the next £37,700 of taxable income, 40% from £50,271 to £125,140, and 45% above £125,140 (the personal allowance tapers away once income passes £100,000). On top of that you pay Class 4 National Insurance at 6% on profits between £12,570 and £50,270, then 2% above £50,270.
Are you actually self-employed? The associate status question
For years, dental associates relied on a long-standing HMRC concession (in manual page ESM4030) that treated them as self-employed almost by default, provided they used an approved British Dental Association or Dental Practitioners' Association agreement.
That concession was withdrawn with effect from 6 April 2023. HMRC's ESM4030 now simply says the guidance is withdrawn and points to the general employment status rules and the Check Employment Status for Tax (CEST) tool.
In plain terms: being a dental associate no longer guarantees self-employed treatment. Status now rests on the ordinary tests, the degree of control, whether you can send a substitute, who bears financial risk, who provides the equipment, and so on. Most genuine associate arrangements still come out as self-employed, but the label is no longer automatic, so the substance of your contract matters more than it used to.
This is worth a proper look if you're a newer associate or your contract has changed. We cover the wider picture for associate dentists and the practice-owner angle for dentists on our niche pages.
How do you report NHS and private income on self-assessment?
You report the combined profit of your dental work on the self-employment pages of your self-assessment tax return. You don't file two returns or two trades just because the income comes from NHS and private sources, it's one profession.
In practice that means:
- Add your NHS pay and your private fees together as turnover.
- Deduct your allowable business costs, lab fees, materials, your share of practice expenses, the GDC Annual Retention Fee, indemnity, professional subscriptions, and so on.
- The result is your taxable profit, which feeds income tax and Class 4 NIC.
One figure that catches dentists out is the GDC Annual Retention Fee. For 2026 the ARF is £698 for dentists and £108 for dental care professionals, and it's an allowable cost of carrying on your profession.
If your dental work is your main income, professional bookkeeping keeps the NHS and private streams cleanly split so the VAT and pension figures are easy to pull out at year end. Zmartly's self-assessment service is built around exactly this kind of mixed-income return, and our self-employed tax calculator gives you a quick estimate of the income tax and NIC on your combined profit.
Is only NHS income pensionable?
Yes. Only your NHS earnings are pensionable in the NHS Pension Scheme. Private fees, cosmetic work, and any income outside the NHS contract are not superannuable and build no NHS pension.
For a self-employed performer or associate, your pensionable figure is your Net Pensionable Earnings (NPE), broadly your NHS pay after deducting your share of practice expenses, which you declare on the NHSBSA's Compass system. It's the NHS slice only.
There's an important exception. If you provide your services through a limited company, you're generally excluded from the NHS Pension Scheme as a performer, because the scheme pensions individuals, not companies. So incorporating can quietly switch off your NHS pension build-up, which is a major decision to weigh against any tax saving. Take advice before incorporating if your NHS pension matters to you.
How do NHS pension contributions get tax relief?
Because the NHS treats self-employed practitioners as contractors, you pay both the "employee" and the "employer" contribution yourself. HMRC's guidance (manual page BIM54020) confirms that, for self-employed practitioners, both elements are relieved as your own member pension contributions.
That's a subtle but important point. Your NHS pension contributions are not simply knocked off your trading profit as a business expense in the accounts, they're given relief as personal pension contributions. Practically, that still reduces the tax you pay, but it's the reason your NHS pension figures need to be reported correctly on the return rather than just buried in expenses.
Your contributions are reconciled each year through the Annual Reconciliation Report process, after which NHSBSA produces your SD86C certificate (the Annual Pensionable Earnings and Contribution Statement). It's typically available on Compass from around the end of July or early August, and your accountant will need it to finalise the pension figures on your tax return.
Do you have to charge VAT on private work?
Most dental work is VAT-exempt, but not all of it, and the test is about purpose, not whether it's NHS or private.
Under VAT Notice 701/57, services by a GDC-registered dental professional are exempt where the primary purpose is the protection, maintenance or restoration of the patient's health. Examinations, fillings, extractions, root canal work, periodontal treatment and clinically indicated orthodontics fall squarely inside the exemption, whether NHS or private.
Where treatment is undertaken purely for cosmetic reasons, with no health purpose, it's standard-rated at 20%. Cosmetic work supplied as part of a genuine oral health treatment programme can still be exempt, so borderline cases turn on the clinical purpose.
This matters because purely-cosmetic income counts towards the VAT registration threshold of £90,000. If your standard-rated cosmetic turnover crosses that threshold on a rolling 12-month basis, you must register for VAT, even though the bulk of your dentistry is exempt. Plenty of mixed practices never get near it, but a busy cosmetic list can, so it's worth tracking the standard-rated slice separately.
Worked example: a mixed associate in 2025/26
Illustrative example. Aisha is a self-employed dental associate in England for 2025/26. Her figures are hypothetical and used only to show how the streams interact.
| Item | Amount |
|---|---|
| NHS associate income | £62,000 |
| Private fees (all health-purpose, VAT-exempt) | £28,000 |
| Total turnover | £90,000 |
| Less: lab fees, materials, GDC ARF, indemnity, subscriptions | £18,000 |
| Taxable profit (NHS + private combined) | £72,000 |
Aisha files one self-assessment return. Her £72,000 profit is taxed as one figure:
- Personal allowance: £12,570 at 0%.
- Basic rate: £37,700 at 20% = £7,540.
- Higher rate: the remaining £21,730 (£72,000 − £12,570 − £37,700) at 40% = £8,692.
- Income tax before pension relief: £7,540 + £8,692 = £16,232.
Class 4 NIC:
- 6% on profit from £12,570 to £50,270 = £37,700 × 6% = £2,262.
- 2% on profit above £50,270 = £21,730 × 2% = £434.60.
- Class 4 NIC: £2,696.60.
On the pension side, only the £62,000 of NHS income is pensionable. Her private £28,000 builds no NHS pension. The NHS contributions she pays (employee plus employer elements) get tax relief as her own member contributions, which reduces the income tax figure above once applied through the return.
On VAT, all £28,000 of private work is health-purpose and exempt, so there's nothing standard-rated. With no cosmetic-only income, she has no VAT registration trigger here. If part of that private list were purely cosmetic, that slice would be standard-rated and would start counting towards the £90,000 VAT threshold.
The takeaway: one profit figure for tax, but the NHS-only pension and the purpose-based VAT test sit alongside it.
What about the annual allowance, McCloud and Scheme Pays?
High-earning dentists, especially those with strong NHS pension growth on top of private income, can run into the pension annual allowance. The standard annual allowance is £60,000 for 2025/26.
It can taper for high earners. The taper bites once your threshold income exceeds £200,000 and your adjusted income exceeds £260,000, reducing your allowance by £1 for every £2 of adjusted income over £260,000, down to a minimum of £10,000. Helpfully, your NHS member contributions are excluded when working out threshold income (unless made under a salary sacrifice arrangement entered into on or after 9 July 2015), which keeps many dentists below the threshold.
Two other things to know:
Scheme Pays. If you have an annual allowance charge, you can ask the NHS scheme to pay it for you rather than finding the cash yourself. The standard deadline to make a Scheme Pays election is 31 July following the self-assessment deadline for the year the charge relates to.
The McCloud remedy. Pensionable service in the remedy period, 1 April 2015 to 31 March 2022, has been rolled back into the legacy 1995/2008 scheme. That can change your annual allowance position for those years, and HMRC runs a digital service to recalculate and correct affected annual allowance charges. If you had charges in the remedy years, they may need revisiting.
These are areas where it pays to get advice rather than guess. Our tax advisory team handles dental annual allowance and Scheme Pays questions regularly.
Your dental tax and pension deadline calendar
The dates below assume the 2025/26 tax year. Adjust the year as you go.
| Deadline | What's due |
|---|---|
| 5 October 2026 | Register for self-assessment if you became self-employed in 2025/26 and aren't already registered |
| ~End July 2026 | NHS Annual Reconciliation Report completed; SD86C certificate then available on Compass (often early August) |
| 31 October 2026 | Paper self-assessment return for 2025/26 |
| 31 December 2025 | GDC Annual Retention Fee (£698 for dentists) due for 2026 registration |
| 31 January 2027 | Online self-assessment return for 2025/26 plus balancing payment and first 2026/27 payment on account |
| 31 July 2027 | Second 2026/27 payment on account; standard Scheme Pays election deadline for a 2025/26 annual allowance charge |
One forward-looking date to have on your radar: Making Tax Digital for Income Tax begins on 6 April 2026 for sole traders and landlords with qualifying gross income over £50,000, then £30,000 from April 2027 and £20,000 from April 2028. Most full-time associates will be in scope, so digital record-keeping is worth setting up early.
Frequently asked questions
Do I file two tax returns for NHS and private work?
No. As a self-employed dentist your NHS and private income are the profits of one profession and go on one self-assessment return. You don't run two trades just because the income comes from two sources. You report the combined turnover, deduct your costs, and tax is charged on the single profit figure.
Is my private dental income pensionable in the NHS scheme?
No. Only your NHS earnings are pensionable in the NHS Pension Scheme. Private fees, cosmetic treatment and any non-NHS income build no NHS pension. For a self-employed performer your pensionable figure is your Net Pensionable Earnings, the NHS slice declared on Compass.
Do I have to charge VAT on private dentistry?
Usually not. Under VAT Notice 701/57, dental services by a GDC-registered professional are exempt where the primary purpose is protecting, maintaining or restoring the patient's health. Only purely-cosmetic work with no health purpose is standard-rated at 20%, and that cosmetic income counts towards the £90,000 VAT registration threshold.
Am I automatically self-employed as a dental associate?
No longer automatically. The old associate concession in HMRC's ESM4030 was withdrawn from 6 April 2023, so status now rests on the ordinary employment status tests and HMRC's CEST tool. Most genuine associate arrangements remain self-employed, but the contract terms and how you actually work decide it.
How do my NHS pension contributions reduce my tax?
As a self-employed practitioner you pay both the employee and employer contributions yourself. HMRC's BIM54020 confirms both are relieved as your own member pension contributions, rather than being a straight business expense in your accounts. The relief still reduces your tax, which is why the NHS pension figures need reporting correctly on your return.
What is the SD86C and when do I get it?
The SD86C is your Annual Pensionable Earnings and Contribution Statement from NHSBSA. It's produced after the Annual Reconciliation Report process, usually completed around the end of July, and is then available on the Compass system, often from early August. Your accountant uses it to finalise the pension figures on your tax return.
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Talk to a dental accountant
A mixed NHS and private list is straightforward to get right once the streams are split cleanly and the pension and VAT positions are nailed down. Getting it wrong means overpaid tax or a nasty surprise on the annual allowance.
Want your NHS and private income handled properly? Book a free call with a Zmartly accountant who works with dentists, and we'll sort your self-assessment, pension reporting and VAT position together.
