An important part of managing your dental practice is ensuring you have sufficiently planned for the future. Here, Adam Siwak, of Lockharts Solicitors, talks through the elements of safeguarding your NHS contract in an eventuality which is rarely considered but has catastrophic repercussions on the practice – an untimely passing of the sole contractor.
It seems like a sombre thing to think about, but as a dentist the most valuable asset you’ll own as part of your business will likely be the goodwill of your practice. However, in the event that the sole contractor passes away and the NHS contract is terminated, a proportion of this goodwill will be lost. This makes planning to protect your NHS contract an incredibly important consideration for many dentists.
Who can step in to take over a practice?
According to Section 38 of the Dentists Act 1984, individuals who are not registered dentists or registered dental care professionals are prohibited from carrying on the practice of dentistry, which means that non-dentists cannot step in to take over a practice following the death of a principal.
However, there is an exemption in section 41(4) which allows the below to carry on for a period of three years, following the death of the practitioner:
- Personal representatives
- Surviving spouse/civil partner
- Trustees on behalf of their spouse/civil partner or children.
There are, however, additional rules relating to who can hold an NHS contract and if these are breached a contract can be terminated.
The General Dental Services (GDS) and Personal Dental Services (PDS) Regulations outline the processes that apply when a sole practitioner, a partner or a signatory (to a PDS agreement) dies. It’s important to note that after a 28 day period following the death of a single-handed contractor, a GDS contract or PDS agreement will terminate automatically. To prevent this, the relevant Regional Team need to be notified within this period, and suitable arrangements for the running of the practice need to be made. It’s therefore important to act quickly and to seek advice to gain an understanding of the process involved.
Where can I find support?
The NHS ‘Policy Book for Primary Dental Services’ which was released in January 2016 provides useful guidance on what needs to be done, including how to notify NHS England of the death of a contractor, together with the steps that can be taken to preserve the contract or transfer it to another person.
There are other methods to protect NHS contracts held by sole contractors, such as entering into nominal partnerships or incorporation. It’s important to ensure the partnership or limited company is itself eligible to hold the NHS contract and that it continues to be eligible to hold it when a partner or director or shareholder (in the case of a limited company) passes away.
If the above methods are correctly used to protect the NHS contract, it will not terminate when a partner, director or shareholder dies, but it will continue to be held by the partnership/limited company. There will be legal tax implications related to both of these options and therefore advice should be sought from both a solicitor on the benefits and risks of each, and from a specialist dental accountant.
For further support and advice on how to protect your NHS dental contract, access a more detailed article here
About Adam Siwak
Adam joined Lockharts Solicitors in 2013 as a Paralegal in the Commercial and Corporate Healthcare Department before qualifying as a Staff Solicitor in 2016. Adam has experience in advising on commercial and corporate healthcare and dispute resolution. He also regularly produces legal articles and documents on legal issues within the healthcare sector.
For more information or to contact Lockharts Solicitors, visit their website