Understanding Business Rates Letters for Dentists: A Guide for Practice Owners
As a dentist running your own practice, managing costs and ensuring your business remains profitable is essential. One of the financial aspects that can sometimes be overlooked is business rates. Business rates, also known as non-domestic rates, are taxes paid on business properties like dental practices. These rates can be a significant expense, and it’s important to understand how they work and how you can manage them effectively.
What are Business Rates?
Business rates are a form of taxation levied on properties used for business purposes. These rates are set by local authorities and are based on the value of the property, which is determined by the rateable value. This value is calculated using factors such as the size of the practice, its location, and its use.
For dental practices, business rates typically cover the premises where the practice operates. These rates contribute to local government funding and can vary greatly depending on where your practice is located and the size of your business.
Why Should Dentists Be Concerned About Business Rates?
As a dental practice owner, your business rates can be a significant financial burden, especially if your practice is in an area with high property values or if your practice is expanding. Since business rates are calculated based on the rateable value of the property, dentists who are leasing or renting space may find that their business rates are higher than expected.
You can claim reimbursement of your business rates via Compass if both of the following apply:
• You, or in cases of partnership, one of the partners pays the business rates
• Your NHS Dental Services contract value is more than £25,000
The application and any supporting evidence (copy of your business rates demand notice) must be received within 3 months of the first payment being due.
If you’re paying by instalments and want to be reimbursed in a lump sum, the NHS must receive your application and any supporting evidence within 3 months of the last instalment being paid.
If you’re entitled to claim small business rates relief, this must be claimed before applying for reimbursement of business rates.
If you’re a new practice who does not have this evidence, you must send a letter from your accountant containing the forecast of NHS proportion, which our specialist dental accountants can of course help with.
As part of our service for dental practices, we prepare letters for all eligible practices and send these each year for use with the application.
How much can be claimed?
The amount a provider can claim is subject to abatement based on their proportion of non-NHS income:
How do I apply?
1. Login to Compass.
2. Select Payments.
3. Select Payment Adjustment Update.
4. Select Create Payment Adjustment.
5. Enter the Payment Adjustment Type ‘RATES_ENG’ or select it from the drop-down list.
6. Select Payment Adjustment Type for Business Rates (England only) from the table.
7. Enter the mandatory fields and include the full practice address and years you’re applying for in the ‘Narrative’ box.
8. Select Attachments.
9. Select Add File to upload your supporting evidence.
10. Select Save to complete your declaration.
If you have any questions, please contact one of our specialist dental accountants here.