Salary vs dividends if you’re operating as a LTD company

If you’re already running your own limited company, one of the key advantages is the flexibility in how you take income. But doing it right takes planning.

VAT exempt? Standard rated? Or a bit of both?

VAT is one of the most misunderstood areas for dental practice owners. While most NHS treatments are VAT exempt, many private and cosmetic services, like teeth whitening or facial aesthetics, can fall under the standard rated category.

This mix of exempt and taxable income creates what’s known as a “partial exemption” scenario, meaning you may not be able to reclaim all of your VAT on expenses. And that’s where many practices unknowingly get caught out.

Limited company or sole trader, what’s right for your practice?

One of the biggest financial decisions a dentist makes is choosing how to operate: as a sole trader or through a limited company. Each structure comes with its own tax implications, responsibilities, and long term considerations. The right setup will depend entirely on your individual circumstances and future plans.

There’s no one size fits all answer. That’s why we take the time to understand your practice model, income level, and ambitions before advising on the most efficient and practical structure for you.