Insolvency Advice For Dental Practices

What happens when a dental practice is unable to meet its debts as they fall due?If your dental practice is experiencing financial difficulties, seeking insolvency advice is essential to help you navigate the situation effectively.

There are several options available to dental practices facing insolvency, including voluntary liquidation, administration, and Company Voluntary Arrangements (CVA).

Each option has its advantages and disadvantages, and seeking expert advice from insolvency professionals can help you determine the best course of action for your practice.

It is essential to act quickly to mitigate the effects of insolvency, protect your assets, and minimize the impact on your staff and patients. With the right advice and support, you can navigate the challenges of insolvency and emerge with a stronger, more sustainable dental practice.

The number of businesses in the United Kingdom in “significant” financial distress, showed that 1,740 dental businesses now fall into this category, or a 4% rise within the past year. A poll by the British Dental Association that 70% of practices say that they can only maintain financial viability for a maximum of three months, with 20% saying that they may only be able to survive for one more month.

Advice and insolvency support for dental practices

When dental practices face financial difficulties, seeking professional advice and insolvency support is crucial. Insolvency professionals can provide guidance on the options available to the practice, such as voluntary liquidation, administration, and Company Voluntary Arrangements (CVA).

They can also offer support throughout the insolvency process, including negotiations with creditors, asset protection, and employee redundancies.

Your corporate structure and insolvency

Corporate structure can have a significant impact on how a business handles insolvency. A company’s legal structure, such as whether it is a limited liability company or a sole proprietorship, can determine how much personal liability the owners have in the event of insolvency.

Additionally, the size and complexity of the corporate structure can impact the ease of restructuring and the ability to access financial resources.

For example, a company with multiple subsidiaries may face more complex insolvency proceedings than a single-entity business. It is important for businesses to regularly review their corporate structure and assess how it may impact their ability to manage insolvency.

Sole traders

Sole traders are individuals who run their businesses as a self-employed entity. In the event of insolvency, the sole trader is personally liable for any debts accrued by the business, which can put their personal assets at risk. Sole traders facing insolvency have several options available, such as negotiating with creditors, seeking a payment plan or debt relief, or filing for bankruptcy.

Seeking professional advice and support is crucial for sole traders facing insolvency, as it can help them to navigate the complex legal and financial implications of their situation. With the right support, sole traders can protect their personal assets and work towards a sustainable financial future. However, it is important to note that prevention is always better than cure, and sole traders should regularly review their financial situation and take steps to manage their debts to avoid insolvency wherever possible.


Partnerships are a business structure in which two or more individuals share ownership and responsibility for the business. In the event of insolvency, each partner is personally liable for the debts accrued by the partnership. This means that personal assets may be at risk in the event of insolvency. Partnerships facing insolvency have several options, including negotiating with creditors, seeking a payment plan or debt relief, or filing for bankruptcy.

The best course of action will depend on the specific circumstances of the partnership, and seeking professional advice and support is crucial. Insolvency professionals can help partnerships navigate the complex legal and financial implications of their situation and identify the best options for protecting personal assets and working towards a sustainable financial future.

Limited company

A limited company is a separate legal entity from its owners, and in the event of insolvency, the owners’ personal assets are generally protected. However, directors of a limited company have a duty to act in the best interests of the company and its shareholders. If a company is insolvent or likely to become insolvent, directors have a responsibility to take appropriate action to protect the interests of creditors.

This may include seeking professional advice and support, negotiating with creditors, or filing for insolvency. There are several options available to limited companies facing insolvency, including voluntary liquidation, administration, and Company Voluntary Arrangements (CVA).

What are the insolvency options for my dental practice?

There are a number of insolvency options for dental practices and dentists,

They may include:


Typically, the initial step in addressing insolvency for dental practices involves entering administration, where the focus is on selling assets or restructuring the business to restore financial stability. However, for practices with NHS contracts, the sale of these contracts is not permitted, so the only option may be to sell the entire company to a buyer who is willing to take on the task of paying off outstanding debts, which may result in a lower asking price for the practice.

For private practices, selling the business outright is also an option, but buyers are often reluctant to assume liability for the practice’s debts. In this case, the practice may need to sell its goodwill and history to generate funds to pay off its debts.

Time to pay arrangements

Time to Pay (TTP) arrangements are a useful tool for dental practices facing financial difficulties, as they allow businesses to spread out their tax payments over a longer period. TTP arrangements can help to ease financial pressure and avoid the need for more drastic measures, such as insolvency. Dental practices can apply for TTP arrangements online or over the phone, and the arrangements are typically negotiated on a case-by-case basis.

It’s important to note that interest and penalties may still be charged on overdue payments, even if a TTP arrangement is in place. Seeking professional advice and support can help dental practices navigate the TTP application process and negotiate more favorable repayment terms. With the right support, dental practices can use TTP arrangements to manage their cash flow and avoid more severe financial difficulties.

CVA and IVAs

While it’s not mandatory to engage an insolvency practitioner when facing financial distress, they can provide valuable assistance in navigating the insolvency process. For limited companies or limited liability partnerships, opting for an insolvency practitioner can provide access to Company Voluntary Arrangements (CVA), which allow businesses to negotiate an affordable repayment plan with their creditors. With a CVA in place, creditors must agree to the repayment schedule proposed by the business.

For sole traders, Individual Voluntary Arrangements (IVA) are a viable alternative to CVAs, which can be arranged through an insolvency practitioner. Similar to CVAs, IVAs prevent creditors from taking legal action against the business owner. In both CVA and IVA, the approval of creditors holding 75% of outstanding debts is required to validate the arrangement. Seeking professional advice and support can increase the chances of a successful CVA or IVA outcome, allowing businesses to regain their financial footing and avoid more severe measures such as bankruptcy.


Restructuring finance for a dental clinic can be a challenging process, but it’s essential to ensure the financial stability and longevity of the practice. One option for restructuring finance is to renegotiate existing loans or lines of credit with lenders, potentially resulting in lower interest rates or more favorable repayment terms. Dental clinics may also consider consolidating multiple loans or credit lines into a single loan, simplifying their repayment obligations.

In some cases, dental clinics may need to consider refinancing or seeking additional equity or debt financing to address cash flow issues or fund growth opportunities. Seeking professional advice and support can help dental clinics identify the best financing options for their specific needs and develop a comprehensive financial plan for the future. With the right approach, dental clinics can restructure their finance to support their operations and position themselves for long-term success.


Liquidation is one of the most severe measures that dental practices may face when dealing with financial difficulties. In a liquidation process, the practice’s assets are sold off to pay its outstanding debts and other obligations. Once all creditors have been paid, any remaining funds are distributed among the practice’s shareholders. Liquidation may be voluntary, where the practice initiates the process, or involuntary, where creditors force the practice into liquidation through legal action.

With the right guidance, dental practices can explore alternative options to liquidation and work to mitigate its impact on their stakeholders.

Dentists should rest assured that liquidation or bankruptcy alone is unlikely to affect their fitness to practice or their registration with the General Dental Council.

Measures under NHS contract

For NHS practices, there are contractual obligations to notify the NHS if the practice cannot pay its debts or is facing bankruptcy, liquidation, or administration. Legally, the NHS then has the right to terminate the contract. Or else to impose certain sanctions on the practice (including suspending the contract and withholding contract payments).

However, given the current situation, it is unlikely that the NHS will consider carrying out any of these until the dust has settled from the pandemic.

Usual clawback measures will continue to apply where practices don’t meet targets set in NHS contracts.

Frequently asked questions

What is insolvency advice for dentists?

Insolvency advice for dentists refers to the specialised guidance and support provided to dentists who are facing financial difficulties, including bankruptcy, insolvency, or debt management issues.

What are some common causes of insolvency for dentists?

Dentists can face insolvency for various reasons, such as excessive personal or business debt, a decline in patient numbers, or unexpected expenses, such as medical emergencies. Poor financial management or planning, including underestimating the costs of running a dental practice, can also lead to insolvency.

How can insolvency advice help dentists?

Insolvency advice can help dentists by providing them with personalized and comprehensive guidance on how to manage their financial challenges. This may include negotiating with creditors, restructuring debts, and developing a plan to improve cash flow and profitability.


Insolvency advice for dental practices is crucial in navigating the complex legal and financial landscape of insolvency. When a dental practice is insolvent, seeking professional advice and support can provide valuable insights into potential solutions to address the situation.

This may include negotiating payment plans with creditors, restructuring finance, or exploring alternative sources of funding. In more severe cases, such as bankruptcy or liquidation, insolvency advice can help dental practices understand the implications of these measures and explore alternative options.

With the right guidance, dental practices can make informed decisions and take proactive steps to address their financial difficulties and position themselves for long-term success.

We have help a number of dentist with turning around distressed practices since 2010, if your surgery is suffering from historic debt simply complete the online enquiry or call 01246 912052.

Steve Jones Profile
Insolvency & Restructuring Expert at Business Insolvency Helpline

With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.