What Is a Limited Company for Dentists?
A Limited Company is a legal business structure where the dental practice is treated as a separate legal entity from the owner. It can own assets, earn income, take on liabilities, and be taxed independently — unlike a sole trader, where the business and owner are legally the same.
In the UK, many dentists operate via limited companies to gain tax planning flexibility, liability protection, and profit control.
Why a Limited Company Matters for Dental Practice Owners
Choosing the right structure isn’t just legal — it’s financial.
With a limited company, you can:
- Split income between salary and dividends
- Delay or reduce personal tax using retained profit
- Protect personal assets from business risk
- Optimise how and when you take money from the business
- Plan for investment, exit, or NHS contract incorporation
Example:
Your practice makes £140,000 profit before tax.
- As a sole trader, you’re taxed on the full £140K personally
- As a limited company, you can pay Corporation Tax (~19%) and draw income in a tax-efficient way — potentially saving thousands
Key Differences: Sole Trader vs. Limited Company (UK Dentists)
| Factor | Sole Trader | Limited Company |
| Legal Entity | You are the business | Separate from you |
| Tax | Personal Income Tax | Corporation Tax + Personal Tax |
| Liability | Unlimited | Limited to company assets |
| Drawings | Direct | Salary + dividends |
| Profit Planning | Limited flexibility | High planning control |
| Exit/Sale | Harder to structure | Easier to value and sell |
DentPulse supports both — but unlocks its full tax and profit planning power when used with a Limited Company structure.
How DentPulse Supports Limited Company Dentists
| Feature | Function |
| PPP™ – Profit-to-Pocket™ | Shows how much you can safely draw as salary and dividends |
| Tax Module | Calculates Corporation Tax and personal tax in real time |
| Drawings Planner | Schedules safe income after accounting for liabilities and buffer |
| Dividend Alerts | Flags when retained profit is too low to legally draw dividends |
| Scenario Modeller | Compares tax and income outcomes across structures |
DentPulse turns your limited company into a cash flow and tax planning machine — not just a legal box tick.
DentPulse Tip™
Being a limited company doesn’t make you tax-efficient.
Knowing how to use your company does.DentPulse gives you the real-time visibility you need to structure salary, dividends, investments, and drawings with confidence.
Related Glossary Terms
- PTP™ – Profit-to-Pocket™ – Tracks how profit becomes personal income
- Corporation Tax – Tax paid on company profit
- Dividends – Taxed distributions from retained profit
- Director’s Loan Account – Tracks overdrawn or underpaid director balances
- Retained Profit – Profit left in the business after tax and drawings
Glossary Summary Table
| Term | Meaning |
| Limited Company | A separate legal entity used to run your dental practice and manage tax and liability |
| Financial Benefits | Income planning, tax flexibility, profit retention |
| Draw Method | Salary + dividends, not direct withdrawals |
| DentPulse Advantage | Full integration of tax, profit, and drawing strategy in one platform |
