Why You Still Can’t Pay the Tax — Even as an Established, Profitable Dental Practice

As a dental practice owner, you could be running an established dental practice, be profitable, and have a healthy bank balance — and still not have the cash to pay your Corporation Tax or Self Assessment on time.

From my experience as a dental accountant and CFO since 2019, that’s exactly what I see every December (for Corporation Tax) as most practices’ financial year end coincides with the tax year end — and again in January and July (for Self Assessment) — inside practices turning over £600K to £2.4M. The numbers look “fine” — but when the tax bill lands, panic sets in.

Here’s what you need to know: this isn’t a production problem. It’s not even a profitability problem. It’s a cash flow design problem in practices that have transitioned from growth phase to established, but never updated how cash moves to match their new reality.

I’m Shishir Khadka — Dental Accountant and CFO, creator of the MAP Method™, and founder of Dentpulse. Since 2019, I’ve helped over 67 UK dental clinics protect owner pay, hardcode their PPBT™, and stabilise their tax planning — without touching reserves or chasing extra production.

This practical guide is for you if:

• You run an established dental practice
• Your patient revenue is stable
• Your team is solid, with less staff turnover
• But you still feel cornered when the tax bill arrives

Let me show you why that happens, and how to fix it using tax liquidity logic, future cash flow pairing, and the same system I install in top-performing private clinics.

Fast Takeaway

Even profitable, stable practices miss tax payments — because their cash model is misaligned with tax timing. You’re likely:

• Recognising profit too early (accrual vs cleared cash mismatch)
• Paying out others first — leaving tax unpaid
• Operating without a rolling tax forecast or liquidity pairing system

The solution isn’t saving more. It’s designing a system that pre-commits tax before it becomes a crisis.

TL;DR-

• Your practice can be profitable — and still cash-poor at tax time
• The issue isn’t your earnings — it’s the mismatch between tax due and cash retained
• Without PPBT™ and CFFP™ embedded, you’ll stay stuck reacting to tax bills
• Fix it by anchoring tax flow inside your forecast — just like you do with salaries or loans
• See HMRC’s Corporation Tax deadlines

Why Am I Still Struggling to Pay the Tax — Even in an Established Dental Practice?

You are still struggling to pay the tax, even in an established dental practice because your tax is due based on reported profit — but your retained cash isn’t structured to match when or how that tax will be paid.

In established dental clinics — with steady income and low staff turnover — the real issue isn’t how much you owe, but when you owe it… and whether the cash has actually been protected for that purpose.

From what I’ve seen reviewing financials in over 67 practices, three advanced cash flow breakdowns explain why stable clinics still run short when tax season hits:

Advanced Breakdown: Where the Real Friction Happens

Do This, Not That — Cash Model Edition

Mini Case Study: 2-Chair Private Clinic in Kent

• Annual Revenue: £710,000
• Owner Pay: £6,500/month drawn
• Profit Margin: 19% (reported), but no tax provision system
• Problem: £17,406 Corporation Tax due in December — only £4,891 available
• Root Cause: Full net profit drawn monthly; no tax pairing or PPBT™ planning
• Fix Applied: Rolling 13-week forecast + PPBT™ £6,000/month + CFFP™ tax pairing weekly

“Before Dentpulse, I’d be scrambling every December. Now I know exactly what’s coming — and it’s already covered.” — Dr. S., Owner of a Private Clinic in Kent

💬 What I Want You to Remember Even in practices with stable income, tax shocks happen when your model doesn’t pre-commit cash. If your system doesn’t allocate for tax, the shortfall will keep repeating.

What’s Hiding Behind My Practice Profit That Makes Tax So Hard to Pay?

Your reported profit doesn’t equal retained cash — and the gap silently drains your ability to pay tax.

Inside most established dental practices, the accrual profit shown on your accountant’s report includes:

• Treatment booked but not yet paid (money earned but money not received)
• Year-end adjustments like depreciation, amortisation, or interest
• Capital investments such as waiting area refurbishment reducing tax but not preserving liquidity

Deconstructing Your Profit: Where Cash Disappears

Mini Case Study: Mixed NHS/Private Clinic in Cheshire

• Turnover: £1.26M
• Reported Profit: £183,000
• Corporation Tax Due: £34,770
• Cash in December: £8,500
• Fix: Monthly tax provision based on cleared net income + CFFP™ + buffer discipline

Key Insight You’re taxed on accounting logic — but you live on cash logic. Ignore that difference, and you’ll keep getting caught.

How Do Established Practices Create Tax-Proof Cash Flow Without Touching Reserves?

Established Practices can create tax-proof cash flow without touching reserves by embedding CFFP™ logic (Cash Flow Future Pairing), before it becomes a liability.

We don’t treat tax as an expense. We treat it like payroll or loan repayments — fixed, scheduled, protected and kept in a tax pot on weekly/monthly or quarterly basis by transferring money from main bank account to tax pot account.

Tax Pairing Framework

Mini Case Study: Private Practice in Cobham, Surrey

• Revenue: £845K/year
• Problem: £28,400 tax due — only £11,200 set aside
• Fix: Weekly tax provision + PPBT™ £7,250/month + CFFP™ dashboard
• Result: Tax funded early, no overdraft, owner pay stable

Another Case Study: Referral Practice in Manchester Picadally 

• Revenue: £2.1M
• Setup: 5 chairs, ortho + sedation referrals
• Issue: £91,300 tax due — £36,400 cash available
• Root Cause: Deferred income + Q4 specialist payouts
• Fix: Quarterly tax pairing by discipline + PPBT™ sync to net cleared by role

Tax Pairing Analogy Tax is like lab bills. You don’t pay them annually — you allocate every case. CFFP™ makes tax predictable the same way.

💬 Here’s what you need to remember: Tax doesn’t break clinics. Poor pairing logic does. Build the cash flow system once — and it protects you forever.

Before You Rework Associate Pay, Lock Your Tax Pairing

Changing associate pay can feel like the right move — but without tax-paired cash logic it often creates a bigger problem. Higher payouts, extra bonuses or faster draw schedules increase taxable profit and shrink the cash available to meet CT/SA dates. In short: you can fix pay fairness and still blow your tax reserve.

Read this next: How to Optimise Dental Associate Pay Models in an Established Practice Without Hurting Your Monthly Cash Flow — it shows pay structures (tiered, collections-based, APEX™-linked) that protect practice margins and timing, so your pay model improves morale and keeps tax pots intact.

Your Next Steps: Make Your Practice Tax-Ready

Option 1: DIY

• Map cleared cash vs P&L profit monthly
• Set fixed Corporation Tax reserve (19%+)
• Separate tax account
• Anchor PPBT™ — and never exceed it casually

Option 2: Done-for-You with Dentpulse We design systems that:

• Forecast tax
• Lock in pay
• Kill tax panic permanently

Book a Clarity Call →

Frequently Asked Questions

Can’t I Just Set Aside 20% and Hope for the Best?

Not reliably. Most principals set it aside late — and often based on incorrect profit. Use cleared income instead.

Should I Pay Corporation Tax Early or Wait?

You must pre-fund it. HMRC says Corporation Tax is due 9 months + 1 day post year-end. Waiting = risk.

What If I Use My Tax Buffer for Something Else?

Don’t. That buffer is clinical indemnity for your finances. Spend it, and tax hits you with no defence.