Coronavirus & Your Practice

As a business we are continuing to follow the Government guidelines on Covid-19 by postponing all client appointments and instructing all staff to work from home with immediate effect. By way of an update the market is in a state of limbo but it’s clear from conversations with Dentists that the issue at the forefront of minds is the welfare of their families, staff and patients whilst also trying to turn their mind to protecting the business.

As is the case with a large number of businesses there is an air of uncertainty until there is further guidance from the Government. We understand that for most of you the biggest question is in respect to the unprecedented measures proposed to allow employers to claim back up to 80% of salaries where an employee is defined as Furloughed. We are currently waiting for further guidance on the HMRC portal that is being designed to handle such claims. This can be reviewed on the gov website and further guidance can be found at https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-the-coronavirus-job-retention-scheme.

We appreciate these are difficult times so we want to provide as much support as we possibly can. We are getting questions in three key areas right now, so we wanted to share this information with you all.

Will I get a breach notice for not fulfilling my UDA target?

Based on the legal advice from several Dental Solicitors, in short the answer is no. There is something called a ‘force majeure’ clause in the NHS contract that protects practices that cannot meet their targets due to events outside of their control. The COVID-19 outbreak could be such an event if the practice is directly affected. In normal circumstances, you are meant to inform your LAT in writing of a force majeure event within 5 days. However, there may be some leniency right now given the enormity of the current national situation! We would advise that in the event that you close, or a performer is unable to work, that you inform the LAT in writing just in case.

The CDO office has also released a letter this morning which confirms that NHS Activity Assessment will be based on 11 months to 29th Feb 2020 with a balancing amount then added based on the No of UDAs achieved in March 2019. If you this would compute a figure below 96% then clawback will still apply but it is difficult to see how they could justify the issuance of a breach notice as you could argue that you would have achieved more UDAs in March 2020 than in March 2019.

Do I have to tell someone if I close the practice?

Where possible, inform the following as soon as the decision to close your practice is made:


  • Your LAT
  • The CQC do-not need to be informed as they have this morning released guidance telling providers not to tell them as this will clog their system.


  • HIW
  • The Health Board

How will this impact values?

While a downturn in income is unlikely to be avoided, we don’t expect to see a reduction in practice values in the medium term but inevitably whilst this situation is ongoing and social distancing is being practiced we are in a situation where viewings and meeting are impossible, so it is going to be difficult for buyers and sellers to agree deals as a result of this. The appetite still remains for dental practices and this will return once this pandemic crisis is over but the practical ability to agree deals is impeded at this point in time. Whilst, as it stands, we are in ‘lockdown’ for three weeks which in my view will likely be extended, no one at the moment is in a position to really know and understand how small or big the knock on effect will be as it all depends on how long the strict measures are in place. The general consensus from existing deals going through sales progression is that this is only a ‘postponement’ on acquisitions and not a change in acquisition strategy. Therefore as a broker we will be advising clients commercially at the time of completion what to expect as and when we get to that point. The likely outcome for sales is that practices may be agreed based on assumed turnover pre-COVID levels, potentially with completion delayed for a short period beyond it to allow the business to pick back up again. The good news is that for most that can be a reality even in spite of the current climate as once everything calms down the consolidators’ acquisition target will not have been eased and the demand for dental practices will no doubt remain high.

We also have it on good authority from two very active lenders in the sector that they are being told to be supportive of practice lending that is already in the system and to permit drawdown and where possible write new business given they can work remotely but we anticipate this could change and those seeking additional support from the government’s CIBL scheme to keep their business afloat will likely become the focus for the coming weeks.

Should I furlough my employees?

Over the last three to four days a lot of businesses have begun furloughing (temporarily laying off) employees as the government announced on Friday that they will fund up to 80% of their cost of up to a maximum of £2,500 per calendar month backdated to the 1st March. Unfortunately there is no further guidance released on this as it stands which we are hoping will be imminent. We have read this to be binary which means an employee is either working or they are not which would prohibit the concept of you having one member of staff working each day to answer phone messages / deal with emergencies. This may be different when full guidance comes out. Further we think the key word is cost so the £2,500 would include Auto-Enrolment costs for example. Once we understand this I will drop you an email again.

Is now really the time to think about a revaluation or selling?

To maximise value we wouldn’t be advising to approach the market at this time. We will always work on the instruction of our clients but our recommendation would be to hold fire until we are in a position where the market can return to a degree of normality and function normally whereby buyers can arrange meetings at practices.  Over the past few weeks practices have still gone to market and sales have been agreed but a lot has changed in the last 24 hours alone and no doubt the next 24 hours will be similar. We will be maintaining business processes as normal but have adapted our processes inline with the guidance and if you would like to talk on the phone or discuss via a video call then do please let us know.  Like most we will be at home for the next three weeks so all things being well we have plenty of space in our diaries.