Most dental practice valuations start with the wrong question. “What multiple of turnover do practices sell for?” has an answer, it is published quarterly, and it is close to useless for valuing your practice. This guide explains how dental practice valuation actually works — the two methods in real use, why they disagree, and the adjustment that catches most principals out.

Why the rule of thumb fails — using the brokers’ own data

The most-quoted UK benchmark is the NASDAL Goodwill Survey, run quarterly since 2008 by the National Association of Specialist Dental Accountants and Lawyers. It is a genuinely useful dataset because it records what practices actually sold for, gathered anonymously from member accountants’ and lawyers’ completed transactions, expressed as goodwill as a percentage of gross fees.

Look at two consecutive quarters of it:

  • Quarter ending 31 July 2025: overall 124% of gross fees — NHS 153%, private 106%, mixed 122%.
  • Quarter ending 31 October 2025: overall 119% of gross fees — NHS 111%, private 100%, mixed 144%.
NASDAL GOODWILL SURVEY
The headline moved five points. NHS practices moved forty-two.
NASDAL Goodwill Survey: the headline moved five points, NHS practices moved forty-twoSlope graph of goodwill as a percentage of gross fees across two consecutive quarters of the NASDAL Goodwill Survey. Quarter ending 31 July 2025 then quarter ending 31 October 2025: overall 124 then 119, a fall of 5 points; NHS practices 153 then 111, a fall of 42 points; mixed practices 122 then 144, a rise of 22 points; private practices 106 then 100, a fall of 6 points. The overall figure is nearly flat while the categories beneath it move sharply in opposite directions.Goodwill as % of gross fees100120140160QUARTER ENDING31 Jul 2025QUARTER ENDING31 Oct 2025NHS153Mixed122Private106Overall124111−42144+22100−6119−5A small quarterly sample — the mix of sellers moves it.
Goodwill as a percentage of gross fees, for practices sold in two consecutive quarters. The overall figure barely shifted; the categories inside it moved sharply and in opposite directions, on a small sample of completed transactions.Source: NASDAL Goodwill Survey, quarters ending 31 July 2025 and 31 October 2025.

In three months, the NHS figure fell from 153% to 111% and the mixed figure rose from 122% to 144%. Nothing about the underlying practices changed that fast. What changed was which practices happened to sell in that quarter — a small sample, with a wide spread inside it, moving on mix rather than on market.

That is the point, and NASDAL are candid about it: the survey describes a market, not a practice. The person compiling it has publicly described the picture as showing “a wide range of values” rather than a clean trend. Applying a headline percentage to your own gross fees does not produce a valuation. It produces a number with the right units.

Treat the percentage-of-turnover figure as a sense-check on a valuation you arrived at properly — a way of noticing you are 40% outside the market — and never as the valuation itself.

The two methods actually in use

Real valuations of UK dental practices are built one of two ways, and which one applies depends mostly on who is buying.

1. Percentage of gross fees

The comparison method: what have similar practices, in similar places, with a similar income mix, recently sold for as a proportion of their fee income? This is the basis the NASDAL survey tracks, and it is how the lower and middle of the market — associates and small groups buying a practice to run — tends to think.

Its weakness is that turnover says nothing about profitability. Two practices with identical gross fees can have materially different earnings once you account for staffing model, lab costs, materials, rent and surgery utilisation. A busy practice that converts little of its turnover into profit is worth less than the rule of thumb suggests, and the buyer’s lender will notice even if the buyer does not.

2. Adjusted EBITDA and a multiple

The earnings method: establish the sustainable annual profit the business produces, then apply a multiple to it. EBITDA — earnings before interest, tax, depreciation and amortisation — is the standard starting point, and it is how corporate and consolidator buyers value practices, because they are buying an income stream, not a job.

The multiple is not a fixed number and is genuinely negotiated: it moves with practice size, income mix, growth headroom, quality of the team, lease position and how much of the profit survives the seller’s departure. Larger, well-run, multi-surgery practices with established associates attract higher multiples than single-handed practices, which is why consolidators can often outbid an individual buyer for the same practice. Be sceptical of any specific multiple quoted at you without the accounts to support it — including the ones in circulation online, many of which come from US brokerages and do not describe the UK market at all.

The adjustment that catches principals out

This is the single most important mechanic in dental practice valuation, and the one that most often produces an unwelcome surprise.

A buyer is not interested in the profit your practice made with you working in it. They are interested in the profit it will make without you. So before any multiple is applied, the accounts are normalised:

  • Your clinical work is replaced with an associate cost. The income you personally generate stays in, but a notional associate is costed against it at the market rate — commonly in the region of 40–50% of the gross fees they generate, with the BDA’s template associate agreement using 50%. If you are a high-earning single-handed principal, this adjustment alone can remove a very large sum from the profit figure.
  • A notional manager’s salary goes in if you currently run the practice yourself without paying anyone to do it. Your unpaid management time is a real cost the buyer will have to fund.
  • Personal and non-recurring items come out. One-off legal or repair costs, expenses that will not continue under new ownership, and anything run through the business that is really personal are added back — legitimately, and with evidence.
  • Owner’s drawings are stripped out and replaced by the two costs above, rather than treated as profit.
HOW A BUYER RE-READS YOUR ACCOUNTS
The profit you report is not the profit you are selling.
How reported profit is normalised down to adjusted, associate-led EBITDAA schematic bridge diagram, carrying no data. It starts from reported profit, shown as a full-width bar. Two deductions are then taken: a notional associate cost, replacing the principal’s own clinical work at the market rate — commonly 40 to 50 per cent of the gross fees that clinician generates — and a notional practice manager’s salary, added where the principal manages the practice unpaid. Personal and one-off costs are then added back with evidence. The result is adjusted, associate-led EBITDA: a materially shorter bar, and the figure to which a valuation multiple is applied. Bar lengths are illustrative only; the size of each adjustment depends entirely on the practice.Schematic: the mechanism, not a measurement.The size of every adjustment depends on the practice.Reported profit− Notional associate cost− Notional manager’s salary+ Add-backsyour own chair time, recosted at40–50% of the fees it generatesif you manage it unpaidone-off, personal costsAdjusted EBITDAassociate-ledThis is what the multiple is applied to.Drawings are not a cost — the two notional costs replace them.
Schematic only — no scale, and no figures. Bar lengths are illustrative; the size of each adjustment depends entirely on the practice, and is the single biggest reason a valuation surprises a single-handed principal.Associate remuneration range: BDA template associate agreement and prevailing practice. The Reliance.

The result — often called underlying or associate-led EBITDA — is what gets multiplied. The practical consequence is uncomfortable but worth confronting early: a practice that depends on the principal’s own chair time can be highly profitable for the principal and only modestly valuable as a business. Reducing that dependence takes years, not months, which is why valuation is a reason to plan a sale well ahead of wanting one.

Different valuations for different purposes

“What is my practice worth” has more than one legitimate answer, because the basis of valuation depends on why it is being valued. A figure prepared for one purpose should not be reused for another:

  • An open-market sale — what a willing buyer would pay, which is what the methods above estimate.
  • A partner or associate buying in — often a share of a going concern, valued differently from a whole-practice exit, and usually without the competitive tension that lifts an open-market price.
  • Bank lending — a lender’s valuation is a security and serviceability question, and tends to be more conservative than a broker’s appraisal.
  • Probate, divorce or a partnership dispute — these are formal valuations on a prescribed basis, and generally need an independent specialist valuer whose work will withstand challenge.

Related to this: a free appraisal from an agent who wants the instruction to sell is a marketing document, not an independent valuation. It may well be accurate. It is not neutral, and it is not the same thing as paying a specialist dental accountant or valuer for a considered opinion.

What you keep: the tax position

The valuation is not the number that matters to a seller — the net proceeds are. Business Asset Disposal Relief (BADR) reduces the rate of Capital Gains Tax on qualifying business disposals, and its rate has been rising on a published schedule:

  • 10% for disposals on or before 5 April 2025
  • 14% for disposals between 6 April 2025 and 5 April 2026
  • 18% for disposals from 6 April 2026 — the rate currently in force

BADR is subject to a £1 million lifetime limit on qualifying gains, and the qualifying conditions generally require you to have met them for at least two years before the disposal. The structure of the deal also matters: selling the shares in a limited company and selling the trade and assets of an unincorporated practice have different tax consequences for both sides, and buyer and seller frequently prefer opposite structures for exactly that reason.

None of this is something to work out from a website. It is the clearest example in the whole process of why a dental-specialist accountant earns their fee — and why the timing of a disposal, relative to both the rate schedule and your two-year qualifying period, is worth planning rather than discovering.

What actually moves the number

Most of what determines value is not in the valuation method at all. It is in the practice: how much of the income survives the owner’s departure, how durable the income mix is, whether the team stays, the lease position, spare surgery capacity, and the state of the compliance evidence a buyer’s due diligence will go through. Our guide to buying and selling a dental practice sets those out in full, along with the regulatory transfer that governs the timetable — because care-regulator registration and NHS contracts cannot simply be handed over with the keys, and that shapes deals more than most sellers expect.

All of these are improvable. Almost none of them are improvable quickly.

Buyers weighing an acquisition against building from scratch — and so avoiding a goodwill payment altogether — should read our guide to opening a squat dental practice, which sets out what you take on instead. If you are proceeding with an acquisition, our due diligence checklist covers what to verify before you commit.

What this means for your practice

What this means for your practice. If you are thinking about selling in the next few years, get a proper valuation from a dental-specialist accountant now rather than at the point of sale — not because the number will be pleasant, but because the gap between the rule-of-thumb figure and the earnings-based figure tells you exactly what to work on. Expect the normalisation adjustment (your clinical work recosted as an associate, plus a manager’s salary) to reduce the profit figure materially if you are single-handed. Sense-check any appraisal against the NASDAL survey range, but never treat a percentage of turnover as a valuation. And check where you sit against the BADR two-year qualifying period and the £1m lifetime limit before you commit to a timetable — at 18%, the tax planning is now worth more than it was two years ago.

For what practices of each type actually earn — and why a benchmark profit figure is not the same as the earnings a buyer inherits — see dental practice profit by the numbers. For more on the mechanics of a transaction, see our full guide to buying and selling a dental practice and our ongoing Buying & Selling coverage.

This guide is produced by The Reliance and reviewed by David Hinckley, a GDC-registered Clinical Dental Technician (GDC No. 150038). It is general information for those running dental practices, not financial, tax or legal advice — valuation and tax outcomes depend entirely on your own circumstances, and tax rates and reliefs change. Take advice from a specialist dental accountant before acting. Survey figures cited are from the NASDAL Goodwill Survey for the quarters stated and describe the market, not any individual practice. See our Editorial Standards.