Effects of Incorporation on your NHS Pension Scheme (NHSPS)

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There has been much debate recently about whether you can incorporate and still maintain your eligibility for the NHS pension. This largely depends on whether you are a provider or a performer.

Providers
A GDS or PDS Practice may be owned by a single-hander or by a partnership. It may also be a company limited by shares (or DBC). Where a shareholder is a qualified (and listed) dentist they are afforded type 1 dental Practitioner/Provider status under the NHSPS Regulations. As you would suspect if the shareholder is not a qualified dentist they do not have access to the NHSPS.
A shareholder must ‘pension’ all the GDS/PDS income that they take (i.e. draw down) from the business in the form of salary and dividends. Any GDS/PDS income that is not taken but left in the business cannot be pensioned now or in future years.
If a Provider opts out of the NHSPS or is ineligible to join their colleagues cannot ‘pension’ their GDS/PDS income.

Performers
If a Performer (i.e. Associate) works for a GDS/PDS Contractor as an individual they are also afforded type 1 dental Practitioner NHSPS status. However if a Performer creates a limited company and works at the Practice through that limited company they (or anyone else who works for the Performer’s limited company) cannot pension their GDS/PDS income with effect from 7th November 2011. This is because this sub-contractor limited company is not recognized under the statutory NHSPS Regulations.
So a Performer must work as an individual (not through a unique limited company) to be able to pension their GDS/PDS income with effect from the 7th of November 2011.

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