Effects of Incorporation on your NHS Pension Scheme (NHSPS)

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.

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.

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.