The NHS contract is the single most valuable asset in most dental practice sales. It is also the asset that causes more transaction delays and post-completion disputes than any other. Understanding exactly how the contract transfers — who applies, what the ICB requires, how long it takes, and what happens in the interim — is essential for any seller and any buyer who wants the process to complete cleanly.
This guide covers the novation process for an asset sale, the share sale alternative that avoids novation entirely, the position of NHS performer numbers, and what happens if novation is refused or delayed.
Novation Is Not the Same as Assignment
The most important point to understand at the outset is that an NHS GDS or PDS contract cannot be assigned. In ordinary commercial contracts, assignment allows one party to transfer their rights and obligations to another, often without requiring the other contracting party’s consent. NHS contracts do not work this way.
Instead, the process is novation. Novation is a tripartite agreement under which the existing contract between the seller and NHS England is extinguished and a new contract is created between the buyer and NHS England on substantially the same terms. The legal consequence is significant: the buyer is not stepping into the seller’s shoes under the existing contract. A new contract comes into existence. NHS England is an active participant in that process and must consent to it — there is no mechanism to transfer the NHS contract without NHS England’s agreement.
This distinction matters practically. It means NHS England (acting through the relevant Integrated Care Board) retains the ability to decline the novation, to require conditions, and to scrutinise the buyer’s credentials before agreeing. A buyer who assumes that the contract will transfer automatically as a matter of course is misunderstanding the legal structure.
Who Applies for Novation
The buyer makes the novation application. This reflects the fact that the new contract is being created in the buyer’s name, and it is the buyer’s credentials, entity structure, and performer arrangements that the ICB is being asked to accept.
In practice, the application is prepared collaboratively. The seller’s solicitor provides the existing contract documentation and history. The buyer’s solicitor prepares the application and coordinates with both sides to ensure all supporting information is in order. The seller must actively co-operate — providing contract documents, UDA records, performer number details, and confirmation of premises arrangements.
The buyer must be a qualified NHS contractor. For most individual buyers this means being a registered dental performer. For corporate buyers — dental groups, limited companies, or other entities — the eligibility criteria are more complex, and the ICB may require additional information about the entity’s structure, its clinical governance arrangements, and the performers who will deliver NHS activity under the contract.
What the ICB Requires
Each ICB has its own administrative process for handling novation applications, but the core documentary requirements are consistent:
- The existing contract documents, including any variations, side letters, or correspondence with NHS England that affects the contractual position
- Buyer entity details: name, registered address, company number (if applicable), and the form of entity (sole practitioner, partnership, company) in which the contract will be held
- Performer number confirmation for every dentist who will be delivering NHS activity under the novated contract; the ICB will check that performers are registered and have no current restrictions
- Premises confirmation: details of the practice address, confirmation of the buyer’s right to occupy (lease assignment, new lease, or freehold transfer), and confirmation that the premises remain suitable for the regulated activity
- The proposed effective date of the novation — typically completion or a date shortly after
Some ICBs also request a business plan or information about the buyer’s clinical governance framework, particularly for de novo buyers or corporate applicants. Solicitors experienced in the relevant ICB area will know what is typically required and can front-load the preparation accordingly.
Timeline: Four to Eight Weeks, With Significant ICB Variation
The standard guidance is that NHS novation takes four to eight weeks from the date of a complete application. In practice, the range is wider. Some ICBs process applications within three to four weeks in straightforward cases; others regularly take ten to twelve weeks, particularly where the ICB has a high volume of contract activity, is managing active UDA retendering, or has administrative backlogs.
ICB variation is one of the most important and underappreciated risks in dental practice transactions. A seller whose practice is in an area with a slow ICB, and whose solicitor has no experience in that area, will not know to build additional time into the heads of terms timetable. That error can cause completion dates to be missed and, in some cases, to lose buyers who cannot wait.
Solicitor experience in the relevant ICB area is not a luxury. It is one of the most material factors in whether a transaction completes on the timetable expected.
When the Novation Application Is Made
The novation application is typically submitted after exchange of contracts. Exchange confirms that both parties are committed to the transaction, and the ICB is being asked to create a new contract for a buyer who is definitively proceeding. Pre-exchange applications are less common because the seller is disclosing the transaction before it is certain.
There are circumstances in which preparation begins earlier. In ICB areas known for slow processing, solicitors experienced in the area may begin collating the application documents during the due diligence period and have everything ready to submit on the day of exchange or shortly after. This is sensible practice and does not require the application to be submitted early — it simply minimises the elapsed time between exchange and submission.
In complex transactions — where the buyer is a corporate entity, where there are multiple performer changes, or where the ICB has indicated it wishes to review the application carefully — early engagement with the ICB through the solicitors may be appropriate, though formal submission will still typically follow exchange.
Between Completion and Confirmed Novation
In many transactions, completion occurs before NHS novation is confirmed. The practice changes hands, the buyer begins operating, but the NHS contract has not yet been formally novated into the buyer’s name. This interim period creates risk that must be addressed explicitly in the sale and purchase agreement.
NHS income during the interim period is typically paid to the seller (as the party still holding the contract) and passed on to the buyer. The precise mechanics — whether held on trust or paid across immediately — must be agreed in the SPA. Delays in passing NHS income through can create cash flow problems for the buyer, particularly in the early weeks of ownership.
UDA risk in the interim period rests with the buyer. The seller is no longer operating the practice, and the UDA delivery obligation runs against the contract — which is technically still the seller’s. The SPA must address how UDA shortfall risk is allocated if the buyer fails to deliver UDAs before novation is confirmed, and how that interacts with any clawback mechanism in the contract.
NHS correspondence — including patient complaints, Band 3 queries, and any ICB communications — must be forwarded promptly by the seller to the buyer, since the buyer is operationally responsible for the practice and needs to respond in time.
The seller’s performer number, if the seller is remaining at the practice as a clinical associate post-completion, requires careful attention. The seller’s own number does not transfer — it remains registered to the seller as an individual — but the arrangements under which the seller will continue performing NHS activity need to be clearly agreed in both the SPA and any post-completion associate agreement.
The Share Sale Alternative
The most straightforward way to avoid the novation process entirely is a share sale. In a share sale, the buyer acquires the shares of the company that holds the NHS contract. Because the contracting entity — the limited company — does not change, the NHS contract remains in force without any novation being required.
This is one of the most significant practical advantages of a share sale for a practice with a large NHS contract in a slow ICB area. There is no novation application, no four-to-twelve-week waiting period, and no interim period during which NHS income is flowing through the seller’s bank account.
The important caveat is that many GDS contracts contain a change-of-control notification clause. Where the clause exists, the buyer (now the new owner of the company) must notify NHS England of the change of beneficial ownership within the specified period. This is notification, not consent — NHS England does not have a right to veto the transaction under a notification-only clause. But the notification must be made, and the SPA should confirm which party is responsible for making it and by when.
Sellers should not assume that the share sale automatically avoids all NHS obligations — their solicitor must check the specific contract for change-of-control provisions before completion.
NHS Performer Numbers
In an asset sale, NHS performer numbers do not transfer with the contract. Each dentist holds their own performer number as an individual, registered to them personally. When the practice changes hands, the buyer brings their own performers — each of whom must be registered on the NHS Performers List and have a valid performer number. The seller’s performer number belongs to the seller and remains with them regardless of the transaction structure.
This means that if the practice relies on a clinical team, the buyer must confirm, before completion, that all dentists who will be delivering NHS activity post-completion hold valid performer numbers and are in a position to perform under the novated contract.
In a share sale, the existing performer arrangements continue. The company’s relationship with its associate performers — their agreements, their performer numbers, and their NHS activity — carries on within the same company structure. There is no disruption to the performer position simply by virtue of the change of ownership, though new owners should review the associate agreements as part of due diligence.
For a detailed treatment of these and other due diligence areas, see our guide to dental practice due diligence.
If Novation Is Refused or Delayed
Novation can be delayed; in rare cases, it may be refused. The SPA must address both scenarios explicitly.
A longstop date — typically a date thirty to sixty days beyond the expected novation date — gives both parties the right to terminate if novation has not been confirmed by that point. The consequences of termination on longstop must be agreed: who bears the costs incurred; whether the deposit is returned; and what, if any, indemnity the seller has if the failure to novate was caused by information provided (or not provided) by the seller.
Extension rights allow the parties to agree to extend the longstop period without rescinding the agreement, which is often the most practical approach when the ICB simply needs more time rather than having raised a substantive objection.
Cost recovery provisions address who bears the additional professional costs — solicitor fees, accountant fees, and broker fees — that result from a novation delay. In a well-drafted SPA, the allocation of these costs is clear before the problem arises.
Refusal of novation — rather than delay — is uncommon but not unheard of. It typically arises where the buyer is not a qualified NHS contractor, where there is a material issue in the contract history that was not adequately disclosed, or where the ICB is actively reducing the number of NHS contract holders in its area. Specialist dental solicitors experienced in the relevant ICB will identify these risks during due diligence. Where there is a genuine risk that the ICB will not novate, the parties should consider whether a share sale structure is a better fit for the transaction.
For a complete guide to the end-to-end process, see how to sell your dental practice.
Get a free confidential dental practice valuation →
Frequently Asked Questions
What is novation and why is it needed to transfer an NHS dental contract?
Novation is a tripartite agreement that extinguishes the existing contract between the seller and NHS England and creates a new contract between the buyer and NHS England. Unlike assignment — where one party transfers rights without the other party’s consent — novation requires NHS England’s active agreement. An NHS dental contract cannot be assigned; novation is the only mechanism for transferring it in an asset sale.
Who makes the novation application when a dental practice is sold?
The buyer makes the application, supported by the seller and both parties’ solicitors. The seller must provide existing contract documents, UDA history, and premises information. The buyer provides their own entity details, performer number confirmations, and the proposed effective date. Both solicitors coordinate the process, and the seller must cooperate actively throughout.
How long does NHS novation take?
Typically four to eight weeks from submission of a complete application, but there is significant variation between ICB areas. Some ICBs process applications in three to four weeks; others regularly take ten to twelve weeks. Solicitor experience in the specific ICB area is one of the most important factors in managing timetable risk effectively.
Does a share sale avoid the NHS novation process?
Yes. In a share sale, the company holding the NHS contract does not change — only its shareholders do. Because the contracting entity remains the same, no novation is required. A change-of-control notification clause in the contract may require the new owners to notify NHS England of the ownership change, but this is notification only and does not hold up completion.
Do NHS performer numbers transfer when a dental practice is sold?
No, not in an asset sale. Performer numbers are registered to individual dentists and remain with them personally. The buyer must ensure that all dentists delivering NHS activity post-completion hold their own valid performer numbers. In a share sale, the existing performer arrangements continue within the company and are not affected by the change of ownership.