Most dental practice sellers instruct a solicitor only after heads of terms have been agreed. By that point, the deal structure is fixed, the timetable has been set — often without allowing for NHS novation or CQC registration timelines — and the scope for a solicitor to add value has narrowed significantly. This guide explains what a specialist dental solicitor should be doing, from before heads of terms through to the warranty period after completion.
Why You Need a Dental Specialist, Not a General Commercial Solicitor
A general commercial solicitor can draft a sale and purchase agreement. What they cannot do is advise on the three regulatory processes that run alongside the commercial transaction in every dental practice sale.
The first is NHS contract novation. The GDS or PDS contract held by the practice cannot be transferred to a buyer like a commercial agreement. It must be novated — NHS England (or the relevant Integrated Care Board) must agree to substitute the buyer as the contracting party. A solicitor who does not understand this process will not know to build NHS novation as a condition precedent to completion, will not advise on timetable risk, and will not know what to disclose about the contract’s history.
The second is CQC registration. The Care Quality Commission does not transfer registrations on completion. The buyer must apply for their own registration before they can lawfully operate the practice. This process takes twelve to twenty-four weeks. A solicitor who has not handled dental transactions will treat CQC as a formality rather than the critical-path item it is.
The third is associate employment status. Most dental practices operate with one or more associate dentists who are engaged as self-employed. This status is often legally uncertain — and any post-completion challenge from HMRC or an employment tribunal becomes the seller’s warranty claim. A specialist solicitor will ensure adequate disclosure and appropriate warranty limitations.
Performer agreements add a further layer. Associates and principals hold NHS performer numbers, and the transfer of NHS activity depends on those numbers remaining valid. A solicitor unfamiliar with dental practice regulation will not know to verify the performer number position or to include performer agreement warranties in the SPA.
Seller-Side Due Diligence Support
Once heads of terms are agreed, the buyer’s solicitors will issue a due diligence request. The seller’s solicitor must advise on what to disclose, how to organise it, and what the disclosure means for the warranties being given.
NHS contract records are the most sensitive disclosure category. The seller must disclose UDA delivery history, any clawback payments received from the ICB, any informal variations to the contracted UDA position, and any correspondence with NHS England or the ICB about the contract. Undisclosed NHS contract issues are the most common source of post-completion warranty claims.
CQC records must include the full inspection history, any enforcement actions, any outstanding conditions on the registration, and all notifications made to CQC during the seller’s ownership. A buyer who discovers post-completion that the seller received a CQC warning letter that was not disclosed has a clear warranty claim.
Employment records for a dental practice include not just the standard TUPE schedule of employees but also the associate agreements, performer number details, and any correspondence with associates about their employment status. The distinction between employed staff (to whom TUPE applies) and self-employed associates (to whom it technically does not) must be correctly drawn.
NHS Novation Mechanics
On an asset sale, the NHS contract must be novated from the seller to the buyer. The novation process is managed by NHS England in England, with applications typically handled at Integrated Care Board level.
Timing is the critical variable. NHS novation applications take four to eight weeks in straightforward cases. They can take longer if the ICB requires additional information, if the buyer is a corporate entity unfamiliar to the ICB, or if there is anything irregular in the contract history.
The interim period — the period between exchange of contracts and confirmed novation — creates risk for both parties. The seller remains the contracting party with NHS England throughout. If the buyer commences trading before novation is confirmed, they are technically delivering NHS treatment under the seller’s contract. The SPA must address how UDA risk is allocated in the interim period, and what happens if the novation is not confirmed by a longstop date.
On a share sale, the position is different. Because the contracting entity — the company — does not change, the NHS contract does not need to be novated. The buyer acquires the company that holds the contract. However, the GDS contract will typically contain a change-of-control clause requiring notification to NHS England. This is notification, not consent, and does not hold up completion — but it must be complied with.
The CQC Critical Path
CQC registration is the longest lead-time item in most dental practice asset sales. The process takes twelve to twenty-four weeks from a complete application, and that timeline is not within the parties’ control.
The buyer’s CQC application must be submitted during the due diligence period — not at exchange, and not at completion. A solicitor who treats CQC as something to be sorted post-completion is creating an unlawful practice: the buyer cannot operate as a regulated healthcare provider without their own registration in place.
During the period between the buyer’s application and their registration being confirmed, the seller remains the CQC-registered provider. The seller is therefore legally responsible for the regulated activity being carried out at the practice. The SPA must address this carefully — including what operational control the buyer has during the interim period, and who carries the risk if a CQC compliance issue arises.
De novo applications — required where the buyer is not already a CQC-registered provider — take materially longer than registration transfers. If the buyer has no existing CQC registration, this must be identified at the outset and factored into the timetable. Failing to identify this at heads of terms stage can cause completion to be delayed by months.
The SPA: Dental-Specific Provisions
The sale and purchase agreement must contain dental-specific provisions that will not appear in a generic commercial SPA.
NHS contract warranties must cover: the contract is in full force and effect; there are no outstanding notices or enforcement actions from NHS England; UDA delivery is as represented; there are no unpaid clawback amounts; and the seller has no knowledge of any circumstances that would lead the ICB to take action against the contract. NHS performer obligations must be warranted separately — the seller must confirm that all clinicians performing NHS activity hold valid performer numbers and are compliant with their performer agreements.
CQC warranties must cover the full inspection history, enforcement record, and compliance position.
The disclosure letter is the seller’s primary protection against post-completion warranty claims. For a dental practice, the disclosure letter must specifically address: clawback history; any informal agreements with the ICB about UDA delivery; any CQC conditions or warnings; the associate engagement terms; and any disputes or potential disputes with associates about employment status. A disclosure letter prepared by a non-specialist will omit most of these.
Non-compete scope is a recurring source of post-completion disputes. The SPA will restrict the seller from competing within a defined geographic area for a defined period. The seller who intends to continue as an associate in the practice post-completion, or who wants to retain the right to work privately elsewhere, must ensure those arrangements are expressly carved out of the restriction. Verbal understandings are unenforceable. The restriction on clinical practice must be carefully distinguished from restrictions on business ownership — a selling principal who continues to work clinically is not automatically in breach of a non-compete, but only if the SPA is drafted to reflect that.
TUPE: Clinical and Administrative Staff
All staff employed by the practice at completion transfer to the buyer under TUPE. This is non-negotiable — it applies regardless of what the SPA says.
For a dental practice, the TUPE schedule must be correct: employed clinical staff (nurses, hygienists, treatment coordinators) and administrative staff all transfer. The SPA must contain warranties about the identities and terms of all transferring employees, the absence of disputes, and compliance with TUPE information and consultation obligations.
NHS performer numbers are not employment rights and do not transfer under TUPE — each clinician holds their own number, which remains valid regardless of who employs them. However, the buyer must confirm that transferring clinical staff hold valid performer numbers if they are to continue delivering NHS activity.
Associate Employment Status: The Hidden Warranty Risk
Self-employed dental associates are the most common source of post-completion warranty claims in dental practice transactions. The issue is straightforward: most associate relationships are structured as self-employment for tax purposes, but many of them would be reclassified as employment by HMRC or an employment tribunal if challenged.
The risk for the seller is that a buyer — or HMRC, or an associate who makes an employment claim — challenges the self-employed status of associates who were working at the practice during the seller’s ownership. If that challenge succeeds, the seller may owe the NIC, tax, and employment rights that should have been provided.
The seller’s solicitor must ensure that the disclosure letter accurately records the associate engagement terms, and that the warranties are limited appropriately. If there is uncertainty about any associate’s status, that uncertainty must be disclosed — an undisclosed employment status risk is a clean warranty claim.
When to Instruct
Instruct a solicitor before heads of terms are finalised. This is the single most important piece of advice in this guide, and it is routinely ignored.
By the time heads of terms are agreed, the price, structure, and timetable are effectively set. The timetable, in particular, must allow for four to eight weeks for NHS novation and twelve to twenty-four weeks for CQC registration. A solicitor who sees heads of terms for the first time after they have been signed cannot always correct these errors — they can only manage the consequences.
A brief heads of terms review, before signing, costs a fraction of the total legal fee. See our guide to dental practice heads of terms for what should be agreed before solicitors are formally instructed.
For a complete guide to the sale process from decision to completion, see how to sell your dental practice.
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Frequently Asked Questions
Do I need a specialist dental solicitor, or can any commercial solicitor handle it?
A general commercial solicitor can manage the mechanics of a business sale but will not know to look for the dental-specific issues — NHS contract clawback history, CQC registration critical path, associate employment status risk, performer agreement warranties — that are the most common sources of post-completion problems in dental transactions. The cost of using a non-specialist is usually measured in post-completion warranty claims.
When should I instruct a solicitor in a dental practice sale?
Before heads of terms are finalised. The timetable must allow for NHS novation (four to eight weeks) and CQC registration (twelve to twenty-four weeks), and these constraints must be built into the heads of terms before they are agreed. Instructing after heads of terms have been signed means working within a timetable that may be unachievable.
What is NHS novation and why does it matter?
NHS novation is the process by which NHS England agrees to substitute the buyer as the contracting party for the GDS or PDS contract, releasing the seller from their obligations. Without confirmed novation, the buyer cannot lawfully deliver NHS treatment under the contract. On a share sale, the NHS contract continues in the company and novation is not required — but a change-of-control notification to the ICB is typically needed.
How long does CQC registration take for the buyer?
Twelve to twenty-four weeks from a complete application. The buyer’s CQC application must be submitted during the due diligence period — not at exchange or completion. If the buyer is not already a CQC-registered provider, a de novo application is required, which typically takes longer than a registration transfer.
What is the associate employment status risk in a dental practice sale?
Most dental associates are engaged as self-employed. If HMRC or an employment tribunal later determines that an associate should have been treated as an employee during the seller’s ownership, the seller may face tax, NIC, and employment rights liability. This risk must be disclosed in the disclosure letter and appropriately limited in the SPA warranties. It is the most common warranty claim source in dental practice transactions.