There are two main types of NHS contract; the General Dental Services Contract (GDS) and the Personal Dental Services Contract (PDS).
For NHS practices, the type of contract that is in place will determine how the practice can be transferred.
GDS contracts
GDS contracts specifically state at clause 12 that “The contractor shall not give, sell, assign or otherwise dispose of any of its rights under the Contract, save in accordance with the Contract.” Despite this, a GDS contract can usually be transferred by way of the partnership route. This means that the buyer is added as a new partner to the contract. Then, on completion, the buyer and seller agree that the division of the assets in that partnership shall be 99.9% in favour of the buyer, and 0.1% in favour of the seller. Once a period of time has elapsed, following completion, the seller can be retired from the partnership leaving the NHS contract in the buyer’s sole name.
Alternatively, GDS contract may be held in the name of a limited company. In which case, the parties also have the option of proceeding with the transfer of the shares in the company to the buyer. This has the effect of transferring the benefit of the contract.
PDS contracts
PDS contracts can be more problematic as they are usually personal to one individual and can be time limited, unliked GDS contracts. They cannot normally be transferred unless they are first converted to a GDS contract, or the PDS contract is held in the name of a limited company.
Orthodontists do not have the option of converting their PDS contracts into GDS contracts, but this route is usually available to general dental practitioners.
PDS contracts can only be transferred into a limited company with the consent of the NHS. NHS England has produced policy guidance which indicates that it may be possible, with their consent, to transfer a PDS Contract by way of a partnership. However, if you are considering this you should take specific advice to consider both the risks and the benefits.
Other types of contracts
Other types of rare NHS contracts include the PDS Plus agreement and contracts on NHS pilot schemes. If your practice or the practice that you are proposing to purchase, hold either type of contract, then we can give you further specific tailored advice.
Regardless of which NHS contract you may hold, or are proposing to purchase, our specialist dental team offers an unparalleled service. We understand both your business and the language you speak.
