A dentist can set up a Limited Company (Private Company Limited by Shares – LTD) to operate their practice. However, incorporation does not change their professional obligations under the Dental Act 1985 or their registration requirements with the Dental Council of Ireland.
1. Benefits of Incorporation
- Tax Efficiency – Companies in Ireland pay 12.5% corporation tax on profits, which is lower than the higher personal income tax rates of up to 52% (including USC & PRSI).
- Limited Liability – Personal assets are generally protected if the business faces financial difficulties.
- Retained Earnings – Profits can be kept in the company, reducing personal tax exposure.
- Pension Contributions – A company can contribute more to a director’s pension than an individual can as a sole trader.
- Expense Deductions – Additional tax-deductible expenses, such as director’s salaries, company car, and employee benefits.
2. Restrictions for Dentists Operating as a Company
- Dental Council Regulations – The Dental Act 1985 requires that only registered dentists can provide dental services. The company itself cannot be the registered dentist.
- Personal Liability – Even if the business is incorporated, the dentist remains personally responsible for patient care and professional conduct.
- Professional Indemnity Insurance – Must still be held by the individual dentist, even if operating through a company.
- Contracting with the HSE – Some Health Service Executive (HSE) contracts may not allow a company to provide dental services directly.
4. Alternative Structures
If a dentist wants tax benefits but is concerned about restrictions, they can consider:
- Sole Trader – Full control, but higher personal tax.
- Partnership – If working with other dentists.
- Hybrid Model – Operating as a sole trader while having a separate company for non-clinical services (e.g., equipment leasing, management, or consultancy).
5. Steps to Incorporate a Dental Practice
- Register a Limited Company with the Companies Registration Office (CRO).
- Appoint Directors & Shareholders (the dentist can be both).
- Register for Taxes (PAYE, Corporation Tax with Revenue).
- Ensure Compliance with the Dental Council of Ireland.
- Maintain Proper Accounts (file annual returns and financial statements).
6. Should You Incorporate?
- If your profits are high, incorporation may help reduce your tax burden.
- If you plan to reinvest in the business, a company allows you to retain profits at 12.5% tax.
- If you want to build a pension tax-efficiently, a company can contribute more than a sole trader.
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