Hi {{firstname|there}},
This question comes up constantly when dentists are planning an equipment upgrade or thinking about their premises. Lease or buy? Monthly payments or pay it off? Own it or never own it?
The instinct most people have is to pay outright and be done with it. No monthly payments, no interest, no obligation to anyone. I understand that instinct. When we were building out the Neem Tree practices, there were plenty of times I felt it too. But the instinct is wrong more often than it's right, especially since the government changed the rules on Full Expensing in 2023. That single change shifted the maths on a lot of equipment decisions significantly, and most dentists I speak to still aren't factoring it in.
Let me walk you through it properly.
£85,000 - average cost of equipping a single new dental surgery from scratch
100% - of qualifying equipment costs can be offset against tax via Full Expensing in Year 1 (for Ltd companies)
7 years - typical useful life of dental equipment, vs a 3–5 year lease term
What are we actually comparing?
Leasing means you pay monthly for an asset you don't own. At term end you hand it back, upgrade, or buy it at residual value. The payments are fully deductible as a business expense. You never own the asset, but you also never carry the obsolescence or disposal risk.
Buying with finance means you borrow the money, own the asset from day one, and can claim the full purchase cost against your Corporation Tax in Year 1 through Full Expensing. You'll own something with residual value at term end. But you've committed the capital and taken on the asset's full lifecycle.
Neither is always right. The answer depends on three things: your current cash position, your tax situation, and what else you'd do with that capital if you didn't spend it here.
Leasing | Buying with Finance: |
|---|---|
Keeps capital free in the business | Full Expensing = 100% Corporation Tax deduction in Year 1 |
Payments are 100% tax deductible | You own it - it sits on your balance sheet |
Easy to upgrade at end of term | Lower total cost over the asset's life |
Good for technology that moves quickly | Best for stable, long-lived equipment |
You never own the asset - no residual value | Requires deposit or cash commitment upfront |
Higher total cost over the asset's lifetime | You carry obsolescence and disposal risk |
The Full Expensing point - don't skip this: Since April 2023, limited companies can deduct 100% of qualifying plant and machinery in Year 1. On a £70,000 CBCT scanner, that's a £17,500 Corporation Tax saving immediately. On a £14,000 chair, that's a £3,500 saving in Year 1. This changes the buy-vs-lease calculation significantly, yet I regularly meet dentists and their accountants who aren't factoring it in.
The bigger question - should you own your premises at all?
This is the most consequential lease-vs-buy decision most dentists never consciously make. They start out renting because that's how it began, and they just keep renting because nobody has sat down and questioned it. But if you've been in the same building for more than five years and have any intention of staying, the case for buying is strong.
Factor | If you rent | If you own |
Monthly cost | Rent - fully deductible | Mortgage interest - deductible |
Capital appreciation | None - goes entirely to your landlord | Yours - often significant over 10–20 years |
Security of tenure | Lease renewal risk and rent reviews | You're in control. Nobody moves you. |
On exit | Lease complicates the sale | Property adds meaningful value to the deal |
Flexibility | Easier to relocate | You're committed to the asset |
In most areas, a dental practice commercial mortgage runs within 10–20% of what you're currently paying in rent - except one of those options builds equity and one doesn't. I've watched dentists pay rent for 15 years and then find, at the point of sale, that the absence of a freehold has knocked six figures off what they walked away with. That is an avoidable outcome but only if the conversation happens early enough.
Five questions before any major equipment or premises decision
How long will this asset genuinely be useful and could technology make it obsolete before the lease ends?
What's my cash position after this? Do I still have 6 months of operating reserves?
Am I set up as a limited company, and have I confirmed whether Full Expensing applies here?
What revenue will this generate and when do I realistically expect to recover the full cost?
Have I spoken to more than one lender? If not, I'm almost certainly not getting the best available rate.
→ Thinking about a big purchase? Talk to us first. Our finance team works with specialist dental lenders every single day. We'll help you figure out whether to lease or buy - then find the best deal in the market if you're borrowing. samera.co.uk/service/business-loans
Speak soon,
Arun
Uros Turcic
Business Development Consultant
Need finance for your next practice?
Uros has helped hundreds of dentists secure funding at excellent rates. Book a free 30-minute call and find out what's possible.
QUICK READS THIS WEEK
Dental Practice Startup - Why Buy when you can Start up a Dental Practice for a much lower cost?
Dental CFO Services - Our Dental CFO Services can take much of the financial decision-making burden off your plate, giving you more time to see patients and enjoy your life.
Making Tax Digital for Dentists - Automate your dental accounts and tax when you go digital with our specialist dental accountants.