Do PCN companies need to register with the CQC?
When advising PCNs on a possible PCN incorporation, a common misconception which we encounter is that the PCN company must register with the CQC. In practice, however, this is rarely the case.
A PCN, as created by the PCN DES, is a contractual ‘sharing’ relationship between its core network practices. These sharing arrangements create well-documented problems in relation to employment, VAT, shared liability and more.
How an incorporated PCN works around these issues
An ‘incorporated’ PCN gets round these problems by creating a structure which sits alongside the PCN in the form of a company owned and controlled by the core network practices. That company is generally used in two different ways:
- As a ‘classic’ PCN company which employs PCN staff and supplies their services to the core network practices. These staff are reimbursed either directly or indirectly from PCN DES monies.
- As a contract holder for non-DES services, which services are then subcontracted to, and delivered by, the core network practices. This second use is less common but is likely to increase with the NHS’ new 10-year plan and the introduction of single-neighbourhood contracts.
What does the CQC actually regulate?
The first critical thing to note is that the CQC only regulates entities which provide regulated services. Clearly a PCN company is an entity, but so is a partnership, or a person. The only ‘thing’ which is not an entity is the PCN itself, since that is a contract (which is why the CQC cannot regulate PCNs).
Since the PCN company is an entity, it COULD be regulated by the CQC, but whether it SHOULD be regulated will depend on whether it ‘provides regulated services.’ The fact that the company employs staff who are involved in delivering regulated services is irrelevant. The question is whether the entity itself is responsible for the delivery of the regulated services, regardless of who actually employs the staff doing the work.
The Key Regulatory Principle
The underlying rule is explained in some helpful CQC guidance from 2023:
https://www.cqc.org.uk/guidance-providers/gps/gp-mythbusters/gp-mythbuster-106-primary-care-first-contact-practitioners-fcps
The critical sentence in that guidance explains that “the meaning of ‘employed’ in the [Health and Social Care Act 2008 (Regulated Activities) 2014 Regulations] is wider than staff employed on an employment contract. It means anyone who works for the provider, under their ongoing direction and control.” That phrase “under their ongoing direction and control” is critical.
Essentially, where ARRS staff are employed by a PCN company, but are under the ongoing direction and control of an entity which is providing the regulated service and has a CQC registration (as is usually the case in the classic usage (1) detailed above), the PCN company doesn’t need its own CQC registration in respect of those employees. This is because, for the purposes of the regulations, such staff will be operating under the clinical supervision of the CQC-registered entity.
This principle may not be as novel to GPs as it might initially sound. Locums and locum agencies, just like PCN companies, provide sub-contracted clinical services to GP practices. The reason that locums and agencies don’t have their own CQC registrations is because the services they provide are always under the ongoing direction and control of a CQC-registered GP practice. The same principle applies when the services are being supplied to practices by a PCN company.
Application to contract-holding PCN companies
When it comes to the more recent usage of PCN companies for neighbourhood and other contracts (usage (2) detailed above), the same principle applies. Although the PCN company might hold the relevant single-neighbourhood contract, so long as the PCN company isn’t itself taking clinical responsibility for supplying the relevant service but is instead sub-contracting delivery of the regulated services to one or more of the member practices, then any staff delivering the clinical service will be under the ongoing direction and control of a CQC-registered entity, namely the responsible GP practice.
It’s important to understand that the principles detailed above aren’t an exhaustive exposition of all the rules and scenarios involved, though they are enough to demonstrate the principles of why PCN companies don’t generally need their own CQC registration. Beyond those principles, the fact of the CQC-registered entity having ongoing direction and control needs to be properly documented, in a way that doesn’t result in the CQC-registered entity taking on employment responsibility for the staff. There are also requirements for the CQC-registered entity to ensure that the staff whose services are supplied to it by the PCN company are suitably qualified and trained, with it being prudent to have documentation in place evidencing that this requirement has been met.
There are also practical issues with how to ensure that the clinical service is under the ongoing direction and control of a CQC-registered entity in practice. It’s easy enough to achieve where the clinical service is being delivered at a GP practice’s premises solely to the patients of that practice, but becomes more complex when patients from multiple practices are seen in the location of a single practice. It becomes even more difficult to achieve when patients from multiple practices are seen in a separate hub location which is not the premises of any of the practices.
It is also important to understand that this problem is not one which applies just to incorporated PCNs. An unincorporated PCN which operates in a way that patients from multiple practices are seen in a single location, whether it be a practice’s location or a remote hub, still needs to be able to demonstrate to the CQC who has ongoing direction and control of clinical staff at all times. “We’re all CQC-registered, so between us we’ve got it covered” is not sufficient, either in an incorporated PCN or an unincorporated one. While incorporation of a PCN often forces the practices to focus on clarifying who should have direction and control at all times, it doesn’t of itself create the requirement, which exists but is often overlooked in unincorporated PCNs too. With that in mind, the CQC requirements don’t create obligations or burdens in respect of PCN incorporations so much as force PCNs to address CQC compliance issues which they often overlooked.
How DR Solicitors can help
Clearly, PCNs (and now neighbourhoods) have made CQC compliance more complicated, but it is wrong to conclude that just because you have a PCN company, it needs to CQC register. In reality, what you need to do is understand and document your PCN-wide processes for clinical governance and then draw the right conclusions from that. If you would like expert support or guidance with your CQC registration requirements, contact DR Solicitors.
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Buying or Selling a Dental Practice
Whether you’re purchasing or selling a dental practice, it’s likely to be one of the most significant financial decisions you’ll ever make.
That’s why it’s essential to appoint a solicitor with the right expertise who can make sure that both you and your business effectively manage every potential risk, and that all formalities surrounding the transfer are properly completed on time.
Key Considerations When Buying or Selling a Dental Practice
1. Heads of Terms
This document sets out the main points of the proposed deal — essentially an “agreement to agree.” It’s not always essential in dental transactions, and the sale remains subject to contract until all details are finalised. Until then, either party may still walk away.
If a holding deposit is involved, it’s wise to have clear documentation outlining the conditions for payment and repayment. Heads of Terms can also include an exclusivity period during which only the buyer may proceed with the purchase.
2. Due Diligence
It’s crucial to fully understand what you’re buying — and the risks that come with it. This process should include a detailed review of the seller’s responses to due diligence enquiries and a report on the findings. Any concerns should be followed up on to ensure there are no unwelcome surprises post-completion, and where risks can’t be avoided, appropriate legal protections (such as warranties and indemnities) should be secured.
For sellers, buyer’s enquiries should be answered swiftly, thoroughly, and accurately. As due diligence can take several months, managing the process carefully to prevent unnecessary delays is key— especially where exclusivity periods or loan drawdown deadlines are involved.
Your legal expert should work alongside your accountant to analyse the practice’s income — including any capitation schemes, NHS contract targets, and fee-per-item private income.
3. Clinical Risk
For buyers, it is important to identify and minimise any specific risks revealed during due diligence, as well as those typically associated with practices of a similar type.
For sellers, negotiating to reduce your exposure to these risks as much as possible is key, while still ensuring the transaction progresses smoothly and without delay.
4. NHS Contracts
For individual or partnership-held NHS contracts, the partnership route can be used to transfer the contract to the buyer, making sure all required notices are served correctly, within the proper timeframes, and to the right recipients.
When the NHS contract is held by a company, it transfers automatically with a share sale, since the company remains the contract holder. However, the GDS contract terms should be carefully reviewed to confirm compliance with any obligations to notify NHS England of a change in control — or to seek approval beforehand, if required.
For buyers, your solicitor should also advise you on UDA/UOA performance levels and ensure they’re protected against any clawback connected to the GDS/PDS contract.
5. Employees and Clinicians
In share sales, all staff and associates are typically employed by the company, meaning there’s no change in employment relationships after completion. It is important that the relevant contracts during due diligence are reviewed to confirm this.
For individual or partnership sales, staff and associates are usually engaged by the sellers directly and must be transferred to the buyer. Employed staff transfer automatically under TUPE (unless they opt out). Your solicitor should provide clear advice to ensure all employees are treated fairly and lawfully during the transition.
The position with self-employed clinicians is more complex — and advice on this when the sale agreement is being prepared is key.
If confidentiality is a concern, it is important to consider discreet communication, often limited to private email addresses and outside of practice hours.
Some buyers also prefer the seller to remain as an associate temporarily — helping with a smooth handover or protecting goodwill. Here you can consider arranging for part of the purchase price to be deferred based on performance and assist with drafting the associate terms.
6. CQC
Every dental provider in England must hold a valid Care Quality Commission (CQC) registration. It’s a criminal offence to operate without one.
Additional CQC applications are often required to transfer NHS contracts. For example, using the partnership route may require a corresponding CQC partnership registration to temporarily hold the NHS contract during the transition.
Because CQC applications can take time, it’s crucial to start the process as early as possible. DR Solicitors works with several specialist CQC service providers and can assist with any registration issues, whether you’re buying or selling.
7. Property
Every dental practice needs premises — which means there’s almost always a property component to the transaction, from buying or selling a freehold, assigning a lease, to taking on a new lease. Sometimes sellers retain ownership of the property and instead grant a lease to the buyer, keeping it as an investment. In other cases, the property may be held in a SIPP, requiring specialist handling. Your solicitor should coordinate all aspects of the property transfer to align with the business sale.
It is also important to ensure the premises meet the high regulatory standards expected of a dental practice.
DR Solicitors collaborates with trusted professionals across the dental sector — including accountants, IFAs, finance brokers, valuers, architects, and business advisers — and we can connect you with the right experts for your specific needs.
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DR Solicitors launches platform for consultants to bring their own work with the support of an established firm
DR Solicitors, a specialist healthcare law firm and part of Dow Schofield Watts’ Legal Division, has announced the launch of a new consultancy model that enables senior lawyers to bring their own clients and work while leveraging the infrastructure, support and reputation of an established legal platform.
The initiative marks a significant evolution in DR’s approach and an expansion of its traditional healthcare client base, reflecting the firm’s commitment to supporting entrepreneurial lawyers who seek autonomy, flexibility, and control over their careers.
Previously focused on delivery-only consultancy, DR is now empowering consultants with established networks to retain and grow their client base without the administrative burden of running a practice.
“We are creating a structure where consultants can focus on what they do best – advising their clients – while we handle the back-office, compliance and operational support,” said Shru Morris, CEO of Dow Schofield Watts, the business advisory group that acquired DR Solicitors in 2024. “This is about enabling lawyers, no matter what their sector or specialism is, to thrive independently, backed by a recognised and respected brand in the legal sector”.
Under the new model, consultants at DR Solicitors can choose to:
- Bring their own clients and matters, continuing long-standing relationships within a trusted framework.
- Focus solely on delivery, working on matters sourced through DR’s central team without business development pressures.
This flexibility allows senior lawyers to tailor their careers to their strengths and networks, giving them the freedom to grow their practice while maintaining the security and operational support of an established firm.
The consultancy platform offers an alternative to conventional law firm structures, which often require long hours, high billing targets and leave fee-earners with limited control over the value they generate. DR Solicitors’ model allows consultants to retain a larger share of billings, maintain client relationships and design their own schedules – all within a regulated, branded and supportive environment.
It’s a model that continues to grow in popularity among senior lawyers, attracting talent from bigger City law firms. DR Solicitors recently announced annual growth in consultants of more than 40 per cent year-on-year, bringing the total to 26. Of these consultants, 85 per cent joined from Magic, Silver Circle and top-tier law firms.
Morris added: “We’re increasingly seeing senior lawyers make the move to consulting platforms, with the benefits becoming ever clearer. It’s why we must evolve the model to provide more options for those with established networks, setting DR Solicitors up for continued growth over the coming years.”