Dentists Who Invest Podcast
Official Podcast of the Dentists Who Invest platform. Talking all things investing, money and finance with a dental spin. Have you ever wondered how you can grow your wealth and protect your hard earned money as a Dentist? We've got you covered. Featuring famous guests such as Andrew Craig, Edward Zuckerberg and Benyamin Ahmed we delve deep into EVERY aspect of finance to educate and empower ALL Dentists.
Dentists Who Invest Podcast
Taxation As A Dentist: What The New Government Means For You with Johnny Minford DWI-EP288
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Explore the complexities of the UK's evolving financial landscape for dentists under the newly elected Labour government with our esteemed guest, Johnny Minford, a veteran in dental accounting. We unravel the potential shifts in income tax, NHS dentistry, pensions, and broader tax matters that could significantly impact your practice and personal finances. With Johnny's expertise, we aim to provide clarity amidst the uncertainties and ensure that you stay ahead of the curve.
What does the future hold for capital gains tax and corporation tax, and how will these changes influence your business restructuring and retirement planning? Join us as we navigate the possible budget announcements and their timelines, offering strategic insights to help you make informed business decisions. Johnny also shares his take on the stability of corporation tax, capital allowances, and the broader economic impacts on sectors including agriculture and dentistry, ensuring you grasp the full picture.
We also tackle the perennial issue of access to NHS dentists and its financial implications. Johnny lends his extensive knowledge to broader tax concerns, emphasizing the importance of synergy between practice owners and associates for mutual benefit. To wrap up, we discuss effective strategies for managing wealth within your dental practice, and highlight the Dentists Who Invest community—your go-to resource for achieving financial freedom. Don't miss our upcoming webinar on mortgages, packed with tips to further empower your financial journey!
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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional.
We're off and running good stuff. Good to see everybody this evening. I have been looking forward to this webinar in particular. I look forward to every webinar, but this one in particular, because this is the first webinar that we've ever done which is contemporaneous on a new government and what that means for the pockets of UK dentists and for those of you who've been watching the news over the last two or three weeks, it's been hard to miss. We do indeed, of course, have a new government. They're a Labour government and we're here today to get hot, fast takes from the man who's got his finger on the pulse, he's got his ears to the ground whenever it comes to this stuff, and his name is Mr Johnny Minford. Johnny, how are you this evening?
Johnny:I am fine and can I show you the finger that is on the pulse. This is the one, this one, the index finger, the index finger. There we go. Having said that, a lot of the pulse and so on, we're still not sure what's going to happen. We've had a little bit of the pulse from the King this afternoon and the King's speech, which has also been interesting and adds a few little bits and pieces to what we already know. But I think an awful lot of thing is what we think and what we think is going to happen and what we think the direction of travel is.
Dr James:And listen. That's a good caveat to throw in just there, because as of today, we are speaking to everybody on the 17th of July, 6, 32 pm to be precise. So it is important to remember that this is a developing, dynamic situation and of course things might shift over the next few weeks. But, like I say, if we can just keep our fingers to the pulse on that one and be as up to date as we possibly can, then that can only ever be a good thing.
Dr James:Well, listen, johnny just before we jump in, let's not even, let's not hesitate, let's not mess mess around. Let's just jump straight in with those hot and fast takes and just just before we do, everybody, everybody who's joining this webinar tonight. The format of these webinars, how we usually run things, is we start off with a little bit of a presentation, a webinar, those hot and fast takes we talked about a second ago, and then, with time, there will be the opportunity to do a q and a. So if anybody has any specific questions or things that they'd like to know, we'll endeavour and do our very best to give answers that are relevant and precise to your situation. That will come up at around about half an hour mark, so something to look forward to. So if anybody has any questions, feel free to either keep them in here or, if you pop them in the chat, we can definitely get to you in about 30 minutes. Anyway, johnny, let's jump straight in with those hot and fast tips.
Johnny:I will do and see what I've got. Can I just let everybody know who I am. I'm actually a commercial director of specialist dental accountants, djh, and I used to run a firm called Minford Dental Accountants and we merged up with what used to be Morrison Co. So I think we're now probably one of the bigger firms in the UK. But I've worked in dentistry all my career and continue I only work with dentists now.
Johnny:So this is really important to me keeping an eye on actually what's happening and what's happening to the industry, because what we have had we've got a lot of big talk about what they're going to do and how they're going to everything is fully costed and fully funded, I believe. But it doesn't actually say when that funding and when that costing is actually going to happen. So it may well be fully funded in five years from now, which doesn't help us an awful lot just right now, in five years from now, which doesn't help us an awful lot just right now. But I'm interested in the industry as a whole, both the NHS part of it and the private part of it. The one thing I've been looking at in what they've been saying so far is how they're going to try and help NHS dentists. They're going to try and help NHS dentists but at the same time, not taxing all dentists out of the marketplace. Because a large part of why we've had a change in government a part of it and not all of it a large part of it is because for the last year or two, we felt pretty poor and we still feel poor. Now, if we've got a new government, they're going to have a bit of a bounce, they're going to have a little bit of encouragement. If they start taxing us out of the water, we're still going to feel poor and from that perspective, I don't think that's going to work well, particularly when they're asking people to support them from a business perspective and trust them from a business perspective going forward. So how the income tax and the NHS dentistry works, we will wait to see Income tax.
Johnny:He has sworn blind at every turn that there is going to be no increase in income tax, but that's a very broad and blunt statement. The same, but there's a lot of less visible moving parts that I think they will change to try and raise a little bit of money. One of the things that I'm particularly looking at is the pensions. That's something we have to keep a very, very close eye on Changing. The tax relief on pensions is a big big thing for certainly NHS dentists. It's also a big thing for dentists coming up to retirement, because one of the ways that we can extract funds coming up to retirement from business or from a company is dump a lot of money into a pension fund into the future for either oneself or one's spouse. It's going to be interesting to see what they do with that.
Johnny:School fees school fees are an issue, but there's a limit to how much money, how much tax school fees is going to raise or having a go at non-doms or tax dodges. There really is a limit to how much you're going to raise from that. There's also a time scale on this and this is why I mentioned earlier about costing and funding when these things are likely to happen. Even if you pay a lot of money to increase a lot of HMRC people, that's only going to bear fruit in three, four, five years time. That's no good if you're trying to raise money right now. So I don't know what's going to happen with what they're going to do with dentistry just at the moment. So these less obvious things within the income tax we have to keep an eye on this. Everything's been very quiet even up to now. Quiet even up to now, as I say, even this afternoon it sounds like even the king doesn't know what changes in income tax are going to happen.
Johnny:The other big tax that we're worried about is capital gains tax. I have particular views on that. All through my career we've had a 10% rate of capital gains and I'm going to put it out there right now to say I think we're going to continue with the 10% rate For two reasons. Ever since I've been a child, there's a 10% rate. All they've done is change the name and they change the rules, but for people retiring or people coming out of it or entrepreneurs, there's always been something that is there. They will change the name and they will change the rules, but there will be something there. The other reason why I don't think they're going to change that is because they're pushing that they are friends of business and business is the way forward. It's all about growth in the economy. For them to say they are friends of business and then suddenly kill the idea of entrepreneurship and being able to realize what you've built as a business in the future at a reasonable level of tax will mean that they will have lost trust politically with the business class for a long, long time. And so those two reasons I can't see them changing that 10% rate with the business class for a long, long time. And for those two reasons, I can't see them changing that 10% rate without changing the name.
Johnny:The other rate for capital gains tax is the 20% rate and again that's been under the spotlight for a while to try and see what can we do with that. That doesn't affect people retiring so much unless the amounts are very large. It does affect things like incorporation for business or selling things which are not business assets. Are they likely to increase that? Possibly, yes, and I'll probably say probably yes. But will they take that up to the normal income tax rates of 40%? That's a doubling, that's a doubling of the tax rate. That's a big step to take and that if they were to do that, that would change very dramatically any restructuring of the business or moving business assets around without a retirement. So we will see.
Johnny:We will see what happens with that, but I don't know the answer to that yet. There's been no whispers about it at all. When will those things happen? There's probably going to be a budget in the autumn. If they're talking about using the officer budget responsibility, then that takes 10 weeks minimum to come through. So even if they started now looking at what the budget might entail, we're looking at the middle of September earliest to do that. So we're looking at a budget. I would have thought end of September, october, possibly November. They want to take a little bit of time on it. Those changes on making the budget likely won't come in until next tax year, next fifth of April. Certainly from the tensions one of you that I've mentioned.
Johnny:It's too hard to get things organized and many of you guys who are involved in NHS dentistry or have been in the past you will know about this horrible thing called the McLeod judgment. They've been trying to work out how to deal with that for the last two or three, two years. They still quite haven't worked it out. I don't think they can make the pension changes and sort out the cloud judgment on how people are being taxed on their NHS pensions. At the same time it's too hard they don't have the people to do it. Same time it's too hard they don't have the people to do it. So those things I can't see being brought in until a year.
Johnny:So we've got a period of time to try and plan um and any changes, any, any structural changes in your business. Now's the time to be looking at it. But has the world ended? I don't think it has just at the moment. One thing we do have, and this is not a fact thing we've got a certain amount of stability, and that's something we haven't had for some time time. It's been some years, what with Boris and Ukraine and COVID. It's been some time, so you can sort of see the way things are going. That's one positive thing, james. How do you feel about that?
Dr James:Well, I was getting a little bored of witnessing once-in-a-lifetime events, which seems to be an annual thing over the last few years. So I'm down for that. I'm pretty game for that. To be honest with you on the certainty front, and yeah, no, what I would say is it's reassuring to hear at least that we've got some time to move things around strategically before these changes come into place. One thing that I might have missed this maybe you did touch upon it and maybe I missed it. Corp tax yeah, did I read that Keir Snowden was going to freeze it? Say again, did I read that?
Johnny:he's going to freeze it or keep it the way it is. I would imagine that that will be frozen, certainly for the moment. Corporation tax bear in mind was 19% for quite some time. The last government sort of helped Labour by whacking it up to 25% and taking a beating for it. Are Labour going to put it up any more? 25% is plenty. Are they going to put it up anymore? 25% is plenty. Are they going to reduce it? No way. So I think, all things being told, I think Rishi Sunak is on Keir Starmer's Christmas card list saying thank you very much for putting up corporation tax up. We're here, so I don't see that changing.
Johnny:The other thing I do see on corporation tax changing is the ability to claim the capital allowances on various things, and whether that's a limited company doing that or whether it's a sole practitioner you know, unincorporated business partnership I can't see that changing massively. I can't see them bringing it down. Why would they? They are trying to get people to go out and grow their businesses and buy stuff to grow their businesses. So you've got a lot of businesses that have big pieces of kits, like farmers. For example, they're trying to get farming going in the UK since we've left the EU.
Johnny:If you reduce the level of capital allowance you can claim you're going to reduce it for, for example, a farmer as well, he's going to try and buy half a million combine harvester. That doesn't fit. So if farmers are going to be looked after, dentists are also going to be looked after, and I think that's something that we can take some some, some comfort in that. One thing that they might change, and that is electric cars, the allowances we get on electric cars, on the grounds that the people who make the profits on the electric cars are not generally people in the UK. Sure, the dealer principles who sell electric cars I'm not going to mention any brands whatsoever but they often go quite fast they will make some profits which will feed into the UK tax system, but the manufacturer and so on are generally not in the UK. So I'm not sure whether that will be a target for the government or not.
Dr James:we'll see yeah, because they're pretty lucrative the way they are right now, with them being taxable right, lots of them have money trapped in their limited company. They've splurged on an electric car, understandably so. So what's the space really?
Johnny:yeah, I think that's uh, I think that's silver, I think with electric cars, at the end of it, you only ever get the tax relief on the depreciated amount. Anyway, at the end of the day, it feels like you're getting a lot of tax relief, but then it's all clawed back when you sell the car or trade it in against something else. Um and uh, that's not something that you a lot of people realize until you trade it in against something else.
Dr James:So that's uh, that's something that's there that doesn't you're right that doesn't actually get mentioned so much that side of things it is little garage man. I'm going to tell you that. What was it? Oh well, of course, exactly.
Johnny:Yeah, that's not what they're just gonna. They're gonna dangle the keys yeah, understandable.
Dr James:Well, listen, that's good to know. I'm very valuable. Okay, cool. So obviously this community is dentists who invest. This community is specifically for dentists. So if we were to take everything that you just said and hone it towards the dentists the dentists that are on this webinar tonight and the dentists you'll be watching this on catch-up how can we distill that down maybe to a little bit of wisdom or a few things that the dentist might want to look out for?
Johnny:I think we shouldn't be too immediately concerned. I think we have a stability and I think we have some time to try and do things. I think we should within each practice and I'm talking to practices here rather than associates right now than associates right now but we should take this next few months and really look at the businesses and really try to look down the track as to when we're going to exit that business and if there's any changes we need to do to make to make sure that we're in a position to exit. If we are thinking of selling in two years or five years or whatever, that we maneuver things around to get that in place before any tax changes start to happen. So, as any business projection or any business planning will do, you start where you want to finish. So if you're thinking of retiring in three years, okay, what's your business going to look like in three years? And then you start changing it now. So we've got it in three years, but let's concentrate it into this current year that we're looking at now. Can I just jump in? I'm going to change slightly on this one. Will there be a change in practice, values or the ability to sell practices and so on?
Johnny:I think inevitably there will be a rush just at the moment to say we're all frightened, let's sell the practice, let's get rid of it now, and the selling agents will be very happy with that. I'm not sure there's necessarily a need to do that for the simple reason I like, as I said, about the retirement from your business, I'm not sure that they will, that they will make the changes on that. If you get a flood of practices coming on the market for sale, that by its nature will depress the price. It's just sale and demand. The banks will be very happy to lend on that. So all those practices you want to sell, if you can find a buyer, I think the banks will support the buyers buying.
Johnny:But is it a need to do things as quickly as that? I'm not sure that it is. I'm not sure that the risk is that great. And Keir Starmer you know he looks pretty healthy and you know we're not going to get a Jeremy Corbyn coming back in again that quickly and with Keir Starmer looking healthy, he's going to be there for a little while. I can't see the changes, the fear changes, happening immediately. Certainly the Conservatives in the election were peddling a lot of fear and that may well be the case Immediately, Not sure.
Dr James:I'm not sure. Does anybody remember New Labour from back in the day?
Johnny:kind of reminds me that it does, it does, um, and the, the tax changes that they made, that gordon brown made, where the tax changes for, like a really old people like me, those changes were very underneath the radar. The pension-type changes, those sorts of things that, unless you were in that situation, the average member of the public doesn't see it. It's invisible, and I think that's where we're probably going to start to see that now, but it's going to be, you know, something, in maybe a year's time, something like that okay.
Dr James:So we got to be vigilant, but we got time at the very least, which is which is a good thing.
Johnny:I think so, I think so, I think so. Can I just say something about the? Not on the tax, but on the politics? There's been so much talk, more than ever there has been before, on what they're going to do with NHS dentistry. Treating the new health secretary has been going on and on about NHS dentistry and they're going to make everything better than it has been. This is the first time people have been talked about dentistry.
Johnny:We had a white paper a year and a half ago and I think dentistry was mentioned in 100 pages. Dentistry was mentioned about four times, something like that. You know, it's way, way down below the junior doctors. That's not what we're hearing from Wes Street in the last four, six months, so I'm going to be very interested to see whether he delivers on it. I'm going to be very interested to see whether he delivers on it.
Johnny:Some of the changes that he's talking about bringing in, about increasing the numbers of dentists bringing from abroad, making people FDs, stay for three years within the NHS system or something. How he's going to do that I don't know, but that's we'll see. There's a whole series of things there that's actually going to be very interesting because one of the well, I would say the big issue that we have in the industry at the moment is staffing Clinical staff, nursing staff. If he starts to address that and that will take a couple of years then that's going to be quite exciting within the industry and see how that operates. If you end up with more dentists and more clinical staff and more nurses staying in the profession, that will change the nature of the profession as well, not just the NHS side, but it will have a splash onto the private side.
Johnny:And I do wonder if, if, if he may wave that magic wand and he said OK, nhs dentistry is this, everybody can have an NHS dentist. I do wonder what would happen to the private sector, whether you'd start seeing a drift of patients back to signing up to NHS dentists from the private sector. I'm musing now. I don't think that's going to happen and I think there's quite a difference between the delivery of clinical treatments on each part of each side of the industry. But of course every practice is different. It comes down to the clinician and whether his patients love him dearly or not. But I think that's going to be something to keep an eye on over the next six months. I say he's got the junior doctors to sort out first. But that's going to be interesting to see where we go with that one.
Dr James:Well, it's certainly something that is in the public's psyche. I, I, I would definitely agree there, because there's something that they're aware of. I mean, how many times have you heard it on the news and people decrying the fact that you can't get an nhs dentist? So obviously, the more attention it gets and where it gets shifted up the agenda, let's see what happens on that front. But listen, johnny, thank you so much for your wisdom and your hot takes on the new government and what it will mean, not only for the finances of the country but also specifically for the finances of Dennis guys. It is worth knowing that Johnny absolutely knows this stuff inside out, not just about the new government, what that means for us, but also about broader than that, much broader than that. Uh, it also johnny knows his stuff whenever it comes to tax in general for us dentist.
Dr James:So what we're going to do this evening? We're going to throw the mic out to the floor for a q a. This is a wonderful opportunity to avail of johnny's knowledge. It doesn't even necessarily have to be something that's related to what's happening contemporaneously At the moment with regards to the new government. It can be anything and everything under the sun. What a wondrous opportunity.
Dr James:So, johnny, if you're happy with that, we can throw the mic out to the floor and have some fun right now, see if any questions pour in, or we can just freestyle. That's fun as well. Does anybody want to brave the camera tonight and jump on the webcam and talk to us? Peeling offer, I know. But having said that, it would be worth it, because if you can get some wisdom relevant to your situation, that is, of course, extremely valuable. Anybody like to step up or turn on the mic? Or we can just freestyle as well. That's also fun. It is. It is also fun as well. So, johnny, can I ask a question? Are you still very much actively involved in the process of completing tax returns for dennis? Is that how your day-to-day looks?
Johnny:I, I I did a tax return.
Dr James:Oh, maybe 15 years ago okay, ah, so it's been a little while, but that's fine I personally don't do it, but I I've.
Johnny:I don't even do my own tax return. I've got one of my guys who is very good at pressing buttons and they are very, very good and very, very knowledgeable about the tax return information. My thing is probably looking at structures and careers and trying to help practices to build whatever wealth they're looking to build. And not everybody's the same and, as you know, james, there are a lot of people let's say your associates who don't want to own a practice but are quite happy to be in and actually focus on doing what they do very well and enjoy their clinical dentistry and enjoy it and go home and enjoy what they've earned. And that's also a thing. And, from a practice point of view, linking the two together a practice owner and the people who clinically enjoy what they do and clinically enjoy working with their patients that's a massive thing you know, I heard something uh, sorry to jump in, I just heard something recently that made me smile.
Dr James:Okay, and it's about principals versus associates. It's not principals versus associates, just to be clear. We're all on the same team. But this thing that made me smile was about principals and associates, and I can't remember who said this or where I got this from, but somebody said to me they were like you know the funny thing about principals and associates both of them think they've got the best end of the deal the other respective party whenever it comes to who makes the money. So the principals are like this guy or girl has it sweet, they get to go home at the end of the day and they get a 45 or 50 percent cut. And the associates are going to the principal like, wow, that's where all that money goes. They're sleeping on a bed, something along those lines. It's just interesting to me that something along those lines.
Johnny:It's just interesting to me that well, I think it is and I think that's the the. I think the beauty of of the uh, of the situation that we have with the practice and associates, is that collaboration. If you can make that collaboration between uh, the clinicians and the owners work, everybody is a winner. Everybody gets what they want. And it's interesting with the demographics within the industry. I do quite a bit with foundation dentists and it's interesting over the last 20 years the change in attitudes between dentists coming out of university and coming out now. And very much it's about clinical what can I do clinically? What can I? Can I grow my career now?
Johnny:not always, but you've got a lot more I think of that now than we had, say, seven or eight years ago and then 10 years before that it was different again, and I think that's interesting because that comes out of the demography of people coming in and doing degrees in dentistry and coming out into the dental profession and the balance between women and men, and I think the balance that we've got at the moment is actually a very, very good thing. Um, and I think, uh, women in the dental industry can be I don't know whether I should say this, but I'm going to anyway can be much more intense and much more um able to create income than a lot of men. Now, I'm not saying that's generalizing or just generalizing, but a lot of practices. I think the women add a lot to what they do from a clinical perspective and harnessing those things between the men and the women within a practice, I think can be very, very profitable, very, very beneficial for the practice and for the clinicians within it.
Dr James:Do you know? There's a question that I absolutely love to ask whenever I get guests on a webinar or a podcast who have an incredible level of expertise in their given area, and that question is this comes from the day-to-day of what you see and what you witness. You're having these conversations with business owners, right, and here's the thing. Let me here's the thing about running a business. Right, you're very much in your own head, you're very much you have. You don't have as much context on the situation as you think you do always, right, because here's the thing you only have context in your own business and what you do in there, and it's not until you start looking into these other businesses that you're like, right, here is where I am, here is where I could be, or here's all the things that I could be doing. Yeah, and someone like yourself gets lots of context on dental practices because you can just look into all these businesses and you can be like, right, this is what's mega successful in these practices. We're turning over 3 million, and here's what's maybe not so much working in this practice. Let me just literally just take that piece of wisdom and put it into this practice. Right, and I love that. That gets me really excited.
Dr James:Right, there's even a name for that type of knowledge, and it's called specific knowledge. That type of knowledge, and it's called specific knowledge, it's knowledge that you can only learn and it can only exist in humans heads, because it's too dynamic and it shifts too much. You write it down six months later it's not going to be valid, right? So, first of all, let me pause there for two seconds. Does that make total sense? What I just said? It does.
Dr James:I love that concept, right, very powerful, to realize that that type of knowledge is the thing. And on that note, on that note, johnny, from talking to all these, from talking to all these businesses, from talking to all these dental practice owners and seeing them at various stages of their development, what would you say, broadly speaking, the practices who are incredibly profitable and very, very, very switched on when it comes to, how can we say, being tax efficient, etc. What are they doing? That maybe, joe joblog, standard practice is not doing, and I get that. There's a million things, but there'll be like four or five biggies in there that you frequently see, I'm assuming, I'm guessing they're.
Johnny:They're. They're wrong, because every practice is different and you get a practice in central london with a cost base there and a practice in barnsley with a cost base there. They're very, very different. The personnel within the practice are also different.
Johnny:If there was one thing I would say, it's. It's a, it's a focus from the leadership of the practice that this is a business. Leadership of the practice that this is a business, but it's actually working the team, as opposed to beating the team into submission and making them do what you want, because that is, and in my view, that that creates a short-term profit quickly. But then you, with the team turnover that you will inevitably have, you end up spending a lot of time unfocused on doing what you do for the business and focused on replacing the team with the right people. So that is one thing that I would say would say. There is another thing I would say here, james, and that is the profitability comes and goes, because you get older, your team changes, your practice manager changes, a lot of your patients die and you get new ones coming in. So the whole dynamic changes and you get new ones coming in. So the whole dynamic changes. You've got to keep reinventing that profitability every few years and that means you need to be nimble.
Johnny:Let me just give you something. At the moment, some of you will know it's just been announced about the Bupa allowance thing that they brought in play just in the last few days, that Bupa are now allowing, you know, one visit to your dentist free once a year. They're also giving you treatments, basically 300 pounds of a treatment once a year that you're doing now that's not because they are very, very generous or altruistic. It's because bupa of an organization are concerned about their practice space and and and um preserving their patient base for all of the practices. And that's something people are doing and it's something in the back of my mind that I see with a lot of our practices that we look after, we should be thinking about protecting the patient base now.
Johnny:Changing government, changing in tax stuff changes the patient's attitudes are going to change, not the patient needs, but if there's a dislocation in the environment, there are always changes that are going to happen. So what I will be looking at, if I have a practice group, of saying where are the weaknesses in the practice, how can I preserve the patient base of my practice so I can continue there's no other way to say this making money out of that group of patients, because if you have to go out and market to buy more patients in, that's a cost and it's also a lack of focus in running the business and running the clinical side of the business. So we're talking about profitability of practices. That's one of the things that we need to look at. It's not what you do, it's also creating the environment within that as well.
Dr James:That, um, that that makes a lot of sense and, and you know what, it's an age-old lesson and it's a simple one and a straightforward one. But to hear you say that and what, that's what you've noticed consistently across these businesses. Well, it reiterates it and it also gives it a whole new dimension of appreciation in terms of gravitas. And, yeah, as you said, I like that, I like that euphemism, if you like their team turnover. That was that said that one way of saying it isn't it? Treat people nice, do right by people, and it comes back to you not just in a one-to-one individual basis, but also Christians. That's really good of you. Fit in business as well, johnny, do know what I had. One other thing that just popped into my head just then Obviously, the way things are with the government, things are dynamic and there could be a new budget coming.
Dr James:Well, there will be a new budget coming in about autumn time-ish and that will come into effect next tax year. What current tax relief opportunities are there right here, right now, in this tax year for dentists? They probably got announced ages ago, but it'd be good to have a little bit of a recap, a reiteration. That'd be extremely valuable for the listeners tonight.
Johnny:Well, I think the capital allowance. If you want to expand your business, I think now's a good time to do it. Do it If tax were to go up next year. Doing something now, today is something that's going to help. I think that makes a lot of sense. I think also looking at the structure of the business. If you've got an unincorporated business, there are a lot of people and we've done a lot of work with incorporating practices and picking up some of the capital gains tax at the 20% rates, because there is a way that you can convert future income tax at 40% into capital gains tax rates now.
Johnny:That may or may not carry on next year, but if you're going to restructure your business with limited companies and move things around, we've got a year to do it and we're all aware that if you're trying to buy a business or sell a business, it takes forever. It's not a six week thing. So let's get started now. This is one of the things that we need to be looking at. The pensions element, again, is something that time could be running out on, so that is something to look at.
Johnny:There are other ways of manoeuvring your business around and this is restructuring, and again we're coming back to the previous government trying to make all unincorporated businesses have a year end of 31st of March, that will be some changes and some extra tax for some businesses. That's one thing we need to look at. If you're a limited company, that doesn't apply to you. So again, keep coming back to restructuring the elements of if there's a limited company, look at the structure and you look at the year ends and if our changes to be made, let's go back and look at it now, potentially change some things from last year, last tax year, and make those changes now.
Dr James:And you know what? I really, really, really wanted to ask that question because, as I said, this is things that we can go ahead and implement straight away. Guys, still got a little bit of time on the clock. If anybody would like to ask a question for Johnny, or else we can just freestyle, either is totally and completely fine. I am just throwing it out there as well that what we're going to do is you're going to throw a link in the chat just now. If anybody wants to catch up with Johnny after this webinar about anything and everything tax related, feel free to use this link. All you've got to do is go ahead through your details into the link. What that will mean is that Johnny can reach out if anybody does want to avail of his knowledge on a conversation off this call. That is completely fine. That's going to happen in just a moment and just while that's happening.
Dr James:Johnny, with regards to what we were talking about a second ago dentists and tax relief, yeah, I just had another question on that front. Do you know, whenever it comes to associates and whenever it comes to them setting up their first practice here's something that I see all the time right um, when it comes, they've got, obviously they've got a big pile of money in a limited company, typically, yeah, and then they're thinking themselves how can I invest that in a dental practice? Or how can I think about, well, you know, not taking all of that money out of the company and getting huge tax debt? And do you know what? Not even just people who are setting up dental practice. I'm actually going to roll back from that one slightly, because it's actually a really common dental problem.
Dr James:It is, you're right. We need to do a webinar on specifically that, specifically that, because that's probably 30, 40 minutes or an hour in and of itself. What words of wisdom can you offer from those people? Because, from what I understand, a big part of it is to figure out what your goals and objectives are, because then that relates to how you can structure things. But listen, I want to hear it from you, you know, because that'd be very valuable.
Johnny:You're right. You're absolutely right, james. I think, looking at those, if you're going into a debtor practice, it's fine. You end up with a holding company and a subsidiary, which effectively is the practice that works okay. But sometimes you then start creating more and more wealth within your practice, within the company. You can't get it out of the company without paying the big tax rates on it, so that's a problem.
Johnny:What a lot of people will do, depending on their age, is to potentially create a separate company, a family investment company, which is separate, and they can shift the funds around into that and surplus funds, and then you start using that family investment company for exactly what it says on the tin. It can be. It's outside the scope of the clinical side, so it's not related to anything. Effectively, you're creating a money box somewhere else. So when the practice is sold or whatever, you've got another company with money in it and potentially other shareholders within it. It could be you, it could be your spouse, it could be your children, it could be your parents. It can't be your dog or your cat because they're not allowed to have personal allowances. Now, I haven't seen any of that in the king's speech, but I'm pretty sure that the current government hasn't changed that either I think we can say that with good authority right there.
Dr James:I don't think there's going to be any any dogs and cats. It can be shareholders in a company. Why do I get the impression that you've had that conversation before with somebody, johnny? Did that come from somewhere? Yeah, no, I'm kidding.
Johnny:I'm kidding, hopefully not but listen, I know it's quite.
Dr James:I think it's just a obviously, let me, let me jump on there.
Johnny:Actually, there's just one more thing I'm going to put into into into this I I I work a lot in the indian subcontinent. Um I I. I have some financial modeling people that I have set up and I actually work in that office from time to time, a few times a year. And also we deal with a lot of dentists in the UK and in Europe who have got backgrounds from the Middle East or the Indian subcontinent or Malaysia or Hong Kong or wherever they might be.
Johnny:One of the things that we so often miss is that there are different tax rates and tax regimes in different countries and we can use some of the residency rules, use some of the residency rules again when we're looking at structuring what we can do for a dental practice, for a dental practice owner, of using maybe the different tax regimes where they are and when they practice. It's not always the same thing, as you and I know as well, james. Ireland is a different tax regime and the Republic is a different tax regime from the UK. Again, you need to just have a quick look at some of those sort of things and if there's things that we can do within a wider family family, we ought to be looking at it there we are, and that's a conversation that probably not enough of us have.
Dr James:Really. It's very much looking at with a uk lens and that's about it really, I should imagine you're absolutely right.
Johnny:Um, I think we're sometimes we're missing something here.
Dr James:There we are, food for thought. Well, listen, johnny, you've been incredibly kind with your time and knowledge this evening, so I just want to take the opportunity to thank you so much for sharing everything that you shared tonight, not just about the government, but obviously more broadly than that, all that other stuff that we got into and I get the impression we're just scratching the surface right there. We definitely need to do some follow-up content, some follow-up webinars and some follow-up podcasts in due course, guys, once again, if anybody wants to reach out to johnny, feel free to do so, uh, using the link in the comments. If you'd like to speak to johnny on a one-on-one basis about anything that we talked about this evening. Guys, we're gonna go ahead that, and just to let people know there's no obligation With me.
Johnny:If I can help, then I can do so. If there's something we need to get into a little bit more, then we'll have a broader conversation. But just for a quick question on where you are, not a problem, there's no obligation, there's no costs.
Dr James:Thanks so much, johnny, and you know what? That's the best way to do things I've always find, actually, because then we give and we come. It comes back to you is what? Something that I've always noticed in life as well. So, anyway, okay, cool. Well, like I said, johnny, thanks so much for your time this evening.
Dr James:Guys, hope everybody got loads of value. That is why we do this stuff. On Denison invest. We run these webinars every two weeks. We will be announcing the next webinar very, very soon on the Dentists Who Invest facebook group. It's going to be all about mortgages. So if that is something that's relevant to you, feel free to show up in two weeks time, same time, same place, where we'll be having a webinar all about mortgages, as I say, with mrs Sarah grace. Something to look forward to, johnny, we're going to wrap up around about now. We like to keep these powerful and punchy, these webinars, because I've always found they're most engaging around the 45 minutes mark, and we're just over that now. So now's a good time to draw the curtains on proceedings, guys. Thank you so much for coming along this evening. Johnny, if anybody wanted to reach out to you beyond this evening, how would it be best off doing that. I know you're on the facebook group johnny minford I am on the facebook.
Johnny:Uh, johnny minford, dental or my, have you got my email up there somewhere?
Dr James:uh, yeah, we could probably sort that uh somewhere, maybe put it in the chat or something. Guys, I just wanted to say as well as that, I know there's going to be some watching people watching this on catch up. If you enjoyed this content and you're a dentist, feel free to join the dentists who invest facebook group or check out dentistswhoinvest. com. We run newsletters three times a week. They talk about all the content that we do everything and anything finance. The goal is to accelerate dentists and their journey towards financial freedom. However that looks for you, we're here to help. We're here to assist and have a blast along the way, just like this webinar. We're going to go ahead and wrap up just now. Guys, thank you so much once again for coming along. Hope everybody has a flipping smashing Wednesday, wherever you are in the whole wide world, and I'll see you all again very soon. Much love.
