Iain Stevenson is Head of Dental at Wesleyan Financial Services and has over 28 years of experience working in financial services.

What has the new Labour government announced so far that could potentially impact financial planning for dentists?

If we consider what has been announced so far, Labour has said it is not planning to raise income tax, National Insurance, VAT and corporation tax. On the face of it, this is a good thing, although, on the other hand, this needs to be balanced against the fact that income tax thresholds are being held and will remain frozen until 2028. This means that more people will start paying tax in the first place and others will be dragged into higher tax bands. Labour has also stated that their plans to end the VAT exemption on private school fees will go ahead – this change may have a significant impact on many of our dental clients whose children attend fee paying schools.

What might change in the future?

At present there is a degree of speculation regarding what was notably absent from Labour’s manifesto and what could therefore potentially change in the future. For example, there has been no specific mention of capital gains tax – this could possibly be an area for reform in the future. Capital gains tax, as we know, is not a tax on income, it's a tax on assets and the sale of assets – something which could perhaps impact the net returns received from the sale of a practice.

Then there is the age-old challenge around pensions – for the 35 years that I have been in this business, pensions have always been a potential target for change and for governments to try and do something in a different way. We know that the lifetime allowance - the maximum amount you're allowed to have in a pension pot or an accumulation of pension pots at retirement - was withdrawn last year, a welcome change that helped to encourage people to continue to save and look after themselves in the long term. Labour has confirmed that it will not reinstate the lifetime allowance, which is good news for dentists; however, another notable omission from the manifesto was around the annual allowance - the amount that you are allowed to contribute to a pension each year. If we look at pensions overall, they're extremely tax efficient and offer a good method of saving – this also means though, that some of the tax allowances may potentially be a target for change, such as pension tax relief to give an example.

The tax-free pension commencement lump sum - this allows you to take a certain percentage (currently 25%) out of your pension as a tax-free lump sum – is another area that has been discussed as a potential for change in recent years. Nothing has been announced however, and this is only speculation. I am hopeful that this government encourages people to save and look to maintain the tax advantages of pension planning and of retirement planning.

What sort of changes would you welcome from the new government?

I would be delighted to see changes made to ISAs to encourage people to invest more, especially so for younger people. If we think of young dentists who are just coming into the profession and how hard they have studied to get started – it would be wonderful to see some sort of scheme specifically for these dentists, to help them save and to encourage them to build solid foundations for their future as well.

What would you encourage dentists to think about now?

I would encourage dentists to look after themselves in the short, medium, and long-term and to not delay making decisions, with regard to their financial planning, in the event that things may change in the future.

My fear is that while there's uncertainty at the moment around what the new government might do, some people may choose to do nothing and that in itself, in the long run, could be even more damaging. By choosing to wait until inflation comes down, until interest rates come down or until the next budget for example, we miss opportunities; and when the autumn statement does come around, it’s likely that other unanswered questions will transpire. There will always be something else, a war that we cannot control or an economic challenge that we weren't expecting, or another reason to delay and before we realise, six months becomes one year, one year becomes five years and so forth, and then the opportunity has gone.

I would encourage dentists to take a step back and use this as a time to reflect and consider the following: What am I trying to do? Am I doing the best I can over the short, medium, and long term?

Speculating over what could happen is an interesting discussion, but it can also create fear. Therefore, we need to be careful that we don't over speculate and just assume that certain things are going to happen. We need to be careful that we don't just keep putting things off and ensure that we continue to make good financial, well-informed decisions.

Bear in mind that the value of investments can go down as well as up and you may get back less than you invest.

Tax treatment depends on individual circumstances and may be subject to change in future.

For further support and guidance to plan on financial planning, speak to a dental Specialist Financial Adviser at Wesleyan Financial Services by booking a no-obligation financial review or calling 0800 316 3784.

About: Iain Stevenson is Head of Dental at Wesleyan Financial Services and has over 28 years of experience working in financial services. Under Iain’s guidance, Wesleyan Financial Service’s Dental segment helps to support dentists, their families, and their practices with financial planning to secure their financial future.

Wesleyan Financial Services Ltd (Registered in England and Wales No. 1651212) is authorised and regulated by the Financial Conduct Authority. Registered Office: Colmore Circus, Birmingham B4 6AR. Telephone: 0345 351 2352. Calls may be recorded to help us provide, monitor and improve our services to you.

NHS Dentistry has been the sick service of the NHS for a long time. Not given importance by successive governments and treated like an optional extra, a nice to have but not necessary service. Their neglect over the years and decades has finally come home to roost and we are now in a position where NHS Dentistry will be one of the top 5 concerns for voters at the next General Election due at some time this year.

Well, what do YOU think would help the NHS General Dental Service Survive? A It More Posh Would Be Nice - Saving The NHS by @DentistGoneBadd

I was initially quite scathing of the Tory Leadership selection process, but when I looked back critically at the way that I chose members of practice staff, I thought better of it. "You'll Do" How NOT To Choose Practice Staff By @DentistGoneBadd

What can CHALLENGE do?

• CHALLENGE will argue and lobby powerfully in support of the dental profession’s position as the key providers of oral health care in the UK. The process of building a new dental service cannot be done in secret.
• CHALLENGE will organise forums and events in which key players can be given the chance to air their views and break through the logjam created by the BDA and the Department of Health both of whom have excellent reasons to exclude others from the debate.
• Carry out field research among the profession to establish their opinions, hopes and fears. This is not a feature of any of the work being carried out at the moment. Suppressing the voice of the dental profession is unforgiveable when it is the profession as a whole that will be required to carry out whatever emerges from the discussions, using their businesses and the human resource they control. That voice must be heard loud and clear.
• CHALLENGE will listen to the voices of those whose work is strongly linked to the dental profession and industry but not part of the established professional hierarchy. The dental industry supports the dental profession in a symbiotic relationship – each needs the other. The importance of that element of the industry needs to be recognised.

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Key principles underpinning the CHALLENGE approach to a new GDS contract in 2014/5

Any new system must concentrate its efforts on delivering –

·         Improved oral health for the population as a whole

·         An oral care system that patients understand and can trust

·         A profession that can take pride in its work

These are the simple but important features of a successful contractual arrangement between the dental profession and the Government.

In addition, CHALLENGE would say that the following issues are just as important -

·         A system where the roles of the state and of individual service providers  are crystal clear

·         A system in which the NHS and non-NHS system work in combination, not in opposition

·         a system in which the profession is encouraged and empowered to act professionally

Whatever emerges from the discussions between the profession and the NHS must be able to demonstrate that it has matched these issues with due sensitivity to the needs of both sides. Both sides need to recognise the need for fiscal control and integrity and both sides need to understand that if high clinical standards are required then the funding has to be there to support those standards.

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Chief Dental Officer for England issues a ‘Call to Action’ to the dental profession to help find workable solutions to the contractual problems that have beset the NHS general dental service since the introduction of the last set of contractual changes in 2006.

You’re a bit late getting to the party, Barry, but now you are here you will be pleased to know that your old adversaries CHALLENGE have been resurrected and are looking forward to joining a robust debate alongside you.

Barry, you will remember, but for those who are too young to recall, CHALLENGE was a political pressure group set up in the wake of the 2006 contract debacle. They argued long and strong for major changes early in the life of the new contracts. They even made a significant appearance in front of a Parliamentary Health Select Committee back in 2008. The three founder members were Eddie Crouch, John Renshaw and Ian Gordon. These are well known names with a long track record of standing up for GDPs in the one-sided battle with the Department of Health. The same three professional leaders are still the face of CHALLENGE.

The call for action from the CDO provides us dentists with quite an intriguing headline, especially coming from one of the most obdurate supporters of the status quo. Barry Cockcroft comes to the vexatious arguments over the way the NHS GDS and its various contractual formats work for patients and for dentists after telling anyone who would listen - for years on end - that the service is in great shape and patients are deliriously happy with the way they are treated.

Well, if Barry wants to hear from the profession, CHALLENGE is willing to take up the cudgels once again to promote and articulate the message we hear coming from all the GDPs we listen to on a regular basis. In the near future we will be running our own listening exercise to gather up data on how you see the contract and how you feel you have fared in the eight years since it began. We also need to know your concerns about the pilots being run at the moment and the possible shape of a new service that may emerge.

If we as a profession are to make any real impact other than making a lot of noise and blowing out a lot of hot air, we need your input to validate what we are saying. When that chance comes along please take the few moments it will require to put down, for our benefit and for the benefit of all your colleagues, exactly how you feel about the situation you find yourself in.

If Barry wants action, CHALLENGE says let’s give it to him!!

John Renshaw

CHALLENGE

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