Dr James, 39s:

Well, the intro left off some interesting considerations, I guess you could say, uh, from uh the budget whenever it comes to our financial prospective, financial landscape. But it could have been worse, I think. It's safe to say.

Johnny, 56s:

I think that's right, uh James, but the the reason it wasn't worse was goes back into uh the economic environment in which we spend ourselves. So we the budget was as late as it possibly could in the year. I think the uh Chancellor was hoping to have some better news that she could uh hang her hat on uh when it came down to actually doing the budget. And indeed, that is actually what happened. She got some uh she got some good news from the Office of Budget responsibility just a few days before the budget, which gave her some wiggle room, gave her some space to uh not do a lot of the things that she had been threatening to do. Um having said that, there was a lot of things that are in the budget which are not going to be helpful for growth, in the opinion of a lot of people. But um the scene is all about what the economic environment is like, not just now, but over the next five years, because there's a little economic trick that goes on here. When they look at um the income and expenditure, the tax and the spending, it's not just about this year, it's about the next several years, and uh Rachel Reeves has very deliberately spent this, spelled this out through to 2030. So it's about what's going to happen in those five years. So her targets aren't for this year, her targets are for 2030. So as long as she brings it home in 2030, she will have hit her targets. And that's the uh economic aspect that makes the uh the markets happy, and in fact, we saw that with the markets reacted um reasonably positively to the budget. Um the interest rates uh got a bit harder, the pound strengthened, so everything was pointed in the right direction. But part of that was because the um the growth for this year for 2025 was just upgraded at the last minute. So with more growth, you have more room to maneuver. Having said that, the growth as projected for the next three, four years was slightly downgraded. So that's something it's a happy day this year. Next year, we're not sure. So we really do have to keep an eye on what's happening over this next few years just to see if we are on target, because a lot of what we do is based on the assumptions of things that are going to happen, growth, for example, in next year, year after through to 2030. If that those assumptions are weakened for whatever reason, then the wiggle room that she has, that she's used, suddenly disappears. So that's why it's important, not just today, but next year and the year after.

Dr James, 4m 43s:

There we are. So it's based on conjecture to a degree, but that's how these things work. Uh you know, it's really uh so yeah, no, but but it's it's it's it's worth repeating, isn't it? Because not, you know, it's it's it's not often said. Uh but yeah, so intervening things might flip around, those projections aren't as to uh what we might expect effectively. But yeah, anyway, moving on to the meat and potatoes of this podcast, that being the changes themselves and how they affect Dennis. Johnny, I know that you sent me over a little bit of a list of talking points beforehand. So, what I'm gonna do is I'm gonna go ahead and get that right up on my phone here. So the very first one, oh, that's uh you might have to help me out there. What does that say in your handwriting, Johnny?

Johnny, 5m 37s:

Well, I'm gonna say, I'm gonna say, we're gonna talk about first-year allowances. So there was uh a lot of stuff coming in for um capital equipment. Um, one of the things that some people were worried about was that the those allowances would be altered.

Dr James, 5m 54s:

Is it is this capital allowances?

Johnny, 5m 56s:

Is it capital allowances? If so, if you're expanding a practice or buying into a practice, uh the she's introduced a new set of allowances of 40%, which that will cover leased assets. So some assets which before you could only get the allowances over the period of the lease, you can now bring some of that forward so you get a better rate.

Dr James, 6m 25s:

So it's an additional tax break.

Johnny, 6m 28s:

It's an additional tax break. Having said that, the 100% allowance that we're all used to, that's been there for years, that hasn't changed. So in some ways, it's it's a tax break, but we actually already had a lot of that anyway. One thing that's balanced that out is she has reduced the writing down allowance. So if you don't get the 100% and you have to get it over a period of time, then the writing down allowance, the percentage available on that, has reduced, which means that you get the rest of your tax relief over a longer period. So that pushes it all out. So that's something that uh I think the Chancellor's got a bit of money back in the economy on that one. So we'll see how that works. But it does mean that um we we we we do need to look at the total expensing as much as we can possibly expense capital equipment expansions so that to get the the first year allowances, the 40% allowances expensive through the normal profit and loss account, um, rather than put it into some sort of a capital or structural thing where we don't get allowances until much later. That suddenly becomes uh important with the other tax changes that are happening now. So we need to get this is an area where practices will make uh as much as much benefit out of this as they possibly can to offset where we're losing elsewhere. One thing I would say on this one uh it hasn't affected the allowances on electric vehicles. So EVs we still get 100%, although we now have to pay as a three pence a mile or something going forward for the mileage that's done in EVs. Um it's not terribly clear how that will come out. There's a talk about every time the car is serviced or goes through an MOT.

Dr James, 8m 40s:

Yeah.

Johnny, 8m 41s:

That that uh mileage, the the miles on the car will be captured, but somehow um I think the uh car owner will be charged. But how that actually works, we don't know. We'll we'll see.

Dr James, 8m 55s:

Interesting. So I guess they're not bringing that one in for a little while then until they figure that out.

Johnny, 9m 0s:

No, I think they'll try and bring it that one in as soon as they possibly can. I think uh on that. The one thing that was said in the budget is uh the 100% allowances on EVs are kept until 2027. Now, what could have been said is that they are being continued, full stop. But the fact that they are being continued until 2027 makes me think what's gonna happen after 2027. So it may well be that um we look at that a little bit more closely and we try and divine uh a direction of travel here. Yes, and maybe if someone wants an EV, maybe sooner rather than later.

Dr James, 9m 51s:

There you go. Well, um it's it's they've they've given themselves space to uh amend that beyond 2027. So it certainly suggests that they'll it won't remain forever because it is it is very generous, right? Like a fully taxable vehicle.

Johnny, 10m 5s:

It is, it is. But um we are we are having there's a lot of tension in this budget between um the greening of the economy, for example, with EVs and actually tax raising.

Dr James, 10m 19s:

Yes.

Johnny, 10m 20s:

And there is uh a lot of things where we're across purposes. This is one of those things where cross purposes do we commit to uh electric vehicles as a country or do we not?

Dr James, 10m 33s:

Yes, I hear you.

Johnny, 10m 34s:

Uh and that's uh that's something that we've got in here. Um another aspect of the budget which which will have a big effect on practices really, is the uh the change that was not announced in the budget, but was announced just before the budget, increasing the national minimum wage for young people. Now they left that out because that was, I think, something that nobody wanted to deal with afterwards, because there's shades of 2024 going on here about the increase in the minimum wage, and of course, like 2024, that is going to have a knock-on effect on all wages, all wage rates across the board. Because if you increase it for younger people, then you increase it in due course for slightly older people, and then you increase it for people who are not on the minimum wage. So that is something that's gone up by between four and five percent. So that we will see factoring through into uh practice costs before too long, that will have that will have an effect.

Dr James, 11m 53s:

Nice.

Johnny, 11m 54s:

So looking at practice is that's something um people with employees will need to factor into the equations when they're planning the next year. If someone is looking to sell a practice to a corporate for the sake of argument, um I am 100% that the corporates will already be looking at that, will already be factoring that in to how they make their valuations.

Dr James, 12m 23s:

Yeah.

Johnny, 12m 25s:

And where the corporates go, the banks tend to follow, and the smaller corporates and independents will also follow, and they'll also factor those things in. That looks like quite a small change, but actually a lot of practices use this salary sacrifice aspect um or actually use it not as a salary sacrifice, but actually as a as a as a as an alternative to having a salary or having a bonus within the practice. Um, it particularly comes down if you've got sort of slightly higher earning staff, like someone who is close to the threshold of going into the 40% band. Um, and rather than taking an extra bonus or an extra pay rise, they will very often have a salary sacrifice scheme. So they keep their salary below that level, and they get the extra rewards by way of a pension. That is now gone as of next year. So that's going to be a negative. We still get the tax relief, but it's going to cost not just going to cost the employee, who may be the owner or connected to the owner, the employee will pay an extra 8%, if they're basically a taxpayer, but also the employer will pay the employer's national insurance, which is an extra 15%. Damn. So someone with a with a with a 5,000 pension bonus suddenly ends up, it costs the employer a lot more, and there's a lot less going into the pension for the employee. So the value is a lot less. So the and I'm thinking about the rewarding staff and also thinking about the retaining staff. As we know, James, there's a lot of problem about staff retention in our industry at the moment. This was one of the ways where staff could be helped in a tax-effective way.

Dr James, 15m 3s:

Yes.

Johnny, 15m 5s:

Within the practice. That is now gone. And I said before, this is this is a budget where there is a lot of mixed messages. Once again, it's one of those things where do we want people to save for their own retirement or not?

Dr James, 15m 25s:

So we want to do this correctly. Yeah. That's basically basically the fact that all pension contributions were tax deductible.

Johnny, 15m 36s:

They are still tax deductible, but they now attract national insurance.

Dr James, 15m 40s:

Well, sorry, yes, technically, but previously they were completely like there was just, you know, let's say, for example, if you had um and perhaps we're going to come on to this tutorial from Interject, and let's say you've got, let's say you've got the associate whose trades is a limited company, and they want to put 40,000 pounds into the pension, they would just put the 40,000 pounds into the pension, and that's it. Whereas now, actually, they can put the 40,000 points in, but they also have to set some money aside for employers' national insurance and employees' national insurance.

Johnny, 16m 14s:

That's correct. I think there will be the detail as it comes out, will be there may well be a difference between the owner, the shareholder, and simply using it for uh for a staff reward and retention.

Dr James, 16m 30s:

Right, okay, but as things stand, what I said is true.

Johnny, 16m 34s:

You can see the direction of travel on this one. Because that's that is huge. Uh but I I think the owners that's probably not going to be the case because that wouldn't be treated as a salary sacrifice, but you can see the way this is going. So it's a worry. That will also push down wages because if uh if someone has already contracted for salary sacrifice with an employee, then there's no way out of this. It's suddenly gonna cost the employer more. So a five thousand pounds going into uh a pension will cost the the employer seven hundred and fifty pounds that it didn't cost the day before.

Dr James, 17m 28s:

Yes.

Johnny, 17m 30s:

So that's that's uh that that that is a big thing. It's it's it's the message that it sends more than anything else, which is which is the concern. So we're gonna have the national minimum wage coming in, going through the ladder of uh of wage rises. That's a squeeze from the bottom into the into a staff row, and then we're gonna have things like this from the top, which is gonna squeeze it down. So that will be interesting to see where that um uh where where that works. But at the end of the day, I think there's going to be less, it's one of those things where we're gonna have less money in the the the employment roles pockets than we had. And again, the outcome of this when we're talking when Rachel Rees is talking about the uh uh the cost of living and the working man, um, on the one hand it looks good, on the other hand, the reality is it may not actually achieve what she's trying to achieve. The concern or the big concern for me, we're gonna have a lot of people who are under saving for the retirement.

Dr James, 18m 49s:

Yeah.

Johnny, 18m 50s:

That causes long-term consequences for the government. We've known this for decades, that as people come up to retirement, um they need to be looking after themselves because the state pension isn't enough. This is something which just shoots us in the foot. It doesn't make sense to me. Bear in mind actually that the NHS pension is not part of all of this, and the NHS superannuation is inflation-proof and still running along. So, whilst these things for private pensions cost for the employees of a practice, the NHS superannuation, if people are involved in that, um doesn't get hit at all. So the difference between the NHS plan and the private plan, the gap widens because the NHS superannuation generally pound for pound provides better returns, probably twice as good returns than a private pension. So this gap then gets wider. Now, if I was being generous, I would say this is the chancellor saying, Oh, we're gonna do something for private dentists. But I'm not totally convinced that that's been thought of. I think this is a consequence, but I'm not sure it's a planned consequence. We will see.

Dr James, 20m 26s:

Interesting.

Johnny, 20m 29s:

So the other um things that I'm uh I've been thinking about that where we have an effect on a practice, and this again, this is uh another very big thing. And this because this raises a lot of money for the government, and that is the uh additional tax on dividends.

Dr James, 20m 50s:

Yes.

Johnny, 20m 51s:

A lot of practices who trade as limited companies will be caught by this. So they are um they operate, the extra two percent will go on. It means that at the moment it's it's there's not a big deal of difference between having a limited company at a certain level and simply being a sole trader at a certain level.

Dr James, 21m 18s:

This already the changes as things stand, right? Like it's it's way more it's way tighter than it used to be used to be in terms of the net tax that you're paying. So surely this is going to push things over the edge where it just pays to remain a sole trader in a lot more situations. It's about crunching the numbers, of course. Anyway, I didn't mean to interrupt, you're just about to.

Johnny, 21m 39s:

But James, you're right, and I think that's a that's a very good point. And I think there's a lot of um rebalancing will have to be done, particularly between those practices who uh have their private going through the limited company and their NHS earnings going through a sole practitioner. So there is a balance, a rebalance that has to be done on this, um, and that will make a change on where the tax falls, because bear in mind that the uh income tax from an individual is paid in January and July, but if you were clever with your year end in the company, your company could end up paying its tax nine months afterwards, so you could get a little bit of a not a tax break, but a hiatus before you pay the tax on your profits. If you are moving from a company back into uh having more earnings as a self-employed individual, then that changes the payment of the tax, and that's something you have to project forward because it may well be that we end up with some um January tax problems that we're relying on the bank to sort out January 27 and January 28. Because this dividend thing starts in April. It's not something it's down the track a bit, it's starting.

Dr James, 23m 20s:

Yes.

Johnny, 23m 20s:

So that is that that is coming. Um moving on from that, a lot of practices, if they are profitable enough, then they will already retain their profits within the company. Um, and I think we're gonna see more and more of that, where if people don't need to take the profits out, they will leave them in and actually start using their companies as an investment vehicle. Because if you're gonna be hammered for tax to take it out, why not just leave it in if you don't need to spend it? So a lot of structure changes will start to happen now. Um, I know we do a lot with uh family investment companies, as you do, where we possibly have another company where we move, we keep it in a corporate environment and move it around. So there is no uh there is no exposure to individual personal tax. It's all within the corporate environment. So we never we only pay the extra two percent on what we want to take out and spend in Sainsbury's or just it. And I think that's I think we're gonna see a lot more of that uh is going to be happening, particularly if the investments are uh in property, because from 2027 the government is also bringing in an extra two percent tax on rental income and then savings income, general savings and rental. So, in other words, investment income. So for properties outside a company there's an extra two percent to pay. If the property is inside the company, then we don't we can avoid the extra tax. So I think we're going to see a lot more investment work within the proper format than traditionally we would have taken the money out and done the family and done the investment. So I think that's gonna be uh quite a big change. Um, obviously, to put investments or to put a property into your company in order to do this, you may well have capital gains tax to pay. So there is a balance to be set up, but this is something that I think uh a lot of individuals are going to have to have a look at. Because in the long term, and bear in mind that this government has a big majority, and bear in mind that a lot of the spending promises, which we're not talking about today, um, will be very well received by the backbenches. This is where we are, is probably where we're going to be for the next few years. So there will be some decisions to be made. My advice on any practice or clinicians would be to take some advice on this, have a look at it, do the crunch the numbers as as you put it, and let's see uh let's see what it turns out over the next two, three, four years. Because it may well be not worth changing if we think there will be a change in economic policy in a few years. Or it may well be that we think, nope, um if Labour get in again, we're gonna have more of the same. If the conservatives or reform get in, it may well be that they say, well, Labour's done the dirty work, we'll just keep all the keep all the tax receipts as they stand. We don't know. But I think we have to we have to crunch the numbers and look at this um example by example. But I mean, as you said, James, this this applies to associates as well as practices. Because a lot of associates work as practice as uh as as limited companies at the moment. And a lot of uh high-earning associates will want to keep the money in the company. So I think there's um that's it's it's something everyone needs to have a look at.

Dr James, 27m 57s:

Sure. Well, I think I think that takes the rate, the basic rate to 10% now, right? So double digits. Yeah. Isn't it 10.5, right? Yeah, yeah. Wow, there we are. And in your in your you know, uh in the time that you've been an accountant, has there has dividends tax ever been higher?

Johnny, 28m 21s:

Um, nope, they only brought the dividend tax in um some years ago because there was a lot of movement towards a limited company and you could avoid national insurance by taking your income as a as a as a dividend rather than as a self-employed individual. They then introduced the dividend tax, which, if you looked at the numbers, basically put the taking a dividend was you pay and end up paying out generally the same sort of amount as a basic rate taxpayer, as as if you were self-employed. So the national insurance that you would have paid as self-employed was based was uh balanced by the dividend tax. So at that point, it didn't make it evened up the playing field for basic rate taxpayers between the two. Now, as you said at the beginning, it's now gone the other way. It's now having a limited company, you are going to pay for this limited company.

Dr James, 29m 33s:

Yeah, because I remember um a few years ago doing a webinar, and um yeah, there was there was when when they initially put dividends tax up, I think it was from like 78 and then corporation tax up as well. And then so I remember this I remember someone doing the math and saying, okay, cool, once upon a time it made sense. Like we probably lost tax if you just extracted those dividends. But now it's it's very, very, very close. And I remember them having the data and the the the sort of two examples that they had were literally right next to each other by way of overall tax. But now I'm gonna imagine that uh well, yeah, as we were saying a second ago, it'd be it'd be interesting to see that. Maybe that's a good webinar right there, something along those lines. Someone who's actually, you know, constant numbers, you know, if you extract X amount, if I had you know a tax-deductible salary, you know, how does that look? Anyway, I'm sure that uh that's a webinar for another day.

Johnny, 30m 35s:

I know one of my colleagues has already pushed those figures, but you've got to put them in at different earnings levels. Because some people earn 50,000 a year and still have a limited company, which never made sense, but some people do. Some people earn 100,000 a year, some people earn 150,000 a year. Um it it all changes on uh on the extra tax.

Dr James, 31m 1s:

Yeah. Yes, depends how much you're taking out of the company, right?

Johnny, 31m 4s:

But the the the key on this, James, I think, is that in the old days, um, and I'm thinking 30, 40 years ago, a company wasn't used to to trade for the way dentists do it, or plumbers, or joiners, or anything like that. A company was something else. Whereas what we're looking at now, uh, companies are just another vehicle for people to go to work with.

Dr James, 31m 30s:

Yeah.

Johnny, 31m 31s:

And that's the difference.

Dr James, 31m 32s:

Yeah.

Johnny, 31m 33s:

And that worries me, because that brings up another thing that does concern me. This is for the first time in more than a generation, but I remember it way back when. And that there was a split between earned income and unearned income. And earned income was related to particular types of people who worked for other people, and unearned income was related to people who owned things, in other words, rich people. Now, that's not the case now. But it seems to me that we're going down that same sort of political route of separating out different classes of society. That worries me. If this is a start. So I'm concerned with that. We follow on, I mean, the mansion tax is part of the same thing. And whilst the mansion tax, if you don't live in central London, the mansion tax may not apply to you. But I look at that and I say they've it's easier to uh sorry, it's more difficult to actually introduce something like that and put thresholds on it. And it's a lot easier than in years' time or two years' time, and they say, oh well that that threshold of two million. I tell you what, let's just reduce that to 1.5 million. Because we need a bit more money. And it's easier to reduce these things than to introduce them. But they're being introduced now, and if they go into law, I like to see the direction of travel of that one because the mechanism mechanism is there to actually start making some of these changes. I I find that a little concerning.

Dr James, 33m 38s:

Yeah. Well, it was like with lifetime allowance, right? Before they repealed it. Yes, it it was actually two million at the start. Maybe two and a half, maybe. I mean, I'd have to look that one up. And then it became 1.8, then it was 1.6, then it was 1.4, and then I think before they got away with it, they got rid of it, it was 1.2 uh million uh lifetime allowance on your pension, and then they just completely repealed it. Uh, didn't know, but uh you know, generally what you would expect is for these things to go up with inflation, but it didn't, right? They did the exact opposite to make to read the pension payback, right? And there was some, I remember there was some sort of well, that there was some level of mitigation that they built into it. If you already like say when they brought it in, say like it they reduced it from 1.4 to 1.2, if you already had 1.4 and they brought it down to 1.2, there was some level of mitigation that they'd included, but it wasn't it didn't go far enough to fully mitigate it for those people who had all this money stashed away and all of a sudden had to pay tax on it. But no, of course it doesn't exist, you know. Um for the for now. For now. And I thought that could have been something they could have brought back, to be honest with you. I think people could would have swallowed that.

Johnny, 34m 52s:

Yeah, I I I agree with you, and it would have it would potentially have hit higher earners or higher users of that, yeah, than the lower users, but it hasn't happened, not not quite at the moment. Before I leave, when we're talking about companies and so on, there's another little thing on the background. There is uh a report which will be started uh to be generated to do with close companies. Close companies are these things that uh actually nobody really thinks about anymore because it doesn't really apply. A close company is a smaller company with less than uh say five employ uh five shareholders, and there used to be uh certain rules have to apply to that. For a close company had to have to behave in a certain way. If they're bringing in a report or a consultation to look at close companies, that actually would start to apply to a lot of dental companies, a lot of husband-wife companies. Um depending on where that goes, that starts to look at how companies are operated, potentially who earns the money, and that could start being start getting very interesting in a negative way if that started to apply and come into our industry. So it may be nothing to do with that. I'm raising it now, because that's what I heard, and I put that in on the direction of travel, um on Wednesday afternoon, and I thought, hmm, right, okay. Let's just see where that one goes. So I'm interested in that. The other thing you mentioned freeze. You mentioned freeze. There's the big big earnest that they've got is the freeze in uh thresholds. So basically thresholds, um higher rate thresholds and so on. Uh I'm not really going to talk about it, that's fairly obvious as to where that is. But I will go back in some ways to the beginning when you set the scene and you have a five-year plan of when uh the chancellor wants to hit the targets. Part of this freeze, it means that people aren't paying the tax today. They're gonna be paying the tax in two, three, four, five years. Because everybody pays a bit more tax but it's down the track a little bit. Now that's been put in, and that's part of what has given the uh uh the council extra headroom that the Office of Budget Responsibility is is positive about and the markets are positive about. But if that doesn't happen, then it's going to be interesting to see what the alternative is. Because when you factor that in to the average, I'm not talking about the average dentist, but the average person, the average earner in the UK, it brings down the actual amount of money that they're going to feel in their pay packets. How that affects our industry is that if people aren't feeling the benefit of all of this, and they won't three, four years from now, because of those reducing uh uh thresholds, then the chancellor have to has to look for another rabbit and another hat. And what's that going to be? And I'm interested to see where that uh will will come out. Um one of the things then she's already uh or the the government has already had a pop at private dentists um a few weeks ago where they started saying saying that uh you know the cost of living, the people who are who affect the cost of living negatively are people like private dentists. And I have seen the BDA rightly so have gone back in and and really attacked back on this because they're saying the private dentists uh are uh and this is what the the public will hear, private dentists um uh overcharge compared to NHS. Private dentists are uh they they haven't the transparency of their costs, so in other words, people don't realize what they're paying for. Um and of course, private dentists are uh getting to the situation where they they're over-treating. Now, I'm not a dentist, but I'd have been pretty offended by all of that sort of thing that was coming out of government. And as I say, the BDA have rightly gone back and pushed that very much back. What this sounds to me, again, standing back and looking at it, is this sounds to me like people are looking for scapegoats, people are looking for people to blame as to why the cost of living hasn't reduced.

Dr James, 40m 21s:

I think the argument this the cynic in me says it was completely political as well.

Johnny, 40m 26s:

Oh, absolutely, and you you sort of say when you she's sort of suggesting there should be some sort of a a national tariff. Um, and you say, Well, actually, isn't that NHS dentistry? So you could actually do something about NHS dentistry, but go away and do it, but leave the private dentist industry alone. Because that's that's that's it sounds like a scapegoat to me that's going on there. Um sorry, just jumping back on the freezes uh from that the other thing that's frozen and it may not be terribly obvious, is they brought in something on the student loans. So the the the PAN2 student loans, the threshold over which you pay nine percent that is also being frozen through to 2030. So all the guys coming out of FD now or young associates, suddenly they're gonna be paying a higher proportion of their income back against the student loan over the next five years. And that's in some ways, I don't think that that was really stuck out to them in the budget, and I'm not entirely sure that that is a positive thing again for the industry. If what we're trying to do is is get more people in. I don't know whether all this is what they call fiscal drag. Um and it's all about tax tomorrow spend today. But it worries me that whilst we've got more headroom in the economy in 2030, all you need is a little change and suddenly the headroom disappears again, and then suddenly we we I I can see where I can't see where the extra money is going to is going to come from. So that's oh one other little thing that I did pick up on this. Often when I'm speaking to uh associates, younger associates, they very often want to take some time out, um, have a family, do something else, go to Australia for a couple of years. Generally, when they come back, we would be advising them to look at the voluntary national insurance and make up those years, maybe two years or something, um, by paying a certain amount, it's about eight or nine hundred pounds, but it it secures it goes against their pension when they come to retire, the retirement pension. That's now done away with. So if you go to Australia, New Zealand, South Africa, wherever, Canada and come back, as of next April, you can't make up your missing years for your national insurance. And I think um that's a negative thing as well. Because the option to do that is um it's what keeps people tight into the UK as well. Um so there's another mixed message that I'm that I'm feeling there, but uh isn't isn't really what I'd what I'd like to what I'd like to see.

Dr James, 44m 1s:

There we go. You know, one thing I'd like to talk about just before we wrap wrap up, one other change that's been brought in, uh, because we want to be as comprehensive as possible on this podcast, is the changes to it and how it is are treated. And if I've understood it correctly, because someone sent it to me initially, and because of how it was worded, we both got completely the wrong end of the book. And we both thought that uh you could only contribute I can't remember what we thought, but we we basically thought that you could contribute less to a stock and power's ISO and it had to be it had to be uninvested. We got completely the wrong end of this book. But anyway, for the record, how I understand it is that if you're under 65, you can contribute 20,000 across all your items in one tax or but you can only put a maximum of 12,000 into your cash iter, and the remaining 8,000 has to go in, has to be invested, it has to go into an investable ISA. So therefore, stocks and shares LISA or stocks and shares ISA are the two that I can think of. So it has to be invested. Have I understood that correctly?

Johnny, 45m 13s:

Is that is that the yeah I think I I've I've got that as well. So it's trying to push more money into investment in um cash. ICEs are, as you know, relatively safe. Try and push more money into um investing in stocks, if you like the stocks, the industry, and so on. Uh again, that's that's that's that comes with its own worries. I think we've been there before maybe 10 or 15 years ago, um, without all the regulation and so on. So I I don't know what regulation they're gonna put in there. But yes, uh I think that's that's what it is. That is going to change how people look at ISIS. But they are bringing in a new lifetime ISA, I believe. Um, so that'll be interesting as to why that's different from the existing one.

Dr James, 46m 9s:

I believe, I believe the new lifetime ISA, the dip because the the Lycer um in its current format basically has two use cases. You can either use it to get your first time home, no rules around that, or you can also use it as a retirement vehicle because you can't take the money out, I believe, off the top of my head, it's it's it's only unless you're buying your first time home and it's under a certain value, or which is 450k, I believe, but don't quote me on that. Or the other occasion in which you can take it out is when you're 55.5, I believe. Uh, or you can take it out anytime you want, but there's a 25% penalty which is designed to reclaim the money that they give you in the light, the the 25% upload. But I believe the challenge that I bring on is the the new LAFTA is only for first time bars. The plans are going to run in such a way that you can only use it for that first time home that we talked about just a second ago. Um, but yeah, anyway, on the cloud out there versus um on the 8000s uh investor out there, invest the class versus 12,000, uh possible class outset. I believe the logical is that they're trying to drive a little bit more money into stocks and the economy or however, but that's contingent on how educated people are on these things. And what I think will happen is there'll just be a lot of people who know all of a sudden can only put 12,000 in the cash out there. You know what I mean? Don't get me wrong though. I'm not saying I don't actually think that that's possibly one of the I can see the logic in it, and I think it's a positive move overall because it's gonna incentivize people to start thinking about how they can invest the cash, how they can uh place it in an asset which is gonna give them some level of return versus an interest rate in a cash asset, which is barely gonna beat inflation if that. Um I can see the logic, and I think that's what they're getting at.

Johnny, 48m 5s:

I think you're right. I think that's uh exactly where it's going. It'll be interesting to see how the market reacts to it and whether the stocks and shares ISIS are uh whether there's any additional regulation into that. Um I don't I don't know what the answer to that will be. But you're right, people are going to be thinking across a whole series of things here. Um across the tax structure we talked about, the investment things that we're talking about. Um but at least the good news is we've got a certain amount of clarity within the marketplace at the moment. Not necessarily the regulation, but the marketplace. There is um more of a clarity and there is more of uh a certainty about where we're going until something else changes somewhere down the track, um, which could well be growth not coming up to the what's planned, it could well be an external event, like another Ukraine or something. We don't know. But at least until that we've got a certain amount of um clarity. My my only concern on all of this that we've got this this concept of um broad shoulders, and those people with broad shoulders are going to shoulder the burden. And my only worry is this is a second step after last year, and there may well be other steps um so that those with the broader shoulders, as it were, all that is it's all that's simply th those are just people who are making their own way. You know, people with dental owners, whether they're associates or practice owners, people have tried to look after themselves, put their money into own pensions, look after their own investments, build their own wealth, if you want to use that word, over the course of their lives. My concern is those are the ones that are targeted to have the broad shoulders. And there is a wariness. Even in the last few days, I have detected a wariness as to where we're going with it that particular section of industry within which we work. There is uh there is a concern.