For dentists in Wales, we have heard that the CDO, Dr Colette Bridgman, has confirmed that mixed-contract practice owners are eligible for government-backed financial support for the private
element of the business for April, May and June.
Should you hear anymore updates on this subject, or have any questions on this,
please do contact me directly, I would love to hear from you.
Now for something different to read about over the holiday
Are you a Dentist? Are you a woman? Do you sometimes feel under STRESS?
Well you are not alone.
New research has shown that as many as one in three women do not feel
comfortable discussing their mental health.
According to the findings by mental health treatment specialist Smart TMS,
women suffer higher levels of social anxiety, poor self-image, and loss of
confidence than men. Over a quarter (27%) of women regularly cancel plans to
avoid social interaction as a result of severe anxiety, compared with 21% of men,
while as many as four in 10 (39%) of women say they feel significantly less
confident than they once were, versus 28% of men.
Despite this, nearly a third (29%) of women feel unable to open up to their family
or friends about their mental health challenges for fear of judgement, while 24%
said they feel unable to discuss their mental health with their partners.
The results of the research showed that work had a big impact on the mental
wellbeing of women, with 31% admitting to suffering from unmanageable levels
of stress and anxiety brought about by work and 29% feeling unable to discuss
their mental wellbeing with their colleagues. A quarter of women (25%) surveyed
said they’re too busy to prioritise their mental wellbeing, despite suffering from
depression or anxiety.
With many women reporting ill side-effects or little positive effects of medication,
Smart TMS’ research has suggested that other methods of mental health
treatment should be explored.
Gerard Barnes, CEO, Smart TMS, has called upon industry and government to
prioritise mental wellbeing, creating more awareness and open conversations
around the topic of mental health.
Barnes said: “It has been made very clear that a huge proportion of women
across the UK are suffering with a variety of mental health challenges. Events
such as International Women’s Day are fantastic initiatives to help raise
awareness, but it’s evident that we cannot limit our focus on the issue to one
“More needs to be done to help everybody across the UK recognise symptoms of
mental health conditions within their own behaviours and respond accordingly,
especially for women. It is also vital that people in positions of power, both in
the public and private sectors, focus their attention on making more mental
health provisions available. Britain’s employers must provide more mental health
support and wellness initiatives, and health services must be equipped with the
resources needed to introduce more support and explore new treatment
Source: Smart TMS
LET’S Talk About Money for a Change
WHA T DO ES T HE G L OB AL L OC K D OWN M E A N F O R D IV I DE N D S?
Latest articles from Fidelity fund managers – providing insight into the
impact of the pandemic in respect of market and investment issues,
utilising the breadth of Fidelity’s investment capability around the world.
NEW: What does the global lockdown mean for dividends?
With large swathes of the world’s population on lockdown and economic activity
on hold, we assess the likely damage to dividend payments over the coming
months. We outline how Fidelity’s equity income portfolios are navigating this
environment and why selectively forsaking dividend growth this year could still
deliver a superior long-term outcome for investors.
NEW: Understanding market volatility
Financial history shows that from time to time markets experience bouts of
heightened volatility. These setbacks could be the result of any number of
factors: economic uncertainty, monetary or fiscal policy changes, financial
contagion or geopolitical tension, for example. With this in mind, Fidelity has
produced interactive tools to take a look at the past and highlight what lessons
we can learn for the future
The three phases of investing through a global pandemic
The coronavirus pandemic can be thought of as evolving in three phases: escalation,
consolidation, and recovery, which map onto the stock market in various ways.
It is important is to understand the resilience of companies to the current challenge, and
their long-term franchise value, in order to take advantage of opportunities.
New names have been added to the portfolio, including staples and healthcare
companies, putting cash to work while maintaining a reasonably balanced profile.
Recent weeks have been one of the most eventful periods in markets that I can remember
since 1987. Never mind what was happening in the real world, the normal market
dynamics were breaking down. As it happens for brief periods from time to time, there
was a real sense of panic. Nothing was behaving as it should. This is what happens in
highly volatile periods of the market - few movements can be justified by fundamentals,
and nearly everything can be explained by positioning and forced actions by participants
who cannot or choose not to hold their ground.
The Fidelity investment team (nearly everyone working from home) were busy with
company calls, talking to senior management to try to understand what they had been
seeing in the effects of the coronavirus first in China and now in Europe and the US, how
they gauged the challenges of both supply and demand factors and how strong their cash
positions really were.
Mitigation and suppression strategies
The recent Imperial College report talks of two basic approaches to deal with a pandemic
- mitigation and suppression. In mitigation, the progress of the epidemic is slowed down
so that health systems are better able to cope with the outbreak. In this approach,
eventual herd immunity is achieved, but at a huge cost. Suppression is the more drastic
approach that aims to reverse the epidemic and aims as far as possible to eliminate the
transfer of the virus once the outbreak has been identified.
We know that China fairly swiftly moved to this approach in Wuhan. This was very painful
for the citizens of Hubei province for a period but appears to have been highly effective so
far. European countries are now rapidly moving to the suppression approach.
Assuming there is a reasonable degree of success in suppressing the virus, the question
is what happens next and what measures will be taken to ensure that the epidemic does
not break out again. At this point I am thinking of this as evolving in three phases:
escalation, consolidation, and recovery.
Phase 1: Escalation
The first escalation phase is upon us where we see huge increases in reported new cases.
While the curve may still look exponential the “second derivative” appears to be improving.
Given the draconian containment measures now in place in Italy, this should mean that
here the active infection rate should peak soon. The same should follow in the rest of
Europe, and then the US sometime later.
How does this map on to the stock market?
This escalation phase has caused huge volatility which produces an extraordinary amount
of noise and wild share price movements.
In my opinion there are many shares that have gone down more than their fundamental
outlook would warrant. This is most clearly visible in defensive areas such as utilities and
healthcare companies, which are likely to see only short-term profit deterioration even if
the economy fails to bounce back quickly. Some other companies which are more
economically sensitive arguably have fallen so sharply that they have rebound potential
even before full economic recovery is evident.
What is important is to understand is how resilient companies are to the current challenges
(in balance sheet and cash flow terms) and to judge their long-term franchise value. In
any case, the massive dislocation we are seeing inevitably throws up opportunities.
Phase 2: Consolidation
The next phase which should be upon us shortly is what we may call (perhaps somewhat
optimistically) the consolidation phase. This is when the virus appears contained but
measures will still be in place to keep it that way. There will be medical advances to better
treat people and perhaps make them more resistant to infection, for example through the
antibody cocktail now being tested by Regeneron Pharmaceuticals.
In this phase we will get a much clearer idea of who will bear the costs, how much bad
debt will be recognised and how much long-term damage has been done to the economy.
Clearly there is a concern that job layoffs will cause a negative spiral which will potentially
lead to full scale depression. In this regard, the measures announced by the UK
government are being echoed elsewhere and this is encouraging. It is clearly of massive
importance that jobs are retained through the escalation phase so that consolidation
afterwards does not become a slump.
Phase 3: Recovery
The final phase of the coronavirus saga should then be recovery, likely marked by decisive
medical prevention of further spread and a full return to normal social interaction. As far
as the market is concerned, this is unlikely to go in a straight line since the markets will
already have anticipated economic improvement. As this comes, there are likely to be
revelations of unexpected bad debts that have been hidden in the crisis period. There will
also be an element of “payback” for government support given.
Will governments have printed too much money in order to support economies? Will there
be inflationary consequences? And will taxes have to rise substantially? I would guess that
at least we should expect rises in tax rates, not least in the US (especially if there is a
change in the administration) where the fiscal position has already deteriorated
significantly as a result of the last round of tax cuts.
We started the year with relatively low cash levels and relatively high economic sensitivity.
When the outbreak started in China, we started to change this position, raised cash, and
brought down sensitivity to market moves by reducing high beta positions. As the market
fall accelerated, the risk in these positions was further accentuated.
In the past several weeks, we have further reduced exposure to financials (mostly banks
but also some insurance positions), transport-related names and also energy companies
most exposed to the sharp fall in the oil price, which we do not expect to recover
meaningfully in the near-term.
In contrast, we have added to companies that are clearly going to be most resilient and
those that should see a near full recovery after the current downturn. With the huge
volatility we’ve seen, we have added new names in areas like staples and healthcare, as
well as increasing our ecommerce exposure.
There is a still a huge amount of noise and returns can be expected to swing around in the
short-term. Nevertheless, we are confident that we have significantly reduced exposure
to weaker companies and increased exposure to long-term winners at reasonable prices.
Over the coming weeks, we will be channelling most of our efforts into staying close to
our investee companies to understand their strategies and current challenges whilst at
times providing our feedback to management. This is key to our approach to active
management. We can assure investors that in this regard whilst we may be working from
home, we remain highly active.
If you are concerned about your savings, your ISAs, and your Pension ring me for a
conversation. Look at the world’s largest economy the United States, history can’t repeat
itself can it?
BU Y IN G A B US IN E S S WI TH HE L P FR OM SE LF - I N VE S TE D PE N S IO N S
(WI T H C A SE ST UD Y)
We sometimes find ourselves handling an enquiry from a client who wishes to buy
a business. Key questions around the subject are likely to include how the
transaction is to be structured and funded and, often, the client does not have
enough business / personal wealth to conclude the transaction in their own right.
Clients might turn to us for guidance on how else the transaction might be
The first port of call may be financing the deal with borrowed funds.
Various sources of this finance might be available, including borrowing from the
client’s own business / personal bankers.
Of course, if the borrower is a limited company, a Small Self-Administered
Scheme (SSAS) could be the source of the funds provided the company in
question is a ‘sponsoring employer’ of the SSAS. The loan must meet strict
criteria laid down by HMRC. One of the most challenging of these criteria is that
the loan must be secured by a First Legal Charge over a suitable asset or assets
of at least equivalent value to cover the amount of capital and interest due over
the term of the loan. It is this requirement alone that often rules-out a SSAS as
a source of loan finance to a connected business. However, it should also be
noted that a SSAS can lend to companies that are not connected with the SSAS
members, without the same HMRC constraints that apply to loans to sponsoring
Self-invested personal pensions (SIPPs) cannot lend funds to connected parties
– either directly or indirectly. As a result, SIPPs cannot be viewed as a source of
loan finance to connected parties.
Equity participation (unquoted shares)
Where the business being acquired is a limited company, the underlying
transaction might be purchase of some / all the share capital in that business
from the current shareholders. Given that SIPP and SSAS are permitted to
acquire unquoted shares, it would be natural to view these as a potential source
of funds to assist with the business purchase.
There are, however, significant due diligence considerations to be borne in mind
with SIPP / SSAS unquoted share ownership and the due diligence work should
be structured to ensure that ownership of those shares does not cause tax
penalties. For example, extreme care should be taken to ensure that the SIPP /
SSAS is not in a position to exercise any degree of direct or indirect control over
the limited company and that no SIPP or SSAS member or anyone connected with
a member, is a controlling director of the company. A surprisingly small SIPP /
SSAS shareholding could create a casting vote situation with four or fewer other
A SSAS is also limited to using no more than 4.99% of its net market value to
acquire shares in a company that is a sponsoring employer of the SSAS. This
restriction does not apply to SIPPs.
It may surprise readers to learn that commercial property purchase by SIPP /
SSAS is often the easiest way for self-invested pensions to participate in a
business acquisition. Bricks and mortar can be viewed as a complex area, and
undoubtedly it can be in some cases, but in comparison to the other funding
options outlined above, it can actually be the most straightforward and
achievable route to go down. It also helps that the rules for property purchase
are identical for SIPP and suitably structured SSAS, so either vehicle might be
suitable depending on the client’s circumstances.
In order for this route to be feasible, the business being acquired must, of course,
own commercial property and it must be available for purchase as part of the
overall deal to buy the business – as is often the case.
In terms of the nuts and bolts of the transaction, it is likely to be necessary to
isolate the value of the bricks and mortar element of the business from all other
elements such as plant and machinery, stock, debtors’ book, goodwill and so on.
Typically, this will involve instructing a Royal Institution of Chartered Surveyors
(RICS) Registered Valuer to value the bricks and mortar specifically. Any
“tangible moveable property” (such as desks, chairs, computer equipment, etc.)
should be excluded from the Valuation and from the SIPP / SSAS purchase
because these items would be “taxable” property if owned by the SIPP / SSAS.
If the bricks and mortar include a residential element which does not comply with
HMRC’s narrow rules around these being held in SIPP / SSAS, then it too, should
be excluded from the Valuation and from the purchase by SIPP / SSAS.
Ultimately, the client can use business and / or personal wealth to acquire the
business excluding the bricks and mortar, with the SIPP / SSAS separately
acquiring the commercial property.
With careful attention to the detail, SIPP / SSAS can assist a client to acquire a
business in a number of ways and the pension arrangement might be key to the
overall funding structure.
Dentist practice for sale – purchase price £750,000 (including commercial
property, fixtures and fittings, goodwill, etc.).
Client has personal / business funds available of £500,000
RICS Registered Valuer is instructed to value the commercial property owned
by the practice (no residential element). Valued at £250,000.
Client has £180,000 in an existing personal pension which is transferred in cash
form into bespoke SIPP.
(Client does not wish to make any Employer / Member contributions because
business / personal cash is needed for the business purchase).
SIPP borrows £90,000 (maximum 50% of its net asset value) from a
SIPP acquires commercial property for £250,000, leaving £20,000 to cover all
associated costs such as Stamp Duty Land Tax (SDLT), legal and valuation fees
and so on. Property is not opted to tax (so, no VAT payable on the purchase
Client uses personal / business funds of £500,000 to acquire the other elements
of the business and the business acquisition is completed.
Commercial property is leased to client’s business with a commercial level of rent
(as confirmed by the Registered Valuer) being paid into the SIPP.
Source:Dentons & Professional Paraplanner
Essential Links for assistance via Gov.uk
As new information is coming to light the below links are updated swiftly should you need
a quick reference guide.
Self-Employment & Universal Credit
Employment & Support Allowance
Covid-19 Small Business Government Grant
Coronavirus Business Interruption Loan
No 10 Daily Briefing – main points
Dominic Raab Foreign Secretary said:
PM continues to progress and is good spirits. 16,784 in Hospital. 3 weeks of social
distancing. Thanks to the NHS. We will never forget those doctors and nurses who lost
Thank you to the volunteers. Massive thank you to those who stayed home.
Must keep going. No let up. We are guided by the science and measures stay in place until
we see we have passed the peak.
We must stick to the plan, to slow the spread of the virus. Follow the Government
guidance. This is a team effort, please stay home this weekend. 881 died today in England.
Cases doubled in 3 days initially, now its approx. 6 days. Consequently, there is still room
and spare capacity in hospitals.
As we approach the Bank Holiday weekend not to lose gains we have made or take our
eye off the ball.
Think long and hard to those on the front line if people don’t comply with the rules.
Bank of England has extended its overdraft to the Government.
Should you have any concerns or questions, we are here for our clients and will happily
arrange a telephone or video call appointment to provide guidance, please either call our
practice mobile 07543 368 478 or email firstname.lastname@example.org to arrange your
We are here to help you through these challenging times, so please get in
Finally, some free advice – Stay safe, stay home this weekend