Description
UK Dentists: Collect your verifiable CPD for this episode here >>> https://courses.dentistswhoinvest.com/smart-money-members-club
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The clock is ticking on Making Tax Digital, and we’re cutting through the noise with a straight-talking guide tailored for UK dentists. If you earn self-employment income as an associate or rental income from buy‑to‑lets, this is the moment to get clear on thresholds, timelines, and the smartest way to stay compliant without drowning in admin.
We unpack the real meaning of “relevant income” and why HMRC looks at gross receipts, not profits, when deciding who must file quarterly. You’ll learn exactly who is in scope right now at £50,000, why PAYE and dividends don’t count for MTD for income tax, and how planned drops to £30,000 and £20,000 will bring many more clinicians into the regime. We also cover the penalty system you need to avoid: an initial grace year for late submissions, points that stack to a £200 fine, and a 24‑month compliance runway to reset. Most crucially, we explain the three‑year lock-in once you’re on the system and how that affects timing if you’re considering incorporation.
From there, we move to tools and tactics. Prefer minimal effort? Ask your accountant about bridging software so you can send simple spreadsheets or bank statements each quarter and let them handle the submission. Want more control and real-time insight? We compare software options like FreeAgent, Sage, Xero and QuickBooks, highlighting free tiers, bank feeds, common setup pitfalls, and how live data can help you steer clear of the 60 percent effective rate band with timely pension and expense planning. We set out the dates that matter: Q1 runs 6 April to 5 July, with the first update due 7 August, and why registering before 5 April buys breathing space and avoids easy points.
We finish with a practical checklist you can act on today: register for MTD or ask your accountant to do it, choose between full bookkeeping or a bridging route, and schedule your July data handover so the first submission lands on time. It’s a clear, calm path through a complex change, built for busy clinicians who value certainty and time.
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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. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.
Transcription
Dr James, 0s:
Makingtaxdigitalishotonthetonguesofalotofdentistsoutthereandalotofaccountantstoo.Andyouknowwhat?FromwhatI'veseenwithmyconversationswithaccountants,there'sarealvarietyastohowdentistersarerespondingtothis.Somepeoplearejuststickingtheirheadsinthesand,somepeoplearecrackingonwithit.We'reheretodaytofacilitateandaidpeopleinmakingtherightchoicesothattheyunderstandhowtounhowtohowtoovercometheimpendingmakingtaxdigitalchanges.I'mjoinedtodaybyexpertaccountantstodentist,Mr.DavidHossine.Inthispodcasttoday,we'llbecoveringwhatmakingtaxdigitalissothatwecanjustensurethateverybodyknows100%howitaffectsthem,whatthatmeansfordentists,whoitaffectsandwhoitdoesn't,andwe'reevengoingtobegivingyouactionabletakeawaysbytheendofthispodcastsothatyouwillknowexactlywhattodo.Lookingforwardtothisoneasever.Asever,youcanclaimyourCPDforthisepisodewithintheofficialDentistWhoInvestSmartMoneyMembersClub.SmartMoneyMembersClubalsoincludesmultipleminicoursesandwebinarseriesonfinancefordentists,includinghowtobecomeastaxefficientaspossible,aswellasunderstandinginvesting.AllofthiscontentcountsasverifiableCPD,andyoucandownloadyourcertificatesthereandthenoncompletionofeachlesson.Inadditiontothis,wealsoincludeawhopping10%discountonyourdentalindemnityanda5%discountonlabbillsfordentalprincipals,amongstotherperksanddiscountsformembers.PleaseusethelinkinthedescriptiontoclaimyourverifiableCBDforthisepisode.David,thisisofcoursethesecondtimethatwe'vesatdownaboutmakingtaxdigital.Atleastthesecondtimefrommemory,thenwastherethreeinthere?Maybedidwedomorepublicpodcasts?
SPEAKER_01, 1m 44s:
Yeah,it'dbethesecondonejustonMTDBMTD,butwehavetouchedonitinkindofpreviousones.ButIthinkweneedit.Umitiscominguparoundthecorner,andalotofpeoplearestillaskingquestionsonit,sostillalotofconfusion,Ithink.
Dr James, 1m 58s:
Well,youknowwhat?Frommemory,thelastpodcastthatwedid,David,wediditinmaybeitwaslikeAugusttime,September,somethinglikethat,right?No,no,no,October,that'swhenitwas,right?Andyouknowwhat?Becauseofwhathadhistoricallyhappened,HMRChadkickedthecandowntheroadwiththisstuff.Wewerelike,hmm,isit100%gonnahappen?Butwe'rewe'rein,we'requiteliterallyinMarchnow,right?We'relikeamonthoutfromthedeadline,sowe'reit'sprettymuchofficialatthisstage.Soyouknowwhat?Itmightbegoodtodo.Itmightjusttobe,itmightjustbeagoodideatostartfromthestart,David,andcoverwhatmakingtaxdigitalis,thenwe'llmoveontowhoitaffects.
SPEAKER_01, 2m 39s:
Yeah,absolutely.Andyou'reright.IthinkwewereallsecretlyhopingHMRCwouldpulltheplugonitbecausetheydidforumtheyhavepulledtheplugforcompanies,butforincometax,itishere,um,andit'sitisaroundthecorner.Sodefinitelygoodtodoanoverview.Let'sgooverwhatitis,whatitmeans.Um,acoupleofupdatessincethelasttimewetalkedaboutit.Becauseinthebudgettherewasachangethatwasannounced,soI'llcoverthataswell.
Dr James, 3m 5s:
Nice.
SPEAKER_01, 3m 6s:
Um,butjustyeah,sojustgettingintoit.SoMTD,itstandsformakingtaxdigital.Itisanewrequirementforquarterlysubmissionsforpeoplewhoareaffecteduhviaincometax.Umitonlyaffectspeoplewhohaveself-employedincomeandrentalpropertyincome.Thatiswhatisumassessedasyourrelevantincome.Anddependingonhowmuchthatis,we'lldetermineifyouhavetodoMTD.Sowe'llgetintokindofthethresholds.Um,butIsupposeabitaboutwhyHMRCwanttodothis.SoHMRCbelievesthereisataxgapofabout5billionfrompoorrecordkeeping.Sothedriverbehinditistheythinkit'spoorrecordkeepingbytaxpayers,specificallytheself-employed,andthisistheirwayofencouragingtheself-employedtohavebetterrecords.Nowyouhavetohavedigitalrecordsandasoftwaretomanagethat.Sothat'stheirpurportedreasonforpushingitforward.Um,ithasbeenaroundforawhileforVAT,andthisisthesecondphasetoputthesameregimeovertoincometax.Corporationtaxandcompaniesarenotaffected,they'veformallytakenitoffthetablebecausethey'venotbeenabletogetthesoftwarerightorthesystemstodoit.
Dr James, 4m 28s:
Sojusttobehyperclear,that'sVATwhenyou'reasoletrader,asinyou'renotincorporated.
SPEAKER_01, 4m 34s:
No,VATforanybody,yeah.Soifyou'reasoletraderoracompanyandyoudoVAT,ifyouandyousubmitVATreturns,thathasaseparateMTDregimealready.AndmostlikelyyouraccountantsaredoingthatforyouinthebackgroundifyoudohaveaVATregisteredbusiness,um,whichwillbethesameforincometaxes,it'sumyeah,overtoyouraccountantsagain.
Dr James, 4m 55s:
Interesting,becauseokay,Iguessthat'swellthereasonwhyitdoesn'taffectalotofDennisisbecausethey'renotVATregistered,ofcourse.Butbutyes,anyway,okay,no,that'sfine.Anyway,backtowhatyouweresaying.Yep,noproblem.
SPEAKER_01, 5m 10s:
Soumthefirstthingistherelevantincome.Sowhatwhatistheumtherelevantincome?Therelevantincomeissolely,andI'lljusttalkonspecificallywithregardtodentists.Somostdentistswillbecaughtiftheyareanassociatewhoisasoletrader,sonotusingacompany,thatmeansyouhaveself-employmentincome.Thatisonecategoryofrelevantincome.Um,ifyouareapracticeownerandagainyouarenotincorporated,thepracticeincomeisyourrelevantincomeforthepurposesofMTD.Ontopofthat,ifyouhavebuy-to-letpropertiesthatyourentout,thatisalsorentalincomethatcomesintothecategoryofuhrelevantincome.Sogivingthatagain,soassociateswhoareself-employed,yourgrossincomefromthepractice.Um,asaprincipal,thepracticegrossincomeandanyincomeyoureceivefrombuy-to-let'srentalincome.Okay,acommercialpropertyalso.Soallofthatisyourrelevantincome.Iftherelevantincomeisover£50,000basedon24-25taxreturns,theoneyou'vejustdone,thenfromthe5thofApril,youarerequiredtobeintheMTDregime.Thatdropsto30,000from2027and20,000from2028.Sothegovernmentreallywantstocapturemostself-employedandpeoplewithrentalincome,becauseifyouthinkaboutitasbeing20,000,justacoupleofbite-letsI'llgetyouthat.Soitreallyisgoingafteralotoftheumtheself-employeduhuhtaxpayers.Sowhatdoesthatmean?Sothere'safewthingsthatneedtobedone.ThefirstthingthatneedstobedoneisyouhavetoactuallytellHMRCyouaresigningupforMTD,youneedtogetagovernmentgatewayID,proveyouridentity,answerallthesecurityquestions,andsay,yes,IamregisteringforMTD.Failuretodothatcouldumresultinapenaltypoint.Iwillcomeontopenaltypointslaterbecauseconsequencesofnon-complianceisreallywhyaccountantswe'retalkingaboutthis,becausewedon'twantpeopletohavenon-compliance,um,becausethereisapenaltyregime,andI'llcomeontothat.Sofailingtoregisterontimecouldresultinapenaltypoint,andwe'llpickupthatabitlater.Andtotalkaboutthresholds.Umlasttimewedidthis,therewerealotofquestionsthatsurprisedmebecauseIthoughtthatumityouknowitmadeitobvious,butit'sit'sitisveryconfusingforpeople.SoIwanttogooverthisbitaswellintermsofwhatdoesnotqualify,somakingitsuperclearforpeoplewhatdoesnotqualifyforMTD.Andthesearethingslikeifyou'reapartnership,soifyouwanttopracticebyapartnership,thatisnotcaughtbyMTD.Ifyouhaveacompany,thatdoesnotcaughtbyMTD.Ifyouareemployed,soifyouhaveum,let'ssayyouyouareanassociateself-employed,butyouhaveumahospitaljobthat'sbyPAYE,thePAYEemploymentincomedoesnotcounttowardsMTD.DividendsthatyoureceivefromacompanyalsodonotcounttowardsMTDorbenefitsthatyoumightreceive.Somakingthatsuperclearthatthatcategorytheredoesnot,it'sjustself-employmentandrentalincome.That'sthat'stheonlythingthatwe'reprimarilyconcernedaboutMTD.Sojustmakingthatreallyclearforpeople.
Dr James, 8m 36s:
Interesting.Sojustonthatoneexample,employedincome,30,000poundsayear,self-employedincomeisalso30,000poundsayear.Youwouldn'tqualifybecauseyourself-employedincomeisnotover50,000pounds,right?Exactly,exactly.
SPEAKER_01, 8m 50s:
Youareokayuntilitcomestoyouknowthethresholdgetslower.
Dr James, 8m 54s:
Sonottobepedantic,butareweusingthe50,000poundsasshorthandfor50,270,whichisthebasictaxrate?No,ititis.Oh,it'sliterally50k.Okay,therewego.Yeah,well,youjustIthoughtIwasbeingpedanticthere,butit'sgoodtoit'sgoodbecausepeopledothat,don'tthey,allthetime.Theysay,hey,uhbasictaxrateendsat50k,right?Andwhattheymeanisthe50,270,right?
SPEAKER_01, 9m 20s:
Yeah,no,andit'saverygoodquestion.There'snothere'snouhthere'snowrongquestion,soanythingthatpeoplehavegotwecanask,andyeah,goodquestion.Goodtoclarify.Idohavesomeexamplestokindofmakeitclear.UmIthinkthatwhenyougetintoit,likeaskinglikethat,itbecomesclearwhatwe'resaying.Soexamplenumberoneself-employeddentistalsohasapart-timeemployment.Um,itisincome,notprofits,andthat'sthedistinction.Soumtheassociatehasumassociatefeesof£52,000fromumthepracticethatheworksat,butafterhisexpenses,hisprofitsareonly£38,000,andhealsohasasalaryof£10,000atahospital.Nowwe'vegot£52,000income,38,000profit,10,000salary.Sosalary,don'tneedtothinkaboutprofitsof38,it'snotprofits,it'sincome.Soit'snotafterexpenses,it'swhatthepracticepaysyou.That'syourincome.Soit'snotafterexpenses.Somostassociates,youwillbecaughtbythisifyou'renotusingalimitedcompany.Andandthat'skindofonescenariothere.Um,thesecondscenarioiswithrentalprofits.Sointhissituation,thedentisthasumfeeincome,soworksatapractice,gets£45,000worthofincome.Afterexpenses,£36,000profits,butwewe'renotconsideredprofits,it'sjustincome.Sothatwas£45,000,buthehasrentalincomeof£12,000,andafterhisexpensesonthat,profitsofeight,butit'snotprofitsagainstincome.So£45,000income,12,000rentalincome,MTDisapplicable.Soagain,mostassociateswilldefinitelybecorporate.Whetherit'spanpracticeownerswhoarenotincorporated.That'sthatIwanttotalkaboutumpenaltyregimeaswell,becausethisisthiswasthethingthatchangedactually.Sowhenwespokeaboutthis,alotofaccountswearetryingtogetthemessageoutthere.Look,youhavetodealwiththis,youhavetodealwiththisbecausethere'spenaltiesinvolved.SoI'lljusttalkabitaboutwhathappensifyou'renotcompliant.Um,sothefirstthingisyouhavetoregisterbythesixthum5thofApril.Youcaneitherdoityourself.Um,forourpractice,weareregisteringitforourclientsumontheirbehalfbecauseit'saloteasier,wecandoitviaourpracticeportal.Wealreadyhavecopyofyourpassportandproofofaddressbecausewecheckthatanywaywhenyoubecomeaclient.Somostaccountswilldothatfirstbeforeyou,andthat'sthefirstthingtodotoavoidapenaltypoint.Umthebudgetconfirmedthattheywillnotapplylatesubmissionpenaltiesinthefirstyear.Sothat'sreallygoodnews.Ontheonehand,thatthisfirst12-monthperiod,ifyouarelate,youwon'tgetapenaltypoint.Now,that'simportanttosayI'mnotencouragingpeoplenottobecompliantbecausestartingitwithgoodhabitswillcarryforwardintotheyearafter.Andthepenaltiesare200poundsifyougetfourpenaltypoints.Soifyougetfourpenaltypoints,yougeta20-poundpenalty,andyouaretrappedinthepenaltysystemthen.Andthepenaltysystemishardtogetoutofbecauseonceyouyoutriggeredthefourpenaltypoints,you'reinthesystem,andyouonlygetoutofitbyhaving24monthsofcompliance.SoascenarioIcouldseehappeningissomebodyregisterslate,theygetapenalty,theymissafewsubmissions,andthenthey'reinthefourpenalties,theygettheygetafinancialcostofthat200quid.Andiftheymissonepenaltyayear,sayonesubmissionayear,it'sveryhardtogetoutofyouknowthispenaltysystem.Soreallywanttojustsayyes,itistruethatthefirstyearthey'renotgoingtoapplythem,butgetintogoodhabitsandgoodbehaviorsbecausethatwillhaveacompoundingeffectaswegointothis.UmareallykindofunfortunateaspectofMTDislikecominginandoutofus.SoaquestionwehadfromaclientrecentlywasUm,WhatifIsetupacompany?DoesthatgetmeoutofMTT?Andtheanswerisyes,becauseyouwouldhavedividendincomefromthecompany,it'snolongerself-employedincome.Andthenthequestionwas,okay,whendoIneedtodealwiththisby?Andtheanswerisnow,becauseumthewaythesystemworksisthat£50,000thresholdisbasedonyourlastyear'staxreturn.Soifbythe5thofAprilyou'venotchangedthatstatus,youhavetoyouhavetoenterintothesystem.AndsomethingthatIthinkisreallyunfair,whichareyouknowisintherules,thatonceyou'reinthesystem,theonlywaytoleaveitisifyou'vegotthreeconsecutiveyearsofnotbeingeligibleorsorry,notbeingrequiredtoyeah,threeyou'reinitforthreeyears.Soifyouifyoujoin,you'reinthesystemforthreeyears.NowIthinkthat'sreallyunfairbecausefortheVATsystem,onceyou'rein,youcanmakeadeclarationatanypoint.Actually,myqualifyingincomeisbelowthethreshold,I'moutoftheVATsystem.Wecandothatatanypoint,andyousaidthat'sagoodfaiththingthatpeoplepredicttheirincome.ButforMTD,thecurrentguidanceisthatonceyou'rein,you'rethereforthreeyears,evenifyousetupacompanytogetoutofit,whichIthoughtthat'sthat'sprettyunfair,butitiswhatitis.Now,whetherthemechanicsofthatchangeumoncewe'reintoitcouldbe,butIdon'tdon'tcountonit.Sopleasetakeitseriously,you'vegottodealwiththis.Ifyou'rethinkingofincorporating,doitquickly.
Dr James, 14m 54s:
AndcanIjustactuallyreferbacktothepenaltypointthingthatyoujustsaid?Sothesubmissionsarequarterly,right?Yeah.Soifyoudonosubmissionsoveraperiodof12months,basicmathisgonnatelluswegetfourpenaltypoints,right?Yeah.Soifyoudon'tgetyourcompanysortedbeforethe5thofAprilandyoudon'tdoanything,you'regonnagetyourpenaltypointsprettyfast,right?Becauseit'sgonnabewithinthefirstyear.Soyoulityeahright.Justtojusttoreallydrivethathome.IfIgotthatright.UKDentists,DennistsWhoInvestnowhasanofficialplatformwhereyoucanlearnaboutfinanceandobtainUKcompliant,verifiableCVDatthesametime.Theonlyplatformthatexistsonwhichyoucandoboth.TheSmartMoneyMembersClubhashundredsofhoursofminicourses,webinarseries,andlivedayrecordingsonallthingsfinanceslashtaxefficiencyforUKdentists.ThisincludescompletecoursesonhowtaxworksforUKdentists,financesothatyoucaninvestandgrowyourownmoney,businesssoyoucanimproveyourprofitabilityasanassociateorprincipal,andforthoseouttherethatwantit,there'salsoaminicourseandhowyoucanresponsiblyenterthecryptospaceusingmeasuredamountsofcapital.I'vegatheredthiscontentfromthebestofthebestIcouldfindineachrespectiveareasothatyouknowthatthisishowpeopleattheforefrontofeachfieldadvisetheirclients.TheSmartMoneyMembersClubalsocontainsdiscountsoncommonthingsthatUKdentistsneedtopayforonaregularbasis.Thisincludesawhopping10%discountondentalindemnity,theoffertobeatyourincomeprotectiondealnomatterwhatyou'repaying,andfortheprincipalsoutthere,5%discountonlabbillsand10%discountonpracticeinsurance.Thesearedesignedtoofferhundreds,ifnotthousands,inannualsavings.Thepurposeofthismembersclubistonotonlyboostyourmonthlyincomebutalsomanageyouroutgoingsasmuchaspossibleandthereforecreatemoreprofit.TocelebratethelaunchoftheSmartMoneyMembersClub,andgiventhattheCPDdeadlineiscomingupsoon,I'vedecidedtoofferthefirstmonthofthisplatformentirelyforfree.ThisofferwillendinthecomingweeksassoonasthecurrentCPDcycleisup.TocollectyourCPDforthispodcastepisodeusingtheSmartMoneyMembersClub,feelfreetousethelinkinthedescriptionofthispodcast.
SPEAKER_01, 17m 13s:
Thatishowthecurrentpositionis.Absolutely.NowIthinkthat'sreallyunfairandnotconsistentwithVAT.AndIwouldlovetopredictandsayoncewe'reintoit,they'llupdatethethemechanicsbecausethere'salotofsoftwarebehindthis.ButthatisthecurrentpositionasIreadthelegislation,soIhavetokindofsayitasitis.Soyeah,wearewearewiththatatthemoment.Soitisititcouldbeanightmareifyoujustgetinandthenyouincorporate,butyou'restillinthesystem,soyoustillhavetodothosenilsubmissions,whichisjustit'sridiculous,butitiswhatitis.Thatisthecurrentposition.
Dr James, 17m 48s:
Yikes.Well,listen,I'mreallygladthatyousharedthisstuffbecausewehaven'twenttothislevelofdetailinanyotherpodcastaboutMTD,that'sforsure.Butanyway,youwereyou'reinfullflowthere.Thatquestionjustcametome.
SPEAKER_01, 17m 59s:
Yeah,no,no,noproblemsatall.Um,sowetalkedabouttheregistrationsideofit.Um,onceyou'veregistered,youhavetosubmitadigital.Soit'sfourquarters.Thefirstquarterwillbeumthe6thofApriltothe5thofJuly.It'salwaysthe5thtothe6th.Soinpracticalterms,it'sumApril,May,June'srevenue.Soyouhavetodeclareyourrevenueandyourexpenses.Thefirstsubmissionthatpeopleneedtodowillbeonthe7thofAugust.Solikebigthingisjustgetyourselfregisteredquickly.Soyouknow,talktoyouraccountant,askthemtoregisteritforyou,becausethenyougetabitofbreathingspaceuntilAugust.Sokeytakeawayforpeopleisifyou'restressedaboutit,you'renotsurewheretostart,andyouraccountantscontactedyou,justaskthemtoregisteryouforMTD,thenyouknow,youcanyoucantakeabitofabreather.Fromourside,that'showwe'replanningourworkflow.Andthenoncethefirstquarter'sfinished,sowe'vecometotheendofJune,wewillbereachingouttopeopletogetthatumfirstreturndone.Um,howit'sdoneisviadigitalsoftware,andit'sbeensuchaninterestingexperienceforusasapractice,justlikeseeingallthosedifferentsoftwarecompaniespopupandtheirpricingandhowthey'rekindofyouknowdealingwithit.Um,youdoneedtohaveasoftwareforthis.UmIdidaslide,IknowI'mnotsharingit,butIjustkindofbecausewegetsomanyquestionsfrompeopleonwhatsoftwaretorecommend.Now,therealityisthataslongasit'scompliantandHMRChasalistofsoftwarethatarecompliant,andmostofthemare,there'snorealdifference.Theyalldothejob.Um,sowhatdoesthatmeanintermsofadvisingpeople?Mostpeoplewantfreesoftwarebecauseit'sit'sverylittleaddedvalue.Um,sotherearefreesoftwareprovidersoutthere.I'lljustfindmyslideonthat,I'vegotasummary.Yeah.Sofreeagentwastheonethatreallystartedfromthebeginningaslook,we'reafreesoftwaretodealwithMTD.Soifyou'vegotaqualifyingbankaccount,MetalNetwork,RBS,andit'sabusinessbankaccount,um,freeagentwillgiveyouafreesoftware.Nowitdoeshavetobeforlife.Thisisthethisisthequestion.Now,ifIwasacynicalperson,Iwouldbepredictingthatasoftwarecompanyisabusinessanddoesn'tdothingsforfree,andtheymightdoitforacertainperiodoftime,ortheygetincentivesfromthebankstokindofencouragepeopletoopenbankaccounts.ButitsurprisedmealsothatSage,whichisanotheraccountingsoftware,andit'sit'soneoftheIdon'twanttocallitadinosaurbecausethey'llsueme,butit'saveryoldkindoflikeyeah,it'saverylikeold-fashionedpioneerinthesector.SoeverybodyusedtouseSagewhenuhsoftwarecameoutforaccountancypractice.Um,soit'sit'soneoftheoldoldschoolones.Davelaunchedafreeversion,andIonlywasmadeawareofthatrecently.Butagain,mythoughtprocesswasislook,thesethesecompaniesarebusinesses.Yes,they'resayingit'sfreenow.Couldthatchangeinthefuture?Ithinkthere'snoguaranteethatit'sfreetodaymeansfreetomorrow.AndifIwasthinkingcommerciallyandIownedacompany,Iwouldprobablyincentivizepeoplewithafreeversionanditwouldcomeinacrossyouknowdownthelinebecauseit'sabusinessattheendoftheday.Um,butwhereweaskwhereweareaskedtoprovideumarecommendation,well,look,thesetwoarefreeSageandfreeagentarefree.YouhaveZero,whichisreally,youknow,prettycomfortabletosayoneofthemarketleadersintermsofwhatitcandoasasoftware.It'sgotallsortsofopenAPIintegrationsforcomplicatedreporting.That'snotreallywhatMTDisabout,butit'sititdoesalsodothat.Thatstartsatabout16poundspermonth.QuickBooksstartsatabout10poundsamonth,um,buttherearefreeversionsoutthere.Now,toshareabitofkindofourexperiencesofar,becausewe'vebeendoingalotofworkonthisinFebruarytellingnow,Clive.Soyouneedtodealwiththis,weneedtohelpyouwiththis,weneedtogetyousetupwiththesoftware.Whatwouldyouliketodo?Um,acommonfeedbackthatwegotfromclientswaslook,David,I'mreallybusy,andhowcanwemakethisassimpleaspossible?Towhichwewerelike,Well,youknow,thefreeonesarefree,butthereisatimecostinvolvedofsubscribing,connecting,linking,refreshing.Itistimetodealwiththesethings.Umandwegotaskedthisquestionenoughtoustothinkasapractice,well,howdowemakeitaseasyaspossibleforpeople?Andkindofonethingthatwe'vedone,andIsuspectuhotheraccountshave,butyoumightneedtotalktothemandkindofseeiftheycandothis,iswewe'veinvestedinabridgingsoftwarethatbridgesfromourumpracticesoftware,ourportalandHMRC,somefancyspreadsheetsinthebackground,butwewecandoitnowwithoutsoftware.Sowell,wecandoitwithoursoftware,soitispossibletodoit.Soifsoifyoulookatthesoftwareoptionsandyougo,look,Idon'tknowwheretostart,Idon'tknowthedifferencebetweenfreeagent,Idon'tknowwhat'sneededfromfromme.Askyouraccount,canyouusetheirbridgingsoftware?Becausemostaccountsumshould,IwouldIwouldsayshouldhavesomethinglikethat.Ifwedo,Iexpectotherpeopledoaswell.Um,andthat'sbeenverywellreceivedbypeople.Intheinsteadofhavingtogoandloginthesoftwareanddoallsortsofrefreshes,theycanjustquarterlyforwardoverthedatatousandwedealwithitatourside.Sosoftwareoptionsarekindoflikethat.Sothatthat'sinterestingtoknow.
Dr James, 23m 32s:
Nice,interesting.Ididn'tIdidn'tknowthatwaspossible.Sothereyougo.AnduhallIcansayisImean,dentistsslashbusinessowners,sorry,sorry,letmebacktrackonthat.Well,no,itmightitmightaffectsomeprinciples,Iguess.YouknowwhatImean?Sothere'llbeafewbusinessoutthereuhwhothisaffectsaswell,um,inthesensethattheyhavedentalpractice.Theyjusttheyjustdon'thavetime,dothey?Becausewe'resofriggin'busy,andit'slikeit'sgoodtoknowthisstuff,butit'salsogoodtomakeitreallyactionableaswell.Andwe'reactuallygoingtodothatattheendofthispodcast,too.Uh,soheadsuponthatone.Butyes,anyway.
SPEAKER_01, 24m 12s:
Yeah,you'reabsolutelyright.Anditithasbeenveryconfusingforourclientsaswell.Andso,well,whatisit?Youknow,justgettingthatmessageacrossthewhatisit,whatdoIneedtodo?Peopleareveryconfusedaboutwhattheyneedtodo,whataretheconsequencesofnotdoingit,anditdoesn'tkindofhelpthatI'mhavingtosayitdoesn'tmatterforthefirstyearbecauseitdoes.Likeyougetintohabits,andyouknow,thefirstyearisanamnestybecauseIthinkHMRCrecognisesthere'salotofwork,andaccountantsandtaxpayersarequiteconfused,andthere'stimeinvolvedinsettingitup,andyouwanttosetitupcorrectly.AndIdon'tthinkthere'saonesizesorry.
Dr James, 24m 45s:
Goon,sorry,goon,sorry.Ithoughtyouwerefinished.
SPEAKER_01, 24m 47s:
No,IwasjustgonnasayIdon'tthinkthere'saonesizefitsallaswell.SoIthinkthatit'sdefinitelyadiscussionaboutdoIjustwantaquicksolutiontowhatisperceivedbymyselfasI'mgettingnovaluefromthis,Ijustwantitdealtwithsomecompliant,oractuallyIdowantthesoftwaresoIcantrackthingsandseewhatI'mupto.Andthat'sumwe'veIthinkusasabusiness,we'reguidedbyourclientsandwhattheytellus.Soweprovideamenuofyouknow,theseareyouroptions.Doyouwanttobookinacalltodiscourse?AndbutpeoplehaveIthinkmorepeoplewentdowntherouteofjustuseyourbridgingsoftware,Iwantitdealtwithquicklywithlikelessinput,aslittleinputformeaspossible.Thatkindofsurprisedme,butitmakessensebecausepeoplewantasolutionthat'squickandeasy,andIthinkgreatforusaswell,becausethereisalotoftimethatgoesintosettingupthesoftwareandrefreshingitandconnectingit,it'sit'sit'snotveryeasy.
Dr James, 25m 39s:
Understood.Andbywayofthedentist'sinputintermsofwhat'sexpectedfromthemwhentheyhavethebridgingsoftware,istheywilljustsendyouthespreadsheetsofwhattheydo.Isthatisthatright?Orhowdoesthathowdoesthatwork?Whatwilltheysendyou?
SPEAKER_01, 25m 57s:
Yeah,sowhatthetheinterestofwhat'srequiredtobedeclared,andthatisincomeandexpenses.Sothatcanbeasumstraightforwardasforwardingyourpayslipsandyourinvoices,orifyou'vegotaspreadsheetthatyouuseyourselftotrackandsomeotherclientsdothat,andiftheydon't,wecanprovideyouoneandyoucanforwardthattousonceyou'veputinyourincome,orwehavesomeclientswhoarejustdownloadingtheirbankstatementsonceaquarterandjustfoldingthatover,andthenweliftitfromthere.SoIdon'tthinkthere'sonesizefitsall,anditisreallypeoplefinddifferentthings,likepeoplegotdifferentsystemsforthemselves,andit'swhateverworksforyou,really.We'requite,youknow,flexible.Ithinktowe'renotprescriptiveinthatithastobedonethisway,it'swhatever'seasiestforyou.
Dr James, 26m 40s:
Nice,okay,understood.AndamIrightinsayingjustafewthingsthatarefloatingaroundinmyheadbeforewemoveonthatmightbeinthemindsoftheaudienceaswell?Twothings.Firstthingwaslet'ssayworstcomestoworstandsomeonedoesmisstheAprilthing,asintheApril6thdeadline,andwe'renotencouragingthatwhatsoever.IftheythenregistersubsequentlybeforeApril,May,June,July,iftheyregisterbeforeJuly,willtheyincuronlyonepenaltypoint?
SPEAKER_01, 27m 11s:
Yes,iftheythendothesubmissionontime.That'sthat'smyunderstanding.
Dr James, 27m 15s:
Fine.Andthenthesecondthingwasyouknow,okay.
SPEAKER_01, 27m 19s:
Butthatbutthatthatonepointstaysfor24monthsperiod.Soifinthenext24monthsyoumissthreeothers,yougetthe200,andyou'retrappedinthiscycleofyouknow,sure.
Dr James, 27m 31s:
AndIdefinitelydon'tmeantodiminishthatweshouldmissyouknowthethethedeadlineoranythinglikethat.I'mjustkindofplayingouttheworstcasescenariohere.Uhsoyes,thatisthat'saverygoodthingyoumentioned,David.AndthenthesecondthingiswhenitcomestoIknowyou'vegotyourbridgeandsoftware,whichisgreat.Isitfairtosaythatthere'sotheradvantagesofhavingbookkeepingsoftwareanyway?Willtherewillbe,won'tthere?
SPEAKER_01, 27m 54s:
Yes,theredefinitelyare.Andifyouaresomebodywhoumwilluseit,thenitcanumbequitequitepowerful.Sothistimeofyear,it'sMarch,wegetalotofumrequestsforlook,I'mgettingtotheendoftheyear,IneedtocheckwheremyincomeisbecauseIdon'twanttogetcaughtinthe60%taxtrap,andalotofassociatesandumarecaughtwiththat.Soifyourincome'sover100,000upto120,thatchunkofyourincomeistrappedat60.Quickfixesforthat,ohwell,letmeputsomemoneyintomypensionthatgetsmyuhincomedown,orI'mthinkingofdoingacourse.CanIacceleratewhatI'mdoingtokindofbutifyou'veusedthesoftwareaccuratelyforyouknowwhenwe'vegotwe'vehadthedataoutside,wecanjumpintozerofree,whateveritis,andsay,yeah,basedonwhatwecanseenow,thisiswhereyouare.Andifyouwereputtingmoneyin,thisishowmuchyou'dhavetoputin,andthatwouldgiveyouyouknowaclearerumpicture.Soitcanhelpyoubemoreproactivewithyourtax,definitely.
Dr James, 28m 55s:
Nice,andyouknowwhat'sahugeonethatIseeonthat.Uhwhenyouhaveazeroaccount,obviouslyitcanconnecttoyourbankaccount,right?So,orforexample,justyouknow,I'mjustI'msuretheotheronesdoaswell,butI'veseenzerofirsthand,itcanconnecttoyourbankaccount,right?Sowhenit'ssetup,whatthatmeansisyoudon'thavetokeepthesespreadsheetrecordsbecausetheyoucanliterallyseethetransactionsjustinzero,andthenyoucanattributethemtouhifit'slikeacourse,youcansay,like,here'stheinvoiceforthecourseorwhatever,thisistaxdeductible,andthingsalongthoselines.Sothat'sit'sit'sIguessit'samoreontheflywayofkeepinguptodatewiththat,uh,justtoreallyspellthatouttopeople.BecauseIknowthere'slotsofpeopleouttherewhomightn'tevenhavebookkeepingsoftwareasyet,sothosewouldcertainlybetheadvantages.Agreewiththat,David.I'vegotaI'vegotsomethingmoretoaddontopofthat,whichisinteresting,andI'msureyou'veseenthat.Butbeforewemoveon,isthatfairtosay?
SPEAKER_01, 29m 55s:
Uhno,absolutely.Ifullyagree,andIthinkthatmyobservationwouldbethatclientswhohaven'tdonethat,thatitwhat'sthebarrier?Becausethere'sathereisabenefit.There'sabenefittohavingyourrecordskeptdigitally,havingaccesstoit,beingabletoseewhatyourincomeisbeforeyouknowyoutheendoftheyearfinishes.Definitelythebenefitofthat.So,what'sthebarrier?Andthebarrierispeople'stime,andit'syouknow,isthereacosttothesoftware?IfIifIgetitforfree,Ihavetopotentiallyopenanewbankaccountandithastobeabusinessaccount.Soapplyingforthatandit'sthesetuptimethatIthinkisthebarrierformostpeople.Buttoansweryourquestion,there'sdefinitelyabenefit.Thereisdefinitelyabenefit.
Dr James, 30m 34s:
Isitfairtosay?Imean,fromwhatI'veheardofotheraccountantsandevenmyownpersonalzeroaccount,I'msurethere'sthingsIcouldbrushuponinthere,butalotofthetimewhenpeoplesetitupontheirown,theydon'tsetitupproperly.WouldyousaythatthatI'veI'veheardaccountantssaythat?Wouldyouagree?Whatareyourthoughtsonthat?
SPEAKER_01, 30m 52s:
Forforbiggerbusinesses,yes,ifthere'smultiplebankaccountsinvolved.Um,ifit'sforanassociatewith12payscomingin,Ithinkthecommonthingthatpeoplegetwrongisthestartdate,becauseyouhavetochooseadatewhenthesoftwareactivates.Andifyou'reusingabankfeed,you'vegottogetthatdateright,otherwiseitwillmisstransactions,whichisprobablythebiggestcommonummistakeweseewesee.It'sentirelyfixable.Solet'ssayyou,youknow,youdothis,yousetyourbank,yousetuhzerofreeupinJuneandyouconnectitandsoit,butyouchooseJuneasyourstartdate.Soitdidn'tdownloadApril,May,orJune,butthenthefirstofthefirstpartofJune,thatwouldbemissingfromthesoftware.Soifthatwasus,wewouldtakealookandsee,oh,well,justtoletyouknowit'snotconnectedfromthatday.PleasegiveusthosetransactionsmanuallyviaanExcel,youknow,downloadfromyourbankstatement,andwecanuploadittoplugthegap.Butthat'sthat'sprobablythemostcommonsetuperror,isjustgettingthedateswrong.
Dr James, 31m 53s:
Nice.Okay,becausethatisI'vehaditbeforewherethebalanceisjustcompletelywronginthere.It'slikewayhigher,waylowerthanitshouldbe.Soitsoundsitsoundslikethatprobably,andthenmymyaccountantfixedit,soitsoundslikethatwaswhathappenedthere,really.
SPEAKER_01, 32m 9s:
Sothat'sthesetupside.Um,thesesoftwaresusewhat'scalledascreenscrapingtechnology.Sothere'sverylikestrictrulesonwhatcommunicationcanhappenbetweenyourbankandthesoftwarefromafraudpretensionprotectperspective.Thebanksdon'twantthesoftwaretotalktothebankbecauseyouknowthebankshavetodealwithfraud,soit'sonlyreallyonewayone-waycommunicationofdatacomingoutofthebank,notthesoftwaretellingthebankstomakepayments.Sothat'sreallyoneaspecttoit.Butbecauseit'sascreenscrapingtechnology,um,it'sadifferentlevelofaccuracyandititdoesmisstransactions,soitcanlikemissafewthings,andthenthenyoulookatitandyougo,Oh,it'soutby10grandbecauseit'smissedatransaction,andthenwhattheteamdowesay,oh,wecanseeit'sowl,let'suhgetanaturalcopyofyourbankstatementsinit.Excel,andwefindoutwhat'sbeenmissed,andwemanuallyaddit.Sothat'sthatthatisaprocessthatwehavetodealwith.Sothey'renotperfect.
Dr James, 33m 7s:
Cool.Anyway,nottodigress,becausethere'stworeallybigthingsI'dlovetocoverbeforewewrapupthispodcast.Sothefirstthingisaccountancyfeesandhowaccountantshaveadaptedtomakingtaxdigital.Isnowagoodtimetomoveontothat,oristhereanythingmoreyouwantedtosayonmakingtaxdigital?No,no,that'sabsolutelyfine.Yeah,we'vewe'vecoveredmostofitthere.Andumbecausejusttoshareonthatone,I'veseenyouseePetepostsonforumsallthetime,andDennisarelike,myaccountantwantstochargeme1,500now,andpreviouslytheywerechargingme500ayear.Uh,isthiscorrect?Isthisright?Whattodo?Whatareyourthoughtsonthat,David?Orhowhaveaccountantsadaptedtothischange?
SPEAKER_01, 33m 49s:
Sotobefairtousall,itisumfourtimestheworkbecauseit'sfourtimesthereturnswehavetodo.SoIthinkit'sunderstandablethatumaccountsareputtingthefeesuptodealwithit.Um,itisalsoworthsayingthatyoucandoityourself.Youyoudon'thavetohaveanaccountanttodoit.Sowewealsogiveourclientstheoptionthatifyouwanttodoityourself,youcandoit,butobviouslyifwe'redoingit,it'smorework.Umwe'vetriedtostaycompetitive,andIandI'veseenthevarietyofquotesthatyouknowpeopleseeontheforumsaswell.Um,butkindofourside,we'veputittoaflatfeeof£75plusVATpermonth.Um,soyouknow,900quidumayearplustheVAT.Andthat'sIthinkwherewe'vetriedtobefairtopeopleandthatlikeit'snotanaddedvaluetoyou.Youcanuseourbridgingsoftware,whichisfreeaswell.Sowe'vetriedtokeepitascompetitiveaspossible,butalsothenjustmakingsureyou'recompliantwiththat.Includesusregisteringyoutostartwith,ourbridgingsoftwareifyouwanttousethat.Umifyouwanttouseasoftware,that'sabsolutelyfine,andwe'llgiveyoutimetosetthatup.That'salsoincludedinthat.Butthen,asIsay,it'sthatflatfeeof£75plusfarpermonthgoingforward.
Dr James, 35m 2s:
Cool.Allright,well,thatcertainlyseemsImean,I'veseenoverathousandquotedforthis.Uhandumquestionforaquestiononyourbehalf,becausewhatI'veseenorwhatI'veheardfrommurmursofaccountantssayingisthattheonesthathavemanagedtokeepthefeemoreequitable,shallwesay,uh,haveleveragedslightlyoutsideoftheboxsolutionslikeAIandeverythingalongthoselines.Isthatpartofyourworkflow?
SPEAKER_01, 35m 29s:
No,no,we'renotusingAI.We'vewe'veumIthinkforus,wearesowe'reanationalfirm.We'vegotalotofclientsthroughouttheUK,youknow,asfarastopofScotlandtoLondon.UmbutIthinkthatwe'reasmallerfirm,sowe'reasmallerindependentpractice,thatwe'venotgotmassiveoverheadsandmultipleoffices.Um,soyouknow,andIthinkweweweIthinkthatjustfeelsrighttouswhenwelookatit.Wejustkindofgo,what'stheworkinvolved?What'sthevaluebeingaddedhereaswell?Andwedidn'twanttotryquadrupleourfees,butwethoughtthat'samodestincreasethatrecognisesmoreworkforus,andititkindofgetsthejobdoneforeverybody,andyouknow,butit'sallitisachoicewhetheryouyoucandoityourself.Andum,Idon'tthinkwe'vehadanybodysaythey'redoingitthemselvesyet.Wehavehadsomepeoplewhoarestillnotrespondingtous,andwesay,look,youneedtodealwiththis,it'scomingup,andthat'skindofabitmoreworkoutoursideoftellingandgettingthemessageacross,whichiswhyit'sreallyhelpfultohavethesepodcastsandgetitouttopeoplebecausealotofpeopleareunsure.Like,whatisit,whatdoesitmean,whatdoIhavetodo?It'sit'sveryconfusingforpeople.
Dr James, 36m 35s:
Boom.Okay,thankyouforthat.Andthenonefinalthingjusttowrapup,becausewedidpromisethisattheverystart.David,ifwehadsomesortofactionableto-dolistthatbasicallysummarizesthispodcast,andthenadentistcouldjustplaybackwhenevertheywanttothemselvesandbelike,right,Ineedtodothis,this,this,this,andthis,orevenwriteitdowniftheywantedto.Ifwecouldcondenseitdowntomaybethree,fouractionpoints,howwouldthatlook?
SPEAKER_01, 37m 3s:
Yeah,justsothreethreethings.FirstthingismakesureyouregisterforMTDbeforethe5thofApril.Um,that'llsaveyouonepenaltypoint,andthenyoudon'tneedtothinkaboutituntilyourfirstreturn.So,firstthingisregisterforMTDortellyouraccountanttodoitforyou.Um,numberone.Secondismakeadecisionondoyouwantasoftwaretosetupandmanage,ordoyouwanttojustgiveittoyouraccountantforthemtousetheirbridgingsoftware?AndifyouaregoingwiththeuhIwantasoftware,putsometimeinthediaryafter,youknow,well,assoonaspossible,really.Sowe'rewe'reofferingpeoplefromnowtodothatsetupbecauseumit'sayouknow,usuallyMarchisabitquietforus,sojustbeingmindfulofwhenaccountsarebusyaswell.Umonceyou'vedonethat,yournextkindofboxtotickisbeforethe7thofAugust,you'llhavetodoyourfirstreturn.Sogetyourdataovertoyouraccountantbefore,well,hopefullyinJulyatsomepoint,andthengetintogoodhabitsgoingforwardofquarterly.Sofromourside,thepracticeuhmanagerwillbeyouknowcontactingpeoplequartertosay,Yeah,don'tforgetyouneedtodoreturn,thesearethingsweneed,andyouknow,getintothathabitgoingforwardofonceaquarter,youhavetodothisnewreturn.
Dr James, 38m 13s:
Thankyousomuch.Thatisreallyuseful.It'sjustreallycrystallizeit.ShoutouttoMr.DavidHawsein,who'sbeenonthispodcasttoday.Davidis,ofcourse,availableontheFacebookcommunityifanybody'samemberofthat.Uh,andDavidrepresentshisfirmortwoortwoaccountants.Thankyousomuch,Zebra,David.We'llseeeachotherverysoon.Thanks,soundsgoodtocatchup.
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