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Optimum Professional Services are delighted to launch the new monthly conversational series, “Optimum: LIVE!” which will provide the opportunity for you to hear from members of the Optimum team and special guests each month as they delve into a variety of subjects in light-hearted, fire-side chat style productions.
Each episode will be shot or broadcast live (yep! One take!) which means that it is not scripted or edited and has a more natural and engaging tone.
This is a https://www.visual-pr.co.uk production
00:00:00:08 - 00:00:25:22
Chris
Welcome back to Optimum Live! This episode we are talking about Make in Tax Digital for income tax self-assessment. Now it is one that you're going to want to stay connected to. You're going to find out who it affects, how it affects them, how you can get ahead of the game a little bit more. And the good news is we've got the experts from optimum that are going to be talking us through this.
00:00:25:24 - 00:00:30:19
Chris
So welcome back to Optimum Life. And I'm delighted to welcome Mandy Gibson.
00:00:30:21 - 00:00:32:00
Mandy
Hello. Hello.
00:00:32:02 - 00:00:34:22
Chris
And Casey Lucca. Yeah. You're right, both of you.
00:00:34:24 - 00:00:36:10
Mandy
Yeah. Thanks.
00:00:36:15 - 00:00:40:22
Chris
First time appearing. Hence, a little bit apprehensive about this one.
00:00:40:24 - 00:00:43:15
Yep. That fit just a tad.
00:00:43:16 - 00:00:51:22
Chris
You're in safe hands. It's fine. We're just having a conversation. Now, the official title is MTD for its, Because you've got you. Accountants love your acronyms, don't you?
00:00:51:24 - 00:00:56:05
Mandy
Yeah, well, HMRC have made this one up. Not as we've make it a little more easier.
00:00:56:05 - 00:01:19:01
Chris
Slope threshold as they're playing with. But obviously it does stand for make and tax digital which has been around for some time, but it's now for a whole different group. Income tax self-assessment. Let's take a run up there. In essence, and I'm not sure which of you I should aim this to first. Who is this effecting?
00:01:19:03 - 00:01:45:23
Kaci
Yeah. So the whole, the whole aim of this is that self-employed people and landlords in particular those the two that HMRC have targeted at the moment will be subject to this make and actually make in tax, digital income tax. So it's phased out. So it's over. It's implemented over a couple of years with the first phase starting from April next year.
00:01:46:00 - 00:01:48:00
Chris
Okay. And what's that first phase.
00:01:48:06 - 00:01:56:14
Kaci
So that first phase is for self-employed people or landlords that have qualifying income of over 50,000 or over.
00:01:56:16 - 00:02:03:07
Chris
So got you. Yeah. So just out of interest then. So the phase what's the next phase after that is that everybody.
00:02:03:09 - 00:02:27:13
Mandy
Comes in next year doesn't it. April 27th. Yeah. And that's it. It's three phases. So if you have income over 50,000. So that can be from a sole trader on its own. Or if you're a landlord it could be just from that base gross sales or from gross rents. Yeah. Or if you're a sole trader and you have rental income as well that's combined.
00:02:27:19 - 00:02:29:00
Chris
Oh it is, it is.
00:02:29:05 - 00:02:30:20
Mandy
So you learned that in together.
00:02:30:21 - 00:02:31:13
Chris
That makes sense.
00:02:31:14 - 00:02:53:03
Mandy
So if the gross income combined is over 50 you go in in April 2026. The second phase is April 2027. And so that's people with income over 30,000, right. And April 28th catches everyone with income over 20,000, which is going to be pretty much everybody. Yeah.
00:02:53:03 - 00:02:56:01
Chris
Well especially with the government constantly putting up minimum wage. Exactly.
00:02:56:01 - 00:02:57:17
Yeah. That's okay.
00:02:57:19 - 00:03:07:23
Chris
Oh, okay. So, so this is people that say, for example, you've got the rental that they're not putting that through a limited company. They are taking it themselves.
00:03:07:23 - 00:03:10:21
Mandy
Yeah. This is just for personal income only.
00:03:10:22 - 00:03:19:17
Chris
Okay. Fair enough. So can we put it into English then. What is MTD for? It's,
00:03:19:19 - 00:03:47:10
Kaci
HMRC is basically bringing in where self-employed people have their year round filing at the moment. So their January tax return. HMRC now want to see additional quarters. So you will be required to do for quarterly submissions. And then you will follow up with your tax return in January or what they are starting to refer to now is your end of period statement.
00:03:47:12 - 00:04:00:13
Kaci
So that bit stays the same, whereas the new bit is obviously the quarterly filings. So they will be to the first quarter will be June and it will run the course is off to June, September, December.
00:04:00:15 - 00:04:04:00
Chris
Okay. Kind of like I do with that returns. Yeah.
00:04:04:00 - 00:04:16:00
Kaci
Exactly. It's it's following the same principle, with the whole of the make in tax digital. So the VAT came in a few years ago now, and they're following now with income tax.
00:04:16:01 - 00:04:34:23
Chris
Which I think is the key thing. I mean, it's very easy to kind of get riled and go. What? I've now got to do this four times a year. This is crazy. But if I had to do my companies, that returns one big thing at the end of the year. Oh, my word is bigger and she matches. It's too much of an issue for me doing it.
00:04:34:23 - 00:04:55:08
Chris
Call to me at times. Now if I've let the reconciling slip a little. Yeah. So we are we're giving actually putting a lot more given the self-employed more control over that. Less surprises, I think was a key one that was coming up that they're going to be more in control of what's going to be owed and when.
00:04:55:08 - 00:05:17:07
Mandy
Etc., or because it's quarterly, they can see when they log in to their software, or if they want to give us a quick call, we can see it drop to the hat what their income is and whether they've had a bad quarter. Okay, cool to see what their cash flow is. So it gets more control over their business and they can see, you know, what's going on rather than looking at the end of the year.
00:05:17:10 - 00:05:28:15
Mandy
Yeah. And have any unexpected surprises. And they can also from that glean what their tax bill was possibly going to be. Or we can give them a better indication of what it's going to be.
00:05:28:17 - 00:05:43:01
Chris
And forgive me, this is probably a silly question. And as everybody knows what is when I host these things, it won't be the last either. Is this that they are reporting quarterly or that they're reporting and paying quarterly?
00:05:43:03 - 00:05:56:10
Mandy
Just reporting the tax payments stay exactly the same. We think possibly in the future, don't we? The change to the same as VAT, but at the moment it's staying as it was on the old system.
00:05:56:16 - 00:06:05:05
Kaci
HMRC haven't brought anything up to say that the tax payments are changing. However, we do know that they like surprised as well saying.
00:06:05:07 - 00:06:07:13
Chris
And it is a line in that for that to be possible.
00:06:07:15 - 00:06:08:17
Yeah. And I.
00:06:08:19 - 00:06:20:19
Chris
I got to be honest and say I again with my bill being quarterly, I find that I hate the corporate tax bill being once a year and we go, oh Happy Christmas, it's December. Easier.
00:06:20:22 - 00:06:22:09
Go for it. Yeah.
00:06:22:11 - 00:06:38:23
Chris
Required. That is a lump sum. And so if it was actually over a period in fact I try to everybody tries to be disciplined. They've put in what they believe their corporation tax bill is going to be in an account will then take it. HMRC just so, it wouldn't surprise me, but it's not at the moment.
00:06:38:23 - 00:06:40:09
Chris
It's purely reporting.
00:06:40:14 - 00:06:41:06
Mandy
Yeah.
00:06:41:08 - 00:06:44:13
Chris
To them. Plus it's being in control for us.
00:06:44:17 - 00:06:47:07
Mandy
Yes.
00:06:47:09 - 00:06:59:02
Chris
It doesn't sound as bad, but it does if somebody is using software already like zero or Freeagent or QuickBooks. Thank you.
00:06:59:04 - 00:07:00:06
I just want to make sure we don't.
00:07:00:06 - 00:07:02:00
Chris
Get political and we're trying to name.
00:07:02:02 - 00:07:05:12
That. Yeah, exactly.
00:07:05:14 - 00:07:08:00
Chris
We're halfway there if we're using it already.
00:07:08:00 - 00:07:33:16
Kaci
That's that's one of the main things is HMRC want you to be filing digitally. So paper records and things like that aren't going to cut it anymore. So the use of software will ease frustrations I think as well around the quarterly quarterly filing because if you have, you know, if you've got a business bank account and you can link that to a software, you are pretty much, you know, you're 80% of the way there.
00:07:33:18 - 00:07:53:23
Kaci
And it is just a case of doing some little bits of bookkeeping, and whether that be the we do it or, you know, the client does it, it then just pulls it all into one like it does about return. And then, you know, you can submit it. And the one thing that HMRC are saying is this these quarterly returns are going to be unadjusted.
00:07:54:00 - 00:08:04:24
Kaci
So they will be filed just as they are, just what's coming through the bank account. And any kind of adjustments will be done then by your accountant at the end of the year with your tax return.
00:08:05:01 - 00:08:27:06
Chris
I'm going to ask a really potentially odd question. And now, as I'm thinking and listening to what you're talking about, it works really well that that my accounting software is linked to the company's bank account. And it just literally goes, okay, what was this? What was this? And and either you've got an electronic invoice or you've got the paper receipt, and I have the app that then take a photo.
00:08:27:06 - 00:08:48:22
Chris
Bosh. It's all against it. Putting the correct draws or whatever you want to call it. The codes. If I'm self-employed, presumably that's my personal bank account. And so how does it then kind of go? Well, I don't care that you've bought your your wife or husband or whatever else it might be. A present. That's nothing to do with the business.
00:08:48:22 - 00:08:53:17
Chris
How does it distinguish that? Or am I be daft that self-employed have a separate account.
00:08:53:19 - 00:09:15:17
Mandy
That we're recommending? They do get a separate business account, and then we know then, and they know that everything that is going through all the transactions are business, and it just keeps the private and the business part separate. It's not essential, is it, that they, they have one, but it's it's better all round. We feel it.
00:09:15:19 - 00:09:32:01
Kaci
It will save you know, it will save a lot of time as well. Because if you are taking on an account and you're taking on a bookkeeper to do this work for you quarterly, they don't have to second guess any of the transactions. As such, they will know that what's going through their bank account is, in fact, business related.
00:09:32:01 - 00:09:40:07
Kaci
And therefore, you know, is nine times out of ten an allowable expense? Such say. Yeah, well, it would it would make life easier.
00:09:40:09 - 00:09:59:04
Chris
And as I said, I'm sure it was a naive question for me because I'm not self-employed. So I don't necessarily know that, I think I do is obviously I'm a, the media work as well. And that historically used to be me just personally raising the invoices. And so that was done in self-assessment. I was that grew.
00:09:59:09 - 00:10:23:07
Chris
It was like, no, this is now, going through the, you know, set up a limited company. And it went through that. But then I changed from not being self-employed. I was it was a limited company with a number of things. Okay. That that that makes sense. The software subscription, if they don't have it, then it is going to be something that they're going to have to add.
00:10:23:09 - 00:10:24:14
Mandy
Yes. So well.
00:10:24:18 - 00:10:35:13
Chris
It's not a nice to have now. It's I mean, can I just say is that, let's be honest, on the TV adverts, these software companies would be targeted in the self-employed for, I don't know.
00:10:35:15 - 00:10:36:10
Mandy
Quite well.
00:10:36:12 - 00:10:50:00
Chris
Absolutely. And I think it really hangs tight that stop worrying about these receipts everywhere. Yeah. Is get it zapped on taken care or forget about it. Once you're organized and you're into that habit, I think it's going to be the best thing that anyone you'll do.
00:10:50:04 - 00:11:22:01
Kaci
Yeah, the main thing to highlight is HMRC want you to be filing digitally that that nine times out of ten will mean using some kind of bookkeeping software. Yeah. They are still at the moment giving you the option to use what's called a bridging software. However, bridging softwares don't necessarily keep as much of an audit trail, so it might be that you you turn a spreadsheet into some electronic file that is then can be submitted through to, HMRC.
00:11:22:01 - 00:11:34:11
Kaci
But it will still need some kind of software subscription to do that. So you know and it would save time to like you say, you just switch on your business bank account in your, in your bookkeeping software and you can do away with it.
00:11:34:13 - 00:11:46:02
Chris
Yeah. Because, I mean, I love when you get repeat bills and things like that. It just it it's it's so intuitive that it will streamline massively. Yeah. So it's going to be a good step.
00:11:46:02 - 00:12:09:12
Mandy
We were also saying with the bridging software as well, if people are really anti software and don't want to go into QuickBooks or Xero etcetera, that the HMRC will probably abolish the bridging software in due course because they're not doing it now with the VAT. So it's probably going to follow suit anyway. So it's probably best just to get on board now and just bite the bullet and just just go with it.
00:12:09:12 - 00:12:24:15
Kaci
Yeah, yeah. The sooner you do it and the sooner you get used to it. You know, no one really likes change to and especially, you know, but the sooner you kind of get on board with the, the easier your life will become. And like we say, you can do as little or as much of it as you want.
00:12:24:15 - 00:12:33:21
Kaci
And actually, it would it would give you more, you know, real time view of your business as well. Yes, I hopefully people will see the benefit in it.
00:12:34:02 - 00:12:43:08
Chris
A lot happens in a year, doesn't it? Like staggering amounts. Yeah. So if you're waiting for once a year and you suddenly go to, there's your tax bill.
00:12:43:10 - 00:12:45:05
Yeah.
00:12:45:07 - 00:12:48:11
Chris
Whereas you could be ahead of the game to know what it's looking like.
00:12:48:16 - 00:12:56:07
Mandy
We get a lot of people that just sit down over the Christmas period and put everything together. They don't have to do that no more so they can sit and drink more wine.
00:12:56:07 - 00:13:01:02
Drink the water, absolutely crack on and pass it. Yeah.
00:13:01:04 - 00:13:19:14
Chris
Another benefit that I find, even as a limited company, and I'm assuming that this is what the self-obsessed people move in to, to software my accountants get to see from their side. They get access to that information to do what you need to do.
00:13:19:20 - 00:13:20:19
Kaci
Yeah, exactly.
00:13:20:19 - 00:13:25:21
Chris
Presumably that's going to be the same once they move on to the software, is that they will be given you access to that.
00:13:26:01 - 00:13:26:20
Mandy
Yeah. Yeah.
00:13:26:20 - 00:13:54:02
Kaci
It might be that, you have someone that wants to do the processing themselves, i.e., you know, matching off their bank transactions in their software and that we just pulled together the quarterly submission. Or it might be that they want us to process it as well. And, you know, it being as though the software is cloud based, that, you know, it's just it's just a log in at the end of the day so we can have access to it at any point.
00:13:54:04 - 00:14:10:18
Chris
I'm going to quickly pull a pin and throw this in the middle, and then we'll we'll briefly touch on it and then move away, especially as I believe we don't have accurate answers right now. But yes, there is going to be a degree of cost to this because there's going to be subscription for the software, which for memory isn't particularly massive.
00:14:10:18 - 00:14:19:08
Chris
Monthly subscription anyway, but that could be dependent on how much we want our accountants to do this. There could be a bit of cost there as well.
00:14:19:11 - 00:14:29:01
Mandy
Yeah, I mean, it's tax deductible. So it will come off of your income. Yeah. So your bottom line figure will take that into account. So it's not all bad.
00:14:29:05 - 00:14:31:23
Chris
Beautiful way to put the pin straight back in again. All right.
00:14:32:04 - 00:14:37:16
Thank you. Yeah.
00:14:37:18 - 00:14:38:17
Chris
Straight back in.
00:14:38:17 - 00:14:41:15
No problem.
00:14:41:17 - 00:14:43:03
Mandy
It was go for the plus side.
00:14:43:05 - 00:14:43:18
00:14:43:20 - 00:15:04:02
Chris
But we are talking that we are, in effect, almost outsourcing. Yeah. Some work we are giving, clarity, control, things like that. And let's not kid ourselves. I'm sure HMRC have done it more so to do with the fact that there was things falling through the cracks.
00:15:04:05 - 00:15:05:15
Mandy
Yeah, absolutely. Yeah.
00:15:05:19 - 00:15:13:23
Chris
We know full well that's going to be the reason why. But I've always had this attitude if I've done nothing wrong, I've got nothing to worry about and.
00:15:13:23 - 00:15:14:18
Mandy
Say, that's.
00:15:14:18 - 00:15:35:17
Chris
Right, I'm yet to have more control, to be able to possibly outsource some of that work that we're hoping we're going to be growing even as self-employed, which means that payroll money gets more work, etc.. And I know when I was doing the media work, I'm not I'm not an accountant, I what am I doing to. Yeah, calling the people that do know that's the reality of it.
00:15:35:17 - 00:15:36:00
Mandy
Yeah.
00:15:36:04 - 00:15:58:13
Kaci
And you know, we we are more than happy to offer people training on software. So you know, if, if they do want to actually do a portion of it themselves, maybe to keep costs down a little bit, you know, that we are we're happy to help you get set up, offer a little bit of training so that, you know, at least kind of the basics to be able to crack on and do some of the yourself.
00:15:58:15 - 00:16:11:19
Chris
And, and answer questions. And I'm back and you're banging your drum because obviously I'll be with you guys for some time now is that every now and again I it could be a daft one. Like going what what do you call the code, the nominal code or whatever.
00:16:11:22 - 00:16:12:18
Oh yeah. Yeah.
00:16:12:18 - 00:16:31:11
Chris
And I'll go, what are these ones supposed to go against. And, and it's been so long and I just can't remember for love, no money and just drop an new and go. Really? Sorry. Sorry. What am I supposed to put? These are the answers. It's boss. Job done. Cool. Thank you. Drop down. Pick that one. Done. Yeah. Not very often that has to happen because it's all self-explanatory, but it's like anything.
00:16:31:11 - 00:16:32:22
Chris
Yeah, it's easy when you know.
00:16:32:22 - 00:16:36:09
Mandy
How to say it. No question. Stupid. Is that you don't know the answer.
00:16:36:13 - 00:16:52:11
Chris
Correct. That's what I've always had a phrase, actually. No question, stupid, unless you're asking me the same one for the third time. A tongue in cheek sort of comment. However, that doesn't necessarily ring true here, because it might be several years later and we've not had to do this before.
00:16:52:13 - 00:17:05:11
Kaci
There's there's no good in, you know, anyone worrying about a question, you know, you're better off just asking it because it would take us a couple of minutes to answer it and then actually, you know, next time then or if you don't, you're happy to ask again. Say, yeah.
00:17:05:13 - 00:17:08:04
Mandy
And if it's a software issue we can always logging how.
00:17:08:04 - 00:17:08:20
Kaci
Exactly.
00:17:08:20 - 00:17:11:13
Mandy
That's take a look. Hold it right for you.
00:17:11:15 - 00:17:25:06
Chris
So my point is saying you guys have access is such a wicked sense. Yeah, I do, I do like that. Indeed. I'm going to go for a pin again.
00:17:25:08 - 00:17:27:21
Mandy
Like this is an asset.
00:17:27:21 - 00:17:28:24
Now, I'm not. I'm the only.
00:17:28:24 - 00:17:41:22
Chris
Phrase I'm going to use because it was mildly brought up before, we went with this conversation. New penalties. That's all I'm going to say. So discuss.
00:17:41:24 - 00:17:47:19
Kaci
It's it's going to follow the same penalty structure briefly as VAT.
00:17:47:19 - 00:17:51:11
Chris
So just to be clear on that is that it needs to be in by a certain time.
00:17:51:11 - 00:17:51:21
Kaci
Yes.
00:17:51:21 - 00:17:52:19
Chris
Or paid by.
00:17:52:19 - 00:18:12:24
Kaci
So yeah. Exactly. So you will have a month and seven days from the quarter end to file. Yeah. Obviously in this case there's no payment needed at the moment. And for every late submission you will get one penalty point. When you get four penalty points you will then receive a fine.
00:18:13:01 - 00:18:13:24
Chris
Okay.
00:18:14:00 - 00:18:16:01
Kaci
Yeah. So it's it's following the same.
00:18:16:01 - 00:18:20:04
Chris
Structure for penalty points ever or four.
00:18:20:07 - 00:18:25:01
Mandy
So full penalty points is for submissions that are late.
00:18:25:01 - 00:18:32:21
Chris
That's what I was saying. Yeah. Because it is. So in other words is that sort of like an amnesty at the turn of the financial year and you go back to zero again?
00:18:32:21 - 00:18:33:17
Mandy
No, not that.
00:18:33:18 - 00:18:36:22
Straightforward like that.
00:18:36:24 - 00:18:45:06
Kaci
Yeah. So then if you've got four penalty points, when you then get your first fine for every submission, that's later after that you would just get a fine automatically.
00:18:45:10 - 00:18:45:21
Chris
Okay.
00:18:45:21 - 00:18:53:11
Kaci
So you then have to have submitted for a period of time after that for your for your penalty points to return to zero.
00:18:53:14 - 00:19:00:06
Chris
Okay. Yeah. Fine. I mean the reality is what do you say a month and seven days. It's, it's it's a good old chunk of time.
00:19:00:08 - 00:19:03:02
Kaci
Yeah. It's, you know, it's a fairly decent amount of time.
00:19:03:04 - 00:19:04:21
Chris
And if you're on software, it reminds you.
00:19:04:23 - 00:19:08:23
Kaci
Yes it does. Yeah. And yeah. Yeah. So there's no there's no excuse. There's no.
00:19:08:23 - 00:19:11:13
Chris
Exactly. Because my head and it's like yeah I've done it. Yeah I know.
00:19:11:13 - 00:19:17:10
I'm on the phone. Sorry. Yeah. It's like a nagging woman. Exactly. Absolutely.
00:19:17:12 - 00:19:20:02
Chris
Mandy's at it again.
00:19:20:04 - 00:19:20:17
00:19:20:19 - 00:19:36:06
Chris
Incidentally, I didn't do this at the start because you're both coming at this for optimum for us as clients from slightly different angles. What's on the start with you, Casey? So you're coming from you are an accountant or you're coming from the accountants side.
00:19:36:10 - 00:20:03:11
Kaci
Yeah. And kind of trying to ensure from a client's perspective that, you know, we're looking after you, we're making sure that our processes are right internally so that we can set you up for success. You know, which we're making sure that or we're on the ball, we know what's going on with it and that we're starting to initiate and engage in those, communications about software and about what's best for you individually.
00:20:03:13 - 00:20:21:00
Kaci
Obviously, the the actual criteria is based on your for when you enroll is based on your 2425 tax returns of, say, some of which our clients have already had, you know, completed. So within kind of engage in and talk to them about how they want what they want to do.
00:20:21:04 - 00:20:30:14
Chris
Okay. Yeah. Because I've got this know that you're like project lead in effect for this to make sure that it that we're informed that we know what we've got to do, how we can do it, the options available.
00:20:30:14 - 00:20:38:06
Kaci
Exactly, exactly. And having someone to talk to essentially. So, you know, if they want to talk about it, you know, with. Yeah.
00:20:38:08 - 00:20:41:23
Chris
And that's 50,000 income from any of those. Not profit.
00:20:42:03 - 00:20:42:24
Kaci
No income.
00:20:43:02 - 00:21:11:14
Mandy
Income before expenses. But it's just so traders and landlords with rental income. And if it's a joint property yeah it's your share. So say it's a husband and wife saying one rental and it's 5050. It will be 50% of the gross rents okay. Only. So a lot of people will drop out and go down to the 2028 mandate and say okay, basis that.
00:21:11:14 - 00:21:21:08
Chris
So they are being fair. They both sounds of that. Yeah. But Mandy, you're the more technical expert. You're coming from the tax side of it rather. Yeah. Accounting side. Yeah.
00:21:21:10 - 00:21:50:07
Mandy
So when we do the 25 return file, that basically indicates if you're going into MTD next year or the following year, etcetera. Got you. So if you haven't got income over 50,000 for April 28th. So on the 25 return, sorry, April 26th for the 25 return. We would do the 26 return the following year and again see if you fall into that criteria.
00:21:50:09 - 00:21:51:14
Mandy
And so on. And so so.
00:21:51:14 - 00:21:56:01
Chris
You're proactively farming, you know, filtering that out as well.
00:21:56:05 - 00:22:17:08
Mandy
Yeah. So if it's determined you're going in April 26th, we then make contact with you, SAP Government Gateway, if client hasn't already done that, a need to do that, register them for MTD. And then we go from there and then I hand it over to you, don't I? The software. Yeah. Hopefully.
00:22:17:10 - 00:22:18:13
Yes.
00:22:18:15 - 00:22:19:03
Kaci
But no.
00:22:19:03 - 00:22:19:17
Mandy
Yeah okay.
00:22:19:17 - 00:22:22:11
Kaci
So far. Yeah. We do. We'll say.
00:22:22:11 - 00:22:43:11
Chris
Okay. No that's good. I just thought it was important to understand who would they you know, so they whether they say in this, they don't have to be clients yet at all, do they? In fact, this could be the catalyst to say, reach out and have a conversation with you. Could be existing clients, but now it's like, I would imagine you're already in conversations with those people to lesser or greater extent.
00:22:43:13 - 00:22:48:17
Chris
Who should they come to if they kind of go, right, I've seen this. I've really got to do something.
00:22:48:19 - 00:22:49:12
Mandy
On Office.
00:22:49:14 - 00:22:51:03
Space. Yeah, yeah.
00:22:51:03 - 00:22:56:20
Mandy
Anybody in the team, if they just phone that main number that would be pointed in the right direction.
00:22:56:20 - 00:23:05:01
Chris
And we got it there, the website. Oh yeah. Co.Uk to look for the, phone number, the email addresses, all that sort of stuff.
00:23:05:02 - 00:23:16:04
Mandy
This is affecting the whole team in the office. So we're all aware of what's going on. So everyone has a good idea, good and knows who to sort of point them towards. Say.
00:23:16:06 - 00:23:35:01
Kaci
We've got a team of amazing bookkeepers that will, you know, they are great with all of the different software, so they'll be able to help with any software related questions. Or you know what, what the client, you know, if the client wants options and what they think would be best for them in terms of software, you know, we're happy to give that advice.
00:23:35:01 - 00:23:36:07
Kaci
And yeah.
00:23:36:09 - 00:23:53:04
Chris
That's good. I mean, that was really I was coming on to how you supporting clients. And I think we've been going into it is the fact that, first of all, check to see whether you do now fall into that, that, that bracket. That means you need to do it. We've got the software and the digital tools helping connect bank feeds.
00:23:53:04 - 00:23:58:11
Chris
Yeah, exactly. All of those things. Nobody needs to feel like they're on their own with this.
00:23:58:13 - 00:24:17:05
Mandy
You know, we've been sending out literature, haven't we, over the course of the year. So everybody has received something whether they've read it or not. Is that to their it's probably quite boring, but it's important. And we're not letting them slip through the net and get away with it. We are keeping in contact with them regularly, so.
00:24:17:07 - 00:24:32:22
Chris
Well, I'm more to the point, not letting them because I would be more on the other side going, should I be should have not doing this. I go, no, no, you're not going to let me slip through the net. You've got us. I've got to stop in my head. I'm going to, keep playing the. Who are you going to call?
00:24:32:24 - 00:24:34:11
No.
00:24:34:13 - 00:24:37:11
Chris
I think I mean, don't do it.
00:24:37:11 - 00:24:41:18
Just don't go to it. Just step away from it.
00:24:41:20 - 00:25:04:17
Chris
The big message, that we've got here, good recordkeeping is everything. I mean, that's been the case anyway, but it's been a very manual paper orientated. If you're lucky, you've kind of done something on an Excel spreadsheet, which is still pull them in manual because you've got to create any equations within it, getting those, things into an app.
00:25:04:17 - 00:25:09:12
Chris
Take a photograph of receipts, going back to the adverts that have been on TV for a long time.
00:25:09:13 - 00:25:20:02
Mandy
We've had a few clients that have come in for training already, have read, and we've actually thought, oh, they may struggle with it and they've embraced it, and it's not been as daunting as they've initially thought.
00:25:20:03 - 00:25:21:04
Chris
So yeah.
00:25:21:10 - 00:25:23:05
Mandy
I think it's good for everyone.
00:25:23:10 - 00:25:42:01
Kaci
I think having, you know, most, most people have kind of an iPhone or Android or, you know, something that would enable you to have an app to take a picture of your receipts and things like that. And it's not, you know, it's not an expensive feature to have you say it. It definitely makes life easier.
00:25:42:01 - 00:25:58:20
Chris
And in fact, for anybody who doesn't know that hasn't used this, it's not like you go into your camera and take a photo and you've now got, we were chatting about photographs clogging up our phones. It's like, no, no, no, it's not that. You open up the app first, you then go right, add document using camera. But take that.
00:25:58:23 - 00:26:02:01
Chris
It then sits there in your inbox. You then reconcile and attach.
00:26:02:01 - 00:26:03:04
That that.
00:26:03:06 - 00:26:27:02
Chris
Photo. I mean that's just simplifying that process. And for me it just makes it so easy. Even if I notice, one of the things I do is that I am terrible. I'm very disorganized. I'll suddenly have a whole load to I've got a lines that I've got to reconcile. So I'll be sat on my laptop and, and be doing it there, but I'm going, what is this receipt that I'm getting these ones out of my wallet and everything?
00:26:27:04 - 00:26:41:20
Chris
Open up the app, take photo from within the app that's now in the box. So I'm back on my laptop. Go. And this is what it is attached to the document in the inbox. That one that I just took back then. It just depends. It is so good, so slick.
00:26:41:21 - 00:26:47:15
Mandy
If you're out in your van all day, for example, you know you can just put the receipts on your dashboard, click, click click.
00:26:47:17 - 00:26:55:07
Chris
Done. Yeah. So yeah, no it really is. And therefore I think people will feel so much more in control.
00:26:55:11 - 00:26:56:11
Yeah.
00:26:56:13 - 00:27:12:20
Chris
And and it works. All those different bits out for them thereafter doesn't it. Within it. The only thing that I would say again speaking from experience as a business owner is it takes a little while because it's almost too easy. Does that make sense that I've had that time? When you just go and submit and it goes, it's fine.
00:27:12:20 - 00:27:22:05
Chris
We've already worked it out. Yeah, you've done it. And you're going, yeah, but especially when it puts that message, you've got a ticking a box to go. I crystal certify that this is all work.
00:27:22:07 - 00:27:25:09
And I'm like, I think so.
00:27:25:11 - 00:27:46:11
Kaci
And if you have those concerns that's where we can help. You know as well. And we although the software does do a, you know, quite a big proportion of it, we're here to check it and make sure that actually what he's saying is right. So yeah, if you do have, you know, nerves about it or anything like that, you know, anyway, you.
00:27:46:11 - 00:27:50:10
Chris
Know, and that comes to the riding the bike thing, you know, you suddenly go, oh.
00:27:50:10 - 00:27:52:08
Yeah, it does work. Yeah. You can trust it.
00:27:52:11 - 00:28:00:16
Chris
Yeah, exactly. But you have to go through a few periods of, of kind of good. Is it what it's asking me to, to confirm I have done that.
00:28:00:16 - 00:28:01:09
But yeah.
00:28:01:10 - 00:28:20:05
Mandy
It's not the end of the world either. If you do get it wrong, because we'll do the final submission, which is the fifth return. So you have four quarterlies. The final one is equivalence. What we know is the tax return. Yes. So all the adjustments go through at the end. So and then add on any other income.
00:28:20:05 - 00:28:37:17
Mandy
So say a client's got bank interest or dividends for example. Or they pay into a pension for tax relief. So that all goes in at the end. So if there's anything that's wrong at the start on the first four quarters, it's going to be we'll put that right in the end. You don't get it all. Get put right.
00:28:37:17 - 00:28:57:00
Chris
Say no. And then yeah. And I think even worst case scenario, it slips through and it's even submitted at the end. It's going to come out in a wash that they're going to go, hang on, this is wrong. And it will just get put as a correction in the next year's ones and things like that. I mean, am I right in saying anything?
00:28:57:02 - 00:28:58:11
Chris
I mean, we shouldn't get.
00:28:58:13 - 00:29:00:03
Mandy
The year end. It will get put right?
00:29:00:07 - 00:29:12:17
Chris
I mean, that's the year that we see that. Fine. I'm just being so that's all it is. Technology is best friend, not enemy is a good quote that I think we've got there.
00:29:12:19 - 00:29:26:10
Chris
There's a section here that I think we've been covering as we've been going is that it isn't all bad. It could be the push that many people need to get on top of their finances. I think that's fair. I mean, we've been talking about being more organized, being more aware.
00:29:26:16 - 00:29:27:07
Yeah.
00:29:27:09 - 00:29:30:01
Chris
I think it is that push that that we probably need.
00:29:30:02 - 00:29:52:07
Kaci
That's that's one of the reasons HMRC have brought this in is to help the reduction of errors and actually to help people get more of a real time, you know, look on their finances because, you know, most people are guilty of just, you know, wait until January rolls around and goes, oh, that's that's how well I did. Was it or, you know, and I think actually will it will help people.
00:29:52:07 - 00:30:02:21
Kaci
It will give them a better understanding and you know, so fingers crossed people will be quite accepting of it. And actually, you know, get on board with it and embrace it.
00:30:02:23 - 00:30:09:04
Mandy
Yeah. And take away the big tax bills as well. The shock of the big tax bill and say it will take away sales.
00:30:09:06 - 00:30:10:15
Tax and certainly no chance.
00:30:10:18 - 00:30:11:04
Chris
Of filing.
00:30:11:04 - 00:30:11:16
For it if you're.
00:30:11:16 - 00:30:28:14
Mandy
Doing it quarterly and you can see that you've had a peak or a slump, you'll know that that's obviously going to affect your tax. Yeah. And you're more in control of what you need to put by if you like to save every month. Yeah. And we can also do some calculations for you.
00:30:28:14 - 00:30:36:09
Chris
So yeah. Because it could even I mean, again, I'd probably be daft on this one, but maybe it has an impact on your business planning.
00:30:36:13 - 00:30:37:06
Yeah, yeah.
00:30:37:07 - 00:30:46:08
Chris
You said that you kind of go, oh, that's enough. Otherwise I'm going to go over or actually I'm going to go for it, but put this away and I don't know, whatever those plans could be, it could have an impact on.
00:30:46:08 - 00:31:03:15
Mandy
Yeah. Especially if you're like, you're thinking of taking some money on an extra member of staff. And you can see over the course of the year that your business is improving. You can also see, you know, what you're spending the most money on, and maybe you want to cut back or make changes. It's all there to see.
00:31:03:15 - 00:31:09:22
Chris
Say, and that runs the course for all of it, doesn't it? The more that you're able to see, the more informed your decisions going.
00:31:09:23 - 00:31:12:13
Kaci
Yeah. Yeah, exactly. And it will help.
00:31:12:16 - 00:31:32:13
Chris
Yeah. No, exactly. Yeah, I love this. No more panic. January's to be say no more guessing. I it it to me it feels like a good thing. It's going to be that change bump which is what. Yeah. It's a team. You're there to manage and as as a company that often we've put that in to go.
00:31:32:13 - 00:31:37:01
Chris
Right. You know what this this needs some management of it.
00:31:37:03 - 00:31:53:00
Kaci
Yeah. We don't want people to feel that they're not supported. We understand there's a big change for many. And we we want people to know that we are here to help and that actually, you know, you have got people that you can rely on, you know.
00:31:53:01 - 00:32:03:13
Chris
Yeah, it a lovely phrase. It's got hey look MTD for Isa. So make in tax did make in tax digital for income tax self-assessment.
00:32:03:15 - 00:32:06:03
Mandy
Easy for you to say.
00:32:06:05 - 00:32:07:09
Chris
I've been practicing in front of you.
00:32:07:10 - 00:32:08:23
All morning.
00:32:09:00 - 00:32:10:08
Chris
It's it's not going away.
00:32:10:14 - 00:32:12:08
Mandy
No, no, it's definitely not.
00:32:12:10 - 00:32:18:18
Chris
And so whether there is any negatives that some people might think it's all for all of us, it's kind of like it's done.
00:32:18:18 - 00:32:25:15
Kaci
Yeah, exactly. And whether you're in from next April or the April after, you know, as long as you're acknowledging.
00:32:25:18 - 00:32:35:20
Chris
And that's an interesting one. So if we know we're not in from next April, but we probably will for the following April, there's nothing stopping us from jumping on board to making it digital now.
00:32:35:20 - 00:32:37:08
Kaci
Because, you know, you can join.
00:32:37:08 - 00:32:37:15
Yeah.
00:32:37:19 - 00:32:56:10
Chris
Get on, get ahead of the game. Yeah. Because there's so many positives that we've talked about in Mark and this morning. And again I'm speaking not from self assessment side of things but from you know even from the company the different software. I mean I'm thinking right back to a company that I was I would a significant position in.
00:32:56:12 - 00:33:06:15
Chris
They ran they did introduce another accounting piece of software eventually but they still ran the manual ledger. The, you know, the big long books. Do you remember?
00:33:06:17 - 00:33:14:14
I remember there's not they say, oh, oh, no. Yeah, yeah.
00:33:14:14 - 00:33:17:15
Chris
You've seen it on the, in the library haven't.
00:33:17:17 - 00:33:20:20
On the microfiche. Yeah.
00:33:20:22 - 00:33:34:21
Chris
But it was this big long book with all the lines and just managing everything and, and people kind of go, yeah, but I know what I'm doing. I know where it is. I can see it. And it's like, yeah, but how about actually a lot of that work is taken away from you. The input is just a slightly different location.
00:33:35:01 - 00:33:51:16
Chris
It works everything out. There's a lot of bond benefits too because all of that being there, fine, you've got it logged. But there's no equations done on that piece of paper. You know this is like taking it a whole other level. So there's a lot of benefits to it. One of the some of the advice here is start small.
00:33:51:18 - 00:34:06:10
Chris
Pick a piece of software. Yeah. Connect it to your bank and start tracking your income and expenses. Yeah that gets you started. Which is why I think even if you don't need to do the MTD just yet, get on to that bit. Yeah.
00:34:06:12 - 00:34:28:16
Kaci
I mean, you know, even if, you know, in from next April, you have the April after, you might be sat there now thinking, oh, I can't do this. But actually, if you if you got on board with the software a little bit earlier than you needed to be when, when April rolls around for the year that you're enrolling, you might go, actually, I know how to do this, you know, and I don't need my accountant to do the quarterly submissions for me.
00:34:28:16 - 00:34:32:10
Kaci
I can do that. And they can do my normal end of year stuff.
00:34:32:10 - 00:34:53:02
Chris
So no, I think that that is my advice as well as a business owner is is getting into the software now. It does help, it does make life easier and you're ahead of the game, even if it is for next April. You can go and get started now on you. What we. Yeah. Well obviously I'm going to date, timestamp this this episode now, but we're at the, middle of October, late October.
00:34:53:02 - 00:35:12:06
Chris
Now I'm, I'm getting ahead of the game by, by multiple months and just getting comfortable with it, making mistakes now when it doesn't actually matter too much, etc.. And just getting comfortable with it and it is intuitive. It's, it's it's and I would actually go as far as to say it's, it's easier than you think it is.
00:35:12:08 - 00:35:18:03
Chris
And I say that because some of the times when I've been scratching my head, I've gone because I'm looking for a complicated answer.
00:35:18:05 - 00:35:19:07
Kaci
You're looking for a problem.
00:35:19:10 - 00:35:29:05
Chris
Yeah, absolutely. And you go, no, it really is just as easy as that. Yeah, there it is. There's a description. There's a dropdown for which code. It's going dumb.
00:35:29:07 - 00:35:42:06
Mandy
Yeah. I mean this applies for landlords as well as the self-employed. There's different softwares for landlords is there. Yeah. We like the look of hammock don't we. Yeah. So we're going to recommend that to the landlord.
00:35:42:07 - 00:36:06:20
Kaci
So yeah it's a really good software actually. You know it can keep track of all of your, you know gas certifications, insurance renewals. Oh wow. So actually as a landlord, it's it becomes more of a finance admin package. Really. It has it all in one. So it seems to be a really good software. And if the properties are jointly owned, it can all be managed within one license as well.
00:36:06:20 - 00:36:10:08
Kaci
So it splits it all out. It's very clever. Okay.
00:36:10:11 - 00:36:18:12
Chris
That's another one I'm sorry thinking ignore the MTD enforcement. That just sounds like such a cool, controlled way to go.
00:36:18:13 - 00:36:22:21
Mandy
Yeah, it's just keeping everything in one place, is there? You just log in and it's all there.
00:36:22:23 - 00:36:31:22
Chris
And it creates the picture, the graphs, the the, whatever it is you want to see. Give yourself the bigger picture. Be in control. So what you said that was called hammered.
00:36:31:24 - 00:36:32:19
Mandy
Yeah.
00:36:32:21 - 00:36:47:11
Chris
Yeah. Okay. Cool. I like the sound of that one. I think that we've covered everything. Is there anything that I haven't guided you on to, to if you've got any more pins?
00:36:47:13 - 00:36:48:19
Kaci
No, we don't do the pins.
00:36:48:20 - 00:36:51:09
No, that's my that's all me. Yeah, yeah.
00:36:51:10 - 00:37:14:16
Mandy
Only thing that we could add is people aren't always mandatory going into, MTD. There will be some people that are exempt, but you have to apply for the exemption. So it's like there's a few things. So I refer to my notes. So it's location. So maybe if you don't have internet access you may be exempt. Okay.
00:37:14:18 - 00:37:36:15
Mandy
Where you stand, if you have an accountant acting for you that does have access to software, I don't know. They haven't really said about that, have they? But, that's one of the criteria. Age and disability is another. And there are a few more. So if you are a foster carer, you're exempt, so you don't need to.
00:37:36:17 - 00:37:42:16
Chris
So if you're a foster carer but it's revenue from other things, it still doesn't count. Or if that's you.
00:37:42:16 - 00:38:07:01
Mandy
Can carry on on the old self assessment. So you still do an annual tax return rather than quarterly filing. So you carry on. So that's one of the exemptions. Other ones which are probably for security more than anything. People that are in the armed forces at the high levels, ministers of religion, things like that. So yeah, MPs so they're on exam.
00:38:07:01 - 00:38:08:00
Mandy
Gosh.
00:38:08:02 - 00:38:13:09
Chris
Don't just keep inner voice out of voice, Chris. Don't go.
00:38:13:11 - 00:38:15:03
Going on for over. Oh, yeah.
00:38:15:03 - 00:38:16:17
Kaci
It's probably for the best.
00:38:16:19 - 00:38:25:17
Mandy
But you have to apply for the exemption. It's not just taken that you don't have to do it. So you have to speak to them first and they will give you the exemption.
00:38:25:20 - 00:38:29:02
Chris
Yes. So in other words it's like that's assessed as to make sure. Yeah.
00:38:29:04 - 00:38:53:10
Kaci
I think another thing as well is don't just sit on it. You know, if you know that you are going to, you know, need to be enrolled into MTD for it. Sir. The HMRC aren't going to do it for you. You know, it, it might come a point, you know, if you if you were due to be in from April next year, it might come to a point that towards the end of next year they might send you a letter and go.
00:38:53:10 - 00:39:00:24
Kaci
Actually, we've looked at your tax return. You should have signed up for this. But they will then will issue you with penalties and subsequently fines.
00:39:00:24 - 00:39:02:08
Chris
Because you've in effect missed for.
00:39:02:10 - 00:39:04:14
Kaci
You have. So yeah. You know.
00:39:04:16 - 00:39:08:20
Chris
Although it shouldn't be fines and you say that it's just a point.
00:39:08:22 - 00:39:09:24
Mandy
To start with. Yeah.
00:39:09:24 - 00:39:11:04
Chris
So you get to follow.
00:39:11:04 - 00:39:11:16
Mandy
Yeah.
00:39:11:16 - 00:39:14:18
Kaci
So you know both C however long you let that lapse.
00:39:14:22 - 00:39:26:01
Chris
So and that I think that as and I think the important wrap up to some extent is that you do have to enroll yourself. Yeah it does enroll you know.
00:39:26:01 - 00:39:32:17
Kaci
No it doesn't. You are responsible for staying compliant. And that's how HMRC sees it. They are not going to rolling.
00:39:32:19 - 00:39:44:23
Chris
Now there's obviously an easy one to say here is working with you will help that happen. But for someone who's not going to go through an accountant, presumably they go on to a website and the enroll themselves.
00:39:45:00 - 00:39:59:02
Mandy
Yes. If they go on the Gov.uk website, typing MTD for its, it would give them all the information. There's a lot of webinars that the revenue producing and a lot of literature. So they are they have been quite good and very informative.
00:39:59:02 - 00:40:05:00
So. For this. Yeah. Yeah, absolutely.
00:40:05:02 - 00:40:19:15
Chris
Okay. So you can enroll yourself. Yeah. Straightforward and get on it and then start working out what you're going to do. Yes. To do it and and yeah, work out which software you want to go for, whether it's hamlet because your landlord, whether it's zero with an X.
00:40:19:20 - 00:40:20:23
Mandy
Zero,
00:40:21:00 - 00:40:22:07
Chris
Free agent.
00:40:22:09 - 00:40:23:08
Kaci
00:40:23:10 - 00:40:24:09
QuickBooks.
00:40:24:11 - 00:40:26:04
Chris
Do we still say sage these days?
00:40:26:04 - 00:40:29:10
Kaci
They have a cloud based system. Say, you.
00:40:29:10 - 00:40:31:20
Chris
Know, that is. That's quite a big beast, though, isn't it? What do.
00:40:31:21 - 00:40:32:07
Kaci
They.
00:40:32:07 - 00:40:32:15
Say?
00:40:32:20 - 00:40:33:14
Chris
They got a little one.
00:40:33:15 - 00:40:35:17
Kaci
Small packages. Okay, so.
00:40:35:21 - 00:40:37:19
Chris
Shows what I know.
00:40:37:21 - 00:40:58:23
Kaci
And also, you know, if, if you wanted to onboard the license through us, it can come at a small discount. So you know, it's it's worth maybe asking even if you're a client before you go out and just pay for one yourself. It might be worth comparing to see what what deals they're offering. You compared to you know what what we get our licenses for.
00:40:58:23 - 00:41:03:15
Chris
Yeah, yeah. And I agree with that because I've done it through you guys, for my account.
00:41:03:17 - 00:41:15:18
Mandy
And the difference is, is while HMRC on offering any free software with it's they have been in the past with self-assessment that that's not going to be the case with this.
00:41:15:20 - 00:41:19:11
Chris
Yeah. Because that probably would be too big a beast wouldn't probably cover.
00:41:19:14 - 00:41:23:11
Mandy
Yeah. So you do have to buy something. There's no getting around it.
00:41:23:11 - 00:41:26:07
Chris
And the point being is when we say buy, it's a monthly subscription.
00:41:26:07 - 00:41:27:00
Mandy
Yes. Yeah, it's.
00:41:27:00 - 00:41:28:03
Chris
Much more palatable and it's.
00:41:28:03 - 00:41:30:21
Kaci
A manageable cost. It's you know, it's not extortionate.
00:41:30:21 - 00:41:51:21
Chris
So fine. Well, thank you very much, for making sense of that. Hopefully that for everybody we've made, it makes sense. And maybe not seeing that is a negative. There's a very I think there's a lot of positives for this as well. For, for for you all. But any questions, any support that's required, reach out.
00:41:51:21 - 00:42:12:19
Chris
We've got the web address there Oppt SCO Duke as in optimum Professional Services. And, reach out. You got Mandy, you got KC. But any of the team here and you can speak to them, find out more, find out what's available in terms of how optimum can can work with you to to help you do that and get ahead of the game.
00:42:12:22 - 00:42:17:05
Chris
That's my biggest advice. Get ahead of the game. Get the software going first.
00:42:17:07 - 00:42:17:23
Kaci
Definitely.
00:42:18:03 - 00:42:24:19
Chris
Maybe the enrollment first, but maybe the slide. Yeah, I don't know. Depends on when you do this. When do you act. But I think that sums it up.
00:42:25:00 - 00:42:25:18
Kaci
Yeah. Brilliant.
00:42:25:20 - 00:42:32:13
Chris
Fabulous. Well thank you both for this one. Thank you everybody for watching. I hope it makes sense. We'll see you next time. Cheers.