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The Navvai Shift – AI & Business Insights
Welcome to The Navvai Shift, the podcast where business leaders in finance share their journeys, challenges, and unfiltered thoughts on artificial intelligence. We dive deep into how AI is shaping industries, uncovering real-world insights from those driving innovation.
Subscribe for expert conversations on AI, automation, and the future of business.
First podcast with Howard Gross, the CEO and cofounder of Gross Klein. Howard, it's a pleasure to have you on the call. We're very excited to delve deeper into exploring how technology and especially AI and digital tools are reshaping the financial services. And hopefully learn a few things from you over the line as well.
Howard Gross:Yeah. Well, I think you'll be teaching me more on planet on, AI than I could ever know. We've really been doing AI for years because the technology's been there. It's now, I think, it's a very clever marketing method. By quoting the development of of technology AI, the big tech companies are gonna earn a lot more money because they've got a new product.
Damarie:100%.
Howard Gross:And all it is is a development of what we've been doing for years. Yeah. So that's my view anyway, but I'm sure they'd say that's something different.
Damarie:So Howard, for you, so what would you say is the biggest challenges affecting financial decisions made for both businesses and individuals today? You To toast to that.
Howard Gross:Oh, I I've already seen it in in my office, with the non dom changes. We've acted for an entertainer from abroad for several years who's got a home here and has been a non dom. He's now quit. But his management company have done me a great favor. They just said we found another entertainer who does the same thing.
Howard Gross:Would you act for them? Which I will do, because the first few years will be they won't make a lot of difference, but but to get a visa, that is very expensive, and you need a lawyer. You don't need an accountant for that. It's just so complicated and and very costly, which will put people off. But as you know, the chancellor has decided that we're going to relieve some of the pressures on non dom so that the millions of millionaires that have left might come back.
Damarie:Might come back. Yeah.
Howard Gross:So Because they spend money here, and that's where they don't seem to understand. And and they may be beginning to get the message. We you this is a good time for your first postcard podcast because today, the Bank of England is going to change interest rates, we hope. Oh, okay. That means the government has to spend less money because the government borrows so much money.
Howard Gross:The higher the interest rate, the more it pays. And that impacts on business because they then don't need to increase tax, we hope, on business anymore, like the National Insurance. That is also having a big effect on clients. One client phoned me up and was going through it with me of what the extra cost was going to be, and another client's already closed an office and has made somebody redundant. It's just really frustrating, especially for the bigger firms, big companies, who want to do development.
Howard Gross:I mean, as you know, there's a lot of people that are leaving jobs, but they're being made redundant.
Damarie:And
Howard Gross:we hear governments say, well, we're going to do this development and that development and create a 100,000 jobs. Well, that's in ten years' time, in my opinion. It's not now. And and we need people to work to get growth.
Damarie:Yeah. 100%.
Howard Gross:Money. You've gotta spend the money. If you don't spend the money, there's no growth. Yeah. And and at the moment, it's there's so many people who are not well, whether that's from COVID or, you know, the outcome of COVID, not necessarily COVID.
Howard Gross:I don't know, it's just very, very frustrating when you hear so many people that are on benefit. And why? But maybe I'm old fashioned. It didn't happen in my day. You just didn't you just went to work.
Howard Gross:Yeah. That's that's how it is.
Damarie:From my from my experience of kinda seeing people in the benefits, sometimes they like to take advantage of the benefits they can get from the government and try to move away from, oh, I don't have to work. I can just get my benefits and be happy. But I think it's due to the fact the way the government are looking to structure things. They're letting the the poor kind of stay obviously not poor, but the more less unfortunate people stay in that position and be be scared to work essentially.
Howard Gross:Yeah. Well, that's, at the moment, we have a lot of promises being made, but not much is happening. I think that's, and I'm saying this from talking to clients, not just my personal view. Although sometimes it is my personal view, but clients are all complaining. And I never talked to politics to any client for many, many, many years until about two years ago.
Howard Gross:Now every other conversation is what's gonna happen next? How are gonna cope? Will we have a good business in twelve months time? It's it's really very frustrating. And but if you're really good at what you do, you'll find a way, and that's what you've got to do.
Howard Gross:But what's worrying me is that the younger ones that are very ill or are off work now are going to suffer from they need the experience. That's the problem. Not going get the you guys have been around you've been to different jobs. You've got experience from those jobs. But if you're ill for five years, you've lost five years of your life experience.
Howard Gross:And that worries me. Yeah. You know, it's difficult. Who knows what's going to happen when we keep hearing all the promises. Yeah.
Howard Gross:Okay, so that where do I say AI is incredibly important. There's no question that in time, okay, something which will upset my profession, there won't be the need for for the chartered accountant that I am. AI will take over a lot of the bookkeeping work, a lot of the day to day mundane work that an accountant or a bookkeeper does. You what you'll need the accountant for is to train your computer to do to get the entries right and to put them in the right place.
Joshua:Would you say would you say the benefits will be utilizing AI tools to transform their business? Do you see them as do you see the benefits very clear? Or do you think there still will be challenges in the past?
Howard Gross:Well, there's always going be challenges on something new. But, and I know because I was the first firm in London to put a certain accounting system in, but in the long run, the owner of a business will be able to press a button and get a profit and loss account come up to see what's going on very quickly. He won't have to wait for a quarterly VAT return. We do quarterly VAT returns and we do quarterly accounts with it, but businesses need to know much more quickly than that. The same with collecting debts.
Howard Gross:It'll be much easier, because all the data will be there for that person, and you'll press a button or click on your mouse, and it'll send the message out straight away. Okay? I mean, nowadays you've got go and look at a list and choose who you want to send it to. Well, you'll be able to train your PC to do that for you. That's why I said my job would change.
Howard Gross:I'm a, what one might call a good old Falcon GP, general practitioner, I can do bit of everything. But now our technology has gone so far that there won't be many GPs in the future. There will be specialists, a specialist auditor, a specialist forensic accountant, a specialist tax advisor, specialist advising and coaching business. And that's how I see my profession going, really coaching and mentoring.
Joshua:That's really interesting. I did want to ask you in relation to the financial side of things, like what common pitfalls in financial management, have you observed, and do you think that might hinder long term growth?
Howard Gross:It's normally start ups where the very brave people like yourself have a go, and they don't know what they're going to what's going to come next. And so when it does come up, something that's new, you've not got an experience to cope with it. And then you can make mistakes because you would think you could do it your way, which is nothing wrong with that. But sometimes it goes wrong. Sometimes it works better than the way it's been done before.
Howard Gross:You know, things like debt collection, or it gets to a point where it's not worth spending the money on debt collection for a couple of grand, because it'll cost you that in legal fees, and the time that it takes you to prepare is different. If you're selling a service, it's one thing if you're selling a product, it's another. It's much easier to claim on a product than it is on a service. And so they're the things that you will learn as you go. Maybe if the education system trained people in business more and financial matters more, it would help.
Howard Gross:Because most most teenagers come out of school, and they must really come out with a national insurance card, and that's about it. They don't know about how to open a bank account. They don't know about anti money laundering. They don't know about the ID that's got to take place. And all those things are then new, and they can irritate.
Howard Gross:But we've just got used to it. It's every new client, we have to do due diligence on every new client. And that's filling in several well, when I say filling in several pages, it's sometimes quicker than doing it on a PC. But you whether it's on the PC or it's on paper, you still gotta do it. Yeah.
Joshua:Do you think the way you can't really do it in terms of, like, filling paper, do you think there is some kind of AI tool that's out there or some kind of automation that could actually do that job for you, where it would be an easier process for you?
Howard Gross:Absolutely. There's absolutely no way that shouldn't happen. The reason why some of us use pen and paper is we were never trained to type,
Joshua:so
Howard Gross:if you've seen good emails from me, you'll find lots of spelling mistakes in them. The AI isn't good enough to correct all, And and that's yes. It's it's gonna change, and then it's gonna change. This is in reality, it's changing. If the Musk can fly a a space rocket up and and get and then the main body comes down, and it gets caught.
Damarie:It lands perfectly.
Howard Gross:Unbelievable. It's just unbelievable. You know, the the fact that you can fly it up and then let it drop and then catch it. It's just incredible. And so things are going to change.
Howard Gross:You know, Debbie Colon is on the moon one day. This this this is question that things will will will go on. When we saw space flights to the moon years ago, and then it sort of faded away. This week, we've seen the new Concorde. Concorde was a fabulous plane.
Howard Gross:There was one terrible accident, and then they dropped it. Now the Americans are caught with the new Concorde, which are no longer going faster. To get to New York in three or four hours is phenomenal.
Joshua:That'd be amazing. I'll be happy.
Howard Gross:They're now saying that's that's new technology. No, it's not. It was there years ago. They just developed it now because for some reason, nobody could have called to rebuild Concorde after the accident. And nobody wanted to run the risk.
Howard Gross:And all that accident was caused by a bit of metal on the runway. A tire burst, I think, on a runway as it hit them, a piece of metal. So Technology's gonna gonna keep going and going and going. You wait till you guys have got a chip inside you. My dog's got a chip in it.
Joshua:Mentioned Howard, you mentioned this when we spoke two days ago, you mentioned that your dog has a chip.
Howard Gross:Well, dog's got a chip in it.
Joshua:Can find it gets
Howard Gross:lost, and you can measure its blood pressure, you can do its temperature, Mr. Musk has already started that in America with humans. It won't be long guys, you will have a chip, and the chip will be talking to you, and it will tell you what's going on all the time. And then it'll link to your glasses, and you'll be able to like Google glasses were a few years ago, you'll be able to watch this podcast on your glasses without a headset because the chip will be telling you what the sound is.
Damarie:Would you yeah. It's it's honestly, it's it's crazy the way technology is growing. But do you think the I think with the the new adoption of technology, people are embracing, but at the same time, are staying away from it. So do you think it's more about a mindset shift or just a a doc be more open to adopting it? New tools.
Howard Gross:People don't like change. It's been I've seen it right throughout my career. People do not like change. They're scared of it. And they're still embracing it and suffering from it, which I do regularly when we try to do upgrades on a PC and it doesn't work, or Microsoft oh no, must have mentioned the name.
Howard Gross:If one of the technology companies does an upgrade, you will find the following day there's a problem, and you don't know because nobody's told you that the the cloud that we're in has done an upgrade for you, and it didn't work that morning. There's that and hacking. There's a lot of hacking going on. I'm sure that a couple of banks have had that in the last few days, but they'll say that it wasn't. But there's there's so much trouble around the world now with people being spiteful, and getting getting data.
Howard Gross:That's what it's all about. So you can then have these horrible scams that take place.
Damarie:Yeah.
Howard Gross:So that's another big problem. How do you cope with it?
Joshua:Yeah.
Howard Gross:So the, you know, the anybody who wants to cheat the system, if they're on the wrong side of the law, will know every way to do it.
Damarie:100%. And they'll also be the one
Howard Gross:that yeah. Exactly.
Damarie:And those those people that are on the other side of the world, they will be adopting the new technology to make sure they're leveraging it as well to to keep it.
Howard Gross:Yeah. Well, they they go into the bank. They'll have the right passport. One of many. They'll have they'll have the right passport.
Howard Gross:They'll have the right, background information, the right approvals from different people, references, and everything else. They know they've got to have that, so they'll have it all. There'd be one or two times in my career where I've met one or two people where I've not wanted to act for them. Somebody comes in and says, I've got 50 companies. Can you act for them?
Howard Gross:And I think, no. I don't really wanna do this. Why would they want to come to me when they got 50 companies?
Damarie:Yeah. Well, it doesn't make sense.
Howard Gross:Yeah. It's changing. And the the it's change people are fearful of change. Now the question then is how can you train people not to be scared of change?
Damarie:100%. But I think at the same time, a lot of people are are afraid of losing that human touch as well. So I can imagine you must imagine when you're doing financial planning and tax planning with some of your clients, they do appreciate that that interaction with the human touch. So I think that's some another reason why people are a bit more hesitant to adopt it. But I think people need to realize it's not about complete adoption.
Damarie:It's about the comp the complementation of the human touch with with the AI assistance as well.
Howard Gross:Yeah. But look today, we are having a con a conversation on screen. You two might be in different offices. I don't know. I'm in a different office.
Howard Gross:We've got perfect sound. We've got perfect vision. It's a change, but there's some people who do not want to have a Zoom meeting or a Teams meeting or a Google Meets meeting. They just don't want to do it. But over the last couple of years since COVID, there are very few meetings that I've had to go to.
Howard Gross:Everybody would well, the majority would rather come on screen. And with with, the phone issue and WhatsApp, people are using WhatsApp a lot because you can phone all around the world at no cost. Yeah. So that's another thing. So it is again getting used to the technology, because there's been a generation of senior citizens who for the last twenty years have been saying, oh, we can't do this, we don't want it.
Howard Gross:But now there's very few senior citizens that don't have a mobile phone.
Damarie:Very true.
Howard Gross:But years ago, they wouldn't do it. You know? And I I I have meetings regularly with some of the voluntary things that I do, where I just say, where's your app? You know, you you can't do things anymore without an app because it's on the phone. And generation zed only know a phone.
Howard Gross:They they don't want a laptop. You know? And what with with Samsung, what they're doing with their with their, shouldn't give them a plug with their zed fold, which I've got one here with me because I use one, where you've got a screen effectively in your hand. And it's got three screens. So you've got one which if you just use it as a normal phone, and if you want to have a conversation with somebody or do something like this, just open it up and you can use it as another screen.
Howard Gross:So it's just fantastic. The technology is absolutely fantastic if you use it properly. But my team, to get them to use a second screen has been interesting. But I had two for years, and and the the only reason I got three is that when the box packed up and I had to replace it, everybody said, get a get a laptop. I said, well, that's not powerful enough.
Howard Gross:They said, you've got be kidding. And then you buy the docking station, and you just plug it in, and, well, you've got three screens. Yeah. Voila. Fantastic.
Damarie:Yeah. And
Howard Gross:then that and that's gonna help business as well because when they want to look at their accounts, they can look at their accounts on one screen up, they can look debt collection on another screen. They can look at their plans if they're designing or building something on another screen. And and that's just wonderful. As you know, if you've been in financial markets, most of the guys there have got several screens in front of them all around the room. Are screens.
Joshua:Yeah. Yeah. Yeah. That's crazy. Howard, I did want to ask.
Joshua:Just in relation to tax Yes. Tax planning and business growth, are there any major operational bottlenecks that you encounter for your team?
Howard Gross:Yeah, a thing called HMRC. Yeah, the tax is VAT, and that's about to change again. Not just VAT, the way that the accounts are dealt with by HMRC is different. It's going be a big challenge over the next twelve to fifteen months. HMRC are introducing Making Tax Digital, which means businesses will be, filing not only their VAT return every quarter, but all their transactions every quarter.
Howard Gross:Now whether it's a quarter or a whole month, I don't know, because they're still deciding what they're going to do. But I guess it'll be quarterly, and then somebody will wake up to the fact that you might as well do the VAT return and the accounting all at the same time. Yeah. And then they'll be using AI to study the transactions. And if the transactions don't fit, then an inquiry will go out to the to the taxpayer who will then go to their accountant.
Howard Gross:And, the accountant will then have to spend the next eighteen months or longer or less or more, depending what the inquiry is, sorting out the inquiry.
Damarie:Yeah.
Howard Gross:It now has a posh name inquiry. It used be called an investigation, but, you know, they they've had to be nice now, so they call it inquiry. Yeah. It's a good sign. Clients are all insured against the tax inquiry.
Howard Gross:So, and there's no excess. And the nice thing is that we can deal with it. That doesn't make life easy for us because the insurer makes sure that we don't waste any time. That's another tough thing that the accountant has to put up with, but it's worth it. It means the client who's gonna suffer whilst it's going on, there's no question that people get terribly frustrated and frightened whilst the inquiry goes on.
Howard Gross:Yeah. And it's you've got to know that as an accountant, that those people are going through a really tough time. And then hopefully at the end of it, you'll be successful and you'll win the inquiry. But during that time, it is really very frustrating for the client. It also could affect their business.
Damarie:Yeah.
Joshua:You know?
Damarie:How how does it tend to come back for the inquiry? How long roughly does it take for them for them to do the inquiry and then come back with their answer?
Howard Gross:Well, we've got to get the answer. They've got to decide whether they like the answer. It takes normally, I would say about eighteen months.
Joshua:Eighteen months. But I've
Howard Gross:known inquiries gone for five years, it, you know, it's, but there is an interesting point that if the HMRC, who will demand replies in a couple of weeks and then take weeks and weeks and weeks to reply to it, if they don't answer and you keep sending them letters, you can make, or issue a complaint. If you issue a complaint and they agree that they've done something wrong, then the accountant's costs are paid. So, even the insurance company likes that because it doesn't cost them anything.
Damarie:Yeah.
Howard Gross:But it's, if you've got good, insurers, they'll also help you if you've got a problem. So you can always phone them up for advice, because they normally have tax advisers within the insurance organization. It's normally through a tax consultancy that's providing the insurance policy. If need some help, they're there. And that is worth every penny, because you never know.
Howard Gross:There's no way that you would know HMRC are going to pick you out to be challenged. Yeah. You know, it's it be hit and miss. Some of it's pretty obvious. If you've a good cash business, sooner or later you're gonna get a question.
Damarie:Of course. So
Joshua:And
Damarie:so also to mention so we did also mention about business growth. I know you did mention that even getting your team to have two screens was a bit of a task on its own. So do you feel like there's an operational bottlenecks in terms of the staff and being the staff being willing to adopt some of some of these new technologies as well.
Howard Gross:Yes. It's back back to change in training, and it's easier in a bigger outfit because you've got an HR department, got a health and safety department, you've got a department managing the departments, and therefore they can issue a DICK'S hat to the staff and say this is what you're going to do. And then if they don't like it, they'll either leave or they'll made redundant. Yeah. But if you're in a smaller firm, it's not quite as easy.
Howard Gross:Because if you've got a key employee that you're working with, and you say, well, you're gonna have two screens tomorrow, and he's he or she doesn't like it, There's not a lot you can do.
Damarie:That's true.
Howard Gross:If you've had been working with them for ten years, you're not gonna say, well, hop it, and I'll get somebody else. Because they know the clients. They know the people they're dealing with. They know their customers. So you don't want to lose them.
Howard Gross:They're very valuable. But again, the times have changed. When I started, you would tend to be in one job for a long time. Now, as you guys know, two or three years, if that, people tend to move. And and that is not a good thing because it's a it's a good thing in the experience, but it's not a good thing for a business because you've got to keep retraining people and retraining people.
Howard Gross:And I suppose what will happen then is just more and more AI will take over because you can't rely on staff. And since COVID, I think it's got worse. I think people the attitude with people working from home. When my team worked from home, we packed up, I read the press in February 20, and it was really scary, some of the reports were really scary, And I said to my team, I think we're going to go and work from home, we're going to get out of this before it becomes a problem. We locked down I think two or three weeks before the government had the first lockdown.
Howard Gross:Since then, we didn't think it was going to go on for much more than, say, six months, but it went on for a couple of years. And since then, the team are very happy because one, they're better off because they don't pay their fares anymore, so therefore got a pay rise immediately. And secondly, they don't have to travel into Central London, which can be two to two and a half hours a day. And now with all the protests going on, it can be worse. And that means I can give them I trust them.
Howard Gross:I've been with them. They've been with me a long time. I don't mind if they don't work a full seven days seven hours a day for five days a week. If they want to work ten days, ten hours one day, and only three or four hours the next day, it doesn't worry me. As long as the work gets done, the plants are happy, fine.
Howard Gross:Yeah. That's the key. As long as the billing goes out at the end of the month or during the month, that's fine. Now that works for some people, it doesn't work for others. It's certainly not working for big firms when they're call centers, when people are working from home.
Howard Gross:They haven't yet worked out how to transfer calls from A to B. These are big organizations, we're not talking about my type of firm, but we're talking about multi staff firms, businesses, where you try to ring up a bank and you've got to hang on, go through unseen menus, Hopefully, AI will stop that. But you go through umpteen menus, and you still can't talk to a person. And then he says, we're very busy, you know, had a lot of calls, you'll have to wait. Now the good ones will say, if you leave your number, we'll call you back.
Howard Gross:And you're in a queue and we'll call you back. That I think is a really good way of going forward. But the others, you the moment you put the phone down, you've got nowhere, you wasted half an hour trying to get through to somebody and you've gained nothing. So in the end, you you have your phone, you put it put the volume on so it's hands free, and you just sit there and wait until somebody picks up. And and that can be well, can be half an hour, three, five minutes.
Damarie:Yeah.
Howard Gross:The same with an HMRC, your an HMRC, they'll get very upset with me because I sit on an HMRC agents group, you can wait up to an hour, and then they cut you off. So, we we don't do that. And they weren't they don't use email. It's only in special cases where they use email if the client permits. So what we are getting is lots of letters.
Howard Gross:We don't want letters anymore. It's bad enough. Emails are bad enough when you've got lots of them, but you don't want hard copy letters, which in the end you scan and you put on your system. It'd be much easier if the email came in, and you just what you've got to do is develop a folder system so you can get to things. And sometimes I think I I over elaborate with folders, and in the end, I can search and copy them all into one folder quicker.
Howard Gross:But, you you know, you've got to work out the best way because certain clients do certain things, especially certain specialties. They're gonna buy a new business. You want to put all the correspondence of the new business into one folder. Know, a general correspondence, well, it doesn't really matter. But it's it's courses for courses.
Howard Gross:It's what you need for yourself that you like, and AI will help with that because AI will improve searches.
Damarie:100% of the method.
Howard Gross:As Josh knows, morning when I was searching at something, I couldn't find it, and he helped me out. But that's another problem. How do you find things quickly? And search is really important. And I think search is AI will improve searching tremendously.
Damarie:Definitely.
Joshua:On the topic of AI, as we know, AI, you know, it helps automate in tasks and, you know, reducing a lot of manual work significantly. Where do you see the processes still slowing down? Perhaps, you know, in client onboarding or compliance?
Howard Gross:I see it with staff. Because you've got to get your staff to go through the changes with you. And then with clients, it's not so much the onboarding, because they now know that we've got to do an anti money laundering check, We've got to see the passport, the utility bill or a bank statement. We don't know how to see them personally. That's a big change.
Howard Gross:We can now see them on something like this. And I won't mention all the names, but on the phone, you can see people on the phone. So as long as you've seen the person, that's really helpful. And the other thing that we have to watch, which I watch for, is when they send me a passport or a driving license, is it in date? I found a few where they've been out of date.
Howard Gross:The client doesn't even know that they're out of date. So it can't help them if they're going on holiday or they're going on business. So we, you know, we point that out. So that's a big problem. Due diligence is very useful because you get to know your client before they are your client, or as they become your client.
Howard Gross:Because when you've acted for somebody for a long time, a good accountant should almost predict what they're going to do next. And sometimes we say to clients, why don't you do this? And then ten years later they do it. I mean, that's a problem when you act for somebody for a long time. And Covid has forced that onto people.
Howard Gross:You know, they've had people with different, workshops in different places doing different things. And I've said to them for a long time, why do you need to have them around the country in different places? Why don't you have it in one place and make sure you've got a good delivery service of the product you're selling to your reps in different places when you need it. Yeah. And that with COVID, we found that they've actually shut other workshops down and moved it to one head office and done just that.
Howard Gross:But it took COVID to do it rather than me. And, know, it's different. You see things differently, and it really depends what the the client wants you to do. Mhmm. You know, you it's know your client.
Howard Gross:If your client wants you to help, they'll tell you. If they don't want you to help, they'll also tell you. You know, you can come up with a good idea, and they'll say, I'm not interested.
Damarie:Yeah.
Howard Gross:You know? So it's it's know your client. Mhmm. And that's that's the key.
Joshua:Yeah. That's true. I was I was also gonna say it's really it's really important to, you know, try and get that that person, for example, if you did want a client to get them to actually see value in what you are trying to, you know, put towards them. But I guess it's all about the conversation that you have with them. But, you're right.
Joshua:Know your client. Right?
Damarie:Yeah. Well, also
Howard Gross:And and talk to your client. Talk to your client as much as you can. And that's why I I I was sent to you the other day with the January 31 tax return deadlines, and my colleague keeps a record of every reminder he's sent to the client over the last nine months. And we get to December, and I get a list of all the people that haven't responded. And he specializes in doing the tax returns.
Howard Gross:And I say to him, and we've agreed for years now, that he won't talk to a pawn because he'll never get finished in time, which we do every year. I'm really proud of it. We get everything done every year, however tough. And that's, therefore I make the calls, and it's great, because I actually get to talk to my clients. The days of the meeting, two or three times a year, have gone out the window.
Howard Gross:Nobody has time anymore to get to a meeting. But if you do it on the technology like we're doing today, it's done within a few minutes. They don't have to travel. They don't have to queue. They don't have to wait for me at a meeting.
Howard Gross:Normally, it's the other way around. I'm waiting for them at the meeting because we've some difficulty getting there. So that's all changed. That the opportunity of being able to talk to clients because of their tax return is great. I talk to so many.
Howard Gross:Unfortunately, it tends to be the same few every year, but it's more than a few. And we still get done. We still get done. And and my colleague, he's just great at it. I know how frustrated he gets, but he gets it all done.
Howard Gross:And we have one client that used to call us at 07:30 on the January 31 every year in the evening, not in the morning, and we still get it done. You see things moved on. Before, technology, we would have to do, tax returns by hand and deliver them by hand. And at Euston Tower, which is where HMRC had a big office, there used to be a queue around the block. And my my one of my colleagues would drive there with me, and one of us would get out with a big box of tax returns.
Howard Gross:The other would go and try and find a parking space. And we'd have the queue carrying this big box round the block until we got in, and then you literally put it down. It didn't have any record of what you delivered. They didn't stamp it or anything. You just put it down and left.
Howard Gross:And you just had to queue. You don't do that anymore. With the fact that it's all being done online, you just file everything online. The biggest headache is when your software fails at the last minute. And it can fail because HMRC's tax computer is so busy collecting tax returns.
Howard Gross:It can go wrong, or your own tax return software can go wrong. And and HMRC will fine you if your returns are a day late. It's a £100 fine. And if you haven't paid your tax, you pay on time. You pay interest on a daily basis.
Howard Gross:And at the end of the first month, February, they charge you 5% surcharge. So over the last week, where some of the big banks have had a problem and a lot of people had difficulty paying their tax, I hear the revenue say, oh, don't worry about the penalty. That won't have the tax has gone in. So it's the payment that hasn't gone. Don't worry about that.
Howard Gross:There's no extra penalty until the March 1, which is actually twenty eighth February. That's when they issue the penalty. But what they don't say is they're still charging you interest from day one.
Damarie:Don't know that.
Howard Gross:And so that's bit naughty. I suspect either Barclays will be paying interest. Oh, sorry. I shouldn't have mentioned the bank tonight. Yeah.
Howard Gross:But it's it's it's they'll they'll it was headline news, wasn't it? So they'll be paying the penalty, or the revenue will be conceding and, on appeal and say, no, we won't charge you. But knowing how much short of money the government is, I suspect that it will be the other way around.
Damarie:I definitely agree.
Howard Gross:It's very frustrating because revenue was HMRC will say to you, you've had since April 5 to do your tax return, why did you leave it till the January 31? But why not? The law is you've got till the January 31 to file your tax return. If they want to change it, change it. Otherwise, you set the date.
Howard Gross:That's how it is. Why why do want to if if you've owed a big refund, then you get your tax return done quickly. It's amazing how those get done quickly to get the refund. But if it's they've got a liability, most of them don't want to do anything until the last minute. So the silly thing is they should put the return in knowing that they've got a big liability and go and talk to HMRC in advance and say, we haven't got the cash this year to pay it.
Howard Gross:Can we have a scheme with you, a payments scheme with you, where we can pay you, but they still charge you interest. Yeah.
Joshua:Yeah.
Howard Gross:So but but they do negotiate payment terms, and and that's something else that you've got to do. But then it it because of technology changes now, certain things, we have to get the client to go online to sign in on certain things, and then they then have to tell the Revenue Online that they've got an accountant. We're not allowed to do it. Whereas in the past, there was a form called a six forty eight. You send the form in, and that will be at the end of it.
Howard Gross:Now that seems to be gradually disappearing, and it's all going to be done in an automated fashion. The irony of that is that they don't send emails for the correspondence. So you can write to HMRC and then wait weeks for a reply. And some things replied very quickly, some are not. And if I say the revenue rather than HMRC, we were brought up with with the inland revenue and customs and excise for VAT.
Howard Gross:Then they merged the two. First of all, they merged the national insurance office with with HMRC, then they merged the VAT office. So now you've got HMRC does VAT, NIC, tax, valuations, property valuations, so there's a whole series of things they're doing. And they wonder why they they haven't got enough staff. Yeah.
Howard Gross:And they they're outsourcing their debt collection now. That's a problem because of all the scams. They can't find me out, and they say we've got a letter from so and so. We then have to check it very carefully to see that all the reference numbers match, because some of them are a scan. And there's another scan that's used, and that's, you know, we owe you some money.
Howard Gross:Why Yeah. Why didn't you tell you've had one of those? Why didn't you tell us that we're owed some money? And we say he cannot owe any money. Just destroy that letter.
Howard Gross:Do not answer it in any way.
Joshua:Or the other ones, the text messages of we've delivered your parcel or we haven't delivered your parcel. Please call. Those are the
Howard Gross:threats which if you don't do something we're going to do nasty things to you and they're not very nice either. But the scamming is really, really difficult. You can get caught out so, so easily. And I'm very cautious. The thing to do is watch the email address.
Damarie:Yeah. Definitely.
Howard Gross:That's the key. The email address. If there's no email address or there's some crazy email address, just delete it.
Damarie:100%.
Howard Gross:I mean, that's, that's something which I've the the question I ask anybody if they phone me up is what's the email address you've had received it from?
Joshua:Yeah. Did ask me that question today, didn't you? Yeah. Howard, Howard, looking ahead, right, how do you envision the role of financial advisors evolving as technology takes a larger role? Like in your opinion, what should be the balance between human insight and machine efficiency?
Joshua:What's your thoughts on that?
Howard Gross:It's obvious which way it's going, but it's already been changing. Days when, believe it or not, I was also an IFA in my spare time. So the reason that happened was that clients would say to me, we don't trust the IFA. Could you arrange a pension scheme? Could you arrange a mortgage?
Howard Gross:What life policy goes with it? There was one company which would do a life policy, but if you move, they terminate the policy and you have to start again. Whereas one of the other big boys, you just stayed with the same policy when it went into the new place. You may want to top it up. What we did, we did it with a certain company, when the twenty five years were up, the terminal bonuses were just phenomenal.
Howard Gross:So you get a client phone you up saying, in the days when the kids got married, so and so is getting married in a few weeks time, and the house is now paper, but look at the money we just got back on this policy, it's going pay for the wedding. And they were happy. They were really, really happy. And that changed a bit when they went to fifteen year mortgages rather than twenty five year mortgages. It doesn't work so well with a life policy on fifteen years rather than twenty five.
Howard Gross:But where's IFCA? I mean, there's a difference now, because most IFAs get paid a fee. They don't get a commission in the same way that we used to. So there's, there's a big difference. And that's the other thing is that with the web, can now go online and you can look up the things.
Howard Gross:You can watch the Martin Lewis Money Show. You can do so many different things online and on TV helping you to make a decision, but it's not always easy, and therefore it is better to take some advice. There might be things that you don't see on TV that can be done, and those are the things that you need an advisor. As an accountant, I'm allowed to advise, but I can't do whole of market research. So I can say you might need a pension.
Howard Gross:And to clients, it's me, well, we want to do it with one of the big boys, can you do it? Yes. I can. Because they've chosen the company. But if they say, company should I go to?
Howard Gross:I can't do it because I can't advise them. Yeah. And the same applies to the challenger banks. Because people will phone me up and they'll say, which bank should we use? You know, your generation now knows what a challenger bank is, but most of the, senior generation know the big four or five, and that's it.
Howard Gross:Yeah. And one of the challenger banks has had some terrible publicity of late. What I am allowed to do is tell people who not to go to.
Joshua:Okay.
Howard Gross:But there's one challenger bank which has not registered with the financial services compensation scheme, unless it has since it hit the press, And if any chance that they're using that bank, I would say, for heaven's sake, don't use it, because your first £85,000 is insured by this compensation scheme. But you've got to prove that if you haven't done anything stupid, most of the banks will pay out. There there's all sorts of changes happening that, you know, you should pay the first £100. You should do this. You should do that.
Howard Gross:But that's that's because they're getting so many claims.
Joshua:Yeah.
Howard Gross:Because people are being conned. Mhmm. And that's that's the biggest problem is you don't need you don't actually need violent crime anymore to be a criminal. You know, they they were saying on the on the radio this morning, and I thought it was about 25,000,000,000 of phones a year. Were saying it's £50,000,000 of stolen phones a year.
Joshua:Wow. Yeah. You see those,
Howard Gross:And they were saying, why is it that we're not taught how to protect the phones? You can do certain settings on phones. Most people with a phone wouldn't know which setting to press, because there's so many items in settings that you've got to find the right one. And it should be much simpler than that. It should be one of the first ones.
Howard Gross:You can protect this phone by hitting the setting.
Damarie:Yeah.
Howard Gross:And so those those are things that are dangerous. Walking down the street is dangerous for the phone. You don't know whether somebody's gonna grab it from you.
Joshua:That's true. Coming back
Howard Gross:to your financial services point, that's AI will be your tool AI and the AI will give you the answer.
Damarie:Yeah, but as you said
Howard Gross:want to talk to somebody because that person may say this company gives a better service than that company.
Damarie:Yeah. But, yeah, even even as you said in terms of, not having the knowledge of what to do with your phone to ensure the security, I think that's also with AI. I think it's just a training and a learning that has to be implemented to allow people to be comfortable and confident using these tools. So I think there's definitely a learning aspect that needs to be put into place in adopting new technologies, even protecting your protecting your phone as well, to be honest.
Howard Gross:Yes. Yeah. I'm absolutely right. There's there's no question that that's gonna happen. And also, you get people who give you an order for something, as we've seen lately with cheese and wine and things like that, they give you the order, the truck will deliver the cheese to wherever it is, and then another truck will be waiting.
Howard Gross:They'll load it and disappear. And and so, you know, these are people they thought they were dealing with. The the the the vendor the seller thought they were dealing with the company that they normally deal with, and they were conned into believing it. And you've got to start saying, well, how? It's such a big order.
Howard Gross:Why didn't anybody check? Why didn't they ring up the normal buyer and say, oh, it's nice to hear from you. You know, we can help, and check that it was a genuine order. And it's just that's so easy to go wrong. So again, AI can be used against you, because you you one of the things that happened to solicitors was AI years ago with, on conveyancing in a house, that you'd send your money to a solicitor would ask you to send money in to buy a house, but they were hacked.
Howard Gross:And the hacker would change the bank account numbers in the hack. So they'd say to send it to a big four bank, but the account number had been changed. So you do what you were told, you send it off, and it ended up in somebody else's bank account. And a few solicitors got caught out by that. So you've got to be very careful.
Howard Gross:One of the things I do, I've got a very good tip. If you open up a new account for somebody, not just in a bank, but for a customer, or a supplier, always make the first payment £1 because you then check, did they get the money? Yeah. And if the answer is yes, you're home and dry. If the answer is no, it only cost you a pound.
Joshua:Yeah. I mean,
Damarie:definitely That
Howard Gross:that works that works extremely well, but you have to tell do tell your supplier or whoever or your well, if your customer's contacting you to to check with you first that you've got the money. Yeah. And I do it every time. And people are beginning to understand that now. Whereas in the in the past, they sort of think it was a joke.
Howard Gross:Now they they understand why. And so because most of them have got a phone. So they've got their bank account on the phone, which I think is incredibly dangerous, but that's another matter, that's personal view at the moment. They they see the pound comes in, and then I get a text back saying we've got the money. Now that phone could have been stolen, that's another problem, and if they've hacked into the phone, then they could do it.
Howard Gross:But then the client or the supplier will tell you that the phone has been stolen, so you're more cautious. But that that's a very neat little trick to protect yourself. Nowadays, as you know, when you try and set up a new account, it tells you whether it's a genuine account or not.
Damarie:Yeah.
Howard Gross:That's another thing. Don't always believe it. I'm very cynical about all these things. I believe AI is the future. I believe in the way forward.
Howard Gross:I I just think it's absolutely fantastic, but you've got to be very, very careful, because you can get tricks so easily. Yeah.
Damarie:So would you say that are there are there any particular technologies or trends that you're excited about excited about that could potentially revolutionize your sector that you're aware of in terms of the within the AI space?
Howard Gross:Yes. Your accounts will be done in an automated fashion. I think it's the way forward. People in my profession won't like it, but it's got to happen. Also audits, the way that audit embraced has got to change.
Howard Gross:It's very expensive, especially for small firms, and that needs to be thought out very carefully, because there are firms that are companies that are below the thresholds for audit, and they still need an audit because the bank says they need it. And that is really a very expensive process. So as an accountant, you have less time to spend with your client than you do ticking boxes.
Joshua:Would you say it's a time consuming cost as well?
Howard Gross:Oh, absolutely. I mean, ticking boxes. When you've got hundreds and hundreds and hundreds of boxes to tick and make notes to satisfy your regulator, it defeats the object. The whole idea of working with perms has been to be able to talk to them and say, well, why did you do this? Why did you do that?
Howard Gross:There's a better way of doing it. It depends what type of accountant you are, because some accounts just do the job. Like in all businesses, others will actually take an interest in what the client's doing. And maybe I take more of an interest than others. I get it wrong sometimes, but largely you don't always see them change it straight away, but it changes.
Damarie:Yeah.
Howard Gross:You know? And and, I think things change all the time, and that's how it is. We we've got to live with change, but change is not being taught in as far as I can see, it's being taught in school. You know, the same sounds
Damarie:like an infrastructure problem from the and it's from the root cause, essentially, because from schools, from colleges, it sounds like it's definitely a root cause to us being to all these adopt issues of adopting essentially.
Howard Gross:Yes. But but it's all changed. And and how do you keep up with it? How do you know what's good and what's not good? And the only way you're going to find out is going on the web, doing your research, seeing what Trustpilot says.
Howard Gross:Yeah. Let's see if it's if it's accurate. You know, because the the web itself, the big companies are not weeding out things in the way they should, according to the press, according to the government,
Joshua:right? And
Howard Gross:I think that needs to be thought about a bit more as well. They're making huge sums of money, just incredible, And good luck to them, I think, you know, for Bill Gates and Zuckerberg and others. I mean, the fact they had the idea and thought about it and came up with this, and that, you know, what you're doing now is people started doing podcasts, and it's been very successful. But you've to make them fun. And hopefully you've had a little chuckle from time to time as I'm No.
Damarie:I definitely did.
Howard Gross:Hopefully I'm not being too controversial. I apologize to all the names that I've mentioned. They'll soon be next week. Howard,
Joshua:it's been a really insightful conversation, especially your experience and perspective on your industry and of course your storytelling is very immaculate. I know you get that from your wife. And also integrating technology with traditional financial poses are, they're very truly enlightening. So I say we've come to the end of the process.
Howard Gross:Very quickly and end up with the funniest story of all, which is technology when we introduced it in London. We decided that we ought to have a website and our institute hadn't got one. The London Society decided we would lead the way. So we set it all up, and we were able to go from here to here and do different type of things. And because, as you know, I like to plan things in advance, I actually printed out all my slides.
Howard Gross:And when it came back to because I had to do the introduction of all of this. It was me that was launching it. And and the when it came back to me to tell people about what we've just done and how to do it for the future, and of course, the system packed up, didn't it? So I had in the front of me all my slides, and I picked them up one by one and said, this is what the next slide says. And I literally went through them by hand, every slide, and that was my launch of the Internet for accountants in London So on you can't you you know, there's the other thing that I I said to you at the beginning.
Howard Gross:Anybody that's going into AI or doing anything needs to plan, and you need to do trial runs, and you need to get things working because things go wrong. And and that's the problem, and you've got to be able to handle it. And my other advice to you is if things go wrong, make a joke of it because you you you make a joke of yourself. Mhmm. Because if you don't, they get incredibly boring.
Howard Gross:If I say the wrong thing, and I've been picked up on meetings for saying the wrong thing, sometimes it's worth even better because more people put their hand up and ask the next question. And upon that, you don't know what you're talking about. Great. And on that, you can see I have known what I'm talking about all morning. So we've we've got to leave it at that.
Howard Gross:But thanks, guys. I've enjoyed that. I think it's been great. I wish you every success with what you're doing. I think you can do incredibly well in this field, and influencing is definitely the big way forward.
Howard Gross:And the question is, you need the million. You need the accountant. That's the key.
Joshua:It's all work in progress. But before, I just say, before we do wrap up, of course, yeah, we'll say there's one thing we wanted to do, is really important, which was for our next guest and also our viewers as well. We would like you to think of something on top of your head, like a memorable quote that will benefit ourselves and our viewers that are watching as well.
Howard Gross:Good luck. If you if you if you are prepared to put the hours in and work hard and think about your clients or customers or users, I don't know which word you use these days, and it's because I'm so old fashioned. If you think about them, what do they want? And you don't always know, and then you'll say something or do something, and everybody will want to watch you. If you're controversial on certain things, and that have been a bit controversial this morning, I think you may find that more people will join in.
Howard Gross:And you've got to be prepared to say the criticism when it comes and then cope with it. So it's it's really up to you. You're you are the future. That's my quote. You are the future.
Joshua:Amazing. I think I think it deserves a round of applause. What do you think, Ilhamayi?
Howard Gross:I do.
Damarie:I appreciate it. It's been a pleasure.
Howard Gross:I think it's the other way around. You're pretty brave enough to put me on this.