Making Tax Digital: What Happens Next? with Vanessa Pople and Anita Holmes [CPD Available]

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dr James (01:43):
What's up everybody?
Welcome to this live webinar onsomething that confuses them to
hack on it in it.
And it still does, even thoughthe deadline has, or at least
the initial deadline anyway,because of course we still have
time to map a lot of thingswe're set in this webinar, and
that is making packs digital.
And I'm thrilled to be joinedby Letter and needed to

(02:03):
represent a for a lot of dumbnumber is going to be super
factual.
And you know what we need tojust know exactly when it's time
to say everything should bemade simple as possible.

(02:27):
Smart money members club.
Smart morning members club alsoincludes small money courses
and comments possible.

(02:48):
All this content comments isverifiable C P D.
And you can download yourcertificates then and then on
completing of each lesson.
In addition to this, we alsoinclude a whopping 10% discount
on your Dental Indemnity and 5%discount on lab bills for Dental
Principles, amongst other perksand disc comments for members.

(03:08):
Please use the link in thedescription to claim your
verifiable CPD for this episode.
Anita and Vanessa, the floor isyours.

Vanessa (03:21):
Thank you, James.
Anita's just going to lightload our slides for us.
Welcome and thank you forjoining us, everybody.
I think Making Tax Digital didstart as of last month, and
we're hoping this session willbe an introduction to you and
give you some ideas on how toprepare and get ready.

Anita (03:43):
Thanks, Vanessa.
So can you all see my screennow?
Can you see the slides?
Yeah, we're all good.
It's on the screen.
Marvellous.
So times have changed.
Making tax digital tax is nowlive.
Vanessa, would you like tointroduce yourself?

Vanessa (03:56):
Yeah, sure.
I'm Vanessa.
I'm a tax partner based inOxfordshire working for ASEX.
I specialise in the dentalsector and across ASEX group we
have over a thousand uh dentalprofessionals, everything from
the newly qualified all the waythrough to large privately owned
groups.
Uh I have qualified in uh tax.

(04:19):
I'm a chartered tax advisorjust over 32 years ago now.
So I've been doing this quite awhile, but specialising in
dentistry for the last 13 years.
Thanks, Vanessa.

Anita (04:31):
I'm Anita, MTD Client Services Director at ASEX.
I specialise in making taxdigital for income tax and
support clients as they navigatethis significant transition.
I've been with ASEX for over 13years now, and just over a year
ago, I joined the MTD projectteam and I've been working
really closely with the MTD teamfrom a very early stage,
ensuring our clients areprepared and fully compliant.

(04:53):
ASEX, we're proud to have beenthe first accounting firm in the
UK to submit an MTD for incometax course that return, and
today we're recognized as theUK's leading advisor in this
space, supporting thousands ofclients across the country.
Over the last year, we'veworked really closely with our
clients on HMRC and we'vecontributed to the largest
cohort of MTD test returns inthe UK.
And this hands-on involvement'sgiven us valuable and

(05:15):
real-world insight into how MTDoperates in practice.
My role focuses mainly onhelping clients understand and
adapt to NTD for income tax,ensuring they remain compliant
and confident throughout thischange.
And I'm really looking forwardto sharing some of that
experience with you all today.
Today we're going to covermaking such digital for income
tax and give you an introductioninto that, what you need to be

(05:36):
doing now, what the benefits areof the MTD and the new way of
reporting, some commonchallenges and how to overcome
them.
We're going to do somefrequently asked questions,
particularly for the dentalsector, and we're going to give
you an overview of our servicesthat we're offering to our
clients.
So, what is MTD and how can youcomply?
So, making tax digital is partof the government's initiative

(05:59):
and plans to make it easier forindividuals and businesses to
ensure that their tax is correctand keep on top of their
affairs.
What it requires is forindividuals and businesses to
keep digital records, use asoftware that is MTD compliant,
and to submit quarterly updates,bringing your tax system closer
to real time.
Who does MTD impact?

(06:21):
So from April 2026, making taxdigital for income tax is going
to impact sole traders,self-employed practice owners
and dental associates, andlandlords with a gross income
that exceeds £50,000.
It's going to be introduced inthree phases.
So from April 2026, it's thosewith a gross income of over
£50,000.
From April 27, it'll be thosewith a gross income of over

(06:44):
£30,000.
And from April 28, it's thosewith a gross income of over
£20,000.
It is worth noting at thisstage that the £50,000, if you
are a sole trader and you haverental income, it is those two
incomes combined.
And it's the gross income, notthe profits.

Dr James (07:06):
Sometimes people use the £50k mark as shorthand for
£50,270, right?
But in this instance, itliterally is £50K, isn't it?
Absolutely.
That might catch a few people'seye.
Because I thought that tomyself, people might do that
math in their head, right?

Anita (07:20):
Yeah, absolutely.
Yeah.
No, it is it's based on your2425 tax return.
So whatever you reported asyour turnover on that tax return
2425, if it was 50,000, if itwas 50,000 and a penny, you are
in scope for MTD.
And you're in scope for threeyears as long as you receive
qualifying income.
And that qualifying income isyour self-employment and your

(07:43):
rental.
Even if it drops below that50,000 after the first year, you
remain in scope for three yearsunless you fall below the
thresholds altogether for threeyears in a row.
So that's a really importantpoint.
Well done, James.
So how do we comply?
So this is a mandatory change.
Um, failures to comply willresult in penalties from HMRC.

(08:04):
There is a soft landing, butthere is absolutely no
confirmation as to when thatsoft landing will end.
So we are advising people getcompliance from the start, don't
wait for the soft landing toend.
To comply, you're going to needto keep digital records.
And what we mean by digitalrecords is that you must record
and store key data either in anMTD compatible software or use

(08:25):
in an application or aspreadsheet that has got digital
links.
And the minimum amount of datathat you need to report is the
date, the amount, and thecascade or the type of income or
expense.
It needs to be submitted usingcompliance software.
It must be submitted everyquarter.
And at the end of the year,after you've submitted your four

(08:46):
quarters, you'll be expected tosubmit a final declaration that
is going to replace yourself-assessment from tax year
26-27.
And that incorporates theinformation you provided through
your MTD quarterly return andalso any other sources of
income.
So, for example, bank interestor employment income, uh,
dividend income, anything elsethat's reported on your normal

(09:07):
self-assessment return.
But you must remember that eventhough you started from the 6th
of April 26th with your MTDsubmissions, you still have your
20 or 25, 26 self-assessmentsreturn to submit in the
traditional way.
So the key deadlines that youneed to remember and you need to
be very wary of, the quarterlyreturns are due to be submitted

(09:29):
to HMRC one month and seven daysfollowing the quarter end.
So the first return that is duein this first mandate is due on
the 7th on or before the 7th ofAugust.
So that's one month, seven daysafter the quarter end.
The next one will be the 7th ofNovember, the following one,
7th of February, and the finalone, 7th of May.
Once you've submitted yourfinal quarter on the 7th of May,

(09:52):
you will then be expected tosubmit your final declaration,
which is due by the 31st ofJanuary.
That will be 2028.
So what do dentists need toreport quarterly, Vanessa?

Vanessa (10:06):
So it's it's everything really, and it's gross income.
So for in particular forassociate dentists, that would
be quite tricky because they'reused to seeing in their bank
account uh the net pay fromtheir pay statement, but they
will need to gross that up.
So backtrack through the paystatement and make sure that's
recorded in their digitalrecords.
For everyone else, it's it'sall the all the income from the

(10:27):
practice combined.
So NHS, private fees, includingthe planner fees, and any
side-along associate income thatyou you might be receiving and
incorporated within yourpractice as well.
I know people have differentstructures when they're when
they're operating a businessthemselves.
On the expenses side, it'severything you would normally
sort of prepare as part of youryear-end process.

(10:48):
So your indemnity insurance,your lab bills, materials,
travels, CPD, anything like thatyou would need to include.
Um many dentists have multiplestreams, so it's important to
remember that if it's onebusiness, it's all those streams
going into one thing.
If you have separate definedbusinesses for whatever reason,

(11:08):
multiple sole trades, forexample, then you will need to
uh report those individually ona quarterly basis.

Anita (11:19):
So what do we need to do now?

Vanessa (11:25):
Okay, so um you need to work out when you're um caught
by MTD.
So Anita explained earlier thatuh the 24-25 tax return
reported figures are important.
If if you fell under thethreshold in that year, then you
know, are you going to fall inin the following year?
And what will the thresholdrequirement be?

(11:46):
Are you going to be caught bythe 30,000 or the 20,000?
Um, and plan accordingly.
Make sure you're geared up andready for it.
Um, choose your compatiblesoftware.
Um, it doesn't have to be umyou know a paid-for product
necessarily, but that might besomething that you choose to go
down the route of and you needto research those, but it can be

(12:08):
quite overwhelming.
If it becomes overwhelming,seek professional advice, talk
to an accountant about theoptions that are around and how
you might be supported.
Um, some of our clients areopting to deal with their MTD
reporting themselves, and that'sfine, and we will support them
and give them training onsoftware and so on.

(12:28):
But others are saying, no, I'mgoing to stick to my lane and I
want you to deal with this forme, which is you know, it's
perfectly acceptable sort ofstance to take.
Um if you're working in apractice environment and you've
got in-house finance function,um, train yourself on your team.
Teach your team what to expect,how to make sure that the

(12:50):
digital records are maintainedadequately and that the
reporting can be made on time.
If you are um, in particular,this this next point is about
sending digital records direct.
We have spoken to some of ourassociate dentists, for example,
who get electronic paystatements from the practices
that they work at to maybe giveinstructions to send those

(13:12):
directly onto their accountantthat might be dealing with MTD
for them.
Um one of the biggest hurdlesfor us as advisors is going to
be collecting and collating thatinformation where people aren't
managing.

Dr James (13:29):
We'll ask Vanessa it sounds like Vanessa's connection
has just dropped out there fora second.
Not a problem at all.

Anita (13:38):
What are we up to?
So, yeah, maintaining yourdigital digital records and
sending them direct to youradvisors, that's really
important.
Send them live, send them asyou get them.
Don't wait till the quarter endup.
Oh, I would like Vanessa.
Sorry, sorry, we lost you for aminute there, Vanessa.
Sorry about that.
Sorry.
We carried on with the digitalrecords direct.

Vanessa (13:57):
So you can see.
I didn't didn't realise you'dlost me.
Sorry, everybody.
Um, and uh the last point, uh,did you cover maintain
regularly, Anita?
Did you not get to no?

Anita (14:08):
We got to um send them direct to your accountants.
So doing it on a regular basis,don't wait till the quarter end
or the month end.
Get them there as soon as youreceive them, get them
forwarded, and then we're goingon to the digitalizing, the
record keeping.

Vanessa (14:19):
Absolutely.
And and you know, a lot ofpeople uh think that that you
know this is something they canhandle, and maybe in in the
preparation for it, they thinkthey're going to be able to do
it.
And then when it comes to thetime and it comes to uh you know
having that that commitmentevery quarter to make sure
everything's up to date andrunning, uh they do come into
problems and uh and they'realready starting to talk again

(14:43):
about changing the way theyapproach this.

Anita (14:50):
So, what are the benefits of making TATS digital?
So I would I talk more a lot ofpeople looking at this really
negatively, and it's just morework for them to do, and it's
all doom and gloom.
But actually, there's a lot ofbenefits from using um cloud
software in particular.
You're getting a lot of timeback through automated tasks.
So where you may have a realmanual process, or you're

(15:11):
inputting everything into aspreadsheet.
Lots of software is out therenow.
I've got lots of facilitieswhere you can record as you go,
you can take pictures, ituploads it into the software,
you know, and it it reads thatinformation direct from
receipts.
You can have direct bank feedsfrom your account, so you don't
have to type in your bankstatements.
That's a direct, it comes up onthe software on a daily basis.

(15:32):
There's so much you canautomate to make life a lot
easier for you.
A lot of our clients on thebeta, um, on the beta uh run,
the project that we did, thetest clients, were actually
amazed at how easy it was andactually said to us, Why did you
not tell me to do this yearsago?
So don't be scared of it.
Um, there's a lot of benefitsto come from it.
You've got real-time financialdata, which means you can

(15:54):
collaborate with youraccountant, you can do a lot of
forward tax planning, you cansee your tax liabilities or an
estimate of your tax liabilitiesin in advance, and you can put
money aside for that.
So it helps with cash flows.
You've got really gooddashboards on there.
A lot of these software's nowhave got dashboards on there.
You can get, you can see a PL,you can see if you've got spare
cash to buy new equipment.

(16:14):
Um, it gives you you knowadvanced notification if you've
got money to save taxes.
So, you know, do you need tobuy more equipment?
Will you get more capitalallowances?
There's lots of tax planningbecause you've got the live
information.
Some of the software optionsallow um simplified invoice
processing where you can send aninvoice direct to a client and
it's got a pay now button on it.
So it's helping people withdebt management as well.

(16:35):
Um, and it's a really easy wayto capture your documents and
not have to keep paper recordsbecause it's a cloud software,
it's there all the time, it'saccessible all the time.
You don't need to be keepingboxes of um reads and reads of
paper records.
So it is really important thatyou look on the benefits of it
as well.
So on this slide, I'd like totalk you through why we've

(16:57):
chosen Xero as our preferredplatform for making tax digital.
We're strategic partners withXero, and we've worked with them
for a very long time, and it'sproven to be one of the most
reliable and user-friendlysystems available.
Importantly, it is fullyrecognised by HMRC for MTD, so
it ticks all the complianceboxes.
What we've seen throughout thepilot scheme is that Xero is

(17:18):
consistently, it comes out therecommended option by our
clients, largely because it'sstraightforward to use and it
doesn't require a steep learningcurve.
From a practical perspective,the big advantage is visibility.
You get real-time financialdata and simple dashboards,
which means you're not juststaying compliant, you're
actually understanding how yourbusiness is performing as you
go.
It also significantly reducesyour manual work.

(17:42):
Compared to spreadsheets,you've got automation, which
means fewer errors and fasterprocessing, which is
particularly important when youmove into coarserly reporting.
There's also lots of additionalapplications available with
Zero, which means you can makethe software bespoke for your
particular requirements.
And because it's cloud-based,you can access it anywhere.
It allows both you and youradvisors to work on the same

(18:04):
data at the same time, whichmakes collaboration much easier.
Throughout our strategicpartnership with Zero, we've got
a large number of trainedcolleagues, plus dedicated
support and training resources.
We can also pass onsubscription savings to our
clients, which helps make thetransition a lot more
cost-effective for them.
So overall, Xero is not justabout compliance, it's about

(18:24):
giving you a system that makesmanaging your finances simpler,
quicker, and much moreinsightful.
So, what are the key challengesand how do we overcome them?
Vanessa, would you like tostart?

Vanessa (18:39):
Yeah, sure.
So one of the things thatclients have discussed with us
often is how do they approachthis, how do they, how do they
comply?
And a big part of that ischoosing the software.
Um there are lots out there.
There are a lot of um, youknow, banks are offering apps
with their their businessaccounts and so on.
Um, and it is about reallyresearching that and finding the

(19:02):
one that works for you.
Um, the you know, the the theones with the banks might be
okay for straightforward simpsituations, but they might not
deliver the advanced reportingand information that you you're
actually looking for for yourbusiness.
So, in those situations, wewould say, you know, discuss it
with an expert, talk to youraccountant, and and be guided by

(19:25):
them.

Anita (19:26):
Yeah, because I think it's really important as well
with the software, is it's thesupport you get with that
software.
Um, it might be simple to use,but if you have that tiny little
quirk that you're not quitesure of, who's there at hand to
help you?
So I think sometimes it isbetter speaking to your advisors
who can give you discountedsoftware and try and work with
them because you'll always havethat backup.
Um, so I think that's reallyimportant, isn't it?

(19:46):
Totally.
Yeah, I think a reallyimportant one is this managing
your quarterly deadlines.
If you're used to just speakingto your advisor once a year, um
turning it up with yourspreadsheets or your bag of
records or what you know,whatever you provide your
advisor.
I think it's really importantto get used to these managing
these deadlines.
Um, and again, use reminders,maintain your regular records

(20:07):
and really keep on top of it.
Don't bury your head, don't letit build up, and don't let it
become a really overwhelmingtask.
I think that's reallyimportant.

Vanessa (20:16):
Totally.
Um, so you know, going back tounderstanding the scope of what
you've got to report, I mean, itreally does feed into again,
you know, all those softwareinteractions between the MTD
platform that you're gonna use,your bank account, whether
you're using Dex and all thatsort of stuff.
Um, if if you're not usingsomething that talks to each

(20:39):
other and fits all in, how howare you going to manage that?
How are you going to pull allthat information together and
understand that you aregathering everything that you
need to do?
Um, if you're unclear onanything, then you need to, you
know, keep keep a list, keep akeep a manual record, you know,
at somewhere to make sure you'repulling all those separate bits

(21:00):
in.
But if you could automate asmuch as possible, that's going
to speed everything up for youand free some time.

Anita (21:06):
Yeah, and I think that's why adapting to new technology
is really important, is it,isn't it?
Um moving from manual todigital, it can be overwhelming,
it can be really daunting.
But I would all I can say isreach out, reach out to your
accountants.
They're there to help you,they're there to guide you, they
know your business, they knowthe type of record keeping that
you use now, then they know howto adapt you into new record
keeping, and they're there tohelp you and get you through

(21:28):
that journey.
And I would say start veryearly, do your research with the
software.
Um, we do Champion Zero, but wealso support all of the other
softwares, and you know, we'vebeen working with them for
years.
So we can guide you and sort ofwhich is the which is the best
model for you and build almost abespoke package for you.
So start early and get someadvice.

Vanessa (21:48):
Yeah, absolutely.
And you know, keeping thatconsistency going, so record
keeping consistency.
Um, you know, keep on top ofit, don't wait until the quarter
end to try and pull everythingtogether.
Um, it's gonna take youpossibly longer than you think,
but if you can keep on top of iton a on a daily, weekly,
monthly basis, that's gonnahelp.

(22:08):
Um the more inconsistently youapproach your record keeping,
the more errors you're likely tomake.
And you know, making taxdigital is all about trying to
iron out those errors.
So um you'd want less work tobe needed to be done at the end
of the year, essentially.

Anita (22:25):
I mean, there's bridging the gap as well between your old
and your new processes.
If it if you're used to using aspreadsheet, the spreadsheet
works for you.
You're not you're finding it'snot taking a load of time to do
that.
There are some softwares outthere that will allow you to
bridge your spreadsheet, but thespreadsheet will need to be in
a certain format.
Um, I mean, I'm a big believerin this cloud software.
You can take it with you whereyou go.

(22:45):
You can't take a spreadsheetwith you, but you can take your
cloud software with you on amobile device, on a bit of
tablet, a mobile phone.
You can take pictures of yourreceipts as you go.
Um, but if you don't want touse a spread, if you don't want
to use cloud software, aspreadsheet can be used in the
right format and it can bebridged through a compliant
software.

Vanessa (23:05):
Absolutely.
And one of the other importantaspects is keeping your personal
and business financial affairsseparate.
Um, for some people, they won'thave even set up a separate
account yet or even thoughtabout doing that, and that's
particularly relevant, I guess,in my associate uh dental world
or you know, therapists of mygenus.

(23:25):
Um, but we are recommendingeveryone does now try and set up
a separate account and haveeverything to do with their
business fed through that andkeep all their private and
personal finances outside of it.
And I know when we're runningour own business, it's our own
bank account, and we you know weinterchange between.
Business credit cards and thebusiness account paying for

(23:45):
personal bills, but that isgoing to muddy the waters with
your MTD, and it's it's not bestpractice.
So try and get a bit moredisciplined with that.

Anita (23:56):
And then the last one I think is delays or uncertainty
about the rollouts, um, beingunclear on your timelines,
making it difficult to plan.
We know what the thresholds arenow, we know when they're
coming into place.
So, what I would say, my bigsuggestion now with clients is
get your 25-26 return submittedas soon as possible.
You know exactly where youstand, and you'll know if you're
gonna be in scope for the nextphase if you're not already in

(24:18):
scope from your 24-25 return.
Um if you don't think you'regonna be in scope till 27, 28,
there's nothing to start yourplanning now, there's nothing to
start your setting up now.
As Vanessa said, start lookingat separate opening a separate
bank account, start looking atsoftware, start looking at
automating now.
Why delay it?
It will make life a lot easierfor you anyway.

(24:38):
So I'm a big believer.

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Anita (26:32):
So we're going to cover some frequently asked questions
now, Vanessa.

Vanessa (26:36):
Yeah, I I've sort of pulled these together from
conversations that we've beenhaving with our clients over the
last sort of six months or so,whilst we've been really heavily
gearing up for the start of ummaking tax digital going live
last month.
Um so um please do chip in,Anita, if you've got anything to
add from your perspective.
But one of the one of the mainquestions is um around, you

(27:00):
know, I have both NHS andprivate income.
How is this treated for NTD?
Well, if you're a sole trader,all of your dental income,
regardless of where it derivesfrom, is usually within one
business.
Um that very rarely would it bewith separate in that way.
So both of those income streamsare pulled together and
reported um quarterly, you know,as a joint figure.

(27:22):
Um if you do have a separatebusiness for any reason, so
perhaps, for example, you've gota um, you know, uh you've kept
it separate because you'reworking at two different sites
and it's reported as twodifferent sole trades, then yes,
you would need to report, youknow, uh two return, two
quarterly returns um each time,but uh I feel that that would be
very unlikely.

(27:43):
So you would normally pull themtogether.
Um we've had a client uh youknow cease self-employment in
24-25, um, and wanting to knowif they still need to um comply
with making tax digital.
Uh ordinarily, if they ceasedand that was it, they retired,

(28:04):
you would say, no, that's fine,you're out of MTD.
But unfortunately for thisindividual, they did have
continuing rental income, whichalthough it was below 50,000 in
gross income, um, it does meanthey still caught for MTD for
that rental income.
Um if you've got rental incomealongside a continuing dental

(28:25):
income stream, then yes, I thinkAnita explained earlier you
would do quarterly returns foreach source.
So that's you know, eight overthe course of the year,
quarterly returns and finaldeclaration.
Um if you move into apartnership or incorporate uh
with a view particularly, Imean, we're having discussions
around this to take you out ofMTD, um that could work, uh, but

(28:51):
only if you don't have anyother sole trade or uh rental
income alongside that.
So you could do that for now.
I mean, you know, there are nodates at the moment uh for when
MTD might apply to partnershipsor indeed companies, but I seem
to recall back in the daybecause I've been around for a

(29:12):
long time, um, there was talk ofthat happening.
At one stage, you were supposedto have MTD for sublect trades,
followed a year later bypartnerships, and a year after
that by companies.
So uh watch this space is whatI say.
But I think that could stillcome in.
Um so uh yeah, um making thosemoves just to avoid MTD might

(29:37):
not be the solution.
Um we had another clientrecently, um, very fortunate,
managed to get the lawyers onboard and sold his practice
right on the 31st of March 2026.
Also thought he would then beoutside of scope uh for MTD,
having ceased, but as mostpeople do when they sell their
practice, he was staying on asan associate on a self-employed

(30:01):
basis, his choice.
Uh, and so therefore he isstill caught.
But even though it's a a newbusiness, he uh he will continue
um being caught for MTD.
Um so uh touched on it, alludedon it in through through the
course of this.
A partnership is is excludedfor MTD at the moment, and some

(30:21):
people do often get confusedwith um a partnership and
jointly owned property.
If you have property that youjust own in joint names and you
and your spouse declare yourappropriate percentage on your
tax returns, individual taxreturns of that rental income,
without there being a need for apartnership tax return to be

(30:43):
prepared, you are not in apartnership.
So you are not outside scope,you will be inside scope for MTD
for that rental income.
Um then the final point here ishow how do I stay compliant
without it taking over myclinical time and running and
growing my practice?
Well, it's about gettingprepared.
If you're if you're running onspreadsheets and you haven't

(31:06):
embraced um, you know, cloudsoftware and everything like
that, yes, there's going to be ashort-term transition, a little
bit of time pain and inputrequired from you.
But I do strongly believe thatonce you get those automated
processes in place, uh yourbusiness will actually flourish
and you will have more time.
Um, it's got to be more timeconsuming manually entering

(31:27):
information for you know a two,three surgery practice onto a
spreadsheet when all that stuffcould be you know automated
through through Xero orQuickBooks or something similar.

Anita (31:40):
It's worth noting on that one as well, Vanessa, that a
lot of um softwares and tillsystems are actually come um
they'll they can feed directinto a lot of these.
So you might have one system inyour practice, but you never
know that might actually feedstraight into Xero into the
accounting software and they canwork alongside each other.
So it is worth definitely doingthe research with your

(32:02):
software.

Vanessa (32:03):
Absolutely, and you know, and it might actually
guide you as well if you if youparticularly like one piece of
software that you're using dayto day within the practice and
it it's known and reported towork particularly well with uh
uh a particular financesoftware, then you that could
steer your decision-makingprocess.
Absolutely, absolutely,definitely research is needed,

(32:23):
isn't it?

Anita (32:24):
Yeah, absolutely.
Thank you.
Okay, so we're just gonna giveyou a quick overview of the
services that ASEX offer.
Um, so like I say, I've beenworking with a project team for
over 12 months now.
Prior to that, I was with theAbbas um accounts and business
advisory services team.
So I'm quite used to workingwith clients and helping them
maintain the records, helpingthem introduce efficiencies.

(32:45):
So we developed three differenttypes of packages for our
clients because we have got lotsand lots of different types of
clients.
And within these threedifferent packages, each one is
built bespoke around theclients.
So we've got the MTD Complypackage, which we think is best
suited for those that want to doeverything themselves.
They're really tech-savvy,they've got a bit more time on
their hands.
Um, and what we tend to do withthat is we'll help them

(33:07):
register with MTD, we'll setthem up on the software of their
choice, get them ready to go,they'll get some training from
us, and then off they go.
They're doing their quarterlyprocessing.
And what we do is we come in atthe end of the quarter and
we'll review the transactionsjust to make sure they are
putting the correct informationin the right place and we'll
submit that return for them, andthen we'll do the final
declaration at the year end forthem.

(33:27):
So that's the comply package.
We have a complete packagewhich is aimed at the people
that are too busy, they want toconcentrate on what they're good
at and what they're good at,and let us do what we're good
at, and we'll do all of theprocessing for them, almost
their bookkeeper.
We'll do all the recordkeeping, set up the systems,
make sure they're compliant,keep on top of them, keep
nagging them for the records,uh, and maintain all of that for

(33:50):
them, submit the course of thereturns, and then the final
declaration.
And then we've got theconfidence package, which is our
all singing, all dancingpackage.
Um, it doesn't suit everybody,but it's a great package.
So it's the complete packagewhere we do absolutely
everything for the client, andincluding that, we'll provide
coursely reporting packs, whichwill give you a full profit and
loss balance sheet if yourequire it, maybe cash flows if

(34:13):
you want them, but it's a fullreport package each quarter,
which we'll send out to you, andthen we'll book in a meeting
with the tax advisor, and youcan have a quarterly meeting
with your tax advisor to do sometax planning.
Uh, and then at the year end,again, we'll do your final
declaration, prepare you anannual report pack, and we'll
also book you in with our wealthmanagement team to do some
planning ahead as well, about uminvestment planning, whatever

(34:35):
you want to talk to them about.
So we've got those threepackages, and like I say, within
each of those packages, we willbe we will build them to meet
your requirements uh and movethem around.
So that's the packages thatwere sorry, Vanessa.

Vanessa (34:47):
Sorry, sorry, Anita.
It's worth saying um at thispoint that our our clients that
we've spoken to, in the dentalclients, that is, um, it's about
a 50-50 split at the moment.
Those those that are engagingwith us, um, I mean, there are
some clients and and uh whohaven't responded to any sort of
request to have a discussionabout what they're gonna do, but

(35:09):
um, you know, they are beingchased.
But it's about 50-50 betweenMTD comply and complete.
And and already we're we'rewriting out to those clients
that said they wanted to do it,have a go at doing it
themselves, saying, How are yougetting on?
First months up.
You know, we've already had ahandful come back to us and say,
actually, do you know what?
I haven't got time, can youupgrade me?

(35:29):
So um, you know, it it's bearthat in mind and don't be afraid
to speak to your youraccountant and say, look, this
isn't for me.
Maybe maybe for this year I'llI'll get you to do it and maybe
I'll step into it another time.
Um, so that that's how we'reworking with our clients.
It's very, it's veryindividual.
Um, everyone's had a you know aphone call and opportunity to

(35:52):
discuss their their businessrequirements and their appetite
for doing this uh themselves uhon a one-to-one basis.

Anita (36:00):
Yeah, it is about being realistic, isn't it?
Realistic with your time.
If you're in surgery all day,are you are you really going to
have the time?
Or have you got somebody whocan do it for you?
You know, I know some of myclients have got the daughters,
they've pulled the daughters inand they're doing the processing
and we're just reviewing whatthey've done.
So being realistic, and andlike you say, absolutely reach
out to your advisor.
And if if halfway through, likeyou say, you're finding that

(36:20):
you're not the manager, you'renot managing to keep on top of
it, then reach out.
Um, and that's where you're at.

Vanessa (36:24):
Yeah, we all have good intentions, don't we, that we're
gonna be organized and dothings, but um uh it doesn't
always come to fruition.
Absolutely.

Anita (36:33):
So I think we're gonna move on to the QA session now,
guys.

Dr James (36:39):
Yeah, that sounds good.
Thanks so much, uh, Anita andVanessa.
I think uh everybody owes you aclap up uh for sharing
everything that you know in thiswebinar this evening and uh
what a turnout we've had aswell, close to 100 people on
this webinar tonight, which isflipping unbelievable.
So, yes, thank you for sharingthat.
Thank you for making it reallyconcise and just breaking it

(36:59):
down as well.
And I know that we're gonnamove on to the community session
very shortly.
So, guys, if you do want to geta question in, although to be
fair, I'm gonna say that uh youguys actually did such good job
there with the facts section andwhat have you, that you might
have, how can I say this,anticipated a lot of things
around people's minds thisevening.
But nevertheless, there'll bethings that are very specific to

(37:20):
each and everybody'scircumstances.
And just on that, that'sactually what this QR code is
about on the screen right now.
If anybody has any questions oranything more specific, or they
just want Anita or Vanessa togive uh their circumstances a
look over to make sure thateverything's taking along as it
should be, or they don't havetime, as you were saying a
second ago.
Uh, Anita and Vanessa are quitehappy to share this in the air.

(37:40):
And you can register uh uh forfor a reach out from either of
them uh on that very note, evenif it is just for a little bit
of an audit to make sure thatyou're compliant and everything
is going uh the way it shoulddo, you can register for that by
scanning this QR code on thescreen just here, or we're gonna
share a link for that in thechat very shortly.
So it's entirely up to you,whichever route that you want to
go down.
And that will be just to simplyput your hand up and say,

(38:04):
actually, I could do with asecond pair of eyes on this,
what I've done or what myaccountant's done, or anything
along those lines.
But yes, anyway, that's enoughfor me.
Let's move on to the QA sectionof this webinar.
Let's scroll right up.
So, first question that hascome in is from Ramin.
Uh, shout out to Ramin.
And Ramin asks, can you name afew software names that we can

(38:28):
look into?
I think you guys kind ofcovered this, did you?
With Zero.

Vanessa (38:32):
Yeah.
Sorry, Vanessa, go on.
You go ahead, Anita.
You know more about thesoftwares than I do.

Anita (38:37):
Yeah, there is so many out there.
Um, I know the the the the thefront runners are your Xero,
your Sage, and your QuickBooks.
Um, we haven't worked alongsideso we do use Sage and we do use
QuickBooks, but we haven'ttested those.
We don't know how closelythey've been working with HMRC.
Um, we like I say we partnerwith Zero and we've been working
with Xero and HMRC together,but they will have to be

(39:01):
compliant um if they're listedon uh HMRC's website.
HMRC has got a list ofcompliant softwares on their
website as well.
Um, I know there's quite a fewum free softwares out there that
have been offered by banks.
Um I would just say be verywary of your free software, make
sure it meets your needs.
They are they tend to be very,very basic, and a lot of them

(39:22):
are only free for a very shortperiod of time.
You suddenly get um introducedto fees six months down the
line.
So just be really sure that ifyou are getting the free
software, one, that it's freeand it stays free, and two, that
it's actually going to suityour needs.

Vanessa (39:37):
Yeah, and try try all the softwares as well.
But you know, one of mycolleagues has been a real big
supporter for uh as long as I'veknown him on QuickBooks uh in
the uh in the last 12 months orso, he's complete turned,
completely turned around and isa real pro sort of zero fan now,
saying that the the way they'veprogressed and how easy it is

(39:59):
to use and explain and trainclients on is so much superior
now.
So um, yeah, do have a look atit.
If if there's a software thatyou're you're used to using, for
example, they will probablyhave an MTD compliant version.
So have a look at it, but don'tlet that stop you exploring
other options as well.

Dr James (40:19):
Nice one, thank you, uh Anita and Vanessa.
By the way, guys, I can see thequestions are coming in thick
and fast now, which iswonderful.
We do have uh 25 minutesremaining on this webinar, so
we're gonna get through as manyas we can.
It will be a hard stop aroundthe half eight mark.
So, again, if we don't get toany of the questions, it might

(40:42):
be another reason why it'sworthwhile just dropping uh
signaling your interest throughthat QR code that we talked
about just a second ago.
Because of course, you can goto a certain level of detail on
a webinar like this thisevening, but in order to say
fully what's going on, you needto know a little bit about
someone's circumstances.
So perhaps that's somethingthat might be better on a
one-to-one basis versus aone-to-many, which is what this
webinar is.

(41:02):
But like I say, we're gonna doeverything that we can to get
some full-bodied answers inthese questions that are coming
in this evening.
Okay, next one is fromMohammed.
And this is, I guess, a broaderquestion uh about accountancy,
I suppose relevant to MTD aswell.
So Mohammed asks, how do youmove money between personal and
business account?
Like money transferred topersonal account gets reported,

(41:25):
how on the balance sheet.

Vanessa (41:29):
You're right to pick that up, Anita?

Anita (41:31):
Yeah, if I heard rightly, it's it's how do we record
transfers between personal andbusiness?
Was that right, James?
I'm sorry.

Dr James (41:38):
That's how I've understood that, yes, or how you
record it.
Yeah, you you know, even on thebanking app or if someone does
a balance sheet, something alongthose lines.
Yeah.

Anita (41:46):
Okay, so if if you're using um a software and you're
using a banking app or whatever,and you you you transfer money
out of the business account intoa personal account, we've set
up what we call a currentaccount, and that requires any
personal income and expend anypersonal drawings and any
personal if you're putting moneyinto the business, and it goes
through what we call a currentaccount, and that sits on the
balance sheet.

Dr James (42:08):
Nice, Shorten.
So is that uh happy with thatanswer to Mohammed?
Let us do let us know if that'suh hit the nail on the head for
you.
That's what you were after.
Uh, do let us know with aresponse in the chat there.
But I believe that's what youwere getting at with that
question.
Anyway, moving on.
Next question, we've gotMandeep.
Mandeep says, Thank you forthis evening.
Have you heard of Sagesoftware?

(42:30):
My accountant has recommendedthem.
Just wanted to know yourthoughts.
Thank you.

Anita (42:34):
Yeah, again, um, we mentioned that in the first in
the earlier, didn't we?
Sage has has been out foryears, many, many years.
Um we we use it, a lot of ourclients use it.
Um, as Vanessa mentioned, someof them have gone a little bit
behind and they're not asprogressive as as others.
Um, but yeah, it's a veryreliable software and it's been
out for years.

Dr James (42:56):
Great stuff.
Anything to add, Vanessa?
Are you happy with that?

Vanessa (42:59):
I just I guess Sage, it from my experience, Sage is
quite an unusual software to usein in dentistry.
Most clients um historicallyhave used uh QuickBooks and more
recently, Xero.
So those are the two softwaresI see mostly.
Um it's very unusual that Icome across a client that um is

(43:21):
working with Sage.
So can't really comment on onhow well that works myself.
Um, but what I would do uhMandeep is investigate whether
that software will actually talkto your bank and talk to all
the other um uh softwares thatyou're using in the business.

Dr James (43:39):
Nice, brilliant.
Okay, cool.
So next question.
I'm just scrolling on my phonehere as well to get them up here
as well, so I can do twoscreens at once.
Let me see here.
So uh thank you for that,Mandy.
And the next question is fromAmy Sinclair.
Can I send my pay slip with thelab bills information on etc to
my accountant?
Or am I meant to upload themsomewhere on my software?

(44:03):
I use Sage in brackets, thankyou.

Vanessa (44:09):
Having just said uh we don't come across Sage very
often, there's a second one.
Um uh it very much depends onwho's doing your bookkeeping for
you.
So if if you're doing your ownbookkeeping, then you would you
would uh you know annotate outthe the um payslip yourself.
Um depends.

Dr James (44:30):
Sure.
Happy with that?
I need anything, Dad?

Anita (44:33):
Well, again, it depends on uh what your accountant's
doing for you and what you'redoing for yourself.
Um I can only refer to ourpackages.
If we were doing complete, I'dsay send it to us, we'll deal
with it.
If you're doing comply, I'dwant you to upload it to the
software yourself and annotateit yourself.
So it does depend on what youwant to do for yourself and what
your accountant's gonna umsupport you with.

Vanessa (44:54):
Yeah, essentially I understand the way to deal with
that is you have to almostcreate a reverse invoice for
yourself within the system sothat you're you're reflecting
the gross income and then theexpenses flowing through.
Um, so that will be possiblewithin that software.
But who's doing that, whetherit's you, Amy, or whether it's
your accountant, I I can't say.

(45:16):
Sorry.

Anita (45:17):
Yeah, it's really important because it's not the
net that you're you're you'rerecording.
You you've got to gross thatup, your full income, and then
you split your expenses out.
So it's not a simple,straightforward, but it it's
doable.

Dr James (45:28):
Well, it you know what, it kind of comes back to
what I was saying just a secondago.
You know, obviously we can bewe can give general answers on a
webinar like this, of course,but to get into the nitty gritty
again might be worth justreaching out, I suppose, or
letting uh Vanessa um and Aninaknow that.
How can I say this?
You want a second pair of eyeson that basically?
But yes, anyway, uh moving onto the next question.

(45:50):
Next question is from James H.
And James says, For my separatebank account, does it have to
be a business bank account, orcan it be a random account used
solely for my business?
Yes.

Anita (46:02):
Yeah, absolutely.
Yeah, you don't need to bepaying for a business account as
a sole trader.
You can just use a secondaccount, um, but just have it as
a sole solely for yourbusiness.

Vanessa (46:13):
Yeah, a lot of clients will sign up to one of the
online banks, online only banks,because they tend to be, you
know, unless you've got a reallygood relationship with your
bank to set up a your existingbank to set up a second account.
Uh, a lot of people will go onand and do one of the online
banks.

Dr James (46:30):
Excellent.
And guys, thank you so much forthe questions as well, because
these are the littlenitty-gritty things that come up
inevitably through such ashakeup as making tax digital
Cesar hyper-valuable, hypervaluable for the person who
asks, but also for the listenerstoo.

Next question is from Megan (46:46):
if you're employed and also a
landlord, gross income over 40k,but landlord income small, um,
does making tax digital stillapply?

Anita (46:59):
So, no, it's basically based on qualifying income, and
the qualifying income for MTD issole trade income and rental
income.
So, if you've got employmentincome, for example, of 40,000,
like you just mentioned, andyou've got rental income of
20,000, you are not in scopebecause it is not taking into
account your employee income.
It's purely sole trade andrental income.

Vanessa (47:21):
Yeah, you just need to watch the thresholds as they
come down.
Um, so you you know you mightnot be caught now or next year,
but you might be caught when thethreshold comes down to 20,000
growth.

Dr James (47:33):
Great stuff.
Great question, Megan.
Because that might catch a fewpeople out or have a few people
wondering, that's for sure.
Uh, next question is fromAnnam.
My gross income falls, sorry,my gross income um from the 24
to 25 uh tax year falls belowthe threshold as I was doing
foundation training, butthankfully gross income has now

(47:54):
gone up as an associate.
But does that mean I'm caughtby MTD for 26-27?
Good question.

Vanessa (48:02):
Yeah, I mean HMRC will pick up, won't they, Anita, if
the if the first period of soletrade is less than 12 months,
um, they will then gross thatup.
So if you uh started working umas a self-employed dental
associate, say in September2024, so you're only recording
six months' worth, but that sixmonths' worth was 30,000, HMRC

(48:26):
will gross that up to 60,000,then you would be caught for 26,
27.

Dr James (48:33):
Cool.
Okay, yep, fair enough.
Thanks for clearing that oneup.
And another question from Meganhere in the chat.
Uh, regarding different makingtax digital uploads uh and
different MTD uploads forlandlord income and associate
income.
Uh, I think Megan is referringto her previous question.
So she's asking, it do we haveto do, do we have is it two

(48:57):
separate?
I think you were sayingsomething earlier about you have
to register as two, you canthere's potentially register for
two separate businesses.

Vanessa (49:04):
Well, you you have to you you have to report
separately for the associateincome and the rental income.
So they are not combined.
Um, so it would be twoquarterly returns every quarter.

Dr James (49:15):
I see.
And would that then apply,let's say somebody has let's say
somebody has um you know, maybelike a small business on the
side, something along those uhalong those lines outside of
dentistry.
Uh let's say they hadassociated income, um rental
income, and also a smallbusiness as well.
Is there potential that couldbe even more?

(49:37):
Yeah, that's so it depends onsources of income.

Vanessa (49:42):
Yeah.

Dr James (49:42):
But then my understanding, if my
understanding is correct, it'swhen those all the sources of
income could accumulateaccumulatively exceed 50,000,
not individually.
Have I got that right?

Vanessa (49:53):
Yeah.

Dr James (49:54):
Okay, boom.
Good.
Really good to highlight thatone.
Amazing.
Thank you, Megan.
Next question is fromStephanie.
Hi there.
If we haven't associated a bankaccount until now, how do we
manually input into zero?
Or is that possible?
You know, this is a greatquestion, actually, but I won't
interrupt because I think I'vegot a follow-up thing to ask

(50:15):
this.
Uh so yeah, if we haven't gotif we haven't associated a bank
account um until now, how do wemanually input information into
Xero?
Or is that possible?
Or does that mean I'm notcompliant?
Do we have to associate apersonal account to reconcile,
which feels a little invasive?
Hmm.

Anita (50:35):
Yeah, okay.
So what you can do with Xero isyou can upload your information
into a spreadsheet and importthat into Xero up to the point
when you opened your bankaccount and then set your bank
feed up and move from there.

Dr James (50:48):
Right.
I guess the other part of thatquestion, um, which uh
Stephanie's asking is could youyou could obviously just set up
a separate business account forall your uh your income, right?
Because then that would meanyou could take some of your
income across to another accountand zero doesn't have a record
of all your transactions whenyou went to Tesco's or you went

(51:09):
to the cinema.

Vanessa (51:09):
Yeah, and and that's one of the things that's one of
the important things to have aseparate bank account for is
that you know if you've got aseparate business account that
links to your zero, that becomespart of your digital footprint
there.
If you did have a revenueinquiry for any reason, then
they haven't got immediate callon your personal bank account
because it's not linked to thebusiness.

Dr James (51:29):
Nice.
Okay, I'm really glad you askedthat question, actually.

Vanessa (51:33):
Yeah, it's a very good question.

Dr James (51:34):
Anita, anything to add?

Anita (51:35):
No, no, less covered it.

Dr James (51:37):
Very good.
And you know what?
I had a little bit of afollow-up to that one because um
I was talking to some friendswho were accountants the other
day, and they were saying thenumber of times they go into uh
someone's how can I say this,bookkeeping software, and then
it's not set up correctly, orthe balance is completely
different on the bookkeepingsoftware to what it is in your
bank account.
Can I ask why that happens?

(51:59):
Or first of all, you can I'massuming you guys have seen that
because I think it's a commongripe of accountants.
Why is it it would that be ayes, Anita and Vanessa?

Anita (52:08):
Yeah, it is okay.

Dr James (52:09):
Because he seemed a little, he was like a bit like
how the you know, I could see hewas completely puzzled, but so
it sounds like it's not justhim, it's other accountants as
well.
Why does that happen?

Anita (52:19):
There's lots of different reasons as as to why and how it
can happen.
Um, um, the main one being notunderstanding the software
properly, um, going gung code,not taking the proper training,
not you know, not researching itand not taking the advice.
Um, you can, you know,accounting software, it's not a
magic tool.
It doesn't do everything foryou.
You do have to give itinstructions.
Um, and if you instruct it todelete something, you think

(52:42):
you've done something wrong, youcan very easily delete a bank
line.
Um, so you do need to have anidea of what you're doing.
But what I would advise peopleto do, if they are using
accounting software with bankfeeds to do regular bank
statement checks and to do thatreconciliation.
Uh, not just don't assume it'sdoing it right, don't assume
you're doing it right.
Regularly check.
We do it once a month or once aquarter.

(53:04):
We'll ask our clients to giveus a physical copy of their bank
statement from the bank, notfrom because there are glitches
sometimes.
We do leave, you know, it's nota perfect ideal world.
Sometimes there will be aglitch in the imports, it might
miss a line, it might miss adate.
So regular checks to make surethat your bank on your software
matches your actual bankphysical bank notes.

Dr James (53:27):
Nice, and yeah, apparently that is a very common
thing.
Again, Vanessa, anything youwant to add on that?

Vanessa (53:33):
No, no, that sounds that's all good.
Yeah.

Dr James (53:35):
Lovely stuff.
Great questions and inspiringsome great conversation as well
and follow-on questions.
Next next query is from ASIA.
Uh ASIA asks, are charitabledonations included in making tax
digital or are these added onthe final tax return?

Anita (53:55):
Final declaration.
So your quarterly return ispurely, it's almost like a
trading statement.
It's purely your trade incomeand expenditure, and it is your
rental income and expenditure.
Everything else that normallygoes on to your self-assessment
return will be added onto thefinal declaration at the year
end.

Dr James (54:12):
Nice, great, short and sweet.
Guys, questions are comingthick and fast in here.
I'm not entirely sure we'regoing to get through all of
these because we only have nineminutes remaining, at least on
this clock.
Uh, so anybody who has gettinggetting the quote, if anybody's
got any questions and you wantthe very best chance that we can
get to them, uh, as I say, feelfree to pop us in the chat now.

(54:32):
Patricia asks, who does thereporting?
Your accountants um from thedetails you put into zero.

Anita (54:41):
Again, that that depends on what agreement and what
package and what plan you youyou make with your accountant.
Um we're we're recommending ourclients a lot, you know, let us
review what if they want toprocess, let us review it for
them, just to give themreassurance that they're
compliant and they're not putmaking any errors.
But it it absolutely depends onwhat your what your accountant

(55:03):
or your advisor is is workingwith you and how you're doing it
together.

Dr James (55:07):
Sure.
Seems reasonable.
Thank you for that.
So, like I said, guys, we'regoing to try to get through all
these questions as best we can.
Uh, we will have to call timeon these very soon.
So, like I say, if you do findyourself in a place where you do
have a question, somethingalong those lines, perhaps that
might be an instance to use thatQR code that we were mentioning
on the screen just a secondago.
Next question is from Amy.

(55:30):
I get paid into my businessaccount and then move money out
into my personal account.
If I need more of my businessaccounts, I move some back.
Is this okay?

Vanessa (55:40):
Yeah, absolutely.
Yeah.
I mean, that that that's a verythat's a very ideal way of
dealing with it, yeah.
And and and as Anita said, itwould be form part of that
current account of the moneymoving between uh on the balance
sheet of the money me movingbetween one business account to
the to the personal account.

Dr James (55:57):
You know, this happened to me once, and I
accidentally sent some money tomy personal account, and I
thought that was a taxableevent, and I was like, oh my
god, seriously.
Uh, but then you can send itback, but you obviously just
have to.
How's that best recorded on thebanking software so that the
accountant knows at the end ofthe year, so there's no uh
confusion, basically?

Anita (56:17):
Well, if you're sending money to your business account,
it would be it would be you youwould just do it as a transfer
to the current account, and thenwhen you transfer it back, it's
just transfer, it'll contouritself out.

Dr James (56:29):
So label is a transfer, right?
Because you know the way youcan label as dividend and all
sorts of things like that.

Anita (56:34):
I mean, don't forget, as a sole trader, you're you're
more than entitled to draw moneyout of that business at any
point in time because you're nottaxed on what you take and what
you draw, you're taxed on yourprofits.
So absolutely no concern there.
There's nothing to worry aboutwith regards to HMRC if you're
taking money from that businessaccount.

Vanessa (56:50):
Yeah, the ideal the ideal scenario is that you do
move money into your personalaccount and then pay your
personal bills from yourpersonal account and not just
leave everything in one.

Dr James (57:00):
Yes, okay, yeah, fair enough.
Because I remember um and thatand actually that's the thing
worth mentioning, and Vanessaand Anita, correct me if I'm
wrong on this, because this iswhat my accountant told me.
Uh, when you take money out ofyour business and you put it
into your personal name, somepeople get really really wrapped
up in, oh, do I count it asincome or do I count it as
dividend?

(57:20):
Right, you know what I mean?
Do I count it as wage orcounter as dividend?
But if you basically just labelit as transfer, then your
accountant can just figure itout at the end of the year,
which is ever the most whicheveris the most tax efficient.

Anita (57:30):
Yeah, that is the one way of looking at it.
Yeah, and I think it's worthremembering um if if it's a
limited company, it's a verydifferent matter as to how you
draw money out of that business.
So we're we're today we discussan MTD for it income tax, which
is sole traders and andlandlords.
So it's a very different matterif you would if you take money
out of the business, it is justpurely a transfer.

Vanessa (57:51):
It's just drawings, isn't it?
It's not salary and dividends.
So that that's the you knowalmost the the the wrong
terminology for for thissituation.
But um, I get what you'resaying.
But you know, the way I workwith my clients that are in a
company, we we don't leavethings till the year end, we
plan a plan from the beginningof the year what's gonna be
salary and what's gonna be drawnas dividends.

Dr James (58:13):
Sure.
And yeah, I should highlightthat.
That is for a limited companyspecifically, not in this sole
trader.
So that is a very good thing tohighlight.
Uh so yeah, that is definitelywhat I said does not apply if
you're a sole trader, basically.
But yes, anyway, um, moving onto the next question, we're
gonna get a few in here beforethe final whistle, before we

(58:33):
call time.
Next question is from Laura.
Sora Laura says, sorry, uh, butcould you just clarify if sole
trader income more than 50k butrental income less than 50k both
still have to be submitted viaMTD individually?
Is this correct?

(58:54):
As anything that contributesokay, do you want to jump in
there?
Because I feel like there'sactually a second part to this
question.

Anita (59:00):
Yeah, so basically, your your um the way that they are
establishing whether your your cyou need to be in scope for MTD
is they're taking all of yoursole trade and rental income
together combined.
So if combined exceeds 50,000,you are in scope for MTD and you
must report your sole trade andyour rental income on a

(59:22):
coursely basis.
If your rental income is 20,000and your sole trade income is
50,000, you still have to reportboth.
It's not a it's not a it's nota threshold for both to be
50,000.
It's combined.
And if you combine no matterwhich way, which one's the more

(59:43):
and which one's the less, theyboth have to be reported.

Dr James (59:46):
Yeah, once you're in for one, you're in for all
cumulative, in in other words,yeah.

Anita (59:51):
But yeah, so even though it's cumulative that's taking
you over the threshold, youstill have to submit two
separate returns, one forrental, one for trade.

Dr James (59:58):
Correct.
Okay, fine.
Sounds good, Laura.
Hopefully that clears that up.
And then the second part tothat question, and by the way,
I'm just reading this out as itcomes, so hopefully this is you
haven't answered this.
Um, is this correct?
Is anything that contributes tototal over 50k?
Yeah, okay.
It sounds like uh Laura's justasked what you guys have just
said just then.
So Laura, do let us know ifthat's cleared things up for you

(01:00:19):
and made that hyper uh yeah,just uh, well, how can I say
this, hyper clear, uh, so thatobviously we are not putting a
foot wrong.
Selena says, Hi, would yourecommend using the Zero
Software app so we can uploadfrom our phones rather than on a
desktop, which may take longerto do?

Anita (01:00:38):
Absolutely.
Um, you can use both becauseit's cloud software.
While you're out and about, usethe app.
When you're back at home, use adesktop.
They all speak to each other,they're they're all live um
data.
So absolutely.
If you've got zero software andyou're out and about,
absolutely have the app and useit.

Dr James (01:00:56):
Great stuff.
And guys, I think we've gottime for one more question, so
let's just slip this one inbefore the final whistle.
Can we choose to manually inputincome and expenditure and
choose not to auto-bank feed,then only what we input is
visible.

(01:01:16):
Does that make sense?
I just read that out literally.

Anita (01:01:19):
Yeah, um you if you look at the um HMRC guidelines,
there's not meant to be manualretyping.
So with that, what I would sayis um if you you are supposed to
uh import, so if you're notgoing to do live bank feed, you
would probably need to downloada CSV and import it into the

(01:01:41):
software.
Yeah.
But HMRC and not looking at yourbank account, HMRC are looking
at your return and what'sreported on that return.
So it's really important thatwe highlight that.
HMRC are not going into zeroand looking at your banking port
and looking at everytransaction and going, what have
they missed?
They're not looking at that,they're looking at what you're
submitting, which is the return.

(01:02:02):
And that return is being pulledfrom that bank feed and from
what you're categorizing intothe business.
Anything that's personal thatyou're put into the personal
currents account, as wementioned earlier, that's not
going onto your report that'sbeing submitted.
So it's really important thatyou know that you understand
that.
And don't be don't be scaredthat the software is giving
things away that you don't wantgiven away because it's not the

(01:02:24):
report.

Vanessa (01:02:25):
It's not going to give it away as of right.
The only the only risk with notseparating out the personal and
the business is that if thereever was a problem and there was
an investigation into youraccounts and your tax returns,
then they would have call onthat that underlying bank
information and that bankaccount and all the transactions
that are in there.

(01:02:45):
But that would be only in thisis in this situation where
there's a tax inquiry.
So something's gone wrong.

Dr James (01:02:55):
Wonderful.
Thank you for clearing that oneup.
And that actually brings us tothe conclusion of proceedings
this evening.
Again, Vanessa and Anita, Ithink the least we can do is
give you both a clap up onceagain on behalf of the Dennis
and Vest audience for being sogenerous with everything that
you've shared tonight.
Guys, there's obviously theopportunity to take the
conversation with uh Vanessa andAnita offline.

(01:03:17):
Uh, should you need a littlebit more specific info on your
circumstances?
Because obviously, we naturallydon't want to go into too much
personal detail on webinars suchas this this evening, given
that they're in the publicdomain.
So there's obviously the QRcode in front of you that we
talked about just a second ago,and we will be sending the link
out after this email as wellthat people can use uh in order
to register themselves for that.
Like I said, guys, thank you somuch for your time, Anina and

(01:03:40):
Vanessa, and of course to theaudience too, because that's
what makes this all so fun andall so worthwhile.
We had a really amazing turnoutof a hundred, over a hundred
dentists this evening, would youbelieve, who've uh used their
Wednesday to come along aboutmaking tax digital.
And to me, that just shows howinteresting this is and valuable
it is, and just how many peopleneed clarity on it.
So, yes, as I said, congratseverybody for coming along this

(01:04:01):
evening.
Looking forward to the nextwebinar already, which will be
in the Dentistry Investplatform.
If you do want to get your CBDfor this, we'll obviously be
releasing details on that verysoon.
So keep an eye on your emails.
In the meantime, the only thingthat remains to be said is I
hope everybody has a wonderfulWednesday and we'll see each
other again super soon.
Bye bye.

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