Foreign and welcome to the PAT Accounting Podcast with me, your host, Vicky Clark.

I'm going to help you get to grips with your finances, save you lots of money and take the stress out of doing your tax return.

So let's get going.

Hello everyone.

Welcome to this week's Live with myself, Vicky and my lovely business partner Lee, who make up the pet accountant.

So I'm going to do my usual.

Lee, if you're going to tell everyone what we're doing today whilst I do the admin, that would be fabulous.

No worries at all.

So today we're having a little look at the software Free Agent and the course that we have built as well to help people navigate themselves around it and basically to be able to start dealing with transactions that we always get questions on like how do you add a loan, what happens if I purchase a vehicle or an asset, what depreciation do I use?

So today is going to take a little bit of a look at, at that course, how easy it is to follow and as well as taking any questions with regards to the, the software that's, that's basically we can go through.

So bit of a nice easy one today and shouldn't be too taxing, I.

Don'T think a nice one.

Usually it's a SIM what you can't have, but today we're telling what you can have and you can have Free agents.

Right, there we go, Admin.

Done.

So as they said, obviously we use various softwares.

Every accountancy firm will have their own preference.

As everyone knows, we do not like the one that begins with Q.

It is not our favorite and therefore we do not use it or at least from this year we're not going to be using it.

The three that we do use are Xero, Dext and Free Agent.

So if you are a lover of those three, then we are definitely the accountancy firm for you.

So that's the three that we use, as Lee mentioned, reagents free as well.

With a metal account.

So it is behind it whether it'll.

Be free next year, who knows?

Because always I did speak to Free Agent a while back and asked them the very question whether they would change their stance on the free software once it becomes compulsory.

I didn't really get a yes or no answer, so who knows.

But Free Agent is free with a metal bank account and ever since we've had this group we have endless amounts of questions on the group about how do I label my wages, how do I put my car in, how do I put my van in, how to Do a loan account, cash sales, how do I do a cash account?

You know, how do I do an invoice?

And it's, it's easy for us just to go, yeah, I need to click here, click there.

But we were seeing the same questions over and over again and even from our clients we'll get emails going, you know, what category do I put this in?

Or how do I show this on free agent?

Or how do I show my low pay deductions because it goes straight into my bank and they've already taken their fees off.

So how do I put that in?

So what we've decided to do, which we have touched on in previous episodes, is basically make a free agent course that shows you how to do all of the things that we've just mentioned, plus a load more.

So if you do have free agent and you're one of those that goes, oh God, I have no idea how to use it, or you've just bought a van or a car and you're unsure how to do free agent properly, then this course is, I say it's a course, it's more of a guide.

It's more of a guide, isn't it?

Yeah, it's not really a course because you're not getting answered questions on it.

It's more of a guide and it's.

It'S going to sit there in the background so that if you come across something that you need to achieve in free agent and you don't know how to do it, then it's been built in a way that gives you easy to follow drop down menus, you find what it is that you're looking for, like adding a van for argument's sake, adding a loan.

And it will give you a video of exactly what to click and what to do to add that into free agent for you.

So it's basically a go to guide.

But it's all been centered around the pet industry.

So everything that we've done and we speak about on there is always about the, the industry that you're in so that it's familiar to you.

And that's what we've done with the expense categories as well, is they, they're all to do with what you should be using day in, day out.

Specific to you guys.

Yeah.

So you're probably thinking, why have we done it?

One of the main reasons, obviously, as we've discussed probably many times in the past few episodes, is regarding making Tax Digital and you are going to have to be using software at some point in your business life.

So if you're not at the moment, then this is definitely something to look into.

If you're looking at software, Free Agent is like probably like the middle ground software.

Xero is very advanced and is very, very good.

But if you're doing it yourself and you want something that's very plain but does what it needs to do and an easy format, then Free Agent is definitely the one to go for because it is very, very user friendly.

But as you are not accountants, you're not going to know how to do certain things, hence where the guide comes in.

Because we want you to get it right.

And the stuff that people are asking for if you did it wrong would have a massive impact on your tax return.

So it's really, really important that you get it right.

Should we show them what it looks like?

Yeah, should we?

We will give you a sneak peek at this trainer course.

So all the videos have been done by myself, Lee and Abby.

He's one of our accountants who, if you're a client of ours, has no doubt spoke to at some point.

And so there's no sort of like loads of text.

It is just videos of showing you what to click on and how to do certain things.

So it's very, very user friendly.

And we've also got a material section as well which gives you an expenses guide.

It gives you how to categorize expenses and also gives you information on our bookkeeping services in case you go through it all and think, sod this, I don't want to do it.

I'm going to let them guys do it.

So we have tested this, so hopefully it does work.

Obviously, those of you who are listening on the podcast, please just head over to the group and have a look.

If you want to have a sneak peek of the course before you purchase it.

Obviously it is a business expense as well, so it's even better.

Although Facebook have said that they're deleting videos after 30 days.

Thirty days?

Yeah.

Whether that happens in groups, they didn't specify, but I'd imagine so.

So if you are listening to the podcast, make sure you go and have a look quickly before they delete it.

And so let's give this a little whirl.

I think it's worth noting there as well.

If they do delete the videos, you can still get the source information from our website.

Anyway, so all of the information with regards to courses is all sat there.

And the great thing about this course is before Viki does show anybody, is that it allows us to add to it.

So if Free agent makes any changes or we're getting a lot of people come back and say, well, I need to know how to do this.

We can actually go in and add that module in and update the course and you don't have to pay anymore.

It's not a subscription, it's a one off cost and you've got access to the course for the life, you know, the lifelong access.

So yeah, it's good.

So it will get updated.

Like Lee said, if there's any changes or if we get any feedback from you guys and say it's really good, but actually I could really do with knowing how to do X, then we can very quickly make that video and add it on there and then everyone gets it and then you've got it there.

So again we welcome any feedback from you guys when you purchase it and we can see who purchases it.

So we might send you a sneaky email just to say, you know, could you give us some feedback?

Because then we can adapt it and make it even better.

So let's see if this works.

I don't share something I shouldn't share.

I got teams messages, right?

Oh, there we go.

So we'll just go into the main page.

I'm not going to click on every single one because I can show you as what happens.

So this is the main page and it's just, well, welcomes you and tells you a bit about the course and any contact numbers you might need as you go through.

And on the left hand side obviously there's the utilities calculator and the tax calculator.

But if you decide that you want to purchase them, it's just a click of the link and it'll take you to that one.

So probably what you're wanting to know is what's in it.

So across the top you can see various categories.

Are you going to say something?

No, no, I'm just.

All right then.

I thought you were gonna say something.

You sort of went so at the top.

Just to give you an idea, how is it gonna work?

Does that work, Lee?

Because I have to.

It has, yeah, everything's absolutely fine.

Yeah.

So we've got things like out of pocket expenses and how to create those bills and how to create those.

And also I've given you a section of my top tips of what not to do in the software, which was very, very insightful and that will help you as probably as much as the rest of the guide.

So definitely look at the top tips.

We've got invoices on how to create them.

How to add clients, how to make them on brand to your business, what if you're paid cash?

So that's all covered as far as invoicing is concerned.

We've got the date.

Now, the reason I put this in is because it's one of the things everyone gets wrong is their accounting dates.

So it shows you how to check those and a bit of background of what date needs to go in what box.

We've got pre trade expenses, which again is another popular question on the group.

If you've bought loads of things like baths and tables and things before you started, we give you a little guide on that one.

We've got transactions, so this is probably like the main bulk of any software.

So we talk about checking your bank balance, how to reconcile your transactions, how to put your wages as drawings.

We go through the Smart Capture app and show you how that works.

I think that's one that Abby did.

And then we've got the bank.

So this is again really, really important one that we get asked a lot is adding a loan account and adding a cash account.

So if you have got a loan for a van, again that's going to be covered in that.

And it's a very, very important topic.

Account transfers, again, it's something that, you know, if you add five bank accounts to free agent and then swap money between them, it has a bit of a meltdown.

So Abby is there to show you how to do it properly.

So that's another really good video.

And then we've got categories, obviously adding a category, which again is another popular question that we get asked.

And also what we've added in is the accounting reports.

So the profit and loss report and balance sheet.

I know from speaking to a number of clients who have free agent, it's something that they didn't even know was there.

So again, understanding your profit and loss and balance sheet is going to be very useful to you as a business and shows you some shortcuts and things to look at through those.

And also, like Lee said, your assets and how to log any assets that you purchase and also give you an understanding of what your cash flow is.

So as you can see, there was a shed load of videos in there and then also the free materials at the side to help you with the transaction, the categories.

So really it's got everything in there and if we just click on one just to give you an idea of what it looks like, there's a little explanation underneath of what the video is going to show you.

And it's just a case of clicking play and it'll bring up the free agent screen.

And like I said, it would be myself, Leah, Abby, talking you through how to do what it is that you need to do.

So there we go.

Yeah.

And those that training is available from today.

It went live this morning and you can enroll into that just by visiting the Pet Accountant website.

It's petaccountant.co.uk training courses.

Oh, and there we go.

Banner is there already.

It's.

Is it £40?

I think it is.

So it's not going to break the bank.

We've tried to keep it nice and cheap as well.

So it's a case of you sign up, you get unlimited access to it and it's not a repeating payment, it's a one off payment of £40.

And you then have access to all of those training videos, all of the materials.

And like I said, as, as the software develops, we'll add in videos to it as well, just to make life a little bit easier.

And again, like we said earlier, if there is anything that is not covered on there that you think would be really useful to people, then please, please just drop us a message or an email or put it on the group and we will create the video for you and add it in.

And like Lee said, you're not gonna have to purchase it again.

We will just keep adding the videos.

So that is gonna be a very, very useful resource, especially those who know they're going to be having to comply with making tax digital rules next year.

So if you're earning 50 grand or more, then you will probably get a letter from HMRC to say that you're going to have to go digital.

So if it's something that you guys haven't thought about, then it's definitely something that needs to be on your radar.

And as Tegan has put in there, and it's a business expense.

It is indeed.

So it's the best £40 you'll ever spend.

And there's hours of fun with me, Lee and Abby going through and they were so good to make.

Yeah.

What we should have done is done the outtakes one and shown how many times we had before the video without swearing.

So 10 minutes in and the dogs bark and you're like, oh, God, I've got to do that all again.

But we, we've tried to do it, you know, as easy as we possibly can.

We haven't gone into technical technicalities around the accountancy side of it.

It is literally how to do those things.

How do I add A category.

This is how you add a category.

How do I straighten?

And videos, what only two to three minutes long?

Five minute max?

Yeah, some of them are a bit longer, like the reconciling ones, about 10 minutes.

But they're not like I say, they're not 30 minute videos where you're going to sit and get bored to death and like click here, click this, click that.

So they are very, very useful.

So any feedback on those who decide to get it, please let us know because that'd be fabulous.

And like Lee said earlier, you can get free agent free with a metal bank account.

Yeah.

Or a West Business bank account.

So yeah, so make sure you're not paying for it I think.

Although just double check.

As long as you've got one transaction going through the metal bank a month then you get Free agent for free.

So if you have another like a Monzo account and you don't want the change, then as long as you add the metal bank account to Free agent as well and have that one transaction going through, you should get it free.

And like you could literally just transfer money into it and use it as a savings account if you like, just so you can keep some money there and then when it's time to pay your taxes, pay your HMC bill out of it.

So yeah, because I have a feeling software fees are probably going to go up next year.

We've seen the price of Xero shoot up over the last 12 months.

We used to get discounts on all of the software so if we had like so many people on we'd get a discount.

Free Agent stopped doing that ages ago.

Zero stopped doing it and now we're just being stingy and not giving us anything.

So we don't really have anything to pass on with you guys.

Although QuickBooks is cheap, but there's a reason for why it's cheap because it's crap.

But even, even with their prices they're starting to creep so they are starting to go up in price as well.

So it's everybody's following suit.

So free Agent, very very good software.

It does what it needs to do and it's less accountancy like than I would say.

Xero is Xero we use for our bookkeeping clients because it is a very, very good piece of software and it does a lot of things that Free Agent doesn't.

Uh and it does things a lot quicker and more efficiently.

So if you're with us with bookkeeping you will be on Xero because that is the better software but harder to navigate as someone who's never seen software before and doesn't have a clue how to do the finance side of it, it would probably be a bit more tricky.

And then we've got Dext, who some of you are on.

And that is like Billy Basic.

Like it doesn't have the profit and loss report or the balance sheet or the cash flows or all of the other stuff that Free Agent has.

It is literally just a mirror image of your bank.

You realize Dext is more of a record keeping software rather than a bookkeeping software.

It's purely designed so that we can categorize the transactions that hit the bank.

It's designed to be used on the mobile, but you don't get any other functionality out there.

It's there to tick a box to say that you're compliant for making tax digital and just to make your record keeping a little bit easier so that if you need to move away from paper or spreadsheets, then Dext is the next step up for you guys.

If you're wanting to grow the business and you're going to want the information, the feedback back from it, then that's where actual accounting software comes into play.

The likes of Free Agent, the likes of Xero, because it gives you so much more information.

And the business owners that are really in tune with their finances in terms of what they're spending, what their income is, their seasonal variations, they know how to adjust and make business decisions based on the finances.

They're the ones that are more successful and they're the ones that will need a better software because without that information you can't make informed business decisions.

So that's why Dext has its place in the world and it's easy to use.

It's a great kit at a fiverr a month as well.

Plus VAT from an accountant like ourselves is, is brilliant.

But obviously in order for us to give our clients good feedback about their business and how well they're doing, we would need you to be on some sort of accounting software the likes of Free Agent and Xero.

Fabulous.

And in case you're wondering, are they going to do a course on or a guide, I should say on Xero.

No, not at the moment.

At the moment it was very, very.

It's a much more complex system than Free Agent.

Reagent is very user friendly to be able to do those sort of videos.

Zero, not so much.

I would say 90% of our clients as well that are with us are on the packages side of things or they've done bookkeeping.

With us.

So it's us doing the work in Xero anyway.

We have very few clients that just have a 0 subscription from us.

Yeah.

So it doesn't make sense for us to be able to do that video.

Unless of course, we have other people in the group that do use Xero and if they want to put a post out there that says can you do it and we can gauge some numbers if the demand is there, then absolutely we would look at doing it.

But at this moment in time the numbers doesn't quite stack up.

No.

And it's to help you as well, to make sure you get it right.

We understand that, you know, it is difficult and you're not accountants and you know, trying to figure out how you put a van as an asset on an accountancy software if you've literally got no clue what you're doing is almost an impossible task.

And it helps you guys, it helps us with clients using the course, hopefully so that when we get the agent it's less things for us to correct, which is where my top tips comes in.

I basically go through everything that people have got wrong in the past and make sure that you go and check it to make sure that's correct.

Like the accounting dates.

If you get those wrong, like it's just.

Yeah, the whole thing is just a mess.

So the accountant dates is important.

We can generally correct that if it's your first year and you come to us.

But if you've done your own self assessments previously and you've reported the wrong dates, then that's very, very difficult to direct.

I've only ever had one client where they've had free agent, where I've had to ring out and go, you basically just going to have to delete it and start again.

It was that bad.

So that just goes to show the amount of people that use it.

It's not an overly difficult software to use.

So please have a look at it if you're not already and if you want to have a chat with us at Crufts about any of the softwares or making Tax digital.

And then we will be at Crufts from Thursday.

It starts Hall 1, Stand 58, which is directly opposite the entrance to Hall 1.

So as you walk in we are on the right hand side.

We have where we were last year.

Same place where we were last year and also we've got a big and better stand because on reflection, last one was crap.

Although we did have lots of goodies which we've got lack of this year because again the Software companies have been stingy and not giving us anything, but what we do have is Prosecco.

So when all else fails, and lots of.

If you want Prosecco and a paper cup, then hole one, standard 58 is where you need to go.

If you fancy a tipple in the afternoon and you want to come and chat to us, we'll also have a few extra staff with us for the weekend, Jodi and Nicola.

So again, if you're a payroll client with us, then Jodi will be there.

Or if you're looking for a payroll provider, then Jodi will be on hand on Friday and Saturday to have a chat.

With regard to payroll.

It's a bit of a short one today.

No questions.

Someone must have a question.

Anyone got any?

Even if it's not related to software, has anyone got any questions?

We can always tell when we do an exciting topic like expenses where we have like 50 people watching, and then a not so exciting topic on software where there's seven.

Oh, now six or down, we've lost one.

But yes, if you ever have any questions, let us know.

Check out the course on our website, the links on there, and if you do get it, please give us some feedback.

We'd really appreciate it.

And like I said, if there's any videos that aren't on there that you would like to see on there, just let us know.

And we'd be more than happy to add them on there.

But, yeah, sweet.

We're probably going to have to give a little bit of a gap next week as well, aren't we?

Because we're going to be setting up.

No, we'll do a live from Crofts.

That'S on setup day.

We've got a new stand, we've got a new.

We go put that together, it's going to be like.

Like IKEA stand.

Yeah.

Which is still in this box, which we've not checked until we get to cross and when we try to erect it.

And it's probably got a hole in something.

What could go wrong?

If anyone wants to see us stress Lee on Wednesday and has got a stand across, come and see us, because we might have bought you a few bottles of Prosecco by that point.

But yes, obviously next Wednesday we will be heading across to set up.

So I will do a few live videos whilst we're there and I'll take you on a little walk around and if there's any interesting stalls, I'll see if we can grab them.

And to have a little chat.

If we have one of those little tiny microphones I could go around and try and pick.

We'll just paint a bit of black fluff and hold it in there festive and people will know you different, Willie.

I know, I'll just get some black earbud or something and just carry around.

But yeah, so we will do a live from Crufts next week and then the week after we'll let you know how it's gone.

But please check out the course, let us know what your feedback is and we will go from there.

But hopefully you all enjoy it.

Like I said, it needed because the amount of questions that we get in the group and this is going to make your life a hell of a lot easier because you've just got to follow us and click some buttons and then it'll be done.

I think people might be wondering, well, why would I need it if I've got you guys as accountants?

And the honest answer is, if you're not with us for the bookkeeping, then when we do the self assessment service, you're paying for the completion of the self assessment.

So we check your figures, we use those figures and then we pull those into the self assessment realm where we assess all of your worldly income.

So the self assessment is very much different to your business kept records where you compile them yourself and then bring us some sort of orderly fashion of the sales and expenses that you have.

Now when it comes to the self assessment side, we include up to an hour to correct any bookkeeping issues that we've got.

But if you've royally mucked up your free agent and it's unusable its current form now, that could be you've misclassified something.

It could be that you've done transfers between different accounts and the transfers haven't been done properly.

It could well be that you've gone in and you've deleted bank transaction line.

Because what happens is that the first thing that we ask for is a bank statement and we check that the balance on the bank statement as of 6th April or 31st March, whenever your year end is, matches what free agent says.

And if it doesn't, that's the first telltale sign that something has gone wrong in that year.

And then that hour can be used up very, very quickly with us trying to find what month that it went wrong.

So if you need any more time to fix the bookkeeping, then obviously we charge an hourly rate for our bookkeeping time because that needs to go to one of our bookkeepers to be able to correct the software to get everything right to bring back to the accountant so that we can take the information that's in the software itself and transfer that over to a set of sole trader accounts or partnership accounts.

If that's wrong, then your whole tax return is wrong.

So actually having a correct set of accounts is vital in the first step of having a self assessment that's correctly reporting your income.

But also as part of that, we find that people misclassify things.

So sometimes incoming money's been classified as sales, when really it's money from you putting money into a business or you've had a loan and you've classified the loan as income.

So it's not all about finding the things that is going to push the sales value up and you pay more tax, but also it's about making sure that any expenses that you've misclassified are included in there as well.

Now, sometimes that means it pushes your tax bill up because if you've classified your own drawings as an allowable business expense, and we go, unfortunately, can't have those, that does push that profit back up.

And it does happen.

Yeah, it does.

And you know, people say that accountants are there to save you money.

They are, but we're also there to make sure that what is submitted is correct.

And the correctness is a, is a higher priority than saving the money.

Because if we submit incorrect figures to hmrc, you, it could open you up to a compliance check.

And that compliance check doesn't just look at the one year, it can go back many years.

So it is vitally important that everything is checked and that the information that we submit and fill the tax return in is correct.

And HMRC are now using algorithms, they're using AI and they're looking at transactions.

Whether or not what you're submitting is in line with industry standards, whether or not it is proportional to what you submitted last year.

And what they're looking at is little telltale red flags that says, hang on a second, something needs looked at here because it's not quite right.

You're, you're not in line with the industry.

You're, you've jumped or you've, you've a lot lower than you were last year and we need to find out why.

And that's the start of a little, I wouldn't call it an investigation at that stage, but it is more so a, a, it's formal, but they're, they're just there to find out whether or not you have done something wrong.

And they're hiring 5,000 new staff as well.

So that's a big telltale sign that they're going to be black.

And what they're looking at now is they're not.

Previously they were just looking at the big things that were wrong.

Now what we're seeing is that if people have forgotten to declare income from their savings, this is now being flagged up with a letter from HMRC to the client saying on your most recent tax return you didn't declare savings interest so we have corrected your tax return and you now do they know how.

Many savings you've got?

Well, this is it.

And the problem that we've now got is that they've, they've now gaining access to bank accounts as well for more so for benefit fraud side.

But it's only a matter of time before that is rolled out right the way across to the self assessment side.

And what they're going to be looking for is to make sure that you are declaring your worldly income as it hits your bank account and that you're not hiding things, you're not delaying things.

And one of the biggest things is people not declaring cash.

And you think, well they're never going to know about it because it's cash and that you know, I'm not putting it through my bank account.

And you know, how on earth would HMRC know that I am not declaring cash?

It takes one disgruntled member of staff, an ex client that you've fallen out with.

It could be that they look at your self assessment, they see all these bank transfers but nowhere do they see cash being deposited.

And that's very recent as well.

I know people do take cash but you've got to look at it is when you're going for a mortgage, if you're not declaring all of your income, you're not going to get a higher mortgage because your income is going to look lower than it actually is because you're taking a grand in cash every month.

Yeah.

Or if you want a loan for a new van, for example, again they're going to look at your tax returns and your accounts and if you're showing is not earning much then the less likely to give you a loan.

So there is reasons why, you know, you should be declaring your cash as far as like a business element's concerned, obviously should be anyway but we know people do it, but you've got to think longer term or am I going to need a mortgage soon?

You know, do I need to get a loan?

Because they're going to look at your accounts and if you've been withholding the cash, then you're just scuppering it.

You get caught not declaring cash one year and you think, okay, they're going to, they're going to sting me for that because I didn't declare it.

And then they go, well, you've done it for the one year.

Now we're going to go to the full extent of the law.

We're going to review all 20 years.

Could you afford to pay the fine, the penalties, the interest on all of the backdated taxes owed for 20 years and potentially a criminal record?

And this is why I say to clients at the down, the negative, still.

Positive, still not positive.

This life.

Yeah, you get a good cause.

Tax fraud.

How do we do it?

Straight to jail.

But, yeah, but, you know, it's important because it does tie in.

And people, we have had like, people wanted to come to us and they've said, well, I haven't declared my cash.

And, and the, the response to us at that stage is, in that case, what you do is you go back, you go and declare the cash and then we'll welcome you on board as a client.

If you don't want to go back and correct your, your fraudulent activity and your tax evasion, then unfortunately we don't want you as a client because we couldn't trust that you would not do that again with us acting as the accountant.

It's scary how many people out there actually ring us up and say, well, actually, I haven't done a tax return for three years and I've just taken cash for the whole three years.

I just started from now.

And you're like, no, yeah, that's it.

And like Helen, Helen's just said there that Covid had scuppered claimants when they hadn't declared cash.

And this is correct because obviously during that time people, people didn't want to take cash because of the transfer of money and germs on the notes.

So people then started paying by cards.

And what happened then is your sales miraculously jumped because you're now having to clear all of the cash, all of the card payments that were going through your bank account that were people paying by cash previously.

And then what happens is down the years, people go back to cash, you stop to clear it and your sales come down again.

So there's always telltale signs that there is something untowards going on, even if you can or can't see it when an accountant looks at the books or when a HMRC looks at the books.

I mean, we've Got comparatives.

We, we have a good indication that something's not quite right.

So, you know, all we're saying is declare it.

It's much, much better.

It's easier.

Just declare it and let us save you tax the correct ways rather than doing it the incorrect ways.

That could scupper you for years to come.

But, you know, I think the software will help you, you know, and we know so many people are on spreadsheet and it's so hard to know what your business is doing on a spreadsheet.

It's just, it is difficult.

I mainly constantly look at Xero.

One of us is always in it, looking at something.

So it is a very, very good tool, especially if you're looking to grow your business to expand, you know, looking at your prices, looking at your expenses, what you're spending your money on, you cannot do that effectively on a spreadsheet.

So this software is there to help you and to help you grow.

And like I say, we look at it every day.

You should know exactly how much is in your bank.

I always say if you're awesome, you're bank.

I don't know.

How do you not know?

We're well in there every day, probably about four times a day doing all the pots in Starling.

So these little things the software will help you to get track of.

I think you touched on a very good point as well about the mortgage side of things because depending on your mortgage advisor, they might say, right, go and speak to your accountant and let an accountant will tell you what your projected figures are going to be and then we can work out the amount of mortgage that we can give you.

And there are some mortgage advisors out there will go, right, well, you need, you need more money or you need.

To go and tell your accountant.

Go and tell your accountant you need to earn more.

Now, that is acquiring funds via deception for.

And you're basically, you're committing fraud because you're defrauding the bank against its loan product based on you declaring that you have a set number of, of income that you then manipulate.

And whether or not you defraud HMRC or you defraud the bank, you are inadvertently or knowingly committing fraud by then manipulating the figures to obtain a higher mortgage so you can get a better house.

But the mortgage advisors don't tell them that they can't do it either.

Which, which baffles me that they should.

Mortgage advisors, not all label all of them, but, but there are some out there.

Well, I must come.

And he said, only the independent people that, that are trying to, to get you a mortgage basically.

But like, like Vic said, you know, the, the moment that you come to us and, and ask us to start manipulating the figures, that's a massive flag.

Yeah, yeah.

So, yeah, don't, whatever you do, save your account.

Like, oh, I need it can't be.

Compliant, you know, and we can't be complicit in it.

So it's not worth our license as accountants to, to help that one person commit fraud with the bank and then obtain a mortgage.

So, so it's one of the reasons why we encourage everybody declare everything.

So the other thing that people do is they say, right, well I'm going for a mortgage next year, I'm not going to put these expenses through because I need to show.

So it's not about just cash, it's about manipulating the expenses that go through.

Now if there's a legitimate reason for cutting down on those expenses, maybe, you know, you want a cheaper supplier, maybe you know, there's products that you're not using or software that you're not using that you want to get rid of.

That's a legitimate, absolutely above board way to improve your profit margins and we would support you on that journey.

You can't decide to deliberately withhold expenses, not put them through this year because you need a higher profit margin and then carry those expenses forward next year and then add them into next year or just forget about them for the year and then start buying them again next year because again it's going back to fraud via deception.

So how on earth did we go.

From the very positive topic of software to fraud by ception?

Fraud's fun.

People want to know about it, you.

Want to be a happy cost, but.

It ties back into having the software because it goes back to you understanding your business, you understanding your income and you understanding your expenses and having all of that information at your fingertips.

And the moment that you move from paper based accounts to software accounts, you already improve the accuracy just by making that move.

Yeah, and what we're trying to do is encourage clients and non clients and everybody within the group to do the right thing, to declare the incomes, declare the earnings, declare the correct expenses and not get caught with your pants down with hmrc.

So when you write in a spreadsheet out, because no one ever does it as you know, as they're going, you could get to the end of the year and think, well, kind of got to do my spreadsheet and you could have lost receipts and things and then you're costing yourself more money because you've got loads of expenses over those 12 months that you've, you've lost and you've manually typing it in.

You think, oh, I'm sure bought something three months ago, I can't remember what it is.

Oh well, I'll just leave it.

And that's going to cost you more money.

Whereas when your bank's linked to Free Agent, for example, you can't miss it because it's there.

It literally pulls it in and you've just got to go and click a button.

So it's definitely worth doing and it will save you money.

And like I said, there is free options out there.

And HMRC accept as well that you, you're not going to keep a hundred percent of the receipts, you will lose some.

Like Vicky lost one this week.

So it does happen.

And I'm not bitter in the slices.

The amount of Prosecco that I bought, he only, he thinks I only bought 15 bottles.

It's here.

Yeah, it does happen.

Lose it.

Losing the receipts does happen.

So what, what you want to look at is on the software side that would have been captured on the bank, you would have known that you've gone to a shop, you would have known what you've bought it.

So you can collect correctly, categorize that expense so you get the tax relief from it.

If you were doing this on spreadsheet or you were doing it on paper and you're doing it at the end of the month or at the end of the year to.

Because you want to do it all at once.

Yeah, I'm going to go out on a limb and say that you probably won't remember what you bought from that shop.

It's certainly, if you know it was 12 months ago, you're not going to exactly remember what you did.

But I might just go personal so I won't put it through.

So therefore you don't get the tax relief on it, so you're costing yourself money.

No random receipt.

Sorry, that's me double clicking.

Okay.

Last week I got some petrol and the receipt machine wasn't working.

What do I do?

Okay, so in this instance, what I generally do is take a photograph of the petrol station forecourt with the amount that's on there because you can then match that up against your bank account.

So you've then got the option of to say to hmrc, you can clearly see that the amount that's on the machine in the picture is the same amount that come out of the bank.

Now in that instance, what I would Say is don't mix the transaction when you go into the garage and then don't buy any extra bits and pieces to put through at the same transaction because otherwise the two won't tally.

So I mean by that is, no water, no chewing gums, just, just pay for the fuel and buy any other extra bits and pieces for you personally as a separate transaction.

But what happens if you've forgotten to take the picture and you've left or you don't have the receipt?

Then it goes back down to the rule of averages.

As long as you have most of the receipts, HMRC will accept that some receipts will get lost and they, they generally will allow a percentage, percentage of transactions.

And again it goes into that rule of percentages.

First of all, you've got to be selected for a compliance check.

Second of all, it's got to be one of the transactions that they query on their compliance check.

And then it's got to be one of the ones that you've missed.

So it narrows down and gets less likely to be selected.

But if you've got a load of transactions where you don't have receipts for, and you say to hmrc, well, I haven't got receipts for those three transactions that you've asked for.

They won't just go, okay, then they'll go, right, I asked you for five receipts before, now I want 20 receipts.

And they will pick another selection of a larger range of transactions to sample.

And then what they're doing is working out how much of your records that you're keeping, because remember, it is a legal requirement for you to keep accurate records.

And if you can't prove the transaction, how do they know that it's accurate?

So that's what it's coming back to.

Don't start taking pictures of weirdos at the petrol station.

You've also got to be careful because you shouldn't be using your phone on the forecourt.

So you, you should be doing it again from the safety of the car away from the petrol pump.

I don't want anybody blowing up any petrol fork like their cameras and phone disclaimer.

No, I.

But you bought it with a cash you didn't declare.

Helena.

Helen, I wish people would pay us cash, but they don't.

Sadly not.

You go to home bargains, you get some cheap Prosecco.

So, yeah, right, I think that's probably it for today.

Very short and sweet.

Started off, started off positive.

We went down a bit of a, a fraud loophole.

It was a bit more fun, wasn't it?

People were A bit more engaged that bit.

Yeah.

He loves a bit of tax fraud and tax evasion.

It's his favorite topic.

He's just made us all do anti money laundering training and I started it and there's like 53 slides.

So I did curse and was about to ring and say, are you joking?

53 slides.

So there we go.

We're always up to date at the pet accountant.

It's difficult.

I go on about tax Fridays because I'm the money laundering officer for the the folks.

So that's why I look into it a little bit.

Nothing gets past its bdi, so not even my lack of receipt for the pra, which I'm sure is around here somewhere.

But yes, next week we will be back or we'll be around Croft.

So we'll, we'll do a little live from there and then we'll be back as normal the week after.

Probably drained.

Hopefully we'll see some of you guys there, make sure you come and say hello, let us know your name because we're crack with faces.

So if we look at you blankly, it's probably just because we're rubbish at names.

If anybody that's within the group is going on Friday and you'd like to give us an on record video review of space even out, we've got a professional coming in that's going to be filming us.

And if you've, you know, if you've got a review of the live that we do, even if you're not a client but you enjoy the group and you enjoy these videos and you'd like to go on record for us and just say, you know, how, how they help or how you enjoy them, then it would be really, really nice of you just to come along just so we can meet you and just say hello in person as well so that, that we would appreciate that.

If there is anybody there on the.

Friday, we'll give you some Prosecco and some sweet.

Yeah, because I find it after though, not before because that would.

No.

Yeah, one trunk.

And once we could do shot games.

Couldn'T we come and do Prosecco shots with the pet accountants?

But yes, come by and say hello and that would be fab.

And yes, hope hopefully you enjoy the guide.

Oh, hang on a second.

We've got a late incomer.

Oh, Helen's on a roll.

Yeah.

Do you want to answer that quickly, Lee?

Okay, so you really need to be asking him for a receipt.

Even if you, you write the receipt out, put his details on it and then get him to sign it but you should ask him for a receipt because again it could well be that he's not declaring the sale of that hay to you as well.

So it's difficult for you then to prove that you've bought the hay to claim it as an expense.

So if just make sure that you're right and ask him for that receipt or get him to sign for to say that you've purchased it at a set price.

Hay is also tax exempt.

So I understand.

Yes.

Yeah.

And again it's because rabbits are fit to for human consumption and feed that you give to animals said that for the human food chain is zero rated and every that's designed for pet foods is not zero rated.

That's I would like someone in the group or anyone to try and find the most obscure tax question that we can all pose to Lee to see how many of the answers he knows we're given like a Quiz Lee a Quiz Lee Life score and find some obscure attach related questions and we'll see if Lee knows the answer to because he probably will.

But yes, if you've got any obscure questions and you find them, please let us know and we'll do a quiz Lee live.

Yes.

Fabulous.

So yes, let us know how you find the free agent guide would be really really handy to have some feedback.

I hope you enjoy it and yeah, have fun and hopefully we will see everyone across and as always these lives are put onto the podcast every Monday.

So if you haven't already please subscribe to the Pet Accountant podcast on Spotify so that you don't miss any of the lives.

We understand people are busy at this time during the week so and if you follow and subscribe us on Spotify you will get a notification when we do one and they do tend to go live every Monday exceeded.

If you're not watching live and you're watching this back, if you do put comments into the into the video link we do come back and answer them as well.

So we can just abandon it once the lives done.

We do monitor it and we do.

No we can monitor it for 30 days now Facebook and they get rid of it for 30 days.

We'll monitor it before it disappears.

But yes, thank you guys as always for contributing and like I said, hopefully you love the guides and hopefully we'll be able to answer all those free agent questions now there'll be less free agent questions in the group because you all have the guide and we will catch you next week live from Cruft to keep you updated.

With that we will have some offers on at Crufts so please come and see us.

We will have the record keeping packs there to purchase as well.

If you are one of those who still likes your pen and paper, which we know you're out there so that's fine.

Bit worried about those because stocks are starting to run down slightly.

We don't have pennies so if you would like them please either order them online we can get them posted to you.

I'll come and grab one quick at Crufts.

I would do it on the Thursday or the Friday because generally by Saturday afternoon I think we've got none left.

Please come and grab one whole one stand 58 and we will do a.

Little live from there anyway.

Fabulous.

Perfect.

Right, well enjoy your little guys and we will see you soon.

Take care.

Bye bye.

Thanks for listening.

If you've enjoyed my podcast, don't forget to subscribe for me and if you want to speak to me please visit my website@www.petaccountant.co.uk and if you'd like to join my Facebook group which is full of like minded pet professionals, then search Accounting for Pet professionals in Facebook and I will see you there.