Dr James, 1m 43s:

This is a podcast I've wanted to do for so long. I just haven't had the right opportunity. How can we tell our accountants we're doing a good job? And how can we know that we're getting really good value for money when it comes to paying our subscriptions every year? But I'm joined today by a specialist accountant, UK dentist. Her name is Alliah Hamid. We're gonna be covering all of that and more. You can take these into your accountant on Monday, ask them, grill them, and make sure that you know that you're getting a really good deal. Looking forward to this episode as ever. As ever, you can claim your CPD for this episode within the official Dentists Who Invest Smart Money Members Club. Smart Money Members Club also includes multiple mini courses and webinar series on finance for dentists, including how to become as tax efficient as possible, as well as understanding investing. All of this content counts as verifiable CPD, and you can download your certificates there and then upon completion of each lesson. In addition to this, we also include a whopping 10% discount on your dental indemnity and a 5% discount on lab bills for dental principals, amongst other perks and discounts for members. Please use the link in the description to claim your verifiable CPD for this episode. Alliah, we've hyped this podcast up a little bit. And you know what? We need to just say a few things before we start. We're definitely not meaning to ignite any controversy for sure. But what we do want to do, we're definitely not meaning to ignite any controversy, definitely not meaning to diminish uh anybody else out there, uh, because that's unprofessional, of course. But what we do wish to do is we do wish to elevate people and their thinking so that we know that people are getting the best deal and educating and everything else along those lines. So, like I say, I don't mean to ignite the sparks of controversy. I think this is going to be a juicy episode.

Alliah, 3m 34s:

Thank you, James. Thank you for having me. Um so the first thing I would say is that what I'm about to share is actually from having lots of different conversations with associates and also from being in the industry for over 20 years. The first thing I would say is there's no one size that fits all. You know, there are so many different accountants out there, there's dental specialist accountants, there are accountants that um you know work with large multi-flight practice owners, there's not a one size that fits all. And the other thing is that what I've noticed as associates tend to focus a lot on cost. I would say the money that you pay to your accountant, you shouldn't look at it as a cost. You should look at it as an investment in yourself and in your business. So if you're earning £100,000, then what you would pay in terms of a portion of your fee would be very, very different to if you were a £1 million multi-free practice. So that's something that you really need to think about. It's an investment. And some associates might want to do it on the cheap and save them, save the save themselves five, six, seven hundred pounds. And I'd say that's absolutely okay. But what are you leaving on the table? You might say £500, but if you don't have the conversation with your accountant, if your accountant's not asking you the right questions, making sure that you're claiming all your expenses, then you could be end up paying more than more in tax, like maybe £5,000. So look at it as an investment.

Dr James, 5m 13s:

Absolutely. And I love these sort of I love these little mindset flips because I remember being that accountant. Sorry, I remember being that dentist regarding my accountant, and I remember being like, How can I spend the least that is humanly possible to get this done? Which is completely the wrong mindset because you're saving pennies, but you're losing out on points, which is an expression that I really like. But the thing is, I just didn't know how that looked or what that meant. I I didn't know enough to justify the differential in the value, which is also going to be partly why this podcast will be useful too.

Alliah, 5m 47s:

I absolutely, and I think really one important point to highlight is the tax rules change. So while you know what might have been beneficial to you, maybe you're a sole trader, um, but now that the tax rules have changed, maybe it's more beneficial for you to be a limited company, and vice versa, the tax rules always change, and an accountant would be able to advise you because they are up to date on all the tax rules. So that is why it's really important to have an accountant versus not having an accountant. And I'll give you a really quick story. I had a conversation with a lady a couple of days ago. She'd be doing her self-assessment herself, you know, kudos to her for navigate the HMRC self-assessment platform herself. Um, and she was now going to be eligible to register for MTD. She's like, I just don't have a clue what to do. And I asked her a few questions about her setup, and you know, she shared some personal information and her income has increased, she's now doing locum work, she's doing a master's. And I said to her, Did do you know you can claim X for X, Y, and Z? And she said, No, I didn't know any of these things. So already just on a call with an accountant, she she could actually reduce her tax liability significantly. And that's a very, very simple example of what it means to have an accountant that asks the right questions rather than doing things yourself and trying to save some pennies here and there.

Dr James, 7m 17s:

Boom, there we go. Because, well, I mean, what I was told back then was whatever uh money I saved by doing it myself, you know, I was probably missing that out in uh exemptions and tax breaks and everything along those lines. Uh it when I did do that also uh personally too. Uh so yeah, like I say, I'm I'm I'm interested to hear what you have to say here whenever it comes to these things that we can ask our accountant specifically. Because again, you know, Alliah, shoot me down, correct me if I'm wrong. There are a lot of accountants out there who will charge you to do a self-assessment and just not do these things, these very basic things as well, correct?

Alliah, 7m 54s:

Yes. So I want to make a very clear distinction between the two, and I might be generalizing here, but just to keep things easy for the listeners, there are two types of accountants. There's a compliance accountant and there's an advisory accountant. Now, a compliance accountant is somebody who you send your information to, whether it's a CSV file, an Excel spreadsheet, and they punch into the numbers into their tax software and they send you a bill and they go, here you go. You don't hear from them all year around, you don't have any interaction with them, you don't have any relationship with them. You know, this is your hard-earned money. You'd want to have somebody as a sounding board that you could ask questions to. But in this situation, a compliance accountant just gives you the tax bill, right? And you pay them a nominal amount. Then you have an advisory accountant. They're somebody who understands your story. Where are you today? Do you want to buy a house? Do you want to put money into a pension? Are you going to have a baby? Is your wife working? Is she not working? Should you put her out as a director on your limited company? Like he understands where you are in your journey and where you want to get to, and then he advises you accordingly. These are the two clear distinctions. Now you tell me which one is going to be the one that's going to save you money in tax and make sure that you're set up correctly. A compliance accountant that gives you your tax bill, or an advisory accountant that actually is invested in you, understands your story, understands your goals, and make sure you're set up correctly and claiming all your expenses and allowances.

Dr James, 9m 35s:

Yeah, well, there we go. And can you maybe this is something that uh I don't know if we can, if you have this information at hand, but I'm going to throw it out there. Let's say you've got your standard associate, okay? Uh, and let's say you have an advisory accountant like you were saying a second ago, how much would you expect typically? Oh no, if you literally just had to lick your finger and put it in the air, and I'm hoping this isn't a tricky question to answer. Uh, how much could that associate expect to save, in your opinion, per year, just by doing some very basic uh tax uh you know, very basic HMRC approved stuff to reduce their tax bill? Are you able to say, is that a figure that you're able to give us? Like would it be a couple thousand?

Alliah, 10m 17s:

It honestly really depends. So some associates are really close closed up, and they know exactly what they can claim. There might be some anomaly situations that they need somebody to ask, uh ask a specific question to. Like, for example, I have an associate who did some shadowing work at a completely different practice that wasn't his uh permanent place of work. He travelled there back and forth, it was a sizeable distance, two or three hours, shadowed for a few days, and then he said to me, Oh, by the way, I spent all this money on fuel, can I claim it back? And I said, Yes, absolutely you can, because it's not your permanent place of work, and you only travel there to do your shadowing for this particular procedure. So I think it really depends, but there, like I said, because the rules are always changing and there's always some anomalies, having an accountant on board that you can ask those questions to is invaluable.

Dr James, 11m 16s:

Boom. Okay, yeah. I thought that might be tricky to put a figure on, but you've given us a good idea of how one can uh how an accountant really can help us error or add value. We were originally gonna do five. Uh, how can I say this? Five things that you can ask your accountant. Was that one of the five, or was that just us back and forth? And Alliah, because if that wasn't one of the five, then we're gonna give people a bonus one, which we just have, which will be six today. Should we count that or not?

Alliah, 11m 42s:

Yeah, yeah. Compliance versus advisory, I'd say that's that's a very okay.

Dr James, 11m 48s:

Maybe we can have that as a bonus one. Let's see how we do within time today. Sounds good. All right, moving on. What's the next? What would you say, in your opinion, is the next red flag or thing that we could be asking our accountant? UK Dentists, Dennis Who Invests now has an official platform where you can learn about finance and obtain UK compliant, verifiable CVD at the same time. The only platform that exists on which you can do both. The Smart Money Members Club has hundreds of hours of mini courses, webinar series, and live day recordings on all things finance slash tax efficiency for UK dentists. This includes complete courses on how tax works for UK dentists, finance so that you can invest and grow your own money, business so you can improve your profitability as an associate or principal, and for those out there that want it, there's also a mini course and how you can responsibly enter the crypto space using measured amounts of capital. I've gathered this content from the best of the best I could find in each respective area so that you know that this is how people at the forefront of each field advise their clients. The Smart Money Members Club also contains discounts on common things that UK dentists need to pay for on a regular basis. This includes a whopping 10% discount on dental indemnity, the offer to beat your income protection deal no matter what you're paying, and for the principals out there, 5% discount on lab bills and 10% discount on practice insurance. These are designed to offer hundreds, if not thousands, in annual savings. The purpose of this members club is to not only boost your monthly income but also manage your outgoings as much as possible and therefore create more profit. To celebrate the launch of the Smart Money Members Club, and given that the CPD deadline is coming up soon, I've decided to offer the first month of this platform entirely for free. This offer will end in the coming weeks as soon as the current CPD cycle is up. To collect your CPD for this podcast episode using the Smart Money Members Club, feel free to use the link in the description of this podcast.

Alliah, 13m 57s:

If your accounting gives you a particular fee, ask them what is included in that fee. If they say it's just compliance, uh fine. If it's advisory, if it's tax planning, if it's you know, whatever it is, ask them, ask them exactly what is included in the fee. Is there software? Who am I going to be working with? Will I be working with you? I have had associates come to me saying they're frustrated because they joined up with one particular accountant, but they've never spoken to them ever again. And because it's like a large firm, every year they get a different person who doesn't understand their particular setup, and they're having to explain the same thing to them over and over again. So ask those questions: who am I going to be working with? If I send a query and who'll respond, who's going to do my tax planning? Because some associates want to build that relationship. They some of them don't care. Some of them say, look, just give me my tax bill. But some of them actually want that go-to person, that partner that they can trust, and they that person understands a particular setup. So ask the right questions, who am I going to be working with? What does the fee include? And how what's included in that fee? Is it tax planning? Is it just compliance? And how often can I have a meeting with you? Because some packages it's just once a year, others are a little bit more flexible.

Dr James, 15m 28s:

Boom. Good to know. And I'm guessing somewhere on that list, Alliah, what you're going to say is a dental specialist accountant versus your average accountant as well. That's one thing to look out for, or have I what would you reckon?

Alliah, 15m 42s:

I mean, I I I think for associates in particular, um, because associates have very a very uh what's the word I'm looking for, very specific type of setup in that you know, they might have NHS income, NHS pension, lab fees, they might have travel. Um it's good to work with somebody who understands all of those different expenses and understand what type of costs associates are likely to incur. Because if you understand the business, then you're likely to ask leading questions, right? So, for example, I know that a lot of associates do education on the side or they work from home quite a lot at the weekends. So a question that I always ask them if they don't provide the information is do you have a dedicated office space at home? Because if they do, and they spend one day a week in that office doing admin, treatment plans, studying, then I would say you could offset some of your working from home costs. Now, a dental specific accountant perhaps might not ask those leading questions. So just these are the things that I I'm talking about, my own experience. So these are the things that an associate would benefit from by working with a dental specific accountant. That's not to say that all accountants aren't good and it's good at all, it's just you know what you're getting with a dental specific accountant.

Dr James, 17m 25s:

Sure. And they're bespoke for your situation, of course. And you know what? Yeah, well, actually, yeah, no, that that that makes complete sense. And another thing um I actually think is something that I'd like to ask, and maybe we're going off a little a little off-piste here as well. I'm gonna say that as you progress through your career as an as a dentist, perhaps you start out self-employed, sole trader, uh associate, then you go limited company associate, then you become a principal, usually operating out of a limited company as well, and then you become a multi-practice owner that actually your needs from an accountant change as well. Maybe if we could, could we quickly cover that actually? Because I think that would be really valuable. Like what should the sole trader look for versus the limited company, et cetera, et cetera, in your opinion?

Alliah, 18m 16s:

So when you're setting out on your associate journey, you're absolutely right. You perhaps don't need full-on advisory support. Maybe you just need a touch point once a year to ask some specific questions. But when you're a principal, your needs are very different. You've got payroll, you've got bookkeeping, you've got you know staff coming and going, you you've got costs changing, like electricity costs are increasing, payroll costs are increasing. You need a very different level of support. You need regular regular reports so you can monitor the performance of your practice. And because of the complexity, you also need an accountant that's going to take the time to explain to you like what's the profit and loss, what does it look like? What does it actually tell you? Why do you need a cash flow? What does a cash flow tell you? So the the needs are very the needs are very, very diff different depending on the complexity of the situation and the I guess I'd say that the the the income the income level. So an associate that's earning 65,000, 70, 80,000 might need a very different level of advisory than an associate that's earning over 150,000. Because over 150,000, you'd want your accountant to start asking you questions because you then hit the higher tax bracket, you could be paying up to something like 60% in tax. So you'd want somebody who's more invested in you asking you the right questions so that you're not paying you're not overpaying in tax.

Dr James, 19m 56s:

Makes sense. And in your opinion, when it comes to a dental practice, do you think that every dental practice should have those things that you mentioned as standard, or is it when you get to a certain size? What's your thoughts on that?

Alliah, 20m 10s:

I'd say as standard. I would say if you're an associate and you're even thinking about uh opening up a dental practice, build that relationship. Because that if that accountant will do your forecasting and planning for the dental practice or the SCOAP that you're going to set up, they will do all the you know the financials for you. They will kind of go on that journey with you and you will trust them. So I would say if you're an associate and you're even thinking about that, you want to own a squat or you want to own a dental practice, build that relationship before you pick the accountant. Ask them, would you be able to support me in X, Y, and Z? Would you be able to provide you know quarterly meeting, quarterly financial reporting, etc.? Would you be able to explain the information in a way that I can understand it so that I don't feel a complete idiot? Because that's really, really important as well.

Dr James, 21m 8s:

Alright, Alliah, you've given us some really useful information so far, but now we're gonna get extra juicy because in this final remaining amount of time, I want us to cover Alliah's two biggest with the remaining two uh how can we say this points that we have, uh I beg pardon, Alliah's just shown me three with her fingers there. We're gonna have to move fast in this last five minutes, uh, because we're gonna cover three of Alliah's biggest red flags whenever it comes to known of your accountants done a great job. Over to you, Alliah.

Alliah, 21m 40s:

I would say, I mean, there's loads, but I would say the top one is that when you have an introductory call with an accountant that you're looking to potentially hire, do you actually understand what they're saying? Because a lot of accountants use jargon. If you can't understand them, then how are you going to have to have a relationship where you can actually trust what they're saying? And sometimes if you explain to an accountant, yeah, I don't know, I don't get it. Could you explain it to me in more layman's terms? They might use different terminology, but understanding what they're saying and making sure that they are breaking things down in using language that you understand is really, really important. Secondly, is that do they ask intelligent questions? Do they act are they actually interested in you? So your income might change from one year to the next and they don't challenge anything. You might um have put through some erroneous expenses, maybe you've put through, I don't know, your holiday, your five grand holiday back to Dubai, and they've not challenged it. Um or they just don't ask you questions about your situation, your plans for the future. I would say that's a red flag. It's like they just want to take your money and fill in a box and give you your tax bill. So they need to ask good questions and be interested in you. Um, and I think the third one is that when you ask them what's included in their fee, they're very vague. They're very vague about what's included. I would say that's also a red flag.

Dr James, 23m 19s:

Bang. The the the hat trick of red flags from Alliah on top of what's been a super valuable podcast already. Alliah, if anybody wants to reach out to you off the back of anything that we said today in the podcast, how are they best off finding you?

Alliah, 23m 39s:

If you've seen me on any of those platforms, I'm known as the Tooth Fairy. And uh my website is swanaccountants.co.uk