TaxGo pioneers low cost MTD practice model

TaxGo - 21st century accounting at 1950s prices
TaxGo
Valme Claro
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AccountingWEB.co.uk
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A new generation of practices is emerging to cater for small businesses in the digital tax era. Valme Claro talks to TaxGo, one of the pacesetters in this movement.

TaxGo was founded in 2016 by directors of Dennis & Turnbull and Tayabali Tomlin as a low-cost digital service for entrepreneurs and microbusinesses offering all the services of a regular accountant for £20 a month.

With fees set a third of the usual rate that most accountants charge, the firm is promising “21st century accounting at 1950s prices”. But there’s no escaping the underlying motivation here, as the service has been specifically designed to cater for the requirements of HMRC’s Making Tax Digital (MTD) regime.

Other firms such as contractor specialist Umbrella Accountants and UK200 member Rees Russell are also moving into this market. And AccountingWEB expects to see more representatives of this new wave when the Practice Excellence Award entries for New Firm of the Year are collated. To find out more about how this new approach is evolving, we talked to TaxGo founder Carl Reader.

Along with Aynsley Damery, the chief executive officer at Tayabali Tomlin, Reader could see the growing gap for microbusinesses faced with a choice between filling out their own tax returns or paying an average of £60 per month to have their tax affairs handled by an accountant.

 “Eighty per cent of practices are currently chasing the 20% of businesses that want or need added value services, leaving the vast majority of small businesses either as second class citizens, or overcharged,” said Reader.

“Many of these microbusinesses are not using online tools, and have no one to point them in the right direction with regards to tax legislation.”

Under MTD businesses will need to use commercial accounting software to maintain their records and to update HMRC. According to Reader, not using an accountant will become increasingly risky under MTD, which will require businesses and self-assessment-registered individuals to file quarterly tax reports.

“It gives the business potentially five opportunities per year to make an incorrect filing rather than just one,” he said. “We are clearly aiming at those businesses who want to stay compliant and also receive some level of assurance.”

Technology such as QuickBooks Online and plug-in applications has paved the way to automate the bookkeeping so TaxGo can offer this level of service at reduced prices.

“We’ve built a full management system from scratch” said Reader. “The tech helps us reduce human input, but is only part of what we have done here. We’ve also fully re-engineered the process of preparing accounts and tax returns, stripping out all superfluous tasks and minimising the work that our team has to perform.”

About Valme Claro

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08th Jul 2017 19:26

T&T are one of the most expensive accountants in the country, there is huge irony in this...

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to stevo5678
10th Jul 2017 14:25

BMW -- Mini, Mercedes -- Smart, Waitrose - Essential, Thinkpad -- Ideapad etc etc

No irony here, just common sense in having product offerings across a range of clients.

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10th Jul 2017 13:57

They seem to be rather ambitiously assuming MTD for sub-VAT reg sole traders it actually happening.

Good luck with selling a £250 a year package for something that people don't need now, and if sanity prevails, may never need. Moreover something like this will STILL only dribble out what is put in. You cant give advice for this sort of level, other than very quickly!

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to ireallyshouldknowthisbut
10th Jul 2017 14:23

It's limited companies too, not just sole trade. I for one can't wait until there are more companies like Tax Go trying to challenge convention. Competition is great and it will make the whole industry work harder and smarter.

Unless the advice you offer for £1,000 more than Tax Go's fees saves more that £1,000 in time or tax, where's the saving and why can Tax Go not provide the same advice with the right tech.

Products like QBO and Xero streamline so much, MTD should be a walk in the park..

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to davidbrokerage
10th Jul 2017 14:45

I am not sure why you think I would charge £1250 to the sort of basic sole trader they (or is it YOU?) are pitching to.

For anyone that complex to need such a large fee, then yes I imagine we would save the £1k, if not a lot more as to get to that sort of fee you would be talking VAT reg, probably multi-employee set up, either that or a really messy set of books. My most expensive sole trader is I think £700.

Its more at the (say) £400-500 level sole trader, which for me would be someone at or around the VAT threshold. If they are only £150 cheaper then its a "win win" from a client point of view to get it done properly with a real accountant such as us as even on a bad day you are going to save them that sort of cash just from looking at it properly and not relying on "the systems" to do it all.

Seen it all before quite frankly, and very happy to complete against the likes of the big 'sausage machine' accounting firms. Not least as I actually put my prices UP for contractors to match them and emphasise not only are we the same price, we do it properly too!

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By NH
to davidbrokerage
10th Jul 2017 16:49

and how can you charge someone £20 a month when the cost of xero is at least that in itself, or is that the point, the actual cost to the client is not £20 a month, because whoever you are if you are only charging £20 a month that has to mean the client is paying extra for software and doing their own book-keeping, and all you are doing is making sure they put everything in the right place and clicking a few buttons each quarter.
So under those circumstances £240 a year is about right, thats about what we have been charging all along, probably the same as many practices.

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to NH
10th Jul 2017 22:38

Their site (why is it .org as it's not a charity?) says £20 per month regardless of Sole Trader or Limited company and includes software which is the "world's number 1" so is QuickBooks Online not Xero.

Given a sub to the Plus version is £25 from Intuit direct you save a fiver before even bothering to get your accounts done. I think it sounds go value..

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By NH
to davidbrokerage
11th Jul 2017 07:29

nothing on the site says they use QBO

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to NH
11th Jul 2017 11:15

NH wrote:

nothing on the site says they use QBO


We use QBO.

Cheers
Carl

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to NH
11th Jul 2017 14:53

And the website's video clearly shows QuickBooks Online at 0:35

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10th Jul 2017 19:43

Hi all, thanks for commenting on this and sharing your views. Some kinder than others :-)

I can't comment personally on Tayabali Tomlin's fee structure, but TaxGo is aimed at a very different market to that which both d&t and TT, and indeed most practices, serve.

Regardless of whether MTD happens or doesn't, and whether we like it or not, the cloud revolution and automation is happening - and that's where TaxGo comes in. Let's be honest, we've all seen the benefits that automated bank feeds have given our clients. Further automation and artificial intelligence is only going to improve their experience of the accountancy process, by providing consistency in both customer service and technical expertise - and we're proud to be leading that innovation.

From a personal perspective, my firm became the first serious "cloud accounting" practice in the early 2000's, was the first UK Xero partner (and indeed helped them adapt it to the UK market), and this is now the natural progression of where the technology is allowing us to help the smallest of businesses.

Some businesses may decide to pay more for a hands on service. There's room for all of us; however, for the smallest of businesses paying over the odds (or possibly, not even using an accountant), TaxGo offers a very real saving for them from a time and / or cost perspective.

Don't forget, we've all still got the >1m larger businesses outside of the "micro business" arena to work with and deliver massive value for. Whilst the upcoming automation will eventually mean that our compliance fees will be minimal, we can use our learned skills and commercial experience to help these businesses grow further - which is far more rewarding and useful to both us and them than adding up yesterday's numbers and ticking disclosure checklists!

(And yes NH - I hate to break it to you, but their bookkeeping software is included with the TaxGo package...!)

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to Carl_Reader
11th Jul 2017 09:06

Carl - can you explain you relationship to this business?

You and the other positive respondent on this thread (David) have registered purely to comment on this topic.

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to ireallyshouldknowthisbut
11th Jul 2017 09:14

ireallyshouldknowthisbut wrote:

Carl - can you explain you relationship to this business?

You and the other positive respondent on this thread (David) have registered purely to comment on this topic.

Hi ireallyshouldknowthisbut - I suspect your username is apt!

I'm Carl Reader - the guy who was quoted in the article, and hence am "related" to the business and indeed the article. Apologies if that wasn't made absolutely clear, I presumed the use of the word "we" when referring to TaxGo, together with registering under my real name would have made that clear.

(I do have an old AccountingWeb membership under carlreader, just can't remember the password to get in...)

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to Carl_Reader
11th Jul 2017 09:18

As a general response you seem to be very confused about what happens with small sole traders.

You do not "sit ticking disclosure checklists" for 3 line P&L's. You don't do that for small limited companies either unless you are pretty unskilled.

This suggests you have little understanding of this market, which is mainly about helping people through the clutter and drilling down to the bare minimum that people at this level need to do to pay the right amount of tax with the minimum amount of fuss. Its about dealing with clients who form a limited company for a £2,000 turnover, its really about steering people in the right direction, something a skilled human can do in minutes.

The actual "number crunching" side is minimal, and is usually around 10% of the time taken on such clients.

The benefits of cloud and automation are much diminished the smaller you go. What use a bank rec when they dont even have a business bank account? who needs software when you can write all your transactions for the year on one sheet of A4 and still have room to ask questions on the unused half of he paper?

Whilst cloud is not just "coming" its very and working right now, I dont see the offering here as any different to what Xero does - they will give you a "garbage in, garbage out" balance sheet and P&L report.

Doesn't means its tax compliant.

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to ireallyshouldknowthisbut
11th Jul 2017 11:15

Thanks for your reply, we honestly appreciate that you've taken the time to look into what we do.

We seem to have a different view on the benefits of cloud and automation for the smallest of businesses - but that's fine by us! It's an evolving world and we will each have a different approach to this. Our belief is that TaxGo will be of huge benefit to those small businesses that see accountancy and tax compliance as a cost, not as a benefit.

Now, I do just need to pick up on your comment about disclosure checklists for sole traders... That's not really what I said, is it? But just to reassure you and other readers, TaxGo has been founded by 4 individuals, each Chartered, with circa 15-20 years experience each in practice. Both founding firms have won multiple industry awards, and certainly at d&t we service a huge number of small businesses across all corners of the UK. We know the small business accountancy market.

This isn't to boast or an act of one-upmanship - this is simply to reassure anyone reading of our experience, given your comments.

We're also regulated by ICAEW, and as such have to work to the standards expected of a firm of Chartered Accountants. All we've done is use technology to minimise the human input, and errors, which can arise in the accounts and tax production process.

Again, thanks for your time looking at TaxGo. I fear batting back and forth on a public forum might not be the most productive use of time for either of us though. If you want to discuss it further, feel free to reach out to me personally - I'm fairly easy to find online - it's much nicer speaking to a real person than an internet username... if you're in London, there might even be a coffee in it for you!

Cheers
Carl

ireallyshouldknowthisbut wrote:

As a general response you seem to be very confused about what happens with small sole traders.

You do not "sit ticking disclosure checklists" for 3 line P&L's. You don't do that for small limited companies either unless you are pretty unskilled.

This suggests you have little understanding of this market, which is mainly about helping people through the clutter and drilling down to the bare minimum that people at this level need to do to pay the right amount of tax with the minimum amount of fuss. Its about dealing with clients who form a limited company for a £2,000 turnover, its really about steering people in the right direction, something a skilled human can do in minutes.

The actual "number crunching" side is minimal, and is usually around 10% of the time taken on such clients.

The benefits of cloud and automation are much diminished the smaller you go. What use a bank rec when they dont even have a business bank account? who needs software when you can write all your transactions for the year on one sheet of A4 and still have room to ask questions on the unused half of he paper?

Whilst cloud is not just "coming" its very and working right now, I dont see the offering here as any different to what Xero does - they will give you a "garbage in, garbage out" balance sheet and P&L report.

Doesn't means its tax compliant.

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By NH
11th Jul 2017 11:40

Are your staff all UK based?

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to NH
11th Jul 2017 14:57

I think Carl is from Essex.. so not really of this planet.. ;-)

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12th Jul 2017 13:52

Hmmm, is this a race to the bottom?

I'm aiming for the £3k+ clients not the £240 ones.

Room for everyone.

Not sure how you'll find the client numbers you'll need, a lot of whom will be home workers, cleaners, tradesmen, BTL investors - hand out flyers at B&Q and adverts in Village Mags? A lot of these people aren't online.

I'm guessing that as another poster has suggested, a lot of this work will be outsourced to India.

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14th Jul 2017 09:15

As I said 4 days ago

"They seem to be rather ambitiously assuming MTD for sub-VAT reg sole traders it actually happening."

Looks like David and Carl has a lot of egg on face right now given MTD has been cancelled for the mico biz.

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14th Jul 2017 12:35

While we respect that sometimes articles can provoke disagreements and even heated discussions, a potentially defamatory comment was posted on this thread suggested impropriety on the individuals involved in the article.

I’ve removed the comment from this thread and ask that no more comments of this nature are made.

While AccountingWEB is proud to have such a passionate and engaged community, we still have to abide by the same rules as every other publisher.

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to Richard Hattersley
14th Jul 2017 16:26

Oi! What was wrong with my comment?!

I'll give you something to sensor!

(**** !!!, full of **** and ****, ****)

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to Richard Hattersley
14th Jul 2017 18:16

I think my post for edited too, so Apologies Richard, I thought the manner in which industry awards work was well know.

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17th Jul 2017 10:43

Ireally...you mean they are essentially 'self promoting' in that you need to be your business forward for the award? You mean you are not compared to all of the industry but just the few who bothered to put forward a case...

For £20 do you actually complete their return as well...(I suspect a significant number would be expecting that...or I hope your helpline is staffed well.....

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