What’s missing in the Making Tax Digital roadmap

Posted by & filed under Making Tax Digital.

Accountants and business owners have two years to prepare for the next milestone stage in Making Tax Digital (MTD).  But do they know enough from HMRC’s road map to prepare for that deadline?

MTD for income tax will see self-employed businesses and landlords with earnings above £10,000 annually required to make tax filings quarterly, starting on or after 6 April 2023.

However, some accountants are concerned that HMRC underestimates the size of the challenge compared to the successfully implemented VAT phase. They also find that a lack of information from HMRC is hampering their efforts to plan for the transformation.

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Roadmap gaps

“As far as MTD for income tax is concerned, all we’ve had so far is that HMRC wants to move to this from April 2023,” explains Ian Jarvis, director of Vertis Accountants. “We haven’t seen the detail of what that involves, how it will be reported and how the returns will be done. There’s still a lot of gaps there and April 2023 is just under two years away and people need to be getting ready for it.”

The gaps Jarvis highlights are:

  • Whether income tax returns will need to be filed quarterly, or if they will instead be quarterly top-line reports with an end-of-year reconciliation
  • Will any specific software be required
  • If so, what criteria does the software need to meet?

“Maybe HMRC doesn’t have the answers yet, and I’m not seeking to be critical of it,” says Jarvis. “We just need to see what the size and shape of the task is if we’re going to have a smooth launch and get through it comfortably in April 2023.”

Overconfidence after MTD for VAT?

Despite being a supporter of MTD, George Bull, senior tax partner at RSM UK, harbours deep concerns about the prospects of extending MTD to income tax and self-assessment based on the performance of MTD for VAT.

“HMRC has not given sufficient time and trials before extending it to a different tax and a wider population,” he says. “Independent bodies which have reported on the experience of MTD for VAT have recorded concern from businesses affected. The system didn’t meet their needs. It was too onerous.

“If you look at HMRC’s reports and look at the data it has published, those broadly in favour of MTD for VAT only slightly outweigh those who feel they’ve had a bad experience,” Bull adds. “If we then come to what’s being proposed for the broader digitalisation of the tax system, we can draw some parallels. Exactly what is the system required to do? We don’t yet know. Exactly how is it going to be required to do it? We don’t yet know. I think there’s very profound concern that HMRC is rushing to implement a broader MTD without having learned the lessons of the past. If it doesn’t, it’s going to be exceptionally difficult for both for the department and for taxpayers.”

Bull is also keen to highlight that even in the current self-assessment system for personal tax, there several manual workarounds which HMRC has had to publish as it doesn’t meet all the statutory requirements.

“If we’re looking at the next steppingstone for MTD, it is imperative that the software copes with all the issues in the income tax and self-assessment system. It would be absolutely unacceptable to have a system that cannot cope with all the nuances of UK tax legislation and requires the same workarounds as at present.”

Cost and challenges of implementation

In addition to these questions, there is the issue of cost. While information about MTD for income tax and corporation tax remains relatively thin, a report for HMRC conducted by Kantar found that adapting to HMRC’s MTD for VAT regime could cost small businesses up to £3,500. In particular, it found those costs occur when investigating software options, purchasing software and upgrading IT systems, along with paying for accountants’ services – tasks businesses falling between the £10,000 threshold and the VAT threshold will undoubtedly have to undertake.

With awareness of the project low among small businesses, the risk for HMRC is that it will need to extend its deadline.

“It’s fantastically important that HMRC maintains public support, and by and large it’s doing that successfully,” he says. “At the moment, people who are dissatisfied with HMRC’s service generally recognise it’s not to do with HMRC as such and to do with a lack of funding from the Treasury. But if the day-to-day, month-to-month experience is not good, that trust will be broken,” says Bull.

For those adopting MTD for income tax, the risk is in costs in attempting to comply, compounded by their work to recover from the effects of the pandemic.

HMRC’s response

When approached about these questions, HMRC told AAT Comment that taxpayers registered for MTD for income tax “will provide quarterly updates that are not equivalent to returns”.

“When businesses submit quarterly summary updates of their income and expenses they will receive a calculation showing them their emerging tax position, helping them budget for their tax throughout the year.  

Over the full cycle of a business year, the integration of tax compliance into day-to-day record keeping will aid the reconciliation of accounts at the end of each year.”

On software, HMRC said: “We expect there to be a wide range of different products available for MTD for income tax and self assessment, including bridging products that allow the transfer of data from spreadsheets. Customers will experience the greatest benefits when using full MTD software. We work closely with software providers to ensure their software meets our criteria in many areas including data security.”

Common mistakes students make in advanced assessments and how to avoid them

Posted by & filed under Students.

AAT publishes Examiner’s Reports for all assessments, which reveal what areas of assessments students are performing well in, and the areas they are struggling with.

The reports are intended to be constructive and informative and promote a better understanding of the assessment requirements. Here we outline some common errors made in the Advanced assessments and how to avoid them.

Management Accounting: Costing

Common mistake: Not double checking answers

  • On average, students completed this assessment in 69% of the 150 minutes that they had available.
  • Students should spend more time re-reading the questions and checking their answers.
  • Over 70% of students achieved minimum requirements in most tasks. Tasks 5, 7 and 8 showed the weakest performance.
  • Key strength areas demonstrated by students are understanding inventory valuation methods and overhead allocation, apportionment and/or absorption.

To prepare for this assessment, visit the AAT Lifelong Learning Portal to complete the:

  1. Real-life scenario.
  2. e-learning modules.
  3. Green Light Test.
  4. Practice assessments.

Indirect Tax

Common mistake: Struggling with VAT practice

  • On average, students completed this assessment in 68% of the 90 minutes available. Some tasks, such as Task 7, could benefit from more time and attention.
  • Performance in this assessment has improved when compared to previous years, but it seems that students still struggle with certain areas of VAT practice.
  • Students were either very good at the calculations or very poor, with very few cases in between.

Students would benefit from:

  1. Making use of the e-learning material on the AAT Lifelong Learning Portal.
  2. More practice with calculation tasks.

Full reports can be viewed on the AAT Lifelong Learning Portal (log in to view content).

Further reading:

Your views: pros and cons of going back to the office

Posted by & filed under Coronavirus.

After over a year of adapting to the restrictions and changes that the pandemic has brought, it’s no surprise that there are mixed emotions about the potential pending return to the office.

Despite the stay at home rule lifting, the government advice is still to work from home if you can. Employers should be supporting work from home (if it is possible for you) or facilitating a return to the office in line with Covid-secure workplace guidance if it isn’t possible. These guidelines are expected to last until May or June 2021.

We’ve explored the process, the pros and cons and different people’s opinions.

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Will you be going back to the workplace and how will it work?

Whether you are asked or decide to go back into your workplace should depend on a range of factors including your individual circumstances, the type of work you do and the office environment.

In England, the government guidelines set out strict rules which employers in different sectors must follow. They include:

  • Minimising the number of unnecessary visits to the workplace
  • Ensuring that staff observe 2m (6ft) social distancing wherever possible
  • If that is not viable, staff should observe 1m social distancing with additional precautions
  • Frequent cleaning of surfaces, objects and communal areas
  • Extra hand washing facilities
  • Introducing one-way systems to minimise contact
  • Using back-to-back or side-to-side working (rather than face-to-face) whenever possible
  • Staggering start and end times

The people who see the pros of getting back to the office

From getting back to the gym early, seeing colleagues and dressing for work. These people are seeing the positives of being in instead of OOO (out of office).


“Getting back in the office has forced me to go to the gym early again and I honestly forgot how much I love it.”
@DaFiretruck

“Not many people will say this, but I’m looking forward to going back to the office.  And now that there’s a possibility of that happening, I’m quite happy. The best part about it?  I get to buy new clothes!”
@CatgirlEva

“I missed the views from my office and it feels good to be back!”

@hnmansour

“Back in the office today, so good to be working with my team in the flesh!”
@JessDataGoddess

“Back in the office (and London) today after 13 months working from home. My train was also reassuringly 10 minutes late just to add to the feeling of normality. I’ve definitely missed it!”
@nirbhai

“Survived my first day back in the office yesterday after over a year of working from home. Felt good to be back around people but wow was I tired.”
@Cally246

“Feels odd, but yet good to be back in the office after 417 days! (Cleaning out my desk drawers was not fun though.)”
@sophlearn

“I want to go back to the office. Especially as a recent graduate. The isolation is not good for one’s career.”
@samoye95

The people who see the cons of getting back to the office

From the commute and missing family and pets, these people are not looking forward to the prospect of being back.

“I don’t mind going back to the office but I do mind getting on public transport.”
@DilwoarHussain

“Loving working from home with my beautiful baby girl and spending time with her. Dreading going back to the office.”
@SuperBenjiZero

“An hour plus commute each way, uncomfortable office furniture, loud people, trying to leave at a time that lets me miss as much traffic as possible, no windows that open for fresh air, etc. please don’t make me go back!”
@CatherineP725

“How am I expected to go back to the office without my furry intern?”
@MegsMiller94

“Just finished my first full five days back in the office in over a year and I would like to sleep forever. Except I can’t because I’m also way behind in chores. This is actually a much harder adjustment than going into working from home every day.”
@VLXCAT

Be mindful of giving yourself time to make the transition if you are going back to the office and speak to your employer if you feel at all anxious.Do you anticipate being back in the office soon? How do you feel about it?

Further reading

The unlimited career paths of accountancy and how to decide which one to take

Posted by & filed under Career.

Half the challenge with a career in accountancy can be choosing which direction you want to go in because it covers such a massive variety of jobs.

Accountants are needed in every country, every company, every charity and every sector, so it keeps many doors open and can lead you into many different career routes.

So should you look to carve out a niche for yourself, or should you keep your options open? How do you decide which path to take? We spoke to Gareth John, who has trained thousands of AAT students in his role as Director at finance training college First Intuition and he has watched them take all manner of career journeys which he says is the most rewarding part of his job.

Why does accounting have so many options?

Gareth himself got into accounting in quite an indirect fashion. When he left college, he had no idea what he wanted to do and went to uni to delay that decision for a bit. He studied Economics to give him an insight into the world of business and keep his options open. This was the same reason he went into accountancy. 

From bookkeeping to financial accountants to management accountants and auditors to corporate finance and tax advisory. These are just a few of the areas you could choose to specialise in. As well as the different areas of finance, you could choose to work for any type of organisation across the world, or even set up your own business. 

Gareth said, “One of the things that appealed to me was not only the breadth of opportunity in accounting but also the height. You can work in treasury, purchase or sales ledger, or work your way up to the board of an FTSE 100 and not even just as a Chief Financial Officer, but you could be an Operations Director, Commercial Director or CEO. Because all business decisions are driven (at least in part) by accountancy decisions, having a depth of financial understanding can lead you in many directions.”

Why the amount of career choice is a good thing

As the business environment becomes more and more dynamic in terms of digital technologies and emerging markets, there’s stability that a career in finance brings. All of its many facets are constantly required across all industries, regardless of environmental changes.

Gareth said, “We work very closely with AAT, and we see two main groups who study with them. One is school leavers, as AAT is a great entry route into accountancy, and the other is career changers. Accountancy has shown itself to be a very robust sector, especially of late. As we move, not just post-Covid, but post-Brexit and with advancements in  green and digital industries, the security that a finance role brings, amongst all the flux, is very appealing.”

Real-life examples of different career paths

Gareth told us about four accountants he knows who have gone on to great things in all manner of different ways.

The traditional path in an unconventional way

“One of the very first students I taught did AAT, then went on to ICAEW and is now the managing partner of the accountancy practice that she trained with. Her firm had never taken people further than AAT, but she made her case for them doing it for her and how it would provide them value. She didn’t sit back and wait to be given things on a plate, and she has done that all the way up to her role in leadership.”

Thought and industry leadership

“One innovative accountant launched one of the first 100% digital cloud-based practices. He is a huge advocate for digital technologies and cloud-based accountancy and has positioned himself as a thought-leader and industry leader. He does this by doing a lot of work helping other people to move forward. He came into the industry with a completely different background. That lack of historical knowledge about working in the industry allowed him to start with a blank sheet from which to lead some groundbreaking developments in finance.”

From finance to procurement

“Many people I know have moved from pure finance roles into other areas of business. Studying accountancy gives you exposure to a wide range of skills in areas such as law, marketing and human resources. This can allow interesting ‘diagonal’ career paths. Namely, a former student of mine who works for a global biotech business recently switched from finance and now works in procurement looking at their global property portfolio.”

A serial entrepreneur

“Another one set up his own business and now owns several successful businesses, including an accountancy practice and an energy company dealing with solar panels. With finance giving you knowledge of budgets, forecasts and organisational strategy, and the ability to review strengths and opportunities in business, the environment and competitors make it a great base for entrepreneurialism. It can also offer you credibility with banks, customers and investors.”

How to decide which direction to go

All the different areas of accounting require very different skill sets, so see which feels suitable for you as you learn.

Having a niche, whether that be a service, sector, or embracing particular technologies, can make you the go-to professional expert, whether for internal stakeholders or external people. This is harder to do if you keep it broad, although many skills are transferable, and these days, people are taking less linear routes and diagonal career paths where they gain as much experience as possible.

Gareth says what’s more important is adopting a growth mindset, a desire for lifelong learning and a willingness to adapt and evolve. Having a solid set of soft skills like communication, time management, negotiation, and the ability to make decisions with uncertain information will set you up better than focusing on one technical skill. And you’ll gain vast amounts of confidence by going through AAT exams. Yes, there’s the technical syllabus, but you’re also gaining the ability to deal with difficult situations like increased workload and stress. You’ll be able to trust in yourself that you can face up to challenges and thrive.

AAT can set you up for a career across many different areas and sectors and be an excellent springboard onto a higher level if that’s what you choose to do.

Ready to accelerate your career in finance and accounting

Join AAT President, David Frederick FMAAT on Thursday 5 August 2021, 12.30–13.30 (UK time) to get some advice and insight on how to advance your career and upskill to accelerate career growth. Hosted by Duncan Brodie, a qualified Accountant who will explore with you how to land the job you want, improve your analytical financial and strategic skills.

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Further reading:

Brexit support fund: limited time to apply

Posted by & filed under Brexit.

SMEs can now apply for the Government’s Brexit support grants to help them adjust to the new trading environment with the EU. How useful are they?

The SME Brexit Support offers £2,000 to UK SMEs who employ up to 500 staff and who have an annual turnover of up to £100m. They must also trade between Great Britain and either the EU or Ireland.

A total of £20m has been allocated for the SME Brexit Support Fund, which will close on 30 June 2021 or earlier, once funding has been claimed.

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The grants are ringfenced in two areas: professional, practical advice and support. Professional advice obtained with grant money can help with:

  • Meeting the latest trading regulations
  • Fulfilling safety and security declaration requirements
  • Meeting customs, excise and import VAT rules.

Training can cover:

  • How to complete customs declarations
  • Managing customs processes and customs software and systems
  • Issues relating to import and exports including VAT, excise duties and rules of origin.

But given the limited time to apply for the SME Brexit Support Fund (just over three months) and the grant amount itself, how popular has the scheme been so far and what do accountants and their clients think of what’s being offered?

There’s been more interest in the latest grant – there’s still a need for education and advice

Alison Horner, indirect tax partner, MHA

We provide support for clients who want to submit a grant application and we’re also an approved provider of customs training for businesses. We provided grant funding support in the previous rounds (in August 2020 and Q4 2020) too and have had about 30-50 clients apply for this round. We have seen an increase in interest in the new grant funding, so it’s clear there is still a need for education and advice even four months after the UK left the transition period.

However, we are seeing longer delays between application and approval this time around because the scheme has widened to include professional advice. Previously, it focused on very specific customs training, and the process was more cumbersome, as it required details of each individual employee on the training. Now though the funding is a fixed amount per company.  

Overall, the process has been working, and clients have successfully received their funding and their training.

Next steps: When speaking to clients, we recommend either a Brexit implementation review or customs training to help them cope with applying all the changes so they are able to deal with imports and exports from both a VAT and Customs point of view. However, there is such demand that it’s likely to run out soon. Clients need to make their applications as soon as they can.

Verdict: There’s been an increase in interest in new grant funding so there’s still a clear need for education and advice four months post-Brexit transition.

It’s not worth the hassle of applying. Free advice – not free money – would have worked better

Andrew Oury, partner, Oury Clark and chartered accountant and tax advisor

We have let our clients know about the grant, but none so far have claimed it. The feeling seems to be that the amount granted – £2k for help with import and export costs – isn’t really worth the hassle of applying. It’s a nice offer but probably more for the optics than anything else.

Our clients have complex problems around VAT between the UK and Europe and not many of them knew about the grant or currently understand how they might use it. Free advice would perhaps be a better plan than free money to then get advice. 

Knowledge of VAT and customs issues is very poor right now, despite robust official guidance. I’d like to see heavy investment into training up logistics companies’ staff on these issues. This where the majority of questions and issues are first arising.

Next steps: The GLA (Greater London Authority) have been running workshops on Brexit and import/export costs and we at Oury Clark have been providing time and leadership on – we have more coming up and it’s what most of our advice is centred on at the moment.

Verdict: The grants aren’t worth the hassle of applying. It would have been better to offer free advice rather than free money.

Some will benefit, but many clients have ‘Covid grant fatigue’

Lisa Dickson, founder, Caseron Cloud Accounting

We haven’t had much interest from clients about the grant because the majority of our clients are service-based, online businesses or they don’t export the products they produce.

The eligibility criteria is also quite strict: businesses must import or export goods between the UK and EU or between Britain and Northern Ireland. They must be a small business with a turnover under 1m and employing less than 500 people. And they must need the training for their own import or export decorations for their own goods. The grant isn’t available for agents who sell those services, just businesses who ship their own goods across borders. 

And of our clients who do export goods to the EU, they’ve actually outsourced the customs and excise role to specialist export agencies, so they pay someone else to manage that challenge for them. Sure, it might cost a little bit more, but that cost is built into their margins.

For many eligible small businesses who do trade with the EU and manage the export process themselves, I think the funding will be of tremendous value. Sadly, not many businesses are even aware of it.

We are seeing a lot of ‘Covid grant fatigue’ among our clients, where so much information and misinformation is out there: clients don’t really read third party emails, newsletters,  or HMRC updates – so they’ll literally just forward to us and ask – ‘is this relevant to me or not?’ Sometimes, it’s a very short answer! 

Next steps:  We try to provide them with enough information so they can quickly assess whether it’s right for their business or not – and if we think it might be an option – we jump on a call to discuss options. 

Verdict: It will be of value to some eligible businesses, but most clients are experiencing Covid grant fatigue and won’t even be aware of it.

Safety first – a “back to the office” roadmap for employers

Posted by & filed under Career.

This “back to the office” roadmap is designed to help employers and HR professionals in the accounting sector navigate the ins and outs of the new office environment.

Step 1: Understand the risks

Whatever approach you plan to take to bringing employees back to the office, it’s important to know what you have to do to make it safe.

So your first port of call should be the government website, where you will find reams of guidance for employers, including mandatory steps for those with office-based workers.

“The UK Government’s ‘Covid-19 secure’ guidelines set out a process for employers to follow, based around risk assessment, social distancing measures and actions to mitigate the risk of coronavirus transmission,” said Susie Munro, senior employment law editor at online HR resource XpertHR.

The next step is to carry out a thorough risk assessment on your office building. “Conducting and updating risk assessments is key to ensuring employers meet the ever-changing guidance around social distancing, cleaning, hygiene, hand washing, ventilation, and air conditioning,” Ford said.

As we know from experience, coming out of lockdown does not necessarily mean it’s over for good, so it’s also sensible to have a contingency plan in case of further restrictions.

Step 2: Introduce protective measures

Failing to follow government workplace rules could land you in hot water with the Health & Safety Executive, which has already conducted more than 150,000 spot checks to ensure employers are toeing the line.

So regularly consulting government guidance is the easiest way to check you are meeting minimum Covid-19 standards.

At the time of writing, measures employers in England are required to take include:

  • Minimising unnecessary visits to the workplace
  • Ensuring employees observe 2m (6ft) social distancing where possible
  • Cleaning surfaces, objects and communal areas more frequently
  • Providing extra hand washing facilities
  • Introducing one-way systems to reduce contact
  • Staggering start/end times

Other measures recommended by HR experts include supporting employees to work from home if they can, helping staff to avoid public transport where possible, and recognising the on-going need to protect workers’ mental health.

Step 3: Consider extra steps

You don’t have to limit your anti-Covid measures to those required by the government.

You may, for example, decide that lateral flow testing at the entrance to your premises is the best way to ensure business continuity and reassure both employees and clients that they are unlikely to catch Covid-19 in your offices.

Making testing mandatory has data protection and privacy implications, though. “We are seeing many ‘office based’ employers insisting on lateral flow testing before entering the office to give confidence to staff, customers, and third parties,” Ford said.

“However there are legal risks, so most employers are strongly encouraging a ‘negative test before entering the office’ approach, but avoiding introducing a blanket rule.”

Encouraging staff to be vaccinated when the opportunity arises is another policy likely to appeal to employers. But there are issues surrounding how you do this too.

“Questions for employers include: Can you ask employees whether they have been vaccinated? Can you insist those who do not get vaccinated work from home? How do you treat employees who cannot have the vaccine, for example because they are pregnant? And do you give sick leave for those who’ve had a bad reaction to it?” Ford added.

Step 4: Communicate with your workforce

As an employer, you have to keep your employees informed of changes affecting their health and safety. “Employers are obliged to consult with their workforce on matters concerning health and safety, which includes the measures they are taking to make premises Covid-secure,” Ford said.

But obligations aside, an effective communication strategy is a crucial step in facilitating a problem-free return to the workplace.

Recent research from smart locker provider Velocity Smart Technology indicates that employees remain concerned about the risks involved in going back to work in an office, with two fifths of UK office workers worried about catching Covid-19 from their colleagues.

So explaining the measures you are taking to protect them looks set to be key to ensuring your workforce stays happy as well as healthy. HR experts also advise addressing employees’ individual concerns on a case-by-case basis.

“HR will be required to manage the needs of employees with particular circumstances that make it difficult or impossible for them to attend the workplace, such as health concerns, childcare or transport issues,” Munro said.

“Applying a blanket approach to all employees will not be appropriate.” Once people are back in the office, you also need to continue checking and adjusting your policies based on changing government guidance, as well as employee responses to the new ways of working.

In summary

Whether you want your staff to return to the office full time or part time, there’s a significant amount of planning and preparation required to ensure the process goes smoothly.

And meeting government requirements is just one piece of the puzzle. Communicating with and listening to your employees will also be an important part of getting it right.

Further reading

Surviving Brexit and overcoming obstacles with AAT

Posted by & filed under Inspiring stories.

Diana Mikolajewska MAAT has overcome a variety of setbacks during her accounting career. Nevertheless, she has learned to adapt.

If there’s anything Diana Mikolajewska’s story demonstrates, it’s that rolling with the punches and adaptability can quickly turn perceived weaknesses into areas of strength. 

Originally from Poland, Mikolajewska moved to the UK in 2001 and began working in the mental healthcare sector. 

“My first job was as a receptionist,” she explains. “I couldn’t speak English, I couldn’t study, so I just had to start something. I was a law student in Poland, so it wasn’t my dream job. I wanted to continue my law studies in the UK, but when I had an interview with an education adviser, she was not confident about my English and she suggested that I should work with numbers and think about accounting.” 

She started studying business, marketing and finance in 2009, but didn’t enjoy the marketing aspects of the course. “Then I came across AAT courses at my college, so I started that in 2011 and I loved it.” 

Mikolajewska completed AAT Advanced Diploma and Professional Diploma within two years, and just two months after qualification, she started working at a practice. 

“I couldn’t believe that I had a job straight away,” she says. “I was so new to accounting.  I wanted to learn more and I wanted to be involved with bigger clients and audit.” 

Her employer encouraged her to study ACCA, so she started in 2014. However, a death of a close friend and subsequently being made redundant made her re-think her career. 

“I came across the AAT practicing licence and I thought: ‘That’s a great option for me, I can work from home and I can work when I want.’  

So I got my licence in 2015.” 

Another setback 

Working from home and looking after her three children, Mikolajewska began to grow her new accounting practice. 

The UK-EU referendum caused some issues for her business in 2016, as it sent many of her clients into panic mode – and many decided to return to their home countries. 

“It was just a massive panic – everybody was bombarding me with phone calls asking me about Brexit,” she says. “But nobody knew at that time what was going to happen.” 

Another setback came for Mikolajewska in 2017 – just as her business was starting to grow and she was taking on more clients, her son suffered a cardiac arrest. 

“The AAT licence meant I had the opportunity to carry on working, despite what had happened,” she explains. “If I was employed I would have had less flexibility.” 

She paused her ACCA studies and reduced her working hours so she could care for her son. 

“I decided to go back to work full-time in December 2019,” she explains. “It was great, and I got a big client who asked me to set up a branch abroad. That allowed me to travel abroad once a month, and eventually I was asked to look after the accounting for that branch too.” 

Surviving the pandemic 

As international travel was disrupted by the pandemic in March 2020, Mikolajewska’s work with her new client slowed. 

“Whenever things are getting better, something happens,” she says. “You can never get too comfortable. You always need to be ready for a change. I think we have all learned this during the pandemic. It’s not just about becoming a big success, it’s about surviving in times of crisis.” 

As she mainly looks after small clients, most of them were affected by the Covid-19 pandemic and needed Mikolajewska’s help to apply for grants and loans. 

“Some of them ended up with debt problems, so I had to advise as well,” she explains. “Similar to the UK-EU referendum, I was again bombarded with phone calls from potential clients asking for help with grants and loans. Being unable to meet face to face, it’s harder to go through and complete due diligence. I didn’t get any new clients during the lockdown and I lost some clients as well. I lost clients during the referendum, and a similar situation occurred during the pandemic – many people decided to go home.” 

Looking ahead 

Mikolajewska is looking forward to focusing on her career in the year ahead. She has options to expand her practice by hiring someone to do administrative and marketing work, or team up with friends to start a new firm. 

“I often spend a lot of time just taking calls from potential clients – it’s tough when you are on your own,” she explains. “I do enjoy working on my own, and I did enjoy working from home, but I don’t want to anymore. I want to be back in the office. 

“I have friends who are chartered accountants and we have started talking about forming a partnership, so we can join our experience and skills. We speak many languages between us, so that allows us to take on international clients. Together, we can offer the complete package.” 

Avid about her CPD, Mikolajewska hopes to finish her ACCA studies this year.  

“There’s a lot that many accountants have realised over the last year,” she says. “We can help clients be more efficient, survive and adapt.”   

MTD phase 2: time to get small businesses on the slipway to digital taxes

Posted by & filed under Making Tax Digital.

Are businesses, clients, accountants,  and software providers ready for the next phase of Making Tax Digital?

Accountants looking ahead to the full implementation of Making Tax Digital (MTD) might think there is plenty of time to get their house in order – and their clients converted to digital.

The reality, however, is that for many accountants, the time to act is now.

Smalls businesses and the self-employed will be forced out onto the super information highway when many are used to the genteel pace of country lanes.

Moving to digital will be a major behavioural change requiring them to shift to quarterly reporting. Be prepared: the road to MTD implementation may be bumpier than many anticipate.

To quantify the challenge, consider a practice with 250 clients below the VAT threshold.

An average of 10 clients would have to be switched every month to make that deadline – and that’s without accounting for any unexpected obstacles. As with any transformation programme, the key to success may well be starting early.

Making Tax Digital for Income Tax webinar

Hear from HMRC on how you can prepare for MTD. Get insights straight from HMRC and software experts Sage, on how you can prepare for MTD for income tax and the requirements for digital links.

Register now

The Government’s roadmap

Since 1 April 2019, VAT-registered businesses with a turnover above the VAT registration threshold (£85,000) have needed to keep records digitally and provide VAT return information to HMRC via MTD-compatible apps and software.

The current plan for businesses under the threshold is as follows:

  • 2022: All VAT-registered entities, including those below the threshold, will have to use MTD-compatible software to file their VAT Returns from periods starting on or after 1 April 2022.
  • 2023: From April, MTD for Income Tax will be introduced for unincorporated entities and landlords with an annual turnover above £10,000 (more on AAT’s views on this later).
  • MTD for Corporation Tax: A call for consultation ended on 5 March 2021 (AAT’s view on this later too).

Upping the pace

Encouraging clients to embrace digital working has become the preferred method to achieve compliance for many firms, given the timeline in front of them and a lack of awareness of MTD among both businesses and individuals. Graham Davies, founder of digital-only firm Addition, has done just that. Addition requires its clients to use accounting and expenses software, which naturally makes them compliant with MTD as they make the quarterly filings with HMRC via the software.

“Whether people are aware of MTD or not, they’re aware of cloud accounting software, and all of those systems operate in an MTD-compliant way, so that’s where our focus is for small companies.”

How to manage the transition

When difficulties do emerge with clients, it’s about reminding them of the process of working to familiarise them with the software.

“We don’t have a formal process, but we’re definitely rooted in how we work because that’s how we keep our costs low,” says Davies. “Some customers like the idea of digital, but when it comes to doing it, they decide for themselves that we’re not right for them and they go somewhere else. There are firms out there which are happy enough to say ‘give me a bag of receipts and I’ll scan them in for you,’ but that’s not how we’d like to work,” he says.

Unfortunately, getting businesses to adopt new approaches can still be a challenge.

“It’s important to work with clients to ensure they comply,” says Lucy Cohen, co-founder of Mazuma Accountants. “When it comes to persuading clients to make the shift, it’s important that they know it isn’t a matter of choice. Our clients are a mix of digitally savvy businesses and traditional companies. For those who are not so savvy with technology, we will digitalise, account and submit their MTD reports to HMRC on their behalf.”

The decision to go paperless

AAT president David Frederick recognises says his firm, Marcus Bishop Associates, has worked hard to prepare and persuade clients.

“In May 2020, we ceased acceptance of paper records,” says David Frederick, AAT president and managing partner of Marcus Bishop Associates. “Our simple advice has been that paperless and digital working is faster, more secure and above all 100% better for health and safety. While home working has resulted in mass compliance as there has been no alternative.”

As a result, it is already 85% prepared for MTD.

Software and HMRC

By and large, the impression is that the software companies have been well prepared and supportive during MTD. But the same wasn’t said of HMRC.

Addition has built its solution around Xero. “Xero has been fantastic in the development and deployment of new features relating to MTD,” says Davies. “The biggest frustration for our advisers is HMRC. Unfortunately, the implementation of MTD in HMRC systems was far from perfect. This is where we see the most room for improvement.”

For Vertis Accounting Director Ian Jarvis, as far as MTD for VAT goes, both Xero and QuickBooks had software ready and fully working well before the launch.

“There was a great deal of advanced support in the form of online training and webinars.”

Next phases

Anecdotally, there is little real sense of preparedness among clients. For example, when Vertis Accounting director Ian Jarvis told a group of people on Zoom in March about upcoming MTD changes, it came as a surprise.

“It’s difficult to really engage clients when the details aren’t available,” he says. “It’s okay for accountants to think about these things and appreciate the change agenda, but the detail is really needed to be able to explain this to clients.”

The requirement for small clients to pay for software will be a stumbling block too.

“It would be really helpful if there were versions of the software targeted at the smallest businesses to soften the pain,” Jarvis says.

Practice view

In respect to income tax, it is still relatively early days, with this not kicking in until April 2023. Despite that, accountants would like to be able to give clients some certainty before 2022/23.

“I don’t believe we have everything we need from the Government yet – I have only seen the roadmap details and nothing specific,” Jarvis says. “I’ve seen a demonstration by Xero of their personal tax return software, which they are to launch in summer 2021. This is not yet complete – we didn’t see the MTD aspects – but it looks to be a very promising foundation for the new regime.”

Meanwhile, Addition founder, Graham Davies, says his company has seen its revenues almost double since the pandemic started.

“We certainly saw a huge forced change in people’s appetite to switch to a digital solution and we expect the trend to continue over the next 12-24 months.”

Tipping point for some accountants

Technology adoption and practice digitisation has become “do or die” for many accountants.

“While a lot of sole practitioners have got to grips with MTD, a hell of a lot haven’t,” Phil Shohet of practice consultancy Foulger Underwood observes. “A lot of sole practitioners in their late 50s and early 60s either don’t feel comfortable with new technology or aren’t interested and are just going to sell up and get out.”

Meanwhile, at the other end of the spectrum, larger firms see a chance to hoover up smaller practices. But in seising this opportunity, some will create their own MTD problems, according to Shohet.

“In some larger firms you have branches taking in mergers and not being able to educate the merged practices or their clients on their modern approach.

“Some practices are doing their own thing, some are doing it right, in terms of software, but it’s very difficult to educate some of these smaller firms that have merged into them, as they might have elderly partners.”

Making Tax Digital for Income Tax webinar

Hear from HMRC on how you can prepare for MTD. Get insights straight from HMRC and software experts Sage, on how you can prepare for MTD for income tax and the requirements for digital links.

Register now

In Summary

It appears quiet on the MTD front and the moment, but this is something of a lull before the storm. Change is on the way, whether it’s small businesses getting used to the pace of quarterly tax and real-time data, practice owners deciding to sell up, or larger firms growing through acquisition.

The first stage of MTD involving VAT shook up the accounting industry. The following step is set to do the same.

How to create a content plan and why you need one

Posted by & filed under Skills.

All businesses will be creating content in one way or another, whether it’s social media posts, emails to clients, website copy or writing a blog. Content will form the core of all your marketing efforts, particularly digitally.

If you commit to creating content regularly and consistently, your marketing will begin to reap the benefits. To do this, you need a content plan and process in place.

The advantages of content creation

By committing to following a good content plan, your business can start to see these benefits.

  • You can build more trust for your brand.
  • You can start to reach new audiences.
  • It can drive sales leads and help with converting people.
  • It can reduce your marketing costs.
  • You can get improved search engine optimisation for your website.
  • You can position yourself as an expert in your industry.

How do you come up with ideas for things to talk about?

The problem isn’t coming up with the ideas. It’s that most people don’t have a process in place to record the thoughts when they do come. The first thing you and anyone else in your company who will be responsible for creating content should do is create a place where you record all your ideas and all of the things that resonate with you. Using a free online tool and app like Notion or Trello can be great for this. These tools make collaboration easy, and the things you put in there will be easily searchable and sortable.

There are plenty of ways to get inspiration and find things that resonate with you. You can read a book, listen to a podcast, attend a webinar or watch a YouTube video. It might even strike at the unlikeliest of times, while watching a cooking show or while you’re having a swim. Make sure you always have a way to capture your thoughts close at hand. You can review them and sort them into more fully-formed ideas later.

Decide on your content themes

What do you want to be known for? The more niche you can go, the easiest it will be for you to start to be recognised as a thought leader around that topic. Do you specialise in accountancy for a particular industry, or do you concentrate on specific services?

Choose three to four themes or content pillars maximum that you’d like to be known for and that you want to focus your attention on. This will also make it easier for you to come up with ideas for your plan. 

Examples of themes you could choose:

  1. Accountancy software (or a specific software product)
  2. Pensions
  3. How to reduce business costs
  4. Tax advice
  5. Excel tips

Always make it about them

Your content should always be as interesting and relevant as possible for your audience. It should help them in some way and give them value. It’s your responsibility to create unmissable content for your target market, and it’s a waste of time to put out boring content or something that has been done a million times before. Make it new and put your spin on it.

Create an editorial calendar

Instead of making a very detailed plan, create an editorial calendar with broader topics that you want to talk about month by month according to other things that are happening at that sort of time in your business, seasonally and in the accounting calendar.

Choose a channel

You’ll be best off choosing one channel and focusing on optimising that first instead of jumping around. Whether it’s a social media channel like LinkedIn, video or email marketing, nail one first, and then you can think about repurposing content and using it across different channels. Always make sure you’re tracking the effectiveness of your content in some way. Keeping a weekly report that shows key stats like follower numbers, engagement levels, and click-throughs will show you what’s worked well and what hasn’t so you know what to do more (and less) of and will help keep you motivated to continue.

If you’re starting from scratch, you will need to work on your plan for at least a few months before you begin to see the real tangible business gains of your content creation. Still, if you apply yourself to publishing content consistently, in whatever form that takes for you, and know that you will only get better, you will see those benefits. 

Further reading:

New All-Wales scheme offers opportunities for apprentices seeking a finance career

Posted by & filed under Apprenticeships, Career.

If you are considering a role in public sector finance, there is an exciting new opportunity available from the All Wales Public Sector Finance Apprenticeship programme.

The programme is delivered in partnership with members of the Finance Skills Development Group which is aimed at developing finance leadership skills across the welsh public sector.

What is the All Wales Public Sector Finance Apprenticeship programme?

The All Wales Public Sector Finance Apprenticeship Programme has been designed as a collaboration between members of the Finance Skills Development Group, which is made up of public sector bodies across Wales. The bodies include Audit Wales, NHS Wales, Gwent Police, local government, Welsh Government and sponsored bodies and Fire and Rescue Services.

The programme is a three-year fixed term programme and offers apprentices the opportunity to train for the Association of Accounting Technicians (AAT) qualification from level 2 to level 4.

In addition to the AAT qualification, a dedicated public sector module is being developed to support the apprentices understanding of the specifics of finance and governance within a public sector context.

Alongside the professional training, apprentices will be provided with specific training to support their on-the-job learning. Apprentices will have a dedicated line manager, buddy, and mentor to support their learning and development. They will also participate in technical skills workshops, action learning activities and other All-Wales Public Sector Finance Apprenticeship programme events, including soft skills training and networking opportunities.

The unique part of the programme, however, is that apprentices will have the opportunity of spending time with other partner bodies of the programme.

Apprentices will spend the first year with their primary employer and then there are two six months secondments with other bodies, allowing them to experience other public sector functions and enabling them to find out how different public sector bodies work and understand the similarities and differences between organisations within the group.

Both the AAT qualification and the wider programme will give apprentices an excellent grounding to go on and complete a chartered accountancy qualification; and where an organisation runs a graduate trainee programme, apprentices will have the opportunity to apply for these schemes.

Who should apply?

The programme is open to applicants with A levels, interested in public finance, enjoys team working, is numerate and wants to progress their career further in accounting and/or auditing.

The programme is aimed at providing opportunities for school leavers, returners and those who do not have a university degree, and who are interested in pursuing a finance career. A key objective of the scheme is to attract the best talent from a wide and diverse range of backgrounds, encouraging people from different socio-economic backgrounds to apply. It is hoped that the opportunity for non-graduates to apply will help increase social inclusion and bring diversity into the workplace.

How do I apply?

Each organisation will run their own recruitment campaigns, but under the umbrella of the All-Wales Public Sector Finance Apprenticeship Programme. Further details are available on each participating bodies’ website.

The apprenticeship programme starts in September, with applications open in April.

To help candidates understand more about the scheme, the FSDG are running a live webinar (which will also be recorded to watch later) to explain the process of applying, the benefits of apprenticeships and what career opportunities are available. Candidates will also get the opportunity to hear from those who are either currently apprentices or have completed their apprenticeship. You can book your place on the webinar via the Audit Wales website.

Further reading: