What does a career at HMRC offer?

Posted by & filed under Career.

HMRC is one of the country’s largest employers, with around 58,000 people working across the UK.

Some of the career opportunities available include helping customers with tax queries, designing cutting edge digital services, tracking down international tax fraudsters and helping to make sure trade flows smoothly in and out of the country.

When you join HMRC you will receive the training and support you need to progress in your career, including shadowing and on-the-job learning, access to mentoring and coaching and secondments across government. You will also receive maternity, adoption or shared parental leave of up to 26 weeks full pay followed by 13 weeks of statutory pay and a further 13 weeks unpaid, and paternity leave of two weeks full pay.1

HMRC now has one of the biggest and most dynamic IT operations in Europe and aims to be among the most digitally advanced tax authorities in the world.  HMRC has offices in Bristol, Cardiff, Leeds, London, Manchester, Newcastle-upon-Tyne, Telford, Edinburgh, Glasgow and Worthing.

We caught up with Sue Taylor, Development & Recruitment Manager at HMRC, to find out what is on offer in the HMRC apprentice training programme and why HMRC uses AAT qualifications and apprentices and why that is important.

What skills are you looking for in your new recruits?

We are looking for enthusiastic individuals who have a genuine interest in developing a career in Finance and will be dedicated to the 3-year programme.  We want our new apprentices to have great communication skills, be innovative and flexible and ready to work in a challenging and exciting environment.

Recruits need to be able to manage their own workloads and meet delivery deadlines whilst forming good relationships across the organisation.

Our recruits will have opportunities to build on the skills and knowledge they have already gained and use this programme as the start of their future career progression.

Why are you growing your finance team?

Our financial services are vital not only to the everyday running of HMRC but to building the Department’s future as a trusted, modern tax and customs department.

As with all areas of HMRC we need to keep our continuous pipeline of talent going and want to grow our senior leaders of the future.  We already support finance apprentices across our organisation, but the opportunities are currently limited to existing civil servants.  We see this programme as a chance to tap into the external market, bring new people into HMRC and enable them to reach their full potential with us.

Who are the people behind the recruitment process and what is their mission?

HMRC’s Finance Community & Profession Team support the whole Finance Community, which equates to over 2000 people, working right across the Department.  The team have worked with Finance Directors to develop this programme, making sure they understand where there might be potential gaps going forward.  The mission is to bring in enthusiastic individuals, who want to develop their finance career with us, and in turn we will provide them with all the support they need to achieve this.

Why do you use AAT qualifications and apprentices and why is that important to you?

An apprenticeship is a great opportunity for someone to learn on the job.  Individuals can build valuable skills and gain an internationally recognised qualification. 

We are offering the AAT qualification on this programme as it gives people the perfect grounding in finance, teaching them all the fundamentals, which they can build on as they progress their finance career.

How many young people are you hoping to recruit?

We are hoping to recruit up to 15 individuals across 4 locations, London, Newcastle, Nottingham and Worthing.

What does a career at HMRC offer?

HMRC is committed to developing its people, we provide clear pathways so that everyone can develop their skills and knowledge and enjoy a rewarding career with us.

We invest in our people and their development and ensure everyone has access to a comprehensive selection of training and development opportunities to suit their skills and ambitions.

Should our apprentices wish to continue to study to a higher level they will have the option to apply for this opportunity at the end of this apprenticeship programme.

How should potential recruits express an interest in the roles on offer and get in touch with you?

Our apprenticeships are open to everyone age 18 upwards.

The entry requirement is five GCSEs grade 4-9 (or grade C and above under the old system), including Maths and English or equivalent.

The apprenticeship is a 3-year programme where trainees will complete their Level 3 and Level 4 AAT qualifications.

The opportunities will be advertised on the Civil Service Jobs website and HMRC social media websites.

Why have you made the decision to hire even in these difficult times? What lessons did you learn from 2020?

We have continued to recruit onto our existing finance apprenticeship schemes during the last year and didn’t see a reason to delay this programme.  We have all learned to be more flexible, to use technology to help us to continue to deliver our business and most importantly to support each other through these unprecedented times.  We know that our finance teams are ready to welcome our new apprentices and continue that support.

Apply here.

Further reading:

Tips for online networking to find a job in 2021

Posted by & filed under Career.

Looking for a new job can be a daunting task. However, many people go about it in the same way, so you can make yourself stand out as a candidate and get to the front of the job market crowd by networking online.

Online networking can help to grow your knowledge and confidence around the industry. If you have the right qualifications too, this will inevitably impress in an interview.

Getting into a positive mindset

Getting your mindset right before you start is key to going about job hunting and online networking in the best way.

Don’t think of every interaction as trying to get you a new job. Let things unfold naturally. See everything as an opportunity to learn. Think about how you can contribute, giving recommendations and helping others. Give first and then you will receive. 

Try not to have any expectations or to fixate on a particular outcome. Enjoy the personal growth and experience you gain from putting yourself out there, regardless of what happens. After all, you never know what might lead to an opportunity further down the line.

This mindset will do wonders to set you apart from other job seekers, and it will allow you to give your quest for a new job your best shot without worrying about a specific desired ending.

Moving in the right circles 

The brilliant thing about social media platforms is that you can see lots about what other people are up to. Things like what groups they are part of, what qualifications they have, who else they are connected to and what events they are attending. If nothing else at first, just watch and listen.

It takes a while to tune in to how different networks work, to build relationships and become part of communities. People are busy, and they might not remember you after one of two interactions. Still, if you prioritise it, dedicate time, start showing up consistently and becoming a valuable member of a network, people will soon take notice.

Always be willing to help others, but make sure you’re not always the smartest person in the room.

“If you’re the smartest person in the room, get a new room.”

Don’t be intimidated if people are more experienced than you. Don’t compare your chapter five to someone else’s chapter 12. You will learn from others with more or different experiences. And don’t be afraid to ask questions. People love to help. Being able to ask questions shows confidence, that you’re interested and therefore, that you’re interesting.

Attend relevant online events – it’s a great way to get up to speed and demonstrate you’re a proactive person, enthusiastic about learning, and you never know who you might meet. These events and learnings will be great to talk about in job interviews.

14 tips for setting yourself apart when online networking

  1. Do your research. Social media is a great place to listen and learn, even if you aren’t confident enough to post yet.
  2. Make sure your profiles are up to date with your experience and qualifications and that they look professional while also showing your personality. When you start making new connections, they will be looking at your profile, so ensure it does you justice.
  3. Start following your dream companies to work for and aim high.
  4. After online events, connect with the other people that were there.
  5. Always read the person’s profile before connecting and add a personalised note to connection requests. It will make you much more memorable.
  6. If you attend an event, read a blog post or article that you enjoy, tell the person who organised or wrote it.
  7. Be genuine and be yourself.
  8. Always bring a positive, helpful and polite attitude.
  9. Don’t be afraid to ask for help; people love to help.
  10. Share your own content.
  11. Never brag.
  12. See if people are willing to intro you to others if the opportunity arises.
  13. Give recommendations and introductions when you can. What goes around, comes around.
  14. Always thank people.

Turn yourself into a candidate who’s too good to miss out on. And remember, it’s as much for you to find a company that fits you as it is for them to find an employee that’s a good match. They will be lucky to have you. 

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.

Register to watch

Further reading:

After coronavirus, can Government afford the cost of unregulated accountants?

Posted by & filed under Accountable, Policy.

First-class financial advice has been crucial for businesses to survive the pandemic and will be even more important in the economic recovery. But not all advisors can be trusted.

At a time of national crisis, when businesses and members of the public need financial advice they can trust, it is disturbing to think that anyone can call themselves an accountant.

Yet, the reality is it is possible to set up without relevant qualifications, without supervision or contributing to the cost of anti-money laundering measures.

Take AAT’s poll on the impact of unregulated accountants

Help AAT AAT lobby for higher standards and a level playing field – share your experiences of unregulated accountants and how they affect clients and the profession.

Take poll

AAT is concerned by this inequality and its effects.

HMRC’s data shows that two-thirds of complaints relate to the one third who are not regulated. It also states that the promoters of tax avoidance schemes are mostly outside professional bodies.

During the pandemic, the importance of professional knowledge and adhering to ethical standards has come to the fore. But instead of supporting consumers by rewarding accountants who maintain their CPD and follow an ethics code, in 2020, HMRC and Government were working on a new Economic Crime Levy (ECL) to be imposed on professional bodies. This charge could actually incentivise accountants to be unregulated and join the sector that poses most risk.

Uneven playing field

AAT Fellow Member Ali Jaw comments: “ACCA and AAT and all those bodies can pay (the ECL), but we as members will see our fees go up because they will have to pass on the cost. Those who aren’t part of those bodies won’t have to worry, so it’s not a level playing field.”

Research for HMRC’s concedes this very point. There is “an uneven playing field and agents that [are] not members of a professional body could undercut those that are members because they do not have the same level of expense in terms of fees for membership, CPD requirements, and professional indemnity insurance.”

“People who are unqualified massively undercut us on price,” says Rachel Martin, founder of  Accountant_She. “It costs us a lot of money to be regulated as accountants. That increases our hourly rate and fees.

“Quite often we’ll get people come to us who are surprised by our fees and it’s because they’ve been with an unregulated accountant.

“As a practice owner, I feel like the benefits of engaging with someone who is regulated are obvious, but a lot of people don’t and just want the accounts done.”

Why regulation matters

The cost of an unregulated accountant may be lower. So, too, can be the standard of service.

Rachel Martin says: “Can you imagine being with an unregulated accountant in 2020? The level of support clients would have received would have been nothing. The level of engagement and being proactive – making sure everyone knows which grants they’re eligible for – would have been very little. If 2020 taught us anything, it was the importance of having a trusted accountant.”

James Moggeridge, the co-founder of Multiply Accountancy, has had first-hand knowledge of the problems from unregulated accountants.       

“We’ve taken over clients and had to inform them that they’ve not been complying with the pensions rules for the last three years and have a £10,000 bill,” he says. “Technically, the lion’s share [of liability] is the staff’s, but they can’t pass it onto the staff because it’s three years on and people have left. Being a member of a professional body is no guarantee of quality, but there is at least recourse for clients in that position.”

AAT Licensed Member Farid Gasanov knows what it is like to inherit a client from an unregulated accountant.

“In the case of one of my first clients – a candle-making business – the business owner had picked up all these penalties and she didn’t understand why. She had paid an accountant to do the job but he stopped returning her calls and emails,” he explains. “It turned out he had simply not done anything and charged her for the work done.”

How things can go wrong

Here are three examples from AAT members and Council representatives of the kind of problems that can arise from unregulated accountants.

1 – Charging to transfer

An AAT licensed member was approached by a new client to assist with accounting and taxation affairs. For this to happen, the member requested all handover information from the outgoing accountant. The information was not forthcoming in the agreed timeframe. Furthermore, the outgoing accountant was requesting £875 from the client to send the information. The member pointed out that this was not only highly unusual, but unethical, and forbidden by AAT’s code of ethics.

2 – Made up figures

An AAT licensed member took on a new client. The AAT member focused on VAT initially and it transpired that the previous tax agent had “made up” figures in returns, as they had “felt sorry” for the client. The AAT member registered as the new agent, producing detailed breakdowns for each of the VAT returns and assessed the liability to be approximately £48,000. The AAT member arranged for the liability to be settled in full. The AAT licensed member then worked on corporation tax and assessed the liability to be £49,000. This liability was also paid in full.

3 – Taking client funds

An AAT licensed member took on two taxi drivers. Both clients had used the same unregulated tax agent firm previously. When the clients tried contacting that company, they were unable to do so – it transpired that it had disappeared with client funds.

Time to regulate to raise standards

AAT believes the time has come for accountancy to be regulated through compulsory membership of professional bodies.

Adam Harper, Director of Professional Standards & Policy, AAT, comments :

“People should be able to have complete confidence in their accountant or tax adviser and feel that they are getting appropriate advice and support to ensure their business can not only survive, but thrive as we enter a critical stage of the UK’s economic recovery. Mandatory membership of a relevant professional body, including AAT, would help to boost that confidence and reinforce the role accountants play in helping individuals and small businesses across the country to grow and succeed.”

It’s not just AAT that would like to see the accounting profession regulated. “We are definitely not against [regulation]. It would be in our members’ interests,” says Maggie McGhee, executive director for governance at ACCA. Given the Government’s efforts to ensure professional bodies enforce standards and ongoing professional development, requiring all those calling themselves accountants to register with a professional body would do so, without the need to establish a regulatory agency. 

HMRC is open to change

HMRC is increasingly open to ideas to raise standards across the profession. It has proposed that all tax advisors have Professional Indemnity Insurance (PII).

AAT believes compulsory membership of a professional body is the way forward. For HMRC to get behind this and really raise standards it needs to gather more evidence, including from accountants.

How you can help

AAT, therefore, invites members to be a force for change. Please share your experiences of the non-regulated sector.

You can help in two ways:

  • Take part in our regulation poll and help build a fuller picture.
  • Submit an example of how unregulated accountants have affected you or your clients.

Give us your feedback now and help build a profession ready to help the nation’s recovery.

Why HMRC Statutory Reviews can be a quicker and more cost-effective way to settle disputes

Posted by & filed under Members, Tax.

When a taxpayer disagrees with an HMRC appealable decision, most accountants – and even their clients – know that they have the option to take the matter to a tribunal.

However, there is far less awareness that such decisions can be reviewed by a different department at HMRC, at no cost, and much more quickly than via a tribunal.

These statutory reviews also have a high success rate, with 75% of cases being settled without going on to appeal to a tribunal.

Here Chris Gargan, HMRC Assistant Director, National Reviews Team, explains why accountants might want to recommend their clients consider a statutory review rather than a tribunal appeal, at least in the first instance.

For various reasons, statutory reviews are usually preferable to embarking on a tax tribunal appeal. The key benefits are that they are a quick, easy and cost-effective way to settle a dispute, avoiding unnecessary litigation, cost and stress, whilst customers retain the right to appeal to a tribunal if they disagree with a review conclusion.

How statutory reviews work

The purpose of the review is to look at the decision again, not to assess new facts or evidence that haven’t been considered by the caseworker. However, the review officer will give customers the opportunity to send in further information during the review period.

The review officer will then decide if the appealable decision is

  • legally and technically correct
  • consistent with HMRC’s policy, and
  • consistent with HMRC’s Litigation and Settlement Strategy.

Some disputes involving a direct challenge on HMRC’s interpretation of legislation may need to be determined by the courts, since a review officer cannot override HMRC policy. However, even in these cases a review can often help clarify facts and both party’s understanding of the dispute.

Process and timing

The statutory time limit for reviews is 45 days (or sometimes a longer agreed time period). Conversely, having the tribunal determine an appeal is time-consuming with a backlog of approximately 30,000 First Tier tribunal appeals, a wait of at least a year is common.

Reviews can only be carried out once an appealable decision is made. When a caseworker makes a decision, they will tell the taxpayer if they can appeal against the decision and what to do if they disagree.

Examples include closure notices following an enquiry, assessments and information notices.

For indirect taxes (for example, VAT, excise or customs duty), the decision letter will include an offer of a review. Customers will have 30 days from the date of the decision to accept the offer, but if they have new information or arguments it is possible to delay the start of the review just in case agreement can be reached.

For direct taxes (for example, corporation tax or income tax), customers will have 30 days from the date of the decision to appeal to HMRC. Either at that stage, or later, they may request a review or they may be offered one. Again, if they have new information or arguments, then it would be useful for them (or their agent) to provide these to the caseworker to consider before the review process begins, as this may resolve the dispute.

Independence

Statutory reviews are carried out within HMRC’s Solicitor’s Office and Legal Services (SOLS) department i.e. a different department to that which made the decision, and so the review is conducted by officers who are entirely outside the management chain of those making the disputed decisions.

Financial considerations

Requesting a statutory review would normally only incur a monetary cost if the customer seeks representation. As three-quarters of reviews do not go on to appeal and costs are generally higher for appeals in time and money, it is often more cost-effective to initially request a review.

How can accountants help the review officer?

To help this process operate smoothly, it is important that you and/or your client clearly explain to the review officer what your client disagrees with and why. Did they rely on any case law or other evidence to form that view? Do they have any further information to provide to the review officer to support their case? Conversely, it is also useful to know what they agree with, as this will help focus the review to the key points in dispute.

Facts and figures

In 2019/20 SOLS carried out 22,649 statutory reviews, of which more than 56% were cancelled or varied as a result of a review.

Of the 22,649 reviews, just over 40% related to VAT penalty cases where, in most instances, “reasonable excuse” was a consideration at review. 81% of the decisions were varied or cancelled at review.

A similar picture arose in 2018/19 with SOLS reviewing 28,068 decisions and cancelling or varying 50% of decisions.

Again, of the 28,068 reviews, 14,905 (53%) related to VAT penalty cases, with two thirds% of decisions cancelled or varied at a review.

The key figure for accountants and their clients to be aware of is that following a review, the majority of cases do not proceed to a tribunal, which suggests they can be a very effective way to settle a dispute.

It’s not just HMRC and users that have recognised the Statutory Review process is a quicker and more effective alternative to a tribunal. Their merits have been acknowledged by both the Office of Tax Simplification and the House of Lords.

More information

More information about appeals and reviews can be found in the HMRC Appeals reviews and tribunal guidance manual.

Government must regulate the unregulated – now!

Posted by & filed under Accountable, Members, Policy.

Phil Hall, AAT Head of Public Affairs & Public Policy, introduces AAT’s new campaign to regulate all accountants.

As many readers will know, a third of the accountancy sector is effectively unregulated.

Anyone can call themselves an accountant, there is no need to have any qualifications, have undertaken any Continuing Professional Development (CPD), demonstrated any relevant knowledge or to be a member of a recognised professional body.

Why does this matter?

According to HMRC, approximately two-thirds of complaints they receive about agents relate to the one third who are unregulated. That should be enough to take action.

But throw into the pot the likely higher incidences of encouraging and facilitating tax avoidance, tax evasion and money laundering – not to mention the increased likelihood of filing errors and bad advice (all ultimately paid for by the end user not the unregulated adviser) – and resolving this issue appears to be not just a “nice to have” but essential.

Why now?

The problem of unregulated accountants has existed for many years. Its financial impact is huge – and growing in significance.

With over £400bn of coronavirus debts needing to be repaid, tackling the problem of unregulated accountants could bring much-needed revenue for the Exchequer.

According to BDO, in 2019 unregulated agents were thought to have helped encourage businesses to overclaim R&D Tax Credits by over £600m This is just one area of tax policy – imagine the impact of unregulated accountants and tax advisers across the board; their impact could possibly run to billions in lost revenue.

Another factor making the need for action particularly pressing is the increasing regulatory pressure being applied to auditors. 

The welcome reports from the Competition & Markets Authority and the Government commissioned Kingman Review mean that the audit sector of the accounting industry will probably have one of the strictest regulatory regimes in the world. This serves to bring the manner in which the rest of the accountancy sector is regulated into much sharper focus – demonstrating the disjointed nature of regulation in the UK. How can auditors be subject to such stringent conditions when high street tax advisers and accountants are effectively left to their own devices?

The solution?

To AAT, the solution appears both simple and obvious. It’s a recommendation AAT has been making repeatedly in recent years (most comprehensively in our 2020 response to the Government consultation on the matter). Put simply, the Government should legally require anyone offering paid for tax/accountancy services to be a member of a professional body – as happens in other professions.

This would mean they would have to:

Support

When AAT surveyed MPs in December 2018, an overwhelming majority agreed with us on this issue. 83% of MPs said anyone providing tax or accountancy services to the public should be a member of a relevant professional body.

We are in the process of asking MPs the same question again to establish if there has been any change in support since the general election of December 2019, which resulted in a significant change in the composition of Parliament. Of course, even 99% support may not be enough as it’s the Treasury – specifically, the Financial Secretary to the Treasury – whose decision this remains. Unfortunately, there does not appear to be any evidence of a Ministerial desire to take effective action.

Next steps

Various tax avoidance scandals, most notably the recent loan charge debacle (where unregulated accountants and tax advisers were identified as having played a large role) forced the Treasury to consult on the issue last year.

However, the outcome of that consultation was very disappointing, containing little more than a proposal to require unregulated accountants and tax advisers to hold personal indemnity insurance – something that any accountant or tax adviser who is a member of a professional body has been required to do for decades.

This may provide some limited recourse for taxpayers receiving bad advice but does almost nothing to raise standards, reduce tax avoidance, tax evasion or money laundering or reduce the mistakes and poor advice that so frequently cause problems in the first place.

AAT will be working with others, including members, to press the Government to take much needed, long-overdue and effective action on this issue.

How the four nations view life after lockdown

Posted by & filed under Coronavirus, Members.

We look at the state of play across the four nations for exiting lockdown.

Lockdown restrictions are easing gradually over the next few weeks and months with businesses across the UK making tentative plans to reopen. But there are significant regional differences in what lockdown roadmaps look like across the four devolved nations.

Take AAT’s poll on the impact of unregulated accountants

Help AAT AAT lobby for higher standards and a level playing field – share your experiences of unregulated accountants and how they affect clients and the profession.

Take poll

In England for instance, most people know that June 21st is the earliest date at which all Covid-19 related restrictions are set to cease (assuming infection rates haven’t risen), but specific rules for each stage can be confusing for many businesses.

Here are the main differences between the four UK nations:

England

  • Lockdown is set to end on the 29th March.
  • Non-essential retail, (outdoor) hospitality and beauty services set to reopen from 12th April, along with outdoor tourist attractions.
  • Six people or two households can meet indoors from 17th May while indoor entertainment services and tourist attractions and holiday accommodation can reopen.
  • All Covid-19-related restrictions including social distancing set to end on June 21st.

Wales

Up until Friday (12th March) no roadmap out of lockdown existed for Wales, but the Welsh Government  has now announced the following:

  • Four people from two households can meet outdoors from 13th March.
  • Primary schools will reopen 15th March as well as secondary schools for pupils in exam years.
  • Non-essential retail can begin to reopen from 22nd March but gyms, hospitality will remain closed.
  • The ‘stay at home’ message is set to end by 27th March, depending on infection rates.

Scotland

  • Four people from two households can meet outdoors from 15th March.
  • The country is expected to stay in lockdown until 5th April.  
  • From 26th April, a ‘phased but significant’ reopening of the economy including non-essential retail, hospitality and beauty services.

Northern Ireland

The blueprint out of lockdown relies on health factors rather than key dates and focuses on nine sectors each with five stages of lockdown easing depending on infection rates. The nine sectors include:

  • Home and community
  • Education and young people
  • Work
  • Retail
  • Hospitality
  • Sport and leisure
  • Culture and entertainment
  • Travel and tourism
  • Worship and ceremonies.

We asked several accountants across the UK how confident their clients are about when and how they can reopen their businesses.

ENGLAND: Businesses are clear when they can reopen although dates aren’t set in stone

Paul Reed, owner, Reed&Co
Although we receive several phone calls from clients asking when they are allowed to open, we feel the government’s roadmap provides an excellent outline on when businesses can reopen and what guidelines need to be followed.

For us here in England the information is clear, although the dates aren’t set in stone.

So our clients are planning to open up at the dates provided to us by the government, but the general understanding is that they could very well change and are clients are prepared for this.

Next steps: we recommend the following before reopening your business:

  • Undertake a Risk Assessment
  • Consider the layout of your premises, for example, 2 metre markings and one-way flow
  • Speak to suppliers: It’s important to plan how and when goods and supplies arrive at your premises.

Verdict: Clients are clear when they can reopen their businesses but they should ensure infection control measures in place when they do.

SCOTLAND: Untangling guidance from Holyrood and Westminster has been difficult for some Scottish-based businesses

Rosalind Catto, Inverness office head & business advisory partner, Johnston Carmichael

There has certainly been no shortage of information and guidance issued to businesses in recent weeks. However, keeping up with the regularly shifting deadlines and the often-nuanced nature of the advice can be challenging. For Scottish businesses, there is also the additional complication of untangling Westminster guidance from Holyrood guidance – especially for companies with a foot in both camps.

Overall, we’re finding businesses have learnt lessons from the experience of reopening last summer, allowing them to better prepare for the process this time around. This means that, for most, it should just be a case of tweaking the processes they put in place last year.

Next steps: It remains vital that companies are aware of the latest grants and support packages that are available to them. On top of this, it’s going to be vital that businesses make themselves as efficient as possible to ensure they are in the best possible position for reopening their doors.

Verdict: Shifting deadlines and untangling guidance from both Holywood and Westminster has been challenging but many businesses are better prepared having learned lessons from last summer.

WALES: Clients are cautious given the frequent sudden changes in the region

Claire Owen-Jones MAAT, Loud and Clear Accounting

The challenge with the Welsh roadmap compared to the English one is that most of our milestones are “possibly”, “may” and “review”. This along with our history of sudden local lockdowns or changes to the rules with short notice, can make everything feel far more uncertain and harder to prepare for.

For this reason, my clients are nervous. They’ve been burnt before, whether it’s through previous re-openings cut short when local lockdowns have cut them off from their clientele. Or had food and drink stock wasted when opening hours have been changed with little notice (one Monday they were told that from Friday they were banned from selling alcohol and couldn’t open to customers after 6pm). 

Everyone is desperate to re-open. Most are applying for any grant they can find primarily to pay their rent, which for most hasn’t stopped, and that is a stressful situation to be in. 

Next steps: Clients have their premises ready in terms of social distancing and cleaning. They just need to footfall and for their customers to return. Some had to make the decision to close earlier than lockdowns have dictated as there just wasn’t the footfall to cover the employees wages/costs. So it’s the balance between being allowed to be open and for people to actually want to return.

Verdict: A history of sudden changes have made clients sceptical of any roadmap.

How kindness and empathy put this AAT entrepreneur on the 100 most inspirational list

Posted by & filed under Members, Women in finance.

FMAAT Kay Daniels is a multi-award winner and a business finance transformation specialist who has carved out a career mentoring others.

Now she’s been named as one of the UK’s most 100 inspirational female entrepreneurs by Small Business Britain.

Her journey shows that emotion – and kindness – should never be underestimated.

Getting emotional

People don’t associate accountancy with emotion. It’s more usual to see the profession as highly-technical and driven by numbers and compliance.

But the modern accountant knows it’s also much more. Soft skills such as communication, relationship building and emotional intelligence are highly prized: the accountant is less of a number cruncher these days and more of a business advisor.

FMAAT Kay Daniels, the founder of The Financial Female, is precisely that.

Her career trajectory has evolved from the traditional accountancy role into business mentor and consultant. And emotion, she says, features hugely in her consultancy work with clients.

After working as an accountant for several decades, Daniels moved into consultancy ‘with a financial bias’.

Switching to consultancy

It started with wondering how she could add value to her clients businesses and be ‘more useful’. As she started to talk more with clients about their personal and business goals, it grew from there.

“There is absolutely a place for statutory accounts and tax returns to keep business owners compliant, but for me, you should always be looking to add value. It’s being more forward-looking, putting plans in place and growing business profit.”

Daniels’ business helps clients transform their business finances to improve profits and cash flow and, ultimately, achieve personal goals. This is where it can get emotional because, as Daniels explains, everything personal is tied up in a business so it can be quite an emotional experience.

“Most business owners I’ve worked with are quite keen to talk about the emotional side,” she says. “They’re not going to do that in front of colleagues or their team, but they are willing to share with me as an outside party because I am the safe space to try out ideas and have a fresh pair of eyes on the business.”

A learning curve


Daniels didn’t go down the traditional accountancy route. She worked in payroll initially at First Choice Holidays which had lots of scope to move around. But it wasn’t until she happened to see a colleague study accountancy that she decided to take the leap because she thought it ‘looked interesting’. Her accountancy career took her from travel to the legal and then publishing sectors.

Later in her career, Daniels set up her own accountancy practice despite having no practice background and was therefore a bit ‘clueless’ when it came to pricing and marketing. Yet despite the learning curve, her business was doing so well, that ten years later, she relocated her business and her all-female team to the West End.

“My practice was one of the first in the country to win an AVN excellence award,” she says. “There was a very lengthy process, covering twelve areas of excellence such as proactivity, teamwork and services to clients. We were externally assessed to make sure we were delivering excellence in all these areas. Winning the award gave me the confidence to know we were on the right track.”

From accountant to consultant


Daniels’ transition into business advisory services and consultancy happened around 2017 following family illness. Her focus changed and she decided to ‘close the door’ on new accountancy clients and make the switch into consultancy. The Financial Female was set up soon after.

But what was that transition like? Did she feel out of her comfort zone in the beginning?

“It didn’t feel strange at all,” Daniels explains. “It’s actually just about having conversations. Everything is about rapport, that’s what’s important when you offer this kind of service. Because on a technical level, every accountant should be equal, in theory. People expect you to deliver on the technical and compliance side. So it’s more about your personality fitting with that of your client. It’s having those emotional conversations, giving people advice, sharing experiences and being vulnerable with it.”

Daniels stops short of describing herself as akin to a counsellor, but in some ways, the role is similar. Often, clients share worries and concerns with her which they wouldn’t share with anyone else.

Charity and mentoring work

However, Daniels’ passion in supporting other businesses and individuals goes beyond the scope of her own business network. Since 2018, she’s been heavily involved in charity work and mentoring at the Friends of Charing Cross Hospital plus the Prince’s Trust and The Girls Network West Midlands.

For Daniels, it’s about giving a helping hand to people who need support on moving up the proverbial ladder. As she points it: “Kindness goes a long way.”

It’s how she’s responded to the Covid-19 pandemic. Her focus throughout has been on providing extra support to struggling businesses. She had relocated to Birmingham just before lockdown and had expected to be up and down to London for meetings and consultancy sessions, but of course, none of that happened. Instead, Daniels made herself available online for anyone who needed support. She even spent several days on Twitter helping business owners with general queries about furlough and other financial issues.

#LeaveNoBusinessBehind  

The Corporate Finance Network launched the #LeaveNoBusinessBehind campaign last year to encourage all business owners to prepare cashflow forecasts to ensure they have a roadmap out of lockdown and into recovery. It was a collaborative effort by accountants and Daniels was one of the entrepreneurs who was happy to get on board.   

To date, Daniels has mentored several individuals through the organisations and charities she’s worked with, including schoolgirls from disadvantaged backgrounds and young women starting their own business.

“You definitely get the feel-good factor mentoring others,” says Daniels. “But also it gives you valuable insight into other peoples’ businesses and you get exposure to different sectors you wouldn’t otherwise see. And you learn so much from the mentee, too. The first person I mentored at the Princes’ Trust was a young artist. It was totally different to anything I’ve done and it was really interesting to see their creative process as well as the business side of things. I’m a naturally curious person.”

Inspirational female entrepreneur

This year, Daniels was named one of the UK’s most 100 inspirational female entrepreneurs by Small Business Britain’s f:Entrepreneur #ialso campaign. The annual #ialso campaign, which first launched in 2019, celebrates the contribution of 100 female entrepreneurs who do over and above through business and beyond.

Daniels has been delighted with the new connections that have resulted.

“I would strongly encourage any female entrepreneur to enter,” she says. “It’s such a warm and welcoming community.”

Daniels invites any FMAAT who has questions about any aspect of running a business to connect with her on LinkedIn. “You have to be a certain kind of person to be cut out for running your own business, but there is support out there. So if anyone wants to reach out to me, I’m always happy to help.”


Career highlights

  • Founding and growing a successful accountancy practice.
  • Supporting clients through successful sale of their businesses.
  • Mentoring young female entrepreneurs.
  • Supporting the NHS during one of its biggest crises.

Awards

  • AVN Rising Star Award – 2012.
  • AVN Excellence Award – 2013.
  • British Accountancy Awards finalist 2015 – Independent Firm of the Year Greater London.
  • F:Entrepreneur #ialso 100 – 2021.                                         

Opinion: global shifts could end the Big Four’s dominance

Posted by & filed under Members.

Major global events, particularly Joe Biden’s presidency and Brexit, could combine to benefit the UK’s smaller accounting firms in 2021 and beyond, says Chris Biggs, Partner, Theta Global Partners.

The first months of 2021 have brought us seismic changes– from the simpler vaccine roll-outs, Brexit and presidential handovers, to the more complex vaccine export rows and riots at the US Capitol. None of this has gone on without effects being felt around the world.

Joe Biden’s inauguration as US president is likely to have a major impact on finance, trade, climate change measures and many other sectors, including in accountancy.

In the accounting market, standards such as the IFRS, and whether businesses will continue to follow these, will have long-term implications for investors, auditors and business leaders alike. This could make the UK more attractive to foreign investors or put firms at risk of having to follow two sets of rules if they trade internationally.

After a parliamentary committee ordered the separation of auditing and consulting services in the Big Four firms, the FRC came under threat as the government tried to show its teeth in governing this area.

However, with Biden looking to have a closer relationship with Europe, it looks increasingly likely that to remain a globally facing country that acts as a bridge between Asia, Europe and North America, the UK government may need to deal with the Big Four (and this issue), and bring governance more in line with its European and American counterparts.

Biden has set out plans for increased spending in many sectors including green tech, and has mooted increased regulation for big tech and others. If, however, he extends this to the Big Four and follows UK business secretary Kwasi Kwarteng’s desire to reform their audit arms, 2021 could present a fantastic opportunity for smaller firms to capitalise.

Areas to watch

The majority of 2020 was a slow year for the UK’s deals market, with mergers and acquisitions depressed by the pandemic and its subsequent lockdown restrictions.

In accountancy, this trend may be reversing, and is welcome news for a sector that has been quiet over the last year. The end of the Big Four’s dominance could also open the door for smaller, more nimble firms to capitalise, and the increasing demand for consultancy around deals means that those looking for a more tailored service will in many cases look for small providers.

Shifting priorities

The past year has really allowed smaller firms to compete in a way that has been difficult in the past. There are no more advantages to a massive office in Canary Wharf when everyone is working from home. Those overheads now look like an unnecessary excess to clients weighing up their options.

As businesses look to avoid actual or perceived conflicts of interest, expect a big shift towards smaller firms. It is easy to get lost in a sea of big clients if your firm is not a key account, but when working with smaller accountancy practices your needs are prioritised, no matter how big you are. This has come into increased focus throughout the pandemic and will continue long beyond it.

Freeports: what are the risks and benefits of the Singapore-on-Thames model?

Posted by & filed under Members, Tax reform.

The Chancellor announced eight freeports in the 2021 budget. What are they and how do they work? By Steve Hemsley

The notion of a low-tax, deregulated economy to fire up the UK post-Brexit was first mooted in 2017 by then-prime minister Theresa May.

The idea of a “Singapore-on-Thames” was originally raised as a threat to dissuade the EU from negotiating an agreement that would punish the UK. Since then, the idea has captured the imagination of tax and economic experts alike.

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Of course, there are many differences between the two countries. The UK has a serviceled economy, while around 22% of Singapore’s economy is made up by manufacturing.

The UK government wants to revive manufacturing as part of its levelling up agenda and Brexit could mean lower taxes and subsidies to support producers investing in new factories.

What is clear is that the UK is no longer obliged to comply with the EU Code of Conduct for Business Taxation. The code was never legally binding, but was designed to stop members rolling back existing tax measures to gain a competitive advantage.

Those against a low-tax, deregulated economy warn there could be a race to the bottom around areas such as corporation tax (it is 17% in Singapore but already 12.5% in Ireland). They also fear that free ports will encourage tax avoidance or evasion and encourage money laundering. The UK has said it will continue to abide by the OECD’s tax avoidance processes.

Supporters of the Singapore model point out the benefits to business, in particular to entrepreneurs and startups where the UK is a world leader. There is also a need to encourage inward investment and boost consumer confidence after a difficult 2020.

In theory, the UK could abolish VAT. This is considered unlikely because it is such a major revenue earner globally and represents 18% of UK tax receipts. The UK is also signed up to the OECD International agreed standards on VAT.

A major unanswered question, though, is how the EU would react to having a tax haven as a noisy neighbour. It could mean the 27 members accelerate their economic integration and introduce more common tax rules, particularly around corporation tax.

AT spoke to a range of experts to get their take on the pros and cons of creating a ‘Singapore of the West’.

What the experts say

If the UK really wants to become Singaporeon-Thames, then it must be bold with its tax changes, say tax experts.

Finn Houlihan, founder of independent UK tax advisers ATC Tax, says corporation tax should be lowered to 10%, income tax cut and tax breaks introduced for certain industries.

“This would attract new companies and encourage entrepreneurs to start businesses in the UK. It would also help the current talent within the UK to grow their businesses,” he says.

He adds that the government must exploit the country’s existing strong infrastructure.

“The UK has high-profile markets in commodities, currency trading, derivatives and fintech, plus established, strong relationships with other trading hubs, including Singapore.”

Mark Kearsley, tax director at DSG Chartered Accountants, describes the creation of Singapore-on-Thames as an extreme approach and one the EU would have to respond to.

“The EU trade agreement comes with a commitment to tax transparency and effectively ensuring a level playing field,” he says. “Significant divergence from the current tax regime could result in UK businesses facing tariffs and other remedial measures from the EU, so this view is unlikely to hold.”

He says the creation of freeports – which have existed in the UK before – could help UK businesses. “They would benefit from simplified processes to regenerate brownfield sites, a package of tax relief and simplified customs procedures.”

Kearsley adds that one tax relief currently constrained by state aid regulations is enterprise management incentives. These popular share schemes promote growth and retain talent by providing individuals with significant tax benefits.

“The Treasury Committee launched an inquiry into the UK tax system last summer. It is focusing on the long-term pressures of the system and how it needs to change to ensure the UK protects its tax base.”

All change on tax? Maybe – but not yet

The UK in a Changing Europe think tank offers a non-partisan view on the Singapore-on-Thames debate.

Senior fellow professor Sarah Hall says there remains a lack of clarity about whether the government wants to follow a Singapore-on-Thames agenda.

“The government is keen on deregulation, but is unsure how it wants to use its freedom specifically to change tax,” she says.

She adds that there is a keenness to use tax breaks to help specific sectors of the economy, including tech and renewable energy businesses.

“We could see a green-led recovery. This is one sector where the UK leads the world. The 2021 United Nations Climate Change Conference is due to be held in Glasgow in November.”

Professor Hall also warns about the ethical implications of creating a low-tax economy.

“Since the financial crisis, we have seen public opinion move away from wanting a deregulated tax haven. Such a move could have an impact on the country’s credibility globally around economic leadership and sound corporate practice,” she says.

Entrepreneurs wait and see

Brexit is an opportunity for the UK to create a new vision around tax, says Sam Dumitriu, research director at think tank the Entrepreneurs Network (EN). EN is part of the growing group of voices which says entrepreneurs should benefit from the UK’s new-found tax freedom.

There could be changes to Entrepreneurs Relief, The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS), for example. Chancellor Rishi Sunak announced in the March 2020 budget that he would limit the lifetime tax relief available to those selling their businesses to £1m, down from £10m, but this could be revised in future.

Potential changes to EIS and SEIS will depend on the government’s commitment to encouraging early-stage investment and a willingness to offer more generous tax relief to investors.

“Tax reliefs will increase investment in start-ups, but freedom around tax is probably limited initially, although we could see things streamlined,” says Dumitriu. “There should be less red tape, which can slow down entrepreneurs and even mean start-ups lose investment.”

The ethical arguments

Paul Monaghan, chief executive at the Fair Tax Mark (FTM) certification scheme, is keen to see a more just tax system post-Brexit to fund public services.

FTM is a joint initiative between the Ethical Consumer cooperative and Tax Research UK.

Monaghan believes there is a battle going on within Downing Street about whether or not to follow a Singapore-on-Thames agenda.

“It is strange we’re talking about reducing the tax take at a time when so many areas need support,” he says.

He adds there is scope to increase corporation tax because, at 19%, the UK has one of the lowest rates.

“How many advantages do British businesses need to compete abroad? Do we really want a race to the bottom? We need to address areas such as productivity.”

Monaghan says there could also be changes in VAT as part of a drive for a fairer tax system, along with changes around state aid to help different industries and revisions of capital gains and inheritance tax rates.

He is critical of plans to create up to 10 freeports, which he says will encourage tax avoidance and evasion and create unfair advantages for some businesses.

Recovery loan and the super-deduction: can they save businesses?

Posted by & filed under Members, Road to Recovery.

Accountants give their views on the new measures outlined in the Budget.

Out of all of the measures outlined in the Budget last week, the ‘super-deduction’ on investments and the Recovery Loan Scheme were two of the biggest wins for members.

The super-deduction on investments comes into effect next month and will end after 31 March 2023. Companies can claim on qualifying expenditures during that period:

  • allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
  • a first-year allowance of 50% on most new plant and machinery investments that ordinarily qualify for the 6% special rate.

The Recovery Loan Scheme will launch on 6 April 2021, following the closure of current CBILS and BBLS on 31 March 2021. It is scheduled to run until 31 December 2021, but this is subject to review. The new scheme aims to help businesses affected by COVID-19:

  • It can be used for any legitimate business purpose, including managing cashflow, investment and growth.
  • The maximum value of a facility provided under the scheme will be £10m per business.
  • Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.

There will be no turnover restriction for businesses accessing the scheme. Businesses will be able to choose from a variety of products including term loans, overdrafts, asset finance and invoice finance facilities. Term loans and asset finance facilities are available for up to six years, with overdrafts and invoice finance available for up to three years.

What will this mean for businesses in reality? We asked accountants for their views.

The Super-deduction misses a trick by limiting to plant and machinery

James Poyser, CEO of inniAccounts

As a service business, we treat service spend as a first-class citizen. We ensure we’re investing in growing our balance sheet through service spend, as well as simple spending to do business.

This means when I look across my organisation, I can clearly see how our spending on services are capital or revenue in nature. We’re used to tracking this and it brings us many benefits. As a CEO I keep a keen eye on how our spend on services impacts our balance sheet or P&L.

FR102 gave us the breakthrough to capitalise these intangible assets with confidence, and this level of reporting is also useful to support our R&D tax claims.

When super-deductions were announced by the Chancellor, there was a profound sense of excitement. We’re planning on making significant investments in services to build new software features, strengthening our balance sheet and paving the way for future growth. A super-deduction for service spend would have encouraged us to be even more ambitious – and that would, without doubt, have translated into investing more of our reserves in spending with other small business, and creating jobs.

But alas, it’s not meant to be. The super-deductions are restricted to plant and machinery. To me, this hints how out of touch, at times, HMT can be with our economy; 71% of the UK’s GDP comes from services. How much comes from those who rely heavily on plant and machinery? It will be a fraction of that.

Verdict: I would imagine part of their rationale will be to mitigate potential fraud. It’s easy for HMRC to audit if someone’s bought a press machine. It’s less straightforward to audit intangible assets. But, if we do want to continue to be a services powerhouse, it would be great if HMRC/HMT could work harder to ensure that such risks don’t stand in the way of business investment.

Determining recovery is more complex than box-ticking

Steve Richardson, a director at Reparo Finance

Eligibility for the recovery loan scheme focuses on the viability of a business pre-pandemic, how it’s been impacted by COVID-19 disruption and trading status. Although this all makes sense, it cannot wholly pinpoint a company’s prospects of recovery, as there’s so many variables to consider. Determining recovery is much more complex and if it’s left to automated, box-ticking led underwriting, it may leave a number of viable SMEs high and dry when it comes to successful loan applications and quickly accessing finance.

The flexibility of the recovery loans is a benefit to business

John McCaffery, Tax Partner and Head of Tax at Alexander & Co

The Super-Deduction Tax Relief is a useful relief and may well encourage capital expenditure. It is early days, but Alexander & Co will be claiming the relief on behalf of clients and be advising them on the tax benefits of capital expenditure under this new relief.

Details of the Recovery Loan are yet to be published, it appears to be on similar terms to previous support loans. It could well provide a new cash injection for businesses and the government guarantee will provide more comfort to lenders than borrowers.

 Compared to previous support loans, at this early stage it appears there is more flexibility with the size of businesses that can apply. This is obviously an advantage.

Verdict: We would advise clients to only take recovery loans out if they are confident that they can repay the loans. In support of this, we strongly advise clients to make sure that accounting records are up to date and they have prepared accurate forecasts, which we can assist with.

The Recovery Loan Scheme could create a new legion of ‘zombies’

Greg Taylor, head of financial solutions, MHA Macintyre Hudson

The structure of the Recovery Loan Scheme gives banks and other types of lenders an incentive to keep companies with weak long-term prospects alive and risks creating a legion of ‘zombie companies’. By allowing businesses which are not viable in the long term to continue operating can hinder the restructuring of capital and labour from less productive businesses to more productive ones.

The new Super-Deduction is the biggest positive news coming out of the budget, allowing businesses to claim a whopping 130% of their new machinery cost as a tax cut. This will stimulate investment in the short-term. In fact, the Office for Budget Responsibility (OBR) is predicting that this measure will boost business investment quite significantly, at least in the short term.

Clients should take robust professional advice and hold off taking on further debt until the criteria of each of these initiatives is known. Taking a medium view around debt will be the key in coming out of the pandemic and lockdown to either thrive or just survive.

Verdict: The Recovery Loan Scheme and Super Deduction are welcome initiatives and can help stimulate investment, however there’s a risk that the Recovery Loan Scheme could create ‘zombie companies’.