Why you should ask your employer to put you on a financial apprenticeship

Posted by & filed under Apprenticeships, Career, National Apprenticeship Week.

To celebrate National Apprenticeship Week, we look at how becoming an apprentice can transform your career and be a great way to study.

Before she started in the Co-op’s finance department, Robyn Elizabeth had enjoyed an eclectic career which involved working as an art teacher and in funeral care with the Co-op. However, having moved over into the finance team last year, she decided she needed to develop her financial skills. The best way of her achieving this? To ask her employer to put her on a financial apprenticeship.

Today, Robyn is one of 742,400 apprentices in England. The notion that apprentices are school-leavers or are only available in manual, blue-collar trades is clearly becoming outdated: today 46% of apprentices starting in 2018/19 were over 25, while 44% of starts were at a higher level. Just like Robyn, many people are increasingly choosing apprenticeships to change jobs or develop skills within their own company so they can progress into a different role (there’s no upper age limit for applying).

 The earn-as-you-learn schemes are also an increasingly popular alternative to university: only half (53%) of 16-18-year-olds now see university as the best career move according to a 2019 survey by jobs website Monster (the same study found a fifth of those survey planned to take up an apprenticeship). They’re available in nearly every sector too, from accountancy to law.

It’s something to ponder during National Apprenticeship Week (8 February). The annual celebration aims to highlight the incredible work being done by employers and apprentices alike; this year’s theme is ‘Build a Future’.

From improving job prospects to asking your boss, here’s the lowdown on everything you need to know about becoming a financial apprentice if you have a job already.

1. Why become a financial apprentice

Training + on-the-job experience + formal qualifications = career progression goals

For those wanting to develop new skills or pivot into a finance career, apprenticeships are an absolute win-win. For a start, you’ll learn the latest accountancy thinking during your training. But instead of this knowledge lying dormant and dusty somewhere in the back of your brain, you’ll get to put these skills to good use within the workplace on a day-to-day-basis, where you’ll also gain valuable advice from experienced staff members and mentors too. What’s more, when the apprenticeship finishes, you’ll also get AAT qualifications to brighten up your CV or LinkedIn profile. This can be particularly helpful if you’ve worked in accountancy for some years, but never had the opportunity to gain formal qualifications before.

Learn business skills as you go

Alongside accounting knowledge, accountancy apprenticeships focus on building up skills and behaviours so individuals have the complete skillset they need to make an impact.

At all levels you will be shown how to analyse, collaborate, work in teams and communicate effectively. You are also coached to reflect on what you have done, which makes them life-long learners.

At Levels 3 and 4, the curriculum includes even more valuable attributes like accountability, adaptability, problem-solving and leadership.

Many who have come up through the apprenticeship route feel the structured approach to acquiring all-round business skills and knowledge is a huge benefit and an advantage over just taking the professional qualification alone.

Enjoy financial freedom

Cash is normally tight when you’re studying. Not so if you’re an apprentice, where you’ll get the chance to earn while you learn. All apprentices over the age of 19 receive the national minimum wage, but many employers choose to top this up. And if you’re moving to an apprenticeship from another department within your organisation, your salary will probably remain the same.

The opportunities are endless

Apprenticeships are offered at many different levels. Got some financial experience but want the qualifications to back this up? Try entering at Level 3; the perfect way to get that first foot-in-the-door. Want to get a degree but never had the chance? Well, degree apprenticeships (Level 6) are the equivalent of a BA (Hons) or BSc (Hons).

You can also undertake your financial apprenticeship in pretty much any area of accountancy you want. The apprenticeships at big four firms such as KPMG and EY give candidates the chance to become chartered accountants and rotate around different parts of the business. You can opt to do an accountancy apprenticeship within the finance team of a large organisation such as the Co-op or Hays Travel, and also public sector parts of the government. Meanwhile, you could learn the trade via the hands-on, day-to-day diversity of a smaller local practice, where’ll you get to experience a wider range of tasks.

2. How apprenticeships work

  • Apprenticeships can last anything from one year or (if you’re building your way up) anything up to six years. 
  • Apprenticeships are graded at different levels, ranging from Level 2 (Intermediate; equivalent to five GCSE qualifications A*-C) to Levels 6 and 7 (Degree; equivalent to a bachelor’s degree).
  • During your apprenticeship, you’ll spend 20% of your time (maybe every Monday or Friday) on off-the-job training, which usually takes place at a college, university or training provider. This is where you’ll receive AAT tuition, which can be tailored towards the needs of your organisation. The rest of the time (80%) will be spent developing new skills in the workplace.
  • All apprentices aged 19 and over will receive the national minimum wage. However, many employers offer their apprentices a competitive salary. You will also get the same benefits (such as holiday allowance) as other employees at your organisation.
  • As an apprentice, you will be given targets to achieve, and have regular review meetings with your line manager and college/training provider to ensure that you’re making progress.

3. Case study 1

“I started an apprenticeship at 29”

Robyn, 30, from Manchester, is midway through her Level 3 apprenticeship at the Co-op.

“I started an apprenticeship at 29”

Robyn Elizabeth, 30, is midway through her Level 3 apprenticeship. She works at the Co-op’s support centre in Manchester.

“I joined the Co-op in 2016 but it wasn’t until I’d worked in two different departments – funeral care and finance – that I decided to pursue a career in finance. It was obvious I needed qualifications and to advance my career in finance; apprenticeships seemed a good way of achieving that. I constantly asked my manager [in the finance team] about apprenticeships, until our leadership team put forward an opportunity in 2019. I went through an internal selection process, and started in summer last year.

Apprenticeships are an immersive experience, which really suits me. I’m a kinaesthetic learner (somebody who absorbs knowledge by doing activities rather than, say, listening to lectures), so picking up skills working alongside others in my current role is perfect.

It’s also helped me understand how the rest of the company works; I understand the bigger picture and have a greater awareness of what’s happening in the teams around me now.

Of course, doing an apprenticeship during lockdown hasn’t been a smooth ride (the Co-op finance team hasn’t returned to the office yet) but there’s still plenty of opportunity to learn in a virtual way.

If you’re in a job already, like I was, never be afraid to ask your manager about apprenticeship opportunities. If your company cares about the development of its staff, people, your manager is likely to listen to your request especially if you can explain how it will benefit the company.

My advice for others wanting to change their jobs? Just go for an apprenticeship. You can spend years in a career knowing it’s not the right one for you. Apprenticeships allow you to boost your career and do something you want – no matter what age you are.”

 

4. Case study 2

“Being an apprentice has helped me become a manager at 21”

Jane Bennett, 24, from Sunderland, is supplier payments supervisor at Hays Travel, the UK’s largest independent travel agent

“Unlike my friends, I never wanted to go to university. Instead, I left school at 16 to do an apprenticeship at Hays Travel. Back then, I was a shy school-leaver with no qualifications whatsoever. But today, I’m 24 and working in a management position. Meanwhile, some friends who went to university are now sadly struggling to find jobs or working in roles they’ve never wanted. Whisper it quietly, but I’ve also had chance to earn and save money over the past eight years too.

There have been many great things about rising through the apprenticeship ranks at Hays Travel. One of the best things is the ability to progress at such an early age. When I was doing my Level 2 AAT, I was put on the company’s in-house ‘Rising Stars’ programme, where I learned about becoming a good manager. It enabled me to become a supervisor at 21-years-old.

There’s also great camaraderie on apprenticeships too. I started at Hays Travel with 20 other apprentices, who have now become some of my best friends. Doing the apprenticeship has given me life skills and the job I’ve always wanted; it’s definitely the way forward.”

5. Case study 3

“I started my apprenticeship on a Monday; by Friday I was presenting to the FD”

Eddison Reed-Brown, 18, from Sunderland, has just started a Level 2 AAT apprenticeship at Hays Travel

“I started my A-levels in September 2019, but by the time of the first national lockdown six months later, I decided it wasn’t for me. It was then when I started thinking about an apprenticeship.

I’ve been interested in maths and numbers ever since I was little, so started to focus my career path towards finance. I searched online and eventually found an apprenticeship within Hays Travel’s finance team on a website. After an interview and some tests, I joined in January 2021.

I’ve only been in the apprenticeship for one week, and so far it’s been great – I’ve learned so much. When I started on the Monday morning, I never thought that I’d be delivering a presentation to Hays Travels’ finance director by the end of the week!

For me, the advantages of doing an apprenticeship are obvious. The qualifications I’ll be working towards eventually (Level 3) will be the equivalent of A-levels, but rather than studying full-time in a college, I’ll be doing it hands-on in a working environment, which I enjoy much more.

I’ve only been working at Hays Travel for a week – and all virtually too. However, it’s given me a sense of what’s achievable. I can’t wait to start getting as many skills as I can and working my way up the ladder…”

6. Interested? Here’s how to find and apply for an apprenticeship

Ask your manager but develop a business case first.

If you’d like to move to the finance team of the company where you currently work, ask your HR team or manager about apprenticeship opportunities.

“If you want to do an apprenticeship, put a business case together,” says Bullen. “Try to look at it through the lenses of both yourself and your employer. What value would it add for you personally? And how will it benefit the company? Then, put all of this into writing before sharing it with your boss. It’s a great way of showing how committed you are. Also, don’t assume your manager will know everything about apprenticeships; share some information and statistics to help them understand.”

Look for apprenticeship opportunities online

Try the following websites:

You can also speak to an AAT advisor on +44 (0)20 3735 2434

More information

National Apprenticeship Week takes place from 8-14 February.

How will businesses cope when coronavirus support schemes end?

Posted by & filed under Coronavirus, Members.

Government measures, such as Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Job Retention Scheme, will end in the coming months. Are businesses prepared?

The end of the coronavirus support schemes is looming. CBILS and BBLS loans are due to come to finish at the end of March. CJRS will continue until April. And yet, we are still in lockdown, and many businesses are restricted in their operations.

While businesses are now better prepared for managing lockdown than they were last March, it is a long time to operate on limited or non-existent sales. Can companies cope without support measures in place?

The answer depends on the sector they are operating in and how nimble they’ve been in responding to the restrictions. Accountants, business owners, surveyors and insolvency practitioners tell us what effect this might have on SMEs over the next few months.

April is too early to end the schemes

Helen White, co-founder, houseof

As a small business, we were encouraged by the introduction of the pay as you grow scheme introduced by the Chancellor last week. It gives us more opportunity for business to bounce back in areas where we are still seeing COVID delays and disruption, for example shipping.

While as an online only business, we are not affected by lockdowns, we are still struggling to meet stock demands as the pandemic causes disruption and cost increases around the world. We believe we are not nearing the end. The schemes have been a lifeline to many businesses like us and we believe that ending the furlough scheme in April is still too early. We are not back to business as usual and we still cannot predict what is going to happen in the next six months.

Next steps: Preserving cash flow is key for all businesses in uncertain times and we the Furlough scheme and Bounce Back Loans have definitely helped with this however – nobody has seen the bounce back from the pandemic yet.

Verdict: Businesses are not ready to return to normal.

Some businesses have been able to adapt. Others might be in trouble

Chris Tate, business advisory director at Moore South

Some industries have not been in a position to adapt at all because of the nature of lockdown. Arts and entertainment have been particularly badly hit; there isn’t much by way of an alternative route to market.

If businesses are able to return to normal trading conditions, then the removal of those support measures shouldn’t be terribly detrimental. In fact, it’s probably a good thing, because it has gone on for some time. There’s almost a reliance on it.

You would hope that if lockdowns continue beyond the end of March, those schemes will be extended. For those businesses that have fared well, planning is still important, but if they’ve got sufficient working capital and reserves to comfortably navigate their way out of the support measures, there is a little less emphasis on planning.

Next steps: If a company’s working capital has been severely diminished in the interim, it’s going to have to be very carefully managed as things return to normal.

Verdict: Most businesses should be fine, but they should take a long, hard look at their cashflow and debts to make sure they can manage it.

Banks will reduce lending, but there may be alternative options

Stephen Wainwright, Partner at Poppleton and Appleby

We are going to be in uncharted waters and facing a number of headwinds. We will shortly enter a phase where traditional bank funding will become more difficult to secure. The market to re-bank a business with another high street bank will become increasingly difficult.

Lenders will start to turn their attention away from new lending and concentrate more on managing existing customer accounts, where profitability has deteriorated over the last 12 months, but liabilities will have increased.

However, as high street banks reduce their lending appetite, an opportunity will arise for alternative and specialist business lenders to play a key role in helping businesses survive.

Business owners must be aware that there are alternative providers in the marketplace that could help them with their financial problems. Alternative business lenders have a different approach to risk. They often focus on certain sectors and can be more flexible with their lending solutions and approach, which could be of value to businesses seeking to establish a new borrowing relationship. Businesses must make sure they have a business plan and strategy in place – this is key to resilience.

Next steps: It is crucial that a business with any sign of financial issues or worries contact a regulated turnaround and insolvency practitioner as early as possible, giving the practitioner the time to investigate their model and facilitate the bringing together of a rescue strategy that is to the benefit of all parties.

Verdict: The lending squeeze will put pressure on businesses, but other providers may come to the rescue.

It’s time to act now if your business is walking dead

 Peter Bracey, Founder and MD of Bracey’s Accountants

With the Federation of Small Businesses warning that at least a quarter of a million small businesses will fold unless more help is given, set against rumours of crippling rates on emergency loans, how much longer can – and should – businesses continue to struggle through? There is a now very practical consideration to be made: with the value of company assets and goodwill through the floor, winding up your business and starting afresh may be the best option.

Now is the time to take stock. With a couple of months before deferred VAT repayments are due and bounce back and CBILS loans have to start to be repaid, businesses have the time to review their fiscal health and plan either how they can come out the other side, or how they can execute an exit strategy in the right, legally correct way.

Can you negotiate a Company Voluntary Arrangement (CVA) and liaise with creditors to reduce some of the debt? Is there an opportunity to restructure or liquidate your business and start anew – when the time is right – by acquiring the trading assets and mothballing the company in the meantime? Or, is the right decision to retain a workforce on furlough, borrow and accept that the next few years are going to be tough?

Next steps: The first thing business owners must do now is to step outside the emotional state, which is a really difficult thing to do when you’ve invested years of hard graft and emotion into growing your own company. Look at the P&L, the balance sheet and cash flow, directors loan accounts, etc and see if the business really does stack up.

Verdict: There is no magic formula to get the vast number of businesses brought to their knees by the pandemic through these next few months and years.

The suffering sectors have a much wider impact than you’d think

 Lucy Cohen, co-founder of Mazuma

The sector we see suffering the most is the hospitality industry. Having been closed for so long, even the furlough payments to keep staff on board may not be enough to allow them to re-open once the pandemic subsides. The events industry has also been massively impacted – and this sector reaches further than you’d first think. Photographers, Graphic Designers, PR companies, Printers and more have all been affected by its closure. Then, of course, there are those within the wedding industry – Florists, Caterers, Bridal Boutiques, and small independent businesses who specialise in the sector.

While many of these businesses have been able to pivot, it still hasn’t been enough to replace their income or fully supplement the help provided by the government.

Next steps: Our advice is to mind your cash first and foremost. That doesn’t always mean cutting spending to the line, but it does mean assessing what is vital and what is not during this time. We’ve also been advising clients of all of the various payment deferral methods for tax that will help them with cashflow as the world slowly starts to open again.

Verdict: The impacts of suffering sectors is broader than it might initially seem.

Businesses have struggled to access the government-backed loans

Steve Richardson, director, Reparo Finance

We worked with Sapio Research to survey more than 200 SMEs nationwide to explore how they were accessing finance when it is needed, and whether the Coronavirus Business Interruption Scheme (CBILS) is adequately supporting their needs.

Although government-backed loans have had some success, with 52% of SMEs that applied for a CBILS having secured funding, the research ultimately shows that more support is needed to help ensure that viable businesses have a future.

According to the results of the survey, 85% of respondents say their company still requires financial help to address the impacts of the pandemic. Of those who applied or started an application for a CBILS loan, 48% have yet to receive any funding.

This shows us that government-backed loans are not straightforward to apply for and aren’t suitable for all companies.

Next steps: With many businesses struggling to get the financial help they need; some are looking to other forms of borrowing. 20% of our sample had already explored other options, while a further 65% were likely to consider looking in the future.

Verdict: There is an urgent need for finance, but businesses are open-minded about their options.

Business owners are anxious – the schemes should be extended

Martin Bown, founder and MD, My Management Accountant

When the first lockdown was imposed, we set up a peer support group for businesses affected by the situation and who needed advice on what support was available and how to secure it – including the SEISS, CBILS and BBL schemes.

It’s an initiative we’ve revived during the current lockdown to offer not only practical advice but to offer a supportive space they can join to talk about their concerns. The general consensus seems to be to hang onto your cash reserves and use the support schemes as widely as you can as right now, it’s impossible to predict when the current situation will end.

For many, the very fact there is so much uncertainty about whether the various schemes are to be extended or axed is causing a great deal of anxiety. It’s vital that decisions are made and communicated properly to remove this cloak of ambiguity and enable businesses to plan effectively for the future.

Next steps: It’s also vital that businesses know in good time what is happening with support schemes to allow them to plan effectively.

Verdict: Knowing that furlough will be extended will help directors make informed decisions for the rest of 2021, regardless of what the virus itself does.

HMRC Update: glitch with furlough claims calculator

Posted by & filed under HMRC updates.

HMRC is alerting employers about a glitch in its online calculator for the Coronavirus Job Retention Scheme (CJRS), which may have led to errors in January claims.

The glitch has now been rectified.

If the calculator was used before 21 January to work out January claims for employees that are not on a fixed salary the claims will need to be checked if: 

  • they used an employee’s pay for January 2019 as reference pay, instead of 2020, and
  • their pay was different in January 2019 to January 2020.

If claims were based on the employee’s January 2020 pay, no action is required.

Dealing with errors

Where a claim is re-calculated and found to be incorrect, take the following action:

  • Where too much has been claimed – either amend the next claim to compensate or let HMRC know as soon as possible and make a repayment online, through its card payment service or by bank transfer on GOV.UK.
  • If too little has been claimed, call the helpline (0800 024 1222) to amend this by 1 March. 

Go to get help with the Coronavirus Job Retention Scheme for more information on how to amend a claim.

January claims – submit now

The final deadline to make January claims is Monday 15 February.

As a reminder, the UK Government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. Employers and their employees do not need to have benefited from the scheme before to make a claim if employers and employees meet the eligibility criteria.

Bounce Back Loan payment holiday

A change has been made to the Bounce Back Loan Scheme (BBLS), which helps smaller businesses gain quick access to finance during the coronavirus crisis.

A repayment holiday of up to 6 months is now possible once at any point during the term of a Bounce Back Loan.

More information is available here.

Cracking down on fraud

Details of CJRS claims will now be published monthly as part of HMRC’s commitment to transparency and to deter fraudulent claims. 

If an employer thinks publishing these details would result in serious risk of violence or intimidation to them or others, they can request that details of their claims are not published.

Starting from 25 February, on a monthly basis HMRC will publish the names and Company Registration Numbers (for those who have one) of employers who make CJRS claims for periods starting on or after 1 December, together with an indication of the value of their claims.

HMRC will publish the band within which claims fall; for example £0 – £10,000, £10,000 – £25,000, or £25,000 – £50,000. You can find a full list of these bands on GOV.UK. The details HMRC publishes will not include information about the employers’ employees.

Employees will also be able to check if a CJRS claim has been made on their behalf through their online Personal Tax Account from 25 February. If they do not already have a Personal Tax Account, they can set one up on GOV.UK.

Latest frequently asked questions about the CJRS

How do employers ask HMRC not to publish their claim details?

If publishing an employer’s claim details could leave someone at risk of violence or intimidation, they can request for these not to be published by completing the online application form.

HMRC will not publish an employer’s details until it has informed them of its decision on their application. Employers only need to apply once, as the decision will cover all CJRS claim periods starting from 1 December 2020.

Applications must be made by an employer and they can’t be made by an agent on their behalf.

Can employers claim for employees who are training?

Employers can claim for employees who undertake training while they are furloughed, as long as they don’t provide services to, or generate revenue for, their business or a linked or associated organisation. More information is available on GOV.UK.

Can employers furlough an employee if they are unable to work because they have caring responsibilities or are classed as clinically extremely vulnerable?

If an employee asks to be furloughed, employers can claim for them under the CJRS if;

  • they have caring responsibilities resulting from coronavirus, such as caring for children who are at home as a result of school or childcare closing, or
  • they are clinically extremely vulnerable, or in the highest risk group for severe illness from coronavirus according to the public health guidance for their area.

Go to here to check which employees can be put on furlough.

The decision to offer furlough rests with the employer.

Nearly two million people miss self-assessment deadline

Posted by & filed under Members, Policy.

Nearly two million people missed the 31 January filing deadline for tax self-assessment according to HMRC.

Figures revealed last week show that 10.7 million people submitted their self-assessment 2019 tax return on time. But a record 1.8 million were late with their return – almost double last year’s figure.

Late filers will not be charged the normal £100 penalty, provided they submit their return online by 28 February.

However, they will be charged interest daily from 1 February.

AAT lobbied for the filing deadline to be delayed because of the exceptional pressures of coronavirus and Brexit.

Phil Hall AAT’s Head of Public Affairs and Public Policy, warned in an opinion article:

“As a result of the coronavirus (Covid-19) pandemic, the situation will likely be much worse this year and late filings will rise dramatically.”

However, HMRC opted for a compromise. Rather than send a message by moving the deadline, it chose a compromise of keeping the deadline, but opting not to enforce penalties.

How to upskill an existing employee with a financial apprenticeship

Posted by & filed under Apprenticeships, Employers, National Apprenticeship Week.

Placing existing employees on apprenticeship schemes is a wonderful way of upskilling and retraining them while making the most of financial incentives.

Robyn Elizabeth works for the Co-op: she began in Funeralcare before moving over to the finance department. As she approached her thirtieth birthday, it became clear that she would benefit from deepening her skills and acquiring a qualification to accelerate her progress.

Today, Robyn is midway through her Level 3 apprenticeship. She’s one of 742,400 apprentices in England, nearly half of whom are over 25 when they start. Many are also existing employees who have chosen an apprenticeship to develop skills or progress into a different role.

Upskilling with the Co-op

“I joined the Co-op in 2016,”  says Robyn. “But it wasn’t until I’d worked in two different departments – funeral care and finance – that I decided to pursue a career in finance. It was obvious I needed qualifications and to advance my career.”

After conversations with her managers in the finance team, Robyn was put forward for an internal selection programme, leading to her starting an apprenticeship in summer 2020.  

“Apprenticeships are an immersive experience, which really suits me. I’m a kinaesthetic learner (somebody who absorbs knowledge by doing activities rather than, say, listening to lectures), so picking up skills working alongside others in my current role is perfect.

“It’s also helped me understand how the rest of the company works; I understand the bigger picture and have a greater awareness of what’s happening in the teams around me now.”

Starting an apprenticeship during lockdown demonstrates that learning and staff development doesn’t have to stop because of the pandemic. The Co-op finance team is still remote working, but there’s have been plenty of opportunities to learn virtually.

“If you’re in a job already, like I was, never be afraid to ask your manager about apprenticeship opportunities. If your company cares about the development of its staff, people, your manager is likely to listen to your request, especially if you can explain how it will benefit the company.

“Apprenticeships allow you to boost your career and do something you want – no matter what age you are,” says Robyn.

With National Apprenticeship Week kicking into action on Monday 8 February more companies will want to investigate the advantages of using apprenticeships to upskill or supplement their workforce. Here’s a quick summary.

1. Apprenticeship benefits for employers

The ROI is incredible

Career development can take many twists and turns, but one of the most effective ways of upskilling an existing employee is by placing them on an apprenticeship scheme.

“Apprenticeships are an investment,” says Laura Bullen, learning & development programme manager at the Co-op, which employs over 1,200 apprentices across a wide range of professions. “If an apprentice starts by learning AAT and progresses to become a chartered accountant, it adds great value to the company. The knowledge and skills they gain along the way are invaluable.”

Once an existing employee starts learning through an apprenticeship, it often leaves them hungry to learn more. “We often see people wanting to do another apprenticeship,” says Bullen. “For example, if a financial apprentice is successful at Level 2, it opens doors to Level 3 and beyond. As a company, we want to encourage that kind of personal growth.”

During their 20% off-the-job training, financial apprentices learn the latest ideas and technical know-how in accountancy, which they then can implement at work. This is particularly valuable for those who have not received formal education/qualifications in some years: after all, the ongoing development of such lifelong learning skills will boost productivity. In many finance teams or practices, some brilliant accountants are great at their jobs but have never had the opportunity to gain a formal qualification. Placing them on an apprenticeship will help them achieve that.

With 41% of their head office managers having started as apprentices, Sunderland-based Hays Travel knows a thing or two about how valuable such schemes can be. Progress tends to be very quick, says Carole Hodgson, Hays Travel’s apprenticeship delivery manager. “The transformation of apprentices, whether they’ve joined from school or elsewhere within the company is what impresses me most,” she says. “When apprentices first join, they’re very quiet. But within weeks, their confidence, motivation and enthusiasm swells. It’s not unusual for apprentices to start on a Monday, and then deliver presentations to the finance director the following Friday.”

It’s cost-effective

If your company’s pay-bill is less than £3m, you’ll only pay 5% of the apprentice’s training costs, with the Government covering the rest. This can be very profitable for many firms, says Gareth John, executive chairman of training providers First Intuition: “If you hire a Level 3 apprentice, the training cap is £8,000. Employers will only pay 5% of that, which is £400.” It’s also certainly much cheaper than paying for expensive training courses.

Larger companies (those with a pay-bill of over £3m a year) pay 0.5% of their payroll into the apprenticeship levy, which is put into the Government’s central training pot. However, employers do get a £15,000 allowance to offset against the amount they pay.

For SMEs and large companies alike, placing internal staff onto apprenticeships makes more economic sense than the risk of recruiting similarly skilled staff on a higher salary. Staff retention of apprentices tends to be high too: 90% of apprentices stay in their workplace after finishing their apprenticeship.

Apprentices help the rest of your team upskill

Bringing apprentices into a finance team or practice is a great opportunity for existing staff to develop supervising or mentoring skills. Bullen remembers one Co-op colleague who took on management responsibilities leading apprentices. “He’s had the best year of his career and unlocked his talent for nurturing and coaching others,” she says.

Many firms have reported that other staff members have been inspired to gain AAT qualifications after seeing apprentices thrive in the workplace thanks to their 20% off-the-job training.

“Our apprentices definitely keep us on our toes,” says Hodgson. “They regularly share knowledge from their off-the-job training, and feedback into how we run our own training sessions differently.” They also teach existing staff in new digital skills including social media.”

The 20% off-the-job training can be tailored towards your organisation

Apprentices are required to spend a fifth of their overall apprenticeship on education, such as theory

or writing assignments. But this doesn’t mean they have to spend one day a week

away from the workplace. Off the job training can actually be delivered at an apprentice’s workplace.

The training provider or college can tweak this training to make it relevant to your firm’s needs. According to one government survey, this bespoke tutoring has resulted in 86% of employers saying their apprentices had developed skills that were pertinent to the organisation.

“The 20% off-the-job training is flexible,” says Bullen. “Things they do in the job can contribute as well, such as one-to-one development conversations, spending time shadowing other colleagues or learning new processes.”

They’ll receive industry-recognised qualifications

“When apprentices gain professional finance qualifications, it adds real value to our finance team,” says Bullen. “Not only do they have the knowledge that being a credited finance professional brings, but they also develop skills and behaviours too… Offering an AAT apprenticeship is a way of giving people the building-blocks to follow a finance career.”

2. How apprenticeships work

  • Apprenticeships can last anything from one year or (if the apprentice is building his/her way up) anything up to six years. 
  • Apprenticeships are available at seven different levels, ranging from Level 2 (Intermediate; equivalent to five GCSE qualifications A*-C) to Levels 6 and 7 (Higher; equivalent to a bachelor’s degree).
  • An apprentice will spend 20% of your time (maybe every Monday or Friday) on off-the-job training, which usually takes place at a college, university or training provider. This is where they’ll receive AAT tuition, which can be tailored towards the needs of your organisation. The rest of the time (80%) will be spent developing new skills in the workplace.
  • All apprentices aged 19 and over will receive the national minimum wage. However, many employers offer their apprentices a competitive salary.
  • There is no upper age limit to apprenticeships and they can be undertaken by people at any stage of their career journey.
  • Staff don’t need to be promoted or have a new job title in order to be placed on an apprenticeship. However, they must sign an Apprenticeship Agreement and Commitment Statement.

3. How to ensure a successful apprenticeship

Spend time with your apprentices in the workplace

“If you want a motivated and developed apprentice, invest your time and support with them,” says Hodgson. “Invest in your staff and they’ll invest in you!” 

Fine-tune your selection process.

When using apprenticeships for new employees, Bullen advises that “selection is key.” “Firstly, the way you advertise your apprenticeship opportunities is critical; be clear about what you’re offering, the benefits and who you’re looking to attract. Think about how you can identify potential through the interview process to identify individuals who demonstrate behaviours which align with your company values.

“I’d also consider the value that apprenticeships can add to existing colleagues.”

More information

National Apprenticeship Week takes place from 8-14 February

You can order an employer information pack here which explains apprenticeships, getting registered and recruiting in greater depth.

You could also speak to an AAT adviser, who can help decide on the right apprenticeship for your business and find local training providers.

Call +44(0)20 3735 2434.

From AAT to Forbes – how accountancy gave this entrepreneur the perfect start

Posted by & filed under Career, Women in finance.

More than half a million new businesses were registered in the UK last year and Katrina Borissova’s was one of them. AAT talks to the entrepreneur about how accountancy qualifications gave her the perfect foundation to launch the vegan beauty industry’s next big thing.

For an accountant who likes nothing more than burying her nose in a textbook, Katrina Borissova may not have been the most likely candidate to form a beauty business. But despite launching during a global pandemic, Borissova’s vegan soap company, Little Danube, has already seen her profiled in Forbes and The Times.

The Bulgarian-born philosophy graduate’s combination of natural business acumen, impressive qualifications, good luck and hard work has helped springboard Little Danube from a fun pastime to commercial reality.

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But, as she explains, she would not have achieved her current success without a firm foundation in accountancy.

“My AAT qualifications helped me not only to work out what prices I should charge and general costings, but also in forming a strategy and in business planning.”

She adds: “Working in accountancy gives you a vision and an understanding of the different functions and departments. You are like a designer and you understand the structure and how everything works.”

A bumpy start

Borissova initially had her sights set on journalism, specifically becoming a war correspondent. Realising she needed to speak fluent English, she travelled from Bulgaria to the UK and secured an administration job in Michelin’s finance department. It is here that her head was turned from journalism to the world of business.

“I was doing invoicing and data entry, but I became fascinated by leadership. I thought ‘wow if you are a CEO you need to be able to understand and implement strategy across each part of the business’. I knew I needed to start studying something, but I still wasn’t sure what.”

Borissova moved from Michelin to Amazon taking a job working in supply chain, but again it was the finance department that attracted her attention.

“I wanted to move to a better role and with a higher salary. I realised quickly that accountancy would be the the best way forward,” she says.

However, without professional qualifications, Borissova knew there was not much chance of progress.

“I decided to study for a qualification from the ACCA, but I failed the exam. I realised that the way that my mind functioned was very philosophical and accountancy requires a more analytical structure,” she says.

Moving online

Undeterred by the setback, Borissova decided to study for an AAT qualification, taking evening classes.

Borissova recalls: “I remember how challenging it was for me just to learn basic like debit and credit. Instead of just getting on with the entries, I would be trying to understand where the double entry bookkeeping system came from. And again, I would read all the theory I started to think I would fail my exams because I was overthinking everything.”

In the second year of the AAT course, Borissova got an accountancy job in Kensington while continuing her studies, but admits the pressure became too much.

“I really struggled because I was comparing myself to others and I was always the last one to complete the exercises. I quit the college and I said I don’t want to do accountancy.”

On the brink of exiting accountancy completely, Borissova found out about AAT courses online and decided to give the qualification another try.

“I realised that I am absolutely fine when I do things on my own. I discovered I was really good at mind mapping, which is how I learned the important management accounting formulae by heart. It is all second nature now; a bit like knowing the alphabet but for accounting,” she says.

Borissova qualified in 2016 and briefly considered taking a qualification with CIMA, but ultimately decided to do her Masters in applied project management at the University of West London.

Taking the plunge

It wasn’t until 2019, when Borissova was made redundant, that she began to think of a life outside the conventional corporate world.

Unable to find a job that matched her experience and qualifications, Borissova looked to how she spent her free time. After years dedicated to business, she recognised how few hobbies she had which used her more creative brain. At the same time, she was organising her forthcoming wedding which inspired her interest in more practical pursuits.

She explains: “I was spending a lot of time and money for going back and forth over wedding candles and other things, and they just weren’t right. I did some project management, but it made me think ‘I wish I could have done a lot more of it myself’. “I realised that I was not being creative so I thought would start with soap making.”

Borissova admits the initial homemade products were far from perfect but after formal training in soap making, she was ready to start considering exploiting their commercial potential. 

On 20th March – just three days before the UK officially entered its first Covid-19 lockdown – Borissova launched Little Danube. The timing could well be seen as far from ideal but free from the distractions of ‘normal life’, Borissova was able to dedicate her full attention to getting Little Danube off the ground.

And looking at the projections for the vegan beauty industry, Borissova has not picked a bad time – or sector – on which to capitalise. The industry is expected to be worth more than $20bn by 2025; a growth of nearly $5bn over the next five years. 

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The future

Borissova’s vision for the business is ambitious – she has her sights set on a top 50 listing for UK beauty brands – but she is, perhaps predictably cautious.

“It took six months to launch and find out what works and what doesn’t I want to send the next six months testing new products and trying new ingredients,” she says.

For others looking to emulate Borissova’s success, the beauty entrepreneur recommends staying flexible.

She says: “The mistake I made before in my career and personal life was overthinking. I don’t need to be a Master of Science to be a good project manager. Instead of thinking that I need to read a book, I am much more likely to roll up my sleeves and give something a go.”

What accountants need to know about recent pension changes

Posted by & filed under Members, Pensions and payroll.

A lot has altered concerning pensions, creating implications for wealth and tax planning. It’s good for accountants to understand what has changed to benefit themselves and their clients.

Up until 2011, the holders of pension policies were compelled to purchase an annuity at age 75 (unless they were in scheme pension or had a religious objection to the pooling of mortality risk).

If the policy-holder died, the only option available to benefit dependants would have been an ongoing income. But if the policy-holder hadn’t included this option at outset, the annuity provider would have gobbled up the pension pot.

For many, this created the unsatisfactory possibility of saving into a pension scheme for years, only to benefit an insurance company, rather than their family.

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2011 pension changes

In 2011, compulsory annuity purchases were abolished.

Pension savers were given more options for how their pension could be secured after age 75 and how pension funds could then be distributed on their death.

For those who chose not to purchase an annuity, remaining funds could be used to provide a drawdown income for dependants, a drawdown pension fund lump sum or a charitable death benefit lump sum.

However, not all pension providers offered these options, and the tax position was complex and changed subject to whether funds were crystallised or uncrystallised (i.e. depending on whether an individual had called on their pension benefits or not).

If the holder had taken their tax-free cash (regardless of their age on death), their pension fund could be paid to any nominated individual as a drawdown pension fund lump sum but would be subject to a 55% tax charge! For those who had not taken their tax-free cash, they would also be subject to the 55% tax bill if they passed away after age 75!

2015 onwards

From 2015 onwards, there were some significant changes to pension scheme legislation, not only around death benefits but also changes to contribution limits, the lifetime allowance and, importantly, retirement options.

The death benefit scenario is now much simpler with the age of death determining the tax position, rather than whether funds were crystallised or uncrystallised. Most schemes (but not all) offer the following options for beneficiaries on death, so it is important to review your own plans individually:

  • Lump-sum death benefit
  • Dependants’ / nominees’ drawdown
  • Dependants’ / nominees’ annuity
  • Charitable lump sum death benefit
  • Annuity purchase

The tax position is subject to the age of death:

Death Pre-75Death Post-75
Funds can be paid to nominated beneficiaries free of income tax. Funds need to be paid within certain timescales.Funds can be paid to nominated beneficiaries, subject to income tax at the beneficiaries’ marginal rate(s) in the year of withdrawal.

The flexibility introduced in 2015 has meant pensions remain a tax-efficient vehicle for retirement saving, but they have become a cascading pension holdings method to the next generation.

Their role in estate planning and inheritance tax is of much more value now to help look after the family and the next generation.

But one thing has not changed, the requirement to ensure expression of wish forms are completed to ensure the pension provider is aware of who your nominated beneficiaries are.

How accountants can benefit

Accountants can benefit from deepening their understanding of pensions in several ways.

If a client passes away without adequate planning, the value passed to their beneficiaries could be reduced significantly. But if the accountant can help them protect their assets, wealth will be cascaded down through the family. Often this will result in future work in the form of tax advice and ongoing services.

A lot of people are unaware of what is at stake. Accountants who look out for their clients’ interests by alerting them to the risks and opportunities can earn a great deal of kudos. And they will cement their position as trusted advisors.

More about pensions

AAT will be hosting a Pension update and planning opportunities webinar in partnership with Mattioli Woods on Thursday 18 February  2021. It will also be available on-demand for a period afterwards. Click here to register.

10 skills you will need post-pandemic

Posted by & filed under Coronavirus.

If you add in-demand abilities to your skillset, you can improve your chances of landing your dream job – particularly in a competitive job market.

But what skills will employers be looking for once the dust settles on the Covid-19 pandemic? 

Here are 10 ways to boost your CV ready for the post-pandemic world.

1. Flexibility

If the pandemic has taught the business world one thing, it’s the importance of adaptability. 

So being flexible and adaptable is likely to earn you major brownie points with prospective employers, both this year and in the future.

Even with more businesses planning to adopt remote working practices longer term, being willing to consider moving to another part of the country – or even another country altogether – will also give you the opportunity to apply for a wider variety of roles. 

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2. Technical skills

Working from home with no direct access to an IT support department means you need to know how to fix any computer issues that arise yourself. In other words, you need to be tech savvy to be a useful member of the team. 

Consequently, taking the time to learn more about how your device work and familiarise yourself with popular technological solutions such as Microsoft Teams is likely to help you impress potential employers both now and after the pandemic.

If you like technology, you might also benefit from taking your studies to a higher level.

3. Cloud computing

Cloud computing was big news even before Covid-19 raised its head. 

And with millions of employees now working remotely, tech such as Microsoft Teams and Google Docs has become integral to business success. 

Companies of all kinds are therefore looking for people with cloud computing and security skills. Ways to increase your desirability in this area include taking a CCSP (Certified Cloud Security Professional) course, many of which can be completed online.

4. UX design

Lockdowns and shop closures have pushed consumers online more than ever before. 

So user experience (UX) designers and developers, whose role is to support visitors to companies’ websites and ensure they get a positive impression, have become even more crucial to businesses of all shapes and sizes.

Whether you already work in design or you’re a complete beginner in the field, there are plenty of UX courses available – and many of them can be done remotely for free. 

5. Emotional intelligence

Sometimes called interpersonal skills, your emotional intelligence level is measured by how you interact with other people. 

And according to professional networking site LinkedIn, emotional intelligence became one of the five most sought after “soft” skills for the first time last year – alongside creativity, persuasion, collaboration, and adaptability. 

Ways to work on improving it include evaluating how you react to stressful situations and considering how your actions will affect others before taking them.

6. PPC and affiliate advertising

Designed to drive traffic to a company’s website, pay-per-click (PPC) advertising is now one of the fastest-growing forms of marketing. 

So learning how to ensure a PPC campaign reaches the right people will make you a valuable asset to businesses of all kinds. 

Affiliate advertising, which involves nurturing relationships with partners that your target demographic already trusts, is also an increasingly important way to connect with customers wary of fake news and misinformation.

A quick online search will lead you to courses in both PPC and affiliate advertising from a range of providers.

7. AI skills

Companies can use artificial intelligence (AI), also known as machine learning, to analyse data on everything from what their customers want to how to better engage with their employees. 

That’s why, according to analyst Research and Markets, the global machine learning market is forecast to grow from $1.41 billion in 2017 to $8.81 billion by 2022. 

Therefore, signing up for some online AI training could prove a very sensible way to use your time during lockdown.

8. SEO expertise

Most employers have now realised they need a strong online presence to succeed. 

And for this, they need individuals who understand search engine optimisation (SEO), or the process by making a website or webpage more visible on search engines such as Google. 

Fortunately, there are lots of courses available to help you hone these skills, including online SEO courses you can access via LinkedIn.

9. Online fraud prevention 

Taking all their operations online has opened many more companies up to the dangers of online – or cyber – fraud. 

According to recent figures from insurance claims analyst Mactavish, 41% of UK businesses are more concerned about cyber attacks now then they were prior to the Covid-19 pandemic.

Online fraud prevention training could prove a worthwhile investment for your future career as a result.

10. Communication skills

With many more people now expected to spend at least some time working remotely, employers are recognising that their internal communications will need to be better than ever. 

People who can interact well with others, motivate colleagues to work as a team, and bring new ideas to the table are therefore likely to be increasingly in demand.

Group activities such as sports teams and local associations can help you to develop these skills.

But under the current circumstances, taking an online communication course may be an easier alternative. 

In summary

The skills employers are expected to seek post pandemic fall into two main categories: “hard”, mainly technical skills that will help them to operate and attract customers in a largely digital world, and “soft” skills such as effective communication and emotional intelligence. 

Making the effort to boost your abilities in these areas now should help you to stand out from the crowd when you are ready to take your career to the next level.

Further reading

Is it time to scrap the VAT threshold?

Posted by & filed under Members, Policy, Tax reform.

Phil Hall, AAT Head of Public Affairs & Public Policy, suggests that in light of recent events, now may be the best time to seriously consider a radically reduced VAT threshold.

Back in 2017, the Office of Tax Simplification (OTS) examined the possibility of VAT simplification and in 2018, the Treasury Select Committee held an inquiry into VAT reform. 

Whilst some suggested an increase in the VAT threshold, and others argued the merits of reducing it, none went so far as to suggest reducing the threshold to such an extent that all must register. Indeed, AAT’s 2017 VAT Survey indicated that approximately 10% of AAT licensed accountants supported such a move, suggesting the measure had some support but that it was far from widespread.

The world has moved on quite dramatically since then. For example, the Making Tax Digital (MTD) programme has largely proven itself as a time saving, productivity boosting programme of improved reporting efficiency for most that use it. The British economy has become saddled with significant Coronavirus debts in addition to an already substantial structural deficit. Brexit has been finalised, but much disruption remains.  

Finding ourselves in a markedly different place to 2017 certainly makes reinvestigation of this issue worthwhile. 

Benefits

There are two obvious benefits in ensuring all businesses have to register for VAT. These are that it would eliminate competition challenges between VAT registered and non-registered businesses and that it would remove the significant “cliff edge” problem that greatly impacts many small businesses’ behaviour and productivity i.e. ceasing to work or reducing work when close to the threshold.

As a result, there would likely be increased productivity amongst an already productive sector of the economy, benefitting individuals and employers and in turn an increased tax yield for the Exchequer. It would likely result in much higher levels of compliance too.

The UK would not be the first country to implement such an approach. Spain, Sweden and Italy already require all businesses to register for VAT/GST (Goods and Services Tax) and this appears to work well in those countries.

Barriers 

Critics will complain about the bureaucracy involved but MTD has already demonstrated much of this can be done quickly, easily and cheaply.  

Furthermore, it is worth noting that 44% of VAT registered businesses are already below the existing threshold but have decided to register voluntarily – which they clearly would not do if they found the process as burdensome as some critics suggest.

Practicalities 

An immediate reduction from a VAT threshold of £85,000 (one of the highest in Europe) to £0 (the joint lowest) could potentially cause disruption.  

However, there is no need to reduce to £0 as in Sweden, Italy, and Spain. The threshold could instead be reduced to £12,500 to mirror the personal allowance (as AAT has suggested be used as the MTD exemption threshold from April 2023). 

Additionally, the change could be introduced in stages over a three year period e.g. from the current position to £50,000 in year one, £25,000 in year two, and £12,500 in year three. 

Support 

In recent weeks AAT has spoken to a number of business groups, accountants and think tanks who would not previously have supported such an idea but are now very receptive to it.

This change would also meet the 2019 Conservative Party manifesto commitments to, “…always consider the needs of small businesses” as it would eliminate both the cliff edge issue experienced by many small businesses as well as competitive challenges between those who are VAT registered and those who are not. In addition, it would help to “build a fairer taxation system”, another manifesto commitment.

What do you think?

AAT is keen to hear from you to find out if you would support such a reduction. With this in mind, please complete AAT’s two-question, one-minute survey here.

Explainer: how to get the most from duty deferment

Posted by & filed under Brexit, Members.

UK businesses seem to have lots of questions around duty deferment, post-Brexit. How do they get up and running with a deferment account?

  • UK businesses can set up a duty deferment accounts to allow them to pay duties following the month of import. This can require a bank guarantee
  • It is possible to get a guarantee waiver, such as the Simplified Import VAT Accounting (SIVA) scheme
  • The COVID pandemic is delaying bank guarantees from being completed

Since the UK left the EU on 1 January 2021, UK businesses importing goods from the EU have had to pay import VAT and other duties at the border, when goods are cleared to enter the UK.

To ease the cashflow impacts of those VAT and duty costs, the UK government introduced postponed VAT, which allows any import VAT to be accounted for as input and output VAT on the same VAT return.

“In the old world, we had the acquisition tax, which got reported on box two of your VAT return,” says Sheered Dewedi, Managing Partner at Shenward Accountants. “You’ve now got postponed accounting as a substitute, effectively. Businesses are able to treat the VAT that they should have paid on the EU imports in a very similar way as before.”

Duty costs

But businesses still have to pay duty on imported goods. This has had the biggest impacts on margins and cashflow. Dewedi says that companies are weighing up whether they can sustain additional costs or whether their customers would pay a higher price.

“In such a delicate climate that we’re in with COVID, not many of our clients are able to pass on that cost,” says Dewedi. “Once the dust settles and we do return to some sort of normality, we’ll be advising our clients to look at it again and see whether the business can continue to be sustainable without passing anything onto their customers.”

The new lockdown has created a perfect storm for businesses as they adjust to the new rules post-transition period. “Everything that could be a challenge is a challenge at the same time.”

Although duties will still apply, you can defer payments to the 15th of the month following the month of import. To do this, you need to have a duty deferment account.

Setting up a deferment account

To set up a deferment account, businesses may need a financial guarantee from their bank. That, at the moment, is proving to be challenging.

“With COVID, getting those guarantees has taken a little bit longer than it normally would,” says Dewedi. “It’s meant that businesses are having to pay the duties at the outset rather than being having those different terms in place. So we’re helping clients from that perspective.”

Some businesses can apply for a guarantee waiver. You can apply for a waiver if you have:

  • no serious or repeated infringements of customs or tax rules in the past three years,
  • no record of serious criminal offences related to your business activities in the past three years, and
  • you held positive net assets (excluding goodwill) at the date of your application and for the past three years (or, if shorter, for the period you have been trading).

There are two different types of guarantee waiver:

  • approval for a guarantee waiver to defer customs duty, import VAT and excise up to £10,000 per month,
  • approval for a guarantee waiver to defer customs duty, import VAT and excise up to a specified amount over £10,000 per month.

You do not need to apply for a guarantee waiver if you have one of the following approvals:

  • Authorised Economic Operator status (AEO(C) or AEO(F)).
  • Excise Payments Security System (EPSS) authorisation.
  • Simplified Import VAT Accounting (SIVA) scheme.

If you apply for a guarantee waiver you may need:

  • records of any times when your business has not followed customs or tax rules in the last three years,
  • financial records.

Information required

Businesses need the following information to apply for a duty deferment account:

  • EORI number
  • name associated with your EORI number
  • registered company number (if this applies), in the UK this will be from Companies House
  • UK address associated with your EORI number
  • correspondence address
  • VAT number (if this applies)
  • company directors’ and officials’ details, including date of birth
  • person responsible for customs authorisations, their details and practical customs experience
  • your estimated debt

Further information on duty deferment