HMRC update – extension to CJRS and upcoming deadlines

Posted by & filed under HMRC updates.

The latest HMRC update includes information for claiming December payments under the Coronavirus Job Retention Scheme (CJRS) and third grant for the Self-Employment Income Support Scheme (SEISS).

Coronavirus Job Retention Scheme

The UK Government has reviewed the terms of the CJRS scheme and extended it until the end of April‌‌ 2021, remaining at the current level of 80% of usual wages for the hours not worked.

Here’s a list of the monthly claims deadlines:

  • 14‌‌ January‌‌ 2021 – final date to submit claims for December‌‌ 2020 by 11‌‌:59pm
  • 15‌‌ February‌‌ 2021 – final date to submit claims for January‌‌ 2021 by 11‌‌:59pm
  • 15‌‌ March‌‌ 2021 – final date to submit claims for February‌‌ 2021 by 11‌‌:59pm
  • 14‌‌ April‌‌ 2021 – final date to submit claims for March‌‌ 2021 by 11‌‌:59pm
  • 14‌‌ May‌‌ 2021 – final date to submit claims for April‌‌ 2021 by 11‌‌:59pm.
  •  

CJRS December claims deadline

As above, December claims must be submitted by ‌Thursday‌‌ ‌14‌‌ ‌January.

You or your clients can claim before, during or after processing payroll. It’s best to make a claim once you’re sure of the exact number of hours employees worked so you don’t have to amend the claim at a later date.

What you or your clients need to do now

  1. Check if they’re eligible and work out how much they can claim using our CJRS calculator and examples, by searching ‘Job Retention Scheme’ on GOV.UK.
  2. Submit any claims for December no later than‌‌ ‌Thursday‌‌ ‌14‌‌‌‌‌ ‌January.
  3. Keep records that support the amount of CJRS grant claimed, in case HMRC needs to check them. ‌

If you or your clients have already submitted claims for December but find you need to make a change because you didn’t claim enough, you can do this until ‌‌Thursday‌‌ ‌28‌‌ ‌January.

To find out how to amend a claim, search ‘Get help with the Coronavirus Job Retention Scheme’ on GOV.UK.

Handling client information

If you are submitting claims on behalf of multiple clients, it’s really important to take care to use the right employer PAYE reference number, which HMRC uses to record claims. To keep your clients’ data safe, please take extra care to check that the details you enter relate to the client and specific payroll scheme you’re claiming for.

Third SEISS grant deadline

The third grant of the SEISS closes for claims on Friday‌‌ ‌29‌‌ ‌January. Eligible customers must claim on or before this date.

You cannot claim on your clients’ behalf, as this will likely trigger a fraud alert in our systems and delay payment. But HMRC knows you’ll be supporting your clients to make their claims, and you can find all you need to know about SEISS, including eligibility criteria, on GOV.UK by searching ‘Self-Employment Income Support Scheme’.

CJRS and SEISS FAQs

CJRS

You can find everything you need to know about CJRS on GOV.UK by searching ‘Job Retention Scheme’, but here are some answers to the most frequently asked questions.

Can I furlough an employee if they are unable to work due to caring responsibilities?

If an employee asks to be furloughed because they have caring responsibilities resulting from coronavirus, such as caring for children who are at home as a result of school or childcare facilities closing, you or your clients can place them on furlough and claim for them under the CJRS.

Can a CJRS grant be used to pay for holiday leave?

If employers have furloughed employees because of the effect of coronavirus on their business, they can claim under the CJRS for periods of paid leave their employees take while on furlough, including for bank holidays such as Christmas Day or Boxing Day. Employers should not place employees on furlough just because they are going to be on leave.

If an employee is flexibly furloughed, your clients can count any time taken as holiday as furloughed hours rather than working hours. This means you or your clients can claim 80% of employees’ usual wages for these hours.

If a furloughed employee takes holiday, their employer should top up their pay to their normal rate in line with the Working Time Regulations. For more information search ‘check if you can claim for your employees’ wages’ on GOV.UK.

Can I include a Christmas bonus in my calculation for the grant?

You or your clients can claim for regular payments that you are contractually obliged to pay employees, including compulsory commission, fees and overtime. However, you or your clients cannot claim for discretionary commission, non-contractual bonuses (including tips) and non-cash payments. For more information search ‘steps to take before calculating your claim’ on GOV.UK.

SEISS

You can find everything you need to know about the third SEISS grant on GOV.UK by searching ‘Self-Employment Income Support’, but here are some answers to the most frequently asked questions, to help support your clients.

Is my client eligible for the third SEISS grant?

You can find all you need to know about SEISS, including the eligibility criteria for the third grant, on GOV.UK by searching ‘Self-Employment Income Support Scheme’.

My client has lost their Unique Taxpayer Reference (UTR)/National Insurance Number (NINO)/Government Gateway user ID and/or password, what should they do?

During the SEISS online claim process, there are prompts for recovering lost UTR, NINO and Government Gateway credentials. Your clients should be able to get these details online without having to call HMRC.

What if my client’s business recovers after they’ve claimed the third grant?

If your client’s business recovers after they’ve claimed, their eligibility will not be affected as this is based on their reasonable belief that their trading profits would have been significantly impacted when they made their claim. Anyone who receives a grant must keep evidence in support of their claim, and HMRC recommends you remind your clients to do so.

Should my client take into account the value of previous SEISS grants when deciding whether they can claim the third SEISS grant?

Your clients do not have to consider any other coronavirus scheme support payments they have already received when deciding whether they reasonably believe that they will suffer a significant reduction in trading profits. This reduction needs to be due to reduced activity, capacity, demand or inability to trade due to coronavirus during 1 November 2020 to 29‌‌ ‌January‌‌ ‌2021.   

Do I need to declare the grant on my client’s 2019-20 Self Assessment tax return?

Similar to the first and second SEISS grants, the third SEISS grant will also be subject to Income Tax and self-employed National Insurance. Alongside the first and second grants, the third grant should be reported on your clients’ 2020-21 Self Assessment tax returns (filing deadline 31‌‌ ‌January‌‌ ‌2022).

How can I find out more about the fourth SEISS grant?

HMRC will contact you when details of the fourth SEISS grant are confirmed.

The EU trade deal provides confidence as we navigate a difficult first quarter

Posted by & filed under Members, News.

We enter the New Year with a Brexit deal finally in place and at least one uncertainty removed.

The free trade agreement is good for the UK’s long-term prospects. It is especially welcome that there will be no trade tariffs to add to costs, particularly as businesses are already under severe pressure from Covid-19.

But there is much work still to do in financial services, data, and mutual recognition of qualifications.

As a service-based economy, the UK must press on to secure an agreement with the EU for financial services. Both sides have earmarked March as a deadline. AAT believes the Government must make strong progress towards this. We will be closely monitoring developments on behalf of our many members employed in this sector.

Brexit – webinar resources

Brexit Webinar: VAT for imports and exports The EU VAT e-commerce package (Sponsored by SAGE 11/12)

Brexit Webinar: VAT for imports and exports

HMRC customs and borders help webinars

An Exporters Guide to Brexit

Customs and VAT post the transitional period

Meanwhile, businesses face the prospect of a stormy first quarter.

They need to adjust to new customs processes, higher administration costs and VAT changes.

Aside from Brexit, there is the continuing lockdown, CBILS and BBLS loans being called in, deferred VAT bills, and a potential rise in company failures.

Businesses, particularly SMEs, will be relying on their accountants to help them work through all this.

It will be painful. But that’s not to say there aren’t reasons for optimism. We have one of the biggest vaccine rollouts in history, which will bring the pandemic to an end.

While the early months will be tough, the economic recovery will begin in 2021. Some sectors will most likely see a real bounce. There are also longer-term changes that are to be celebrated as well.

The crisis has accelerated the evolution of work, with tech adoption, a greater focus on wellbeing, and the high-value, real-time work that we have been talking about for the last few years.

The recovery will also move the green agenda forward, which accountants have a crucial role to play in.

Brexit Webinar: VAT for imports and exports

This webinar will bring you up to speed on the significant changes to the movement of goods from Great Britain to the EU, how goods are reported, and the conditions for zero-rate goods exports, plus the Northern Ireland protocol.

Register

I often find myself talking about both cost and carbon. If we’ve taken costs out and carbon down as a result of the switch to remote working, don’t just put it all back in again when restrictions end. Accountants are ideally placed to use their skills to look at a wide range of business data and to consider what carbon-heavy costs the business can do away with for good.

Use this as an opportunity and do things differently, with an eye on a greener sustainable future. So we have some reasons to look forward to 2021. And while we face some challenging days in the nearer future, there is plenty of light at the end of the tunnel.

Further reading

Trade deal means tariff-free trade, but leaves plenty of work to do

Posted by & filed under Brexit.

From tariffs to qualifications through to extra form-filling: here’s an explainer for the post-Brexit deal and how it will affect the world of accountancy.

The historic post-Brexit deal finalised by the UK and EU on Christmas Eve – and ratified on New Year’s Eve – came just in the nick of time.

The UK has a deal that, at first glance, seems better than many expected, particularly its guarantee of a “zero tariff and zero quota” trade on goods, which has avoided a big shock to the economy.

Brexit Webinar: VAT for imports and exports

This webinar will bring you up to speed on the significant changes to the movement of goods from Great Britain to the EU, how goods are reported, and the conditions for zero-rate goods exports, plus the Northern Ireland protocol.

Register

But a deep-dive into the 1,246-page treaty soon reveals the deal’s flaws too. In particular, the agreement has been rebuked for neglecting Britain’s services sector, which constitutes 80% of the economy. Meanwhile, with companies having to complete an estimated 200 million new customs form, it’s predicted that businesses could face a mountain of red-tape too.

Here’s what you need to know about the changes that will impact accountants.

Trade and tariffs  

The big story from the trade agreement is its declaration that there will be no tariffs on goods transited between the UK and EU, and no limit on the quantity of goods that can be traded.

This has been hailed as a huge win for the UK as it means both sides can continue trading in a similar way to how they did before. It’s also avoided the 10% tariffs of a no-deal, which would have been economically disastrous for the UK.

A tariff and quota-free deal is particularly good news for British manufacturers that import/export materials from the EU, such as the UK’s automotive sector, which sources many of its parts from the bloc.

One of the biggest stumbling-blocks in the negotiations was the EU’s insistence on “dynamic realignment”, so that the UK wouldn’t attempt to undercut EU firms by doling out unfair state subsidies to British businesses.

The post-Brexit deal also saw both sides agree on a ‘level playing field’, which means they must not lower their standards to undermine each other by engaging in anti-competitive trade, and be transparent about subsidies. Tariffs could be imposed in the future if the UK deviates from these standards.

It’s worth nothing thatthe quota-free deal only covers ‘originating goods’ (those produced within the UK/EU), meaning that if your client or business’s goods are manufactured in, say, China or Latin America, they could face possible tariffs.

The complex ‘rules of origin’ means that if more than 40% of a product’s pre-finished value was not of British/EU origin, then it could be face tariffs of more than 40%.

Borders

The 11th-hour deal might promise tariff-free business, but cross-border trade will suffer the friction of extra customs checks and forms. As such, the UK and EU have agreed to help resolve these administrative barriers with provisions to make documentary clearance, transparency and advance rulings more efficient.

There will also be a ‘bespoke’ agreement on extra cooperation at roll-on, roll-off ports such as Dover and Holyhead which should help minimise any disruption, possibly with both sides sharing declaration data. To speed up border processes, there will also be mutual recognition of trusted trader programmes, with British producers observing both UK and EU standards. Haulage operators can also continue to transport goods throughout the UK and EU with no permit agreements.

The UK’s borders with the EU aren’t just physical. Three-quarters of UK data passes through EU countries, so ensuring that this data flows as smoothly as possible is essential for many British businesses. However, the post-Brexit agreement hasn’t resolved the tricky issue of ‘data adequacy’ (a status granted by the European Commission to non-EU countries that allows information to transfer freely). The deal has an interim solution, expected to run for six months, but a decision probably won’t be made for many months or even years.

Brexit – webinar resources

Brexit Webinar: VAT for imports and exports The EU VAT e-commerce package (Sponsored by SAGE 11/12)

Brexit Webinar: VAT for imports and exports

HMRC customs and borders help webinars

An Exporters Guide to Brexit

Customs and VAT post the transitional period

Services businesses

The post-Brexit agreement has received much criticism for neglecting the UK’s services sector, which is worth 80% of the British economy. Free movement of services between the UK and EU has now ended, meaning that British firms will have to follow the different rules of individual member states.

The UK’s financial services are particularly chagrinned by the news, especially given that the issue of ‘equivalence’ (whereby UK financial institutions can trade, on a regulatory basis, as if they were still in the EU) wasn’t settled in the deal.

Even Boris Johnson has admitted the post-Brexit deal “does not go as far as we would like” over the financial sector’s access to EU markets. However, chancellor Rishi Sunak recently hinted he hoped a system of equivalence could be struck in the future. It’s likely both sides will return to the negotiating table in the months ahead.

Customs and trade

The tariff-free deal means that the much-feared rise in retail prices (caused by the taxes on goods) may have been been avoided: the British Retail Consortium has told shoppers they can exhale a “collective sigh of relief”.

Yet, the deal hasn’t reduced the need for more post-Brexit controls: new customs rules and rules of origins checks will mean parts/goods will be slower to enter the UK, with supply chain glitches. As such, there will be extra bureaucracy such as extra customs costs and forms, with businesses – and this obviously includes their financial teams and accountants – having to navigate an obstacle course of paperwork in early-2021.

If your business or client is one of the expected 250,000 companies making customs declarations for the first time in 2021, then it’s worth advising them to hire a customs agent and sign them up for EORI numbers (to transit goods) if you haven’t already.

Qualifications

UK accountancy and auditing qualifications are no longer recognised in the EU. This means means any accountants who want to work and go through the nerve-wracking experience of sitting exams again.

“We won’t be able to send audit partners who hold UK audit qualifications to sign audit reports overseas any more, which means the quality of audits will be that little bit lower, if the best person who could have given that audit opinion is a Brit,” Sally Jones, UK trade strategy and Brexit leader at EY, told the BBC recently.

Apart from accountants, this rule will also apply to other professions such as doctors, nurses, lawyers, architects, vets, ski instructors and engineers.

However, UK qualification bodies may be able to work with their counterparts in Europe to negotiate their own bilateral agreement.

Business Travel

British short-term business visitors can enter the EU visa-free for 90 days in any six-month period. However, there are restrictions on the types-of-work to be conducted in Europe. Business travellers can still attend meetings, trade exhibitions, conferences and consultations. However, if you are selling goods or services to the public, you’ll need a work visa. 

These rules vary by member state, so it’s worth checking the individual entry requirements of any country you’ll be visiting.

Further reading

How being a KPMG apprentice has fast-tracked my management career

Posted by & filed under Apprentices, National Apprenticeship Week, Social mobility.

KPMG is finding the apprentice route is beneficial for the firm. It invited the AAT to meet three of the first candidates on its KPMG360° programme to show how rapidly they’ve advanced…

Standing on stage in front of 12,000 people at Wembley Arena, Gabriele Scavinskyte probably thought she’d woken up in some surreal dream.

Usually, it’s only famous musicians who tread the boards here; the 24-year-old accountant was about to deliver a three-minute speech to an endless mass of people, including Jessie J and Kate Winslet.

Gabriele took to the stage to speak about her journey from Lithuania a few years before with little English, eventually ending up on KPMG’s lauded 360° apprenticeship programme.

Since it launched in 2015, the KPMG360° programme has enhanced the career prospects of Gabriele and her fellow apprentices. They’ve helped restructure companies, worked in Europe, picked up AAT qualifications and are now hurtling towards chartered status.

Having opted for KPMG360° over university or going straight into work from studies, the apprentices have been able to progress their careers through the scheme, as if they were graduates. From Waitrose to Wembley, here are their stories…

Meet the apprentices

Vivian Laditan

Before KPMG360°, Vivian Laditan had worked was in Waitrose, as a stock assistant.

“Your parents always want you to go to university,” says the 24-year-old Londoner. “But KPMG360° challenges that, giving you the chance to pursue a career you love… I wouldn’t have these opportunities elsewhere.”

“Because I joined KPMG straight from school, I didn’t really know how to speak professionally. But when I joined KPMG, we had an induction week where we learned how to give pitches, how to speak to people and write emails. It helped a lot with my fear of not fitting in.”

Brian Nounev

KPMG360° has meant working in some newsworthy areas. Having joined KPMG’s Pension and Investment Advisory team after his A-levels (where he “looked at how pension schemes are funded; a hot topic”), Brian worked with a broad range of companies across healthcare, government and FMCG

He’s also changed the tyre of a Formula 1 car during a pit stop challenge, sat in the cockpit of an RAF plane and spoken at the Labour party conference.

 “At 18, I didn’t know what area of the firm I wanted to work in. But the rotational aspect has allowed me to choose somewhere I felt I could progress. No two days are the same.” Brian is currently working in Restructuring and loving every minute of it. Like Vivian, he’s also working towards chartered accountant status.

Gabriele Scavinskyte

When she’s not ‘playing Wembley’ or gracing Time’s magazine covers (yep, she’s done that too), Gabriele is working in Mergers & Acquisition. She also spent three months working with the Royal Air Force. Gabriele has gone on to become a KPMG mentor herself and visited her former school to give talks on “how students can reach their potential”.

There’s also the opportunity to travel. Brian has worked in Italy, Germany and Holland, while Vivian is looking forward to a potential Australia secondment. “KPMG360° is a game-changer,” she enthuses. “Working towards my chartered status is a nice finish too. It’s amazing to be part of it.”

The application process

Vivian: “The first stage of the application process involved filling out an online questionnaire. That was followed by a telephone interview, where I was asked about my knowledge of KPMG and to see whether I had a real interest in working there. It involved being asked questions such as, ‘Tell me what you know about KPMG’ and ‘Why are you interested in KPMG’. After that, I had to complete the assessment on the assessment day.”

Brian: “I found the application process extremely straightforward. Much of it was online. It all culminated in me attending an assessment centre in Manchester. This took an entire day, and involved applicants going through group tasks and writing assignments. It was a well-run day that brought out a lot of skills.”

Joan Egenes, Head of Business and Leadership at KPMG advises, “if you’re interested in applying for KPMG360, the easiest way is to access our website or on one of our social media pages (Instagram, LinkedIn, Facebook). Here, you can find out about all of our apprenticeship programmes and make an enquiry. There is an application process through our careers portal, followed by an audio submission and finally an assessment centre.”

What’s involved in the KPMG360° programme?

As you might have guessed by the ‘360’ moniker, KPMG360°, course is rotational, with apprentices spending 9-12 months in different parts of the company. This sees them working with a diverse bunch of clients, from start-ups to multinationals, and in sectors spanning aerospace to healthcare.

The necessary entry requirements are grades BCC (or higher) at A-level, plus five GCSEs at A*-C (UK) or grades BBBB (or higher) in your Highers and five Standard Grades at grades 1-3 (Scotland).

KPMG360° apprentices must complete AAT up to level 4. Studying the UK’s leading accounting qualification is something that apprentices, Vivian, Gabriele and Brian have found invaluable, not least the fact they are able to use the practical skills in their day-job.

Here’s how it works:

  • the course is six years long
  • there are three levels: Foundation, Technical and Professional
  • foundation is Year 1 and involves two placements in different business areas. You’ll also complete AAT Level Three
  • technical is Years 2 and 3. The placements are for longer spells, and you’ll complete AAT Level Four
  • professional level is Years 4-6. You can decide to specialise in Audit, Tax, Consulting or Deal Advisory
  • and then…? Well, after those six years, you can become a chartered accountant, a KPMG assistant manager or do secondments in overseas countries.

AAT and KPMG360° – creating the perfect match

Vivian feels that the partnership between AAT and KPMG works really well together, giving her the confidence to perform well in her department.

“I remember the joy at finishing Level 4 and thinking, ‘okay, I’m now a qualified bookkeeper/accountant. You know your stuff – you can do this.’ Even though I finished AAT a year ago, I still log onto aat.org.uk. Watching its short videos and reading tips refreshes what I know and keeps my work to a good quality.”

Brian: “The skills and knowledge I’ve gained through studying AAT has been incredibly useful and transferable to all my KPMG roles… It also helps that AAT is an internationally-recognised qualification; the company that I worked with in the Netherlands picked up on it.”

Tizzy Blythin, KPMG’s head of professional qualifications and accreditations, says, “Our clients look for solutions to problems,” she says. “And hiring people who think in different ways, have different mindsets and backgrounds means we can offer more rounded solutions, which is very beneficial. The people we recruit represent the breadth of society.”

What the future holds

With Gabriele aiming to become a KPMG assistant manager, and Vivian and Brian working towards chartered accountant status, KPMG360° has clearly given its apprentices an almighty head start with their careers. Aside from the technical knowledge that comes with an AAT qualification, the course has boosted their confidence too.

 “Doing this has made me so much more confident,” booms Vivian. “I can walk into a room of people and spark up a conversation about what’s going on in the financial world. Having done AAT and KPMG360°, I feel like the world is my oyster… I’m enjoying the ride.”

Find out more from KPMG on the benefits of offering apprenticeships:Why a KPMG apprenticeship is good for business

RSM apprentices on fast track to chartered status and success

Posted by & filed under Apprenticeships, National Apprenticeship Week.

This joint AAT-ICAEW case study highlights how apprentices are making rapid career progress with leading accountancy firm RSM, and helping to increase diversity.

Young people have traditionally entered accountancy by going to university and studying for a further three years before qualifying. But with rising university costs and different routes into the profession now available, apprenticeships are becoming an attractive option.

RSM trains apprentices through an in-house programme, providing an alternative accountancy training route. School leavers join the scheme after their A-levels and follow the AAT to ACA pathway to achieve chartered status.

Career fast track

Under the AAT to ACA pathway, apprentices take AAT’s level 3 Bookkeeping Certificate, before moving on to AAT’s Professional Diploma (Level 4) in a fast-track apprenticeship completed within 24 months.

They then embark on a three year ACA programme with ICAEW under the Level 7 Accountancy Professional Apprenticeship.

With an apprenticeship, you do five years and come out with two qualifications, no debt and good career prospects.

Jack Hayden, manager RSM UK Audit

Jack Hayden, a manager at RSM UK Audit, is enthusiastic about the benefits:

“If you go down the university route, you may be studying for up to six years before qualifying, not to mention incurring a lot of student debt. This way, you do five years and come out with two qualifications, no debt and good career prospects.”

Work experience boosts skills

Students also gain work experience alongside their studies, meaning they pick up vital skills along the way. This can potentially make them ready for managerial positions earlier than a university-leaver with a degree.

In terms of on-the-job work and training, there’s no differentiation between the role an AAT-ACA apprentice does and that of a graduate. For both groups, career prospects are improved by completing the ACA qualification.

Increasing diversity in the workplace

For RSM, apprenticeships make a career in accountancy accessible to people from different backgrounds and a way of increasing diversity in the business. “It means we get slightly different skillsets and people with different points of view,” says Jack.

“Overall, our intakes have increased due to growth in the business and as such we have been looking to increase the number of school leavers to provide us with a more diverse workforce,” Jack continues.

Plans for expansion

Now, RSM is looking to increase the number of people it recruits on to its school leaver apprenticeship scheme. There are a number of ways it’s looking to do this, including holding taster weeks for school leavers where they can try out working for an accountancy firm, and holding a CV-writing workshop, in the hope they will apply to RSM when they leave school.

We have an increasing number of our trainees joining us from school, and we find that they are able to very quickly make a real contribution to the business.

Victoria Kirkhope, HR & Development Director RSM

“We really value the apprenticeship route into the profession. We have an increasing number of our trainees joining us from school, and we find that they are able to very quickly make a real contribution to the business,”
says Victoria Kirkhope, HR & Development Director at RSM. “Along with the opportunity to gain a professional qualification, our school leaver trainees tell us that the additional work experience they gain is of real benefit to them as they develop their career.”

The increasing popularity of apprenticeships as a genuine alternative to university has also helped to make RSM’s scheme attractive, both to students and their parents. Jack continues; “There’s definitely a shift in the market with university fees being so high. For people who want to go straight from school into a chartered accountancy career, it’s a really good option.”

Case study: no debt and rapid career progression

Louise Leonard first became interested in accountancy when she took it as an A-level at school before a teacher alerted her to the idea of starting her career as an apprentice with RSM UK. “University never appealed to me but I’d enjoyed the course in the sixth form so thought I’d stick to that route,” she says.

Louise Leonard earned a promotion within 6 months

Students are given time off to attend college and exams, but alongside her AAT, and later ACA training, Louise worked for the business in the London office. “From the start you’re on-site doing the work,” she says. “You’re treated the same as a graduate in terms of the workload, and RSM were really good at giving on-the-job training around our studies.”

Chartered status and a promotion

Louise completed her ACA in August 2017 and was promoted to audit manager just six months later. “If I’d come in as a graduate there’s no way I’d have been promoted within six months, but because I’d had those two years’ additional experience while doing AAT, it means that I was promoted much sooner,” she says.

Today, there are no regrets around either the career or the route she took, and she believes others will also follow in her footsteps. “Ten years ago it was all about going to university but now there’s more of a push to consider other options,” she says.

Ten years ago it was all about going to university but now there’s more of a push to consider other options.

Louise Leonard, RSM

As for herself, Louise is keen to continue progressing at RSM UK. “I’d like to manage for at least another year and then see where it goes. The next step would be to senior manager although I’m not looking at that just yet.”

About RSM

RSM is one of the country’s major accountancy firms with around 3,800 partners and staff in the UK and access to more than 41,000 people in 116 countries across the RSM network.

Read more on apprenticeships;

Lifelong Learning Portal: How to add a reflection to a completed unit

Posted by & filed under Students.

In the fourth of our learning portal series here we show you how to add a reflection to a completed unit.


In our third video we showed you how to add a due date to a project. Here we show you how to add a reflection to a completed unit.

  • Now that you’ve completed the unit, why not leave yourself some notes on the resources you found most useful?
  • Adding comments about how useful you found different resources and what you learned…
  • … will help you if you need to revisit any of the units

Log in here to access your support resources

Further reading:

Commercial construction is suffering, but housing is holding its own

Posted by & filed under Road to Recovery.

Some areas of construction are threatened with can look forward to
contractual disputes, squeezed profit margins and tricky cash flows, but for others prospects are good.

  • Residential construction is in a ‘good place’ while commercial has seen turnover hit
  • 2021 could see an increase in contractual disputes due to project delays
  • A collaborative approach in place of ‘hierarchical’ culture could be way forward
  • This year’s online boom has driven massive demand for datacentres and warehouses worth millions to the sector.  

The story of the construction sector during 2020 is very much a tale of two cities. While one arm – the commercial side – struggles with cash flow and profit margins, the residential business remains in a relatively healthy state.

Construction and maintenance company Echelon Construction, which works across the housing sector and local authorities are one of the lucky ones.

While the company experienced supply chain issues earlier in the year due to global market shutdowns and temporary factory closures, it is now back on track, despite significant changes to working practices and a few delayed projects.

“Profit margin and cash flow have been a bit of a challenge but not a massive one,” says MD Matthew Baxter. “It’s not been our best year but definitely not our worst. In March, we were very worried because some clients had put a lot of procurement projects on hold. We had a bit of a pause, but procurement activity to date has now normalised.”

Echelon Construction had the foresight to adapt quickly. Early on, it set up weekly industry conference calls with housing providers, suppliers, local authorities and the Chartered Institute of Housing to share best practice, knowledge and expertise to help mitigate the worst effects of the crisis.

A best-practice collaborative approach

These weekly calls helped Echelon Construction stay ahead of the curve. The collaboration between suppliers and local authorities ensured essential services and maintenance to residential properties continued. “I’ve been blown away with how we’ve all got through it,” says Baxter. “The housing sector moved incredibly quickly, with very few slips.”

Within a week, most staff across several local authorities and housing organisations were working remotely. At the same time, Echelon Construction reduced non-essential property maintenance such as kitchen replacements and upgrades by 20% to comply with restrictions. Essential maintenance checks and updates, however, such as gas compliance and boiler checks, never dipped below 99%.

“We all just had to adapt,” Baxter adds. “We do a lot of hands-on work including interviewing contractors, negotiating with clients, scoping out sites as well as the ongoing repairs and maintenance work we do, but we’ve moved as much online as possible.”

Since then, Echelon has even recruited. It has more people on staff now than they did in March.

“The housing sector is fairly busy all the time, so we’re fortunate. If there is a recession, there’s increased demand for social housing, and if there’s a boom, people can’t afford to buy their own place anyway, so the demand for social housing will go up.”

Continued investment

Ben Harwood, Chartered Accountant and Director of construction and real estate consultancy Naismiths, agrees. “Residential construction is in a much better place,” he says. “We’re actually seeing more development happening now than in the past six or seven years.”  

Reduced rates of stamp duty coupled with government investment have seen a boom in the residential market, so much so that developers are now able to sell straight off-plan. “Even three years ago, that just wasn’t happening; you had to show people around the property before,” Harwood says.

Matthew Thorpe, Managing Partner at Haynes Watts, is also relatively optimistic. Turnover has indeed been hit, particularly among SMEs in the commercial construction sector, but the work hasn’t gone away. “We’re not seeing projects being cut off totally; they’re just rolling into next year.”

Contractual dispute issues

There are concerns, however. Postponed project delivery is likely to incur costs, and Harwood warns of an increase in contractual disputes. Although many disputes may not be legally enforceable – it depends on the terms and conditions – it’s likely to leave firms in a difficult situation.

“Once firms realise they haven’t profited as much as they thought or have ended up incurring additional charges, they may try to claw back as much profit as they can,” Harwood explains.

It will put many contractors in a difficult position, especially those who have also taken advantage of delayed VAT payments and bounce-back loans to ensure survival. As Harwood puts it: “If firms haven’t won any additional work and are still completing work they were doing before, where does the money come from to repay the additional debt?”

Firms in limbo

There are also concerns around cash flow. With projects paused and a reduction in available tenders, firms must either wait it out and lose money in the short term or cut overheads until they can commence projects. But therein lies the problem: those who have opted to save money by making cutbacks will be under-resourced and must invest more upfront in hiring and procurement costs. “The industry has been caught on a seesaw,” Thorpe explains. “It’s leaving firms in limbo. How long can businesses sustain themselves on the promise of work tomorrow?”

Thorpe believes it will be the smaller players likely to struggle the most. The larger firms with plenty of cash reserves and strong balance sheets are already in a stronger position. They can also rely on performance bonds when pitching for new projects. But, says Thorpe, performance bonds encourage a potentially damaging ‘survival of the fittest’ situation. Whenever there is a shock to the market, insurers cut bond availability so only larger players with strong balance sheets can obtain them, pushing smaller, more innovative contractors with little or no assets out of the market.

Hierarchical culture

Thorpe also points to a broader issue with the sector which has been exacerbated by the pandemic. The sector’s hierarchical culture means that every firm in a project chain puts more financial pressure on the one below it. This way of working, he insists, is no longer sustainable. If clients are already putting their main contractors under pressure, the already skinny margins will disappear altogether when times get hard. This has a knock-on effect throughout the supply chain.

Speed of change

Despite all this, there are definite upsides for the sector as a whole. Thorpe points to the rate of digital and technological innovation over the past six months. Although it had started to evolve over the past few years, has now accelerated due to the pandemic. During lockdown, there was an ‘online boom’.  Consumers turned en-masse to online retail, creating a need for bigger warehousing and datacentres to respond to increased demand.  

The value of these projects Thorpe says, ‘is huge’ and ‘far outweighs’ anything of similar size. There are also significant investment and development programmes starting in 2021, including the Road Investment Strategy (RiS2), HS2 and the Government’s hospital building programme which will build six new hospitals by 2025 at the cost of £2.8bn.

The outlook for 2021 then, is a mixed picture: contractual disputes due to project delays, squeezed profit margins and cash flow issues. Simultaneously, the residential market continues to do well and continued government investment and the growth in warehousing and datacentres all point to a brighter outlook.

In summary

Baxter, meanwhile, is optimistic that the sector’s collaborative approach this year will help bring about cultural change: “It needs to be about collaboration now and how well clients and contractors work together,” he says. “Hopefully that will be a legacy for the sector going forward.”

Get your client’s R&D claim in well before March 2021 to ensure they receive the maximum reward

Posted by & filed under Tax.

This content is brought to you by rannd uk

What is the R&D incentive?

The R&D incentive (AKA R&D tax credits) is a government-funded scheme that helps UK companies sustainably fund their innovation through cash awards provided by HMRC. R&D can be broadly defined as striving to improve existing products, processes, and services or creating new ones. Businesses from any sector can qualify for the scheme by carrying out eligible R&D activities.  These activities include:

  • Overcoming technical challenges
  • Creating and testing prototypes
  • Streamlining processes
  • Trialling new or substituting materials
  • Developing bespoke software
  • Trial and error
  • Industry firsts

During the R&D process, there are a number of costs incurred that firms can claim for. These include:

  • Staff costs
  • Sub-contractors
  • Materials consumed
  • Utility costs
  • Some software costs

How are claims calculated?

Qualifying R&D expenditure is enhanced by 130% which is then used within the R&D tax calculation to create a financial award. Both profit and loss-making companies are eligible, and the scheme is designed to be equally generous in both cases. Claims can be backdated up to 2 financial years and successful claims can be used to decrease corporation tax paid or can result in a cash refund. 

Who are randd uk 

Randd are R&D tax credit specialists who have been servicing clients across the UK for over 12 years. Randd’s clients come from a range of industries- you don’t need to be a heavy hitter in the manufacturing, engineering and construction industries to qualify. Companies from many industries are eligible for the scheme including education, gaming, and cosmetics businesses to name a few.  

How can randd help accountants?

The process of claiming the R&D incentive can be complex and time-consuming for claimants and accountants alike, which is where randd uk come in.  

Accountants that refer clients to randd are awarded a referral fee for every successful claim meaning it’s worth having a conversation with your client about R&D as they could be eligible for the scheme and a cash award could be waiting for them. Not only does our referral process benefit accountants by opening them an additional revenue stream, but it also benefits their clients as claim sums are maximised in the minimum time and our experts are able to spot more unusual R&D activities.

This results in a strengthened relationship between our partnered accountants and their clients as costs and time spent are minimised with revenue maximised. Randd also serves as the insurance for clients and their accountants that claims won’t be rejected or questioned by HMRC as this can result in a tax inquiry which make claims lengthily and difficult to manage.

It’s worth noting that you can backdate R&D claims by up to 2 years, and with many companies, year ends fast approaching in December, and March it’s the perfect time to start the conversation as you don’t want your client to miss out on money they’re entitled to. Randd makes the process quick and simple and clients can receive their cash award in as little as 4 weeks.

Contact randd today to increase your income without increasing your workload. A 15- minute call with one of our experts will outline our simple process and can inform you on what R&D activities to look for in your client’s work.

Email: [email protected]Telephone: 01332 477070

This content is brought to you by rannd uk

How accountants can show the way through Northern Ireland VAT and customs complexity

Posted by & filed under Brexit, Tax.

Businesses in Ireland have two sets of rules to follow, which multiplies the complications.

As the Government pushes the deadline for Brexit negotiations yet further towards the end of the year, there is no clear sign as to whether a trade deal with the EU will be reached.

What is clear, however, is that Northern Irish businesses have an uphill struggle if they are to meet the dual VAT regulations coming their way from January 1 next year.

Brexit Webinar: VAT for imports and exports

This webinar will bring you up to speed on the significant changes to the movement of goods from Great Britain to the EU, how goods are reported, and the conditions for zero-rate goods exports, plus the Northern Ireland protocol.

Register

Under the Northern Ireland protocol to the Withdrawal Agreement that has already been agreed, the region will have the most complex VAT and customs regime in Europe.

On the surface, it makes sense to apply distinct rules to Northern Ireland since it is being treated differently to the rest of the UK after Brexit.

The Northern Ireland Protocol means that Northern Ireland maintains alignment with the EU VAT rules for goods, including on goods moving to, from and within Northern Ireland. However, Northern Ireland is and will remain, part of the UK’s VAT system.

Major complexity

Yet while this might make sense superficially, the new system introduces serious complexities for Northern Irish businesses. These are compounded by potential differences of opinion between the EU and Britain over how to apply the rules. Furthermore, there will be changes according to what is ultimately agreed between the EU and the UK on any possible trade agreement.

Cróna Clohisey, public policy lead at Chartered Accountants Ireland, says: “The whole issue with VAT change is extremely complicated and there is still a huge amount of detail to be worked through.”

Clohisey adds: “The Government updated guidance on the VAT and customs changes this week but the EU will likely have its own interpretation on what the protocol will be.”

Brexit Resources – Northern Ireland

Accounting for VAT on goods moving between Great Britain and Northern Ireland

10 Key steps to be ready in Northern Ireland

VAT & Northern Ireland – Guide

VAT & Republic of Ireland – Guide

Brexit and customs – Northern Ireland – Guide

Brexit and customs – Republic of Ireland – Guide

Customs rules for Northern Ireland

And accountants will need to help businesses with more than just VAT. There are also changes to the customs regime.

Lee Squires, head of indirect tax at Grant Thornton says: “Goods imported into the UK will be subject to the customs duties set out in the UK’s new Global Tariff schedule published in May 2020. Goods imported into the EU will be subject to the duties in the EU’s Common External Tariff.”

There will be the EU’s free trade agreements (FTAs) to contend with, too. British businesses no longer benefit from these. But they will still apply to Northern Irish businesses.

Squires says: “To benefit from [EU] FTAs, traders will need to ensure their products meet any relevant rules of origin requirements in the FTA. These vary between FTAs and depending on the type of product in question, but often require a certain proportion of ingredients to originate from, or processing to be carried out in, one of the countries that is a party to the FTA.”

This could present an issue where UK products include EU-originating or processed goods, in particular food and drink.

The UK produces and exports over £22 billion in food products for overseas markets, but the ingredients usually contain overseas goods, many of which are not produced in the UK or not in sufficient quantity throughout the year. The Food and Drink Federation says the EU and UK could consider innovative ways to protect the global supply chains of EU and UK food and drink manufacturers from disruption as a result of the re-imposition of origin requirements on EU-UK trade.

Not only are the rules themselves complex, but there are also discrepancies between how particular goods and services are treated under the regime and how they are treated, dependent on where they end up. To help, Grant Thornton’s Squires produced a table to summarise the issues that accountants and businesses need to be aware of and what is still to be decided (see table one).

How to help

Even with so little clarity, there is still plenty accountants can do to help businesses prepare for these changes.

The first is to help businesses moving goods into Great Britain apply for a UK Economic Operator Registration and Identification (EORI) number. The same will applies to British GB suppliers moving goods into the EU.

They will also need help with submitting import declarations where goods move from GB to NI and in securing the commodity codes for their imports/exports and the tariffs on these products under the EU Common External Tariff and UKGT.

Squires says: “Businesses also need to know whether goods they import from GB or the rest of the world could be at risk of moving to the EU, and the potential for reimbursement/waiver/compensation for any EU duties.

Accountants can also help businesses obtain qualifying status to show their goods are of Northern Irish origin and establish which party is responsible for import formalities and duties in their supply chain.

Significantly to help manage the costs, businesses can apply to HMRC for a grant towards the cost of updating systems. Further, accountants can establish whether any customs special procedures or reliefs could be applied to mitigate the very real expense of change.

While there are many issues yet to be clarified, it is clear accountants can play a valuable part in preparing businesses for this complex change.

Clohisey says the profession is already making a difference in this area but concludes: “There is so much to get through that patience is required. It will take time before systems and processes are able to manage the new regime.”

Source: Grant Thornton, Brexit VAT and Customs Issues for Northern Ireland Aug 2020

[i] [https://www.gov.uk/government/publications/accounting-for-vat-on-goods-moving-between-great-britain-and-northern-ireland-from-1-january-2021/accounting-for-vat-on-goods-moving-between-great-britain-and-northern-ireland-from-1-january-2021

Covid-19 is a force majeure that should have delayed Brexit

Posted by & filed under Members, News.

Accountant Chris Conway of Multiply Accountancy details his frustrations over the failure to delay Brexit and his hopes for 2021.

From the moment the UK officially left the EU and entered the Transition Period, Brexit took a backseat while the world battled a pandemic.

However, while the country wrestled to control the spread of Covid-19 and accountants frantically tried to stay on top of the Government support measures, the clock counting down to the end of the transition period kept ticking.

Brexit Webinar: VAT for imports and exports

This webinar will bring you up to speed on the significant changes to the movement of goods from Great Britain to the EU, how goods are reported, and the conditions for zero-rate goods exports, plus the Northern Ireland protocol.

Register

Naturally, responding to the impact of the pandemic and the Government measures will have been the priority for most accountants throughout 2020.

Clients and advisers have spent months trying to get to grips with and stay on top of new allowances, calculations, grants, JRS vs JSS vs SEISS, and new submission deadlines – and it’s not over yet.

Now, against a backdrop of social and financial hardship, as well as legislative turmoil, the UK’s businesses are facing another wave of legislative upheaval and economic uncertainty.

Why common sense should prevail

In recent years, the accounting industry has seen the introduction of MTD for VAT and the iXBRL tagging of accounts to support tax returns.

These changes took years to implement, were delayed from their proposed launch dates and were not without their challenges once they went live. But they are insignificant by comparison to the scale of the changes Brexit brings.

I fear the UK is woefully underprepared for this.

Without doubt, the sensible approach would be to accept the obvious force majeure of the pandemic and push it all back a year. But,  presumably, that would be bad politics.

The overwhelming feedback we’ve had from clients is a certain level of despair that those trumpeting the virtues of Brexit are nowhere to be seen when it comes to the details of accounting for VAT on B2C EU sales in 2021 (for example).

Why accountants can still succeed in 2021

If Covid-19 has taught accountants anything, it’s how to adapt, react quickly under pressure and be valuable to clients.

The skills developed throughout the Covid-19 crisis will be essential again as the changes from Brexit occur.

How accountants approach the challenges of 2021 may well define the relationships they have with their clients for years to come.

Now isn’t the time for us to abdicate their responsibility, manage their risk and simply direct clients to the nearest government website link. The best accountants will identify those clients affected and engage with the issues they are facing to help their clients be ready.

Staying up-to-date with developments is essential and collaborating with other experts (where necessary) to achieve the right outcome for clients should become the norm. For businesses in some sectors, the supply chain disruption, additional working capital requirements and increased administration will take very careful planning to navigate successfully.

2020 was a tragic year for many and a difficult year for most.

2021 offers reason for optimism over combatting the virus, beginning the economic recovery and returning to normality.

Challenges are a given.

But accountants can be a key part of helping clients overcome. So we’d better act now.