How to prepare for five times more customs declarations and £7bn of higher costs?

Posted by & filed under Brexit.

Liam Smyth, Director of Trade Facilitation at the British Chambers of Commerce, discusses how to prepare for leaving the Single Market. 

The UK left the European Union on 31st January 2020 and the transition period comes to an end on 31 December this year. The Chambers of Commerce, like many other business groups, believe the most important message is that businesses must take action NOW to get ready for a new border operating environment from 1st January 2021.

The revised Border Operating Model published in July brings changes to how goods will be controlled at our borders into a stark reality: businesses need to prepare for a significantly higher level of customs declarations and associated administration. With substantial understatement, the publication concludes, “customs declarations are complicated”.

Declaration volumes will grow from 55 million now, to almost 300 million next year.  The cost to British business is estimated at around £7bn per annum, and the customs intermediary market lacks the necessary capacity to deal with this increase.

Taxes and payments

Many AAT licensed accountants will have clients who are importing or exporting (or both) to and from the EU and they face some very big changes in a very short period of time.

Traders importing ‘standard goods’ – covering everything from clothes to electronics – will need to prepare for new customs paperwork.  Exporters and importers will need to keep specific records of imported goods and can opt to take up to six months to submit a full customs declaration for goods arriving from the EU. 

Taxes will need to be paid on all imports, but payments can be deferred for up to 6 months until July 2021. This will help traders cash flow until the end of 2021, but only if they or their agent has the correct approvals in place to use simplified procedures.  Full customs requirements will apply to controlled goods from 1 January 2021 whether they arrive from the EU or elsewhere.

Businesses will be able to account for VAT on goods imports using Postponed VAT Accounting from the start of the new year.  This means that once the staged introduction period ends, payment of VAT due on imported goods can be delayed until the next VAT return. 

The choice for business

Despite the much-needed clarity on customs procedures, and a welcome delay through the staged introduction of full customs controls, big challenges remain for most businesses. 

Declarations volumes will increase, costs will rise, traders need to upskill to deal with new procedures and time is incredibly short.

Companies trading across the globe will need to make a choice. Should they take advantage of the staged introduction of measures for EU imports and gain a cashflow advantage through delayed duty and VAT payments?  Or, should they instead stick with the systems and processes they already know, and use the newly introduced postponed VAT accounting and guarantee free deferment accounts to delay border taxes by up to 6 months?  

Whatever they decide, businesses that export and import goods face inevitable change. 

Help and advice

Some businesses are alert to change and will be preparing themselves or seeking help and advice from accountants and others, whilst some will have their heads buried in the sand and others will simply not know where to turn.

Against this backdrop, the UK approaches the end of transition with a serious shortage of customs agents.

For many small businesses who need specific customs help and advice, Chamber Customs may be able to help. Chamber Customs is the advisory and brokerage service delivered through the British Chambers of Commerce.

Our expert team and our overseas connections make us an ideal customs partner so as businesses get ready for the end of the transition period, our customs agents are ready to help clear their goods at the border.

Further details are available at: www.chambercustoms.co.uk

“We should look forward to the next 40 years”

Posted by & filed under AAT at 40, Members.

As part of our series, AAT at 40, we asked chief executive Mark Farrar to take stock of the association’s 40 years of operation and to look at what’s to come in future.

Q. When you took on the chief executive role in 2014, what was the state of the organisation and what were your immediate goals at that point?

 “AAT was in a good place and it commanded a lot of respect, particularly in the educational world. It had also recently become a full member of the International Federation for Accountants (IFAC), and the organisation’s pitch at technician level was highly regarded.

“At the time, I could also see that the wider world of accountancy was changing – primarily because of increasing technological developments, which have been present ever since and will stay with us through Covid-19 and beyond.
“We recognised the need to widen our activity and reach not just those who wish to attain the qualification and achieve membership, but also reach people who needed more general finance training in business – for example those in small business, or employees in larger corporate or public sector entities.”

Q. Have you found any additional priorities coming in that you think are important?

 “While we’re seeking to develop our own initiatives, we always find, given the nature of the world our members and our education structures operate in, that we have to be responsive to external changes. For example, it may be regulatory changes such as the tightening of anti-money laundering regulations, or new developments on the educational side, such as the recent government’s initiatives on apprenticeships, or other changes.

“We need to support members on those and ensure we stay well-positioned for the future. Of course, at a macro-level, you will then also get changes such as what the Chancellor may or may not be doing with tax, small business regulation, or matters such as exiting the EU. Brexit has been ongoing for a long time. I suspect it will be running for a while yet, even with the breakpoint at the end of this year.”

Q. We’ve got two momentous things happening simultaneously – Brexit and Covid-19. What kind of impact do you think those events will have?

“I remain extremely wary of what the UK’s economic position might yet be early in the new year as we enter winter with Covid-19 still present.

“We seem to be positioned for some serious changes with regard to tax, tariffs, and customs procedures early in the new year because of Brexit. In particular, I think, the SME community is going to be under huge strain. On the one hand, desperately concentrating on surviving tomorrow, while also having to plan for some pretty major changes coming their way within a matter of weeks.

“I think it’s going to be very tough. There will be fallout in terms of businesses – in the sense that more will go into administration or insolvency. It feels like unemployment rates will markedly increase. We have a role to play in all of that, to help both on the information and communication side. Also, in helping or facilitating skills training for those who find themselves looking for a change of direction, a change of career, or seeking to simply improve their marketability and the functions they find themselves in, such as finance.”

Q. How do you see the future for AAT and its members?

“Bright. I think accounting technicians are in a great place, probably more so than the wider accountancy community. I say that very carefully as a chartered accountant myself. All the anecdotal evidence about people that come through our ranks says that they’re hands-on, they’re practical, they’re experienced, and they can get the job done. They largely will be driving the technology now, and as they learn, in the future as well.

“That puts all our members in a very strong position. No matter how good or how efficient the technology is, people are needed to translate it, to spot where things aren’t quite right. I think that’s where technicians excel.”

Q. Looking back over the history of AAT, there’s been several major recessions. How has AAT has come through all of them and developed in that time?

“The first thing I did when I joined AAT was to look at the books – I looked at the volumes in those recent years to see what had happened over the previous five years. I was pleasantly surprised to see that AAT had fared well. It hadn’t experienced the deep recessionary conditions that other organisations had, primarily because training and skills needs had held up. Over many years AAT has weathered many storms, and I’m certainly intending that it’s going to weather this one as well.

Q. Given the current challenges and opportunities, how is the demand for accountants and accounting technicians looking?

“Finance is at the core of all businesses and that doesn’t change.

“Right now, all organisations are hugely focused on their cash flow and their forecast cash flow, and this is where the accountancy community can come into its own – translating for managers. Again, the skills here are not just for the students who wish to become members and go on to a career in accountancy, but it’s a skill set that we can help facilitate for business managers generally. Whether they are in a small business or maybe managing cost centres in large businesses.

“You’ve got to manage your finances carefully and you need people to help you do that. You need people that are hands-on and practical. That’s where technicians come in.

“I think it’s a difficult period ahead and certainly the further education world is under huge stress. This is where  the Government has a role to play to support that area of the economy and what it can do to help people.”

Q. Putting those factors to one side, what are the other priorities you’d like to pursue?

“I think while our own infrastructure and technology will remain a key development area, we need to also help members adapt to new tools while also reaching out into the wider business community. We have a role to play in assisting that wider community in financial and business skills, and we are actively trying to do that at the moment.

“Not necessarily activity that would lead to full membership of the organisation, but activity that gives people those bite-sized finance training skills or analysis skills that they need. In the case of UK businesses, particularly SMEs, it improves the productivity and the profitability of those businesses.

“I think that’s where the future lies for us. It’s to broach out into those new areas. When we do get into businesses, they absolutely welcome us and want more of
what we have to offer.”

Q. Any final thoughts to summarise?

“It’s great to see how far the organisation has travelled over 40 years and all the successes it’s had, but it’s only 40 years old. Let’s look forward. We should look forward to the next 40 years as well. It doesn’t stop here. There is a long way to go and it looks like an exciting journey. That’s where my focus for the organisation, its members, its staff and everyone connected would be – to enthuse about what’s to come next and the role we will play in it.” 

5 ways accounting careers will change in the future

Posted by & filed under AAT at 40, Career.

As part of our series, AAT: life at 40, we look at the future for career pathways in accountancy and finance.

In a year when Covid-19 has severely disrupted education, vocational routes offer many attractive opportunities. It’s likely, too, that the accounting profession’s next intake won’t follow a traditional career path. Here’s what to expect in the future

1. Education vs training

Unemployment is set to grow sharply as a result of the Covid-19 pandemic. The Office for Budget Responsibility has said the unemployment rate could peak at between 9.7% to 13.2% in the next few years.

Prime minister Boris Johnson says the Government wants to give people the skills to find and create new and better jobs. “We’re transforming the foundations of the skills system so that everyone has the chance to train and retrain.”

The Government also plans to make it easier for people to study part-time, by making higher education loans more flexible.

Mark Farrar, chief executive of AAT, said the prime minister’s commitment to skills and retraining for adults – at every stage of life and from any background – is of vital importance to the success of the jobs market.

“The Covid-19 pandemic is generating huge retraining and upskilling needs, and individuals with the required skills will ultimately fuel the nation’s economic recovery. Offering training to specifically meet employers’ needs gives us a clear direction of travel with further education skills training needed more than ever in a post-Covid-19 and Brexit world.”

So with unemployment set to grow and the UK government focusing on education and training, will accountants be educated or trained?

Looking to the future, accountants will continue to learn with a mixture of both education and hands-on training, as both education and training are equally valuable, says Suzie Webb, AAT’s director of education and development.

“The ‘balance’ will depend on the individual,” Webb explains. “The context, the end-point being targeted, the previous experience and knowledge of the learner, etc. There is not (and nor should there be) a ‘one size fits all’ way of developing individuals.”

2. New trajectories

The career path of the accountant is not following the set trajectory it once did. Instead, a wider range of options are available to explore.

Those entering the accounting industry will take up roles such as outsourcing director, finance business partner and data analyst. These avenues will continue to expand in the coming years.

Companies wanting to fill these emerging roles will still be looking for recognised qualifications, however.

“AAT has high awareness and recognition within the market – around 80% of employers have heard of AAT,” says Rob Alder, AAT’s head of business development. “Employers like candidates with AAT backed up with experience, because it demonstrates someone has the practical skills needed to fulfil a range of functions within a finance team.”

Alder adds that AAT is popular in all sectors of the economy across a range of businesses, from SMEs to the public sector.

“Employers know from previous recessions the benefit of people increasing their studies as they
invest in making themselves
more employable.”

3. Evolving demands

Specialist recruiter Robert Half has highlighted that many businesses are redesigning traditional job roles to meet current day demands. The recruiter recently surveyed more than 1,500 executives, with the results revealing thatone-in-three businesses are rescoping roles to assist with their recovery post-Covid.

As firms look to ensure agility and resilience moving forward, the survey showed the top two in-demand skills are focused on IT security (32%) and IT management (30%), followed by financial management (25%) and business planning and analysis (21%).

5. Automation and digitisation

Many businesses are seeking to automate and streamline their finance functions through cloud-based systems. So it’s no surprise that for the finance and accounting sector, the survey revealed an increased focus on candidates with digital operations and data analytics experience, as well as a rise in demand for credit and cash control roles.

Similarly, for financial services, there was a prioritisation of candidates with cloud computing and analytical skills, coupled with an increase in demand for payment and analyst roles.

While digital and technical capabilities remain critical to business recovery, 41% of executives say “soft” skills will be key to dealing with ongoing uncertainty.

The top in-demand “soft” skills include creative thinking (38%) and agility (36%), while effective communication (35%), strong leadership (33%) and strategic thinking (29%) are also in high demand.

Recently, a report by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) revealed that the role of the CFO is rapidly evolving too thanks to Covid-19. In the “CFO of the Future” report, respondents strongly agreed with the hypothesis that CFOs will play an increasingly important role in strategy formulation, validation, and execution.

5. Converging skillsets

So as clients and businesses demand a wider service offering, the increased use of technology for tasks such as data entry mean the skillsets of accountants will continue to change.

Donne Burrows, chief operating officer at Engine B, which provides a data management solution to accountants, says it is now important for accountants to have a grasp of how technology is applied within the profession. This includes some knowledge of how data and analytics are used in accountancy.

For example, how technology brings siloed data together to help advise clients more effectively.

“It is really important to consider the skills that organisations will need from their accountants in the future,” she says. “There is clearly a big focus on technology and data and analytics, so getting yourself exposure to these areas will be a real benefit in the future.”

She adds that technology is also one of the sectors actively hiring and, with competition for talent fierce, professional qualifications are a bonus.

Webb notes that although technology is changing the tasks that accountants perform, knowledge of the fundamentals of accounting is still vital.

“The evolution of technology is changing what accountants will do in the future and how they do it,” she says. “But it doesn’t change the importance of excellent building blocks and a sound knowledge of
the fundamentals of accounting, which is what AAT provides through our qualifications.”

Brexit: HMRC issues warning of essential actions with 70 days to go

Posted by & filed under Brexit.

HMRC is writing to traders urging them to step up their preparations ready for departure from the European Single Market.

The letter comes in the same week as the Government announces a national lock-down and the extension of the Coronavirus Job Retention Scheme. Therefore, HMRC is especially keen that agents draw their clients’ attention to the advice in the letter.

Businesses need to act now

The key message is that businesses must act now. Not even a last-gasp free trade agreement will save companies from the extra processes required to continue trading with the EU.

“It’s really important that businesses act now – a free trade agreement will not remove any of these requirements. Unless you have all the correct processes, contracts and agreements in place you will not be able to trade with the EU from 1 January 2021,” the letter notes.

What’s changing?

From 1 January 2021, businesses that send goods from Great Britain to customers in the EU will be responsible for completing export declarations for those goods.

Businesses that import goods and have a good compliance record will have the option to defer customs declarations for up to 6 months, provided the goods are not on the controlled list. However, they must still keep records of everything they import, this is called an entry in declarant’s records.

Businesses that important items on the controlled list (such as animal products, alcohol or tobacco, or firearms) will have to make declarations from 1 January 2021.

Traders with a poor recent compliance history will not be able to defer declarations and will receive a separate letter explaining that they need to make full declarations.

Finding a customs advisor

HMRC strongly urges companies to enlist the help of a third party, such as a customs agent.

“Import and export declarations are complicated, requiring specialist skill, knowledge and IT, including government authorisations,” says the letter.

However, this may be easier said than done. Demand for customs advisors is rising sharply and there is already a serious skills shortage, but there are still organisations that can help.

Businesses should therefore make it a priority to find an advisor, and accountants should encourage them to make this a priority.

“Now is the time to speak to these companies so you have everything in place by 31 December 2020, and to ensure you can continue to trade with the EU,” says HMRC’s letter.

“The sooner you contact these organisations the more likely it is that you will secure the services you need.”

Further information

How extending the CJRS has created last-minute confusion for businesses

Posted by & filed under Coronavirus.

The Coronavirus Job Retention Scheme will be extended until March, but could more jobs have been saved with greater clarity in Government planning?

Two rounds of changes to Government assistance schemes within a week have increased the help available to businesses. At the same time, they have led to uncertainty – and extra pressure for finance professionals.

Businesses were planning for the Job Support Scheme Open (JSS Open) to come in on 1 November.

However, when the Prime Minister announced a national lockdown it was decided to extend the existing Coronavirus Job Retention Scheme (CJRS). This was first extended until December. After further pressure, the Chancellor announced on 5 November CJRS will run until March 2021, covering the original 80% of salary levels.

Businesses across the UK had already invested a considerable amount of time and resources into preparing for JSS Open. Many had already decided to restructure in the light of the Government’s policy of tapering assistance and closing the scheme after October.

Because of the haste of the decision, the Government still needs to change the legal terms of the scheme and update its systems. Businesses will consequently be paid in arrears for that period.

AAT CEO Mark Farrar commented:

“It’s good to see the Chancellor recognising the severity of the economic damage some sectors are facing. However, this is creating yet more change and yet more pressure for the finance community as it supports businesses through this crisis.”

You can read details of the extended CJRS here, or at the Treasury’s web site.

  • Be eligible to all full or part-time employees who were on payroll on 30 October 2020.
  • Retain the flexible-furlough element which had been brought in during July.
  • Cover 80 per cent of employee’s salaries capped at £2,500 per month per employee.
  • The scheme is open to employees and employers not previously using it.
  • Anyone made redundant after 23 September can be re-employed and claimed for.

But what do accountants think about the extension and the last-minute decision to postpone JSS? Will it create more issues than it solves, or is it a welcome move?

The last-minute change has lost businesses time and money

Christina Nawrocki, managing partner, Wellers

The last-minute announcement to extend the CJRS will create many problems for businesses. We had already posted blogs, newsletters and were also providing advice about JSS. Clients have incurred costs in seeking advice around JSS and now it’s not relevant! Also, people have already made redundancy decisions and let people go. It was an exceptionally late turnaround. Fundamentally, some people will have already made decisions that will affect employees and their businesses that sadly may now be irreversible.

However, the CJRS extension is good news for SMEs overall and their employees who had been worried about their jobs. It also provides businesses with another lifeline through another unwelcomed lockdown period and will undoubtedly mean that employees will still get paid.

Next steps: It is key to remember there are other changes to the various grants and support schemes available. Although there is undoubtedly a focus on job retention, business owners also need to consider the future of the company in order to keep jobs alive once furlough ends. These include things like Bounce Back Loans and grants for businesses which have been forced to close due to the heightened restrictions.

Verdict: The last-minute change has caused headaches for businesses, but the overall principle of CJRS will be a lifeline for many businesses and their employees.

Businesses are exasperated and frustrated at sudden changes

Mahmood Reza, owner, Proactive Resolutions

Businesses are a resilient lot, and their staff certainly need to be. Companies are getting used to planning in cycles of days and not months. The extension of furlough to March is good news financially, but rostering, cash flows, communication and mental agility are stretched.

Also, some decisions have already been made regarding redundancy. Should businesses throw their plans in the bin? Hopefully, it’s not too late to save some of those jobs.

Clients have been exasperated and frustrated this week. They are having to rip up their previous plans around JSS and start all over again. They are unhappy about the uncertainty of the situation but there is also some acceptance that this is how things are and they are just trying to get on with it.

It’s likely that JSS will return at some point, so clients should think beyond March for rostering options and cashflow.

Next steps: Our advice to clients is to stay calm and try not to get overwhelmed with the news and latest developments. It’s also important to ensure that revised letters and agreements are sent to staff and that compliance is maintained.

Verdict: Businesses are frustrated at the last-minute change in plans and the general uncertainty but are managing to adapt.   

The furlough extension adds some much-needed certainty in a difficult time

Nigel Morris, employment tax director, MHA MacIntyre Hudson

A UK wide furlough scheme with a fixed end-date and the flexibility to manage local and regional restrictions will be a real help for business drawing up their budgets. Companies now know what they need to pay out in NIC and pension costs over the coming months. The fact the Job Retention Bonus (JRB) and Job Support Scheme (JSS) have been deferred also provides additional clarity; businesses no longer face the prospect of grappling with a whole new set of rules, or the admin juggling act of using multiple support schemes.

There may still be some uncertainty and changes to come, particularly if the review the Chancellor mentioned for January results in a reduction from 80% of employee wages paid by the Treasury to say 70% or 60%. However, overall today’s announcement cuts the number of scenarios to consider and provides a basis for much needed planning on the best way to survive.

With advisers and businesses gearing up for the introduction of the JSS schemes and analysing the 11 documents issued on Friday, an announcement the next day to delay the introduction of the JSS schemes, extend CJRS and introduce slightly different criteria has impacted on the previous planning. It has made some of the work already undertaken redundant and resulted in numerous queries from clients on how the extended CJRS will work, particularly with annual leave and reference pay due to the new deadline for employees using an RTI submission.

These changes to plans will cause increased uncertainty about when things will change again, when JSS will come in to force and how this will impact on the viability of some jobs.

Next steps: We are advising clients to plan as best as you can, be agile, flexible and realistic. Utilise CJRS in the best way practically and financially for the business and employees, spend the lock down creating scenario plans for the 3 or 4 typical contingencies of full lock down and likely Tiers and how they may impact trading and future resources requirements. This will enable you to react quickly and with some confidence to any future revised levels of restrictions, or easing of restrictions. 


Verdict: Businesses were already gearing up for the introduction of JSS but the sudden decision to extend CJRS has created a lot of extra work and more uncertainty.

My big lesson from last lockdown – everyone must share in furlough

David Chaplin, chartered accountant and chairman at Chaplin Group of hotels

Going into another national lockdown feels like fulfilling Einstein’s definition of lunacy. He defined lunacy as repeating the same action and expecting a different outcome. We shouldn’t therefore use this next period of lockdown as an opportunity to reinvent things we’ve already invented – measures are already in place.

In terms of furloughing staff: last time, we kept core teams of four or five people in the two larger hotels, despite the fact they were closed. But this time, I’m insisting that every single employee takes at least two weeks off on furlough. I’m doing that for the sake of their own wellbeing. Also, after the last lockdown, I noticed a slight ‘them and us’ feeling between those who had worked through It and those who hadn’t.

Possibly, with this lockdown lasting only a month rather than three months, there’s no chance of that. But it occurred to me that it’s better that everybody’s in the same boat and feels that they are contributing in both ways. So every single employee, from the most senior to the most junior, will take two weeks of furlough during this month.

Next steps: We will encourage staff to take annual leave during November as well, though it will cost us more in the short term. We don’t want to start December with yet more accrued holiday to be taken and paid for.

Verdict: We’re taking an ‘all in this together’ approach to furlough this time around.

Extending the CJRS makes it easier for businesses but likely to increase workloads

Kevin Winterburn, director Sheards Accountancy

In the short term, adjusting to the CJRS extension will be easier for businesses to manage than implementing the new JSS, simply due to familiarity with CJRS.

Payroll professionals will, however, be concerned about what is likely to be a considerable increase in their workloads, although maybe not to the levels seen during the first lockdown.

For accountancy practices, it’s simply having the time to do the additional calculations and also complete the claims. Understandably, businesses want to receive their information and grant payments as soon as they can, creating pressure on those dealing with it for them.

As a practice, we were not convinced that the take up of the JSS would have been very high. However, clients are much more likely to want to use the CJRS, a scheme that they are familiar with, during the second lockdown.

Next steps: We are advising clients to use this scheme where it is right for their business. However, the uncertainty over how long this lockdown will last is impacting upon decision making. Each business has its own unique circumstances which need to be taken into consideration.

Verdict: Businesses will find it easier to navigate CJRS because it’s familiar, while JSS was likely to have low take-up rates anyway

Why large companies should be required to reveal their ethnicity pay gap

Posted by & filed under Ethnicity pay gap reporting, Members.

Wera Hobhouse MP, Liberal Democrat Spokesperson for Women & Equalities, argues that ethnicity pay gap reporting should be obligatory for large companies.

In 2015 the Liberal Democrats were central to ensuring the Government made gender pay gap reporting mandatory for all large companies.

This was a game-changer. 

It allowed both the public and employees to be fully informed about what a company was doing – or in many cases not doing – to address their gender pay gap. 

It forced companies who had a bad track record to act with urgency, and failure to follow through on action has been met with public outrage and in many cases negatively impacted a company’s brand.

Ethnicity pay gap

The next step must be compulsory reporting of the ethnicity pay gap for these same big companies. And it is vital that the Government urgently acts to make this happen.

Studies suggest that the economic impact of coronavirus (Covid-19) will be overwhelmingly concentred on those in lower-paid, insecure and gig economy work. Evidence also suggests that Black, Asian and minority ethnic (BAME) workers are much more likely to have such insecure and low paid jobs. 

Writing and speaking about these generalisations can be uncomfortable but without understanding the true extent of the problem and how it manifests itself in people’s lives we cannot hope to make things better. 

We already know that far too many people experience discrimination, inequality, and injustice. The ethnicity pay gap is an obvious part of this.

We also know the impact that growing up in poverty can have on children, impacting entire lives from an increased likelihood that they end up in our criminal justice system to a reduced life expectancy. The ethnicity pay gap is also a factor here.

Lessons from 2020

If 2020 has taught us anything, it is that British society is far from equal. Thousands of people are struggling in ways that many of us simply cannot relate to and Covid-19 has made these inequalities that much more painful.

The Black Lives Matter movement has started some important conversations in our communities – about our history, our present situations, and what we want our futures to look like.

The Government has had two years since closing its consultation on ethnicity pay reporting and has still not taken any action to resolve it – something I know AAT has commendably highlighted on several occasions. As with so much else, when it comes to tackling racial injustice, this Conservative Government is failing to show the urgency that such a situation demands. It has set up a new “Commission on Race and Ethnic Disparities” but we shouldn’t have to wait for yet another report to implement a change we all agree is needed.

Kicking the can down the road is no longer an option. What we know about the ethnicity pay gap – from large scale surveys such as those run by the Office for National Statistics – is that certain workers, such as those from a Bangladeshi or Pakistani background, could be paid up to 15% less than white people on average. 

This is extremely worrying. 

More Government action

We need more than gesture politics from this Government – we need a commitment to transparency so that the public, the media, and our communities can hold businesses to account.

At the recent Liberal Democrat Conference, our party made the commitment to actively work to make our workplaces more equal, beyond simply reporting the problem. We are asking the Government to invest in employment support services to enable job centres to improve the quality of advice. We are also asking them to establish community-led employment services in areas where there are especially vulnerable communities. And we are asking them to support employees to empower themselves within companies.

But first and foremost, we are saying to Ministers: stop dragging your feet and introduce mandatory ethnicity pay gap reporting for large companies, now.

In summary

As we emerge from the pandemic, let’s use this transparency and data to empower workers from ethnic minority backgrounds to get fairer pay. This is in the best interests not just of those from BAME backgrounds but all workers, businesses and the wider economy.

Advance your career from home with an online AAT qualification

Posted by & filed under Students.

This content is brought to you by ICS Learn.

The coronavirus pandemic is causing an increasing number of people to think about new job opportunities going forward.

It may be that you have lost your job or are at risk of being made redundant. Or your work-life pattern may have changed and you have greater childcare and family responsibilities. Or you may have decided that you would like a career that offers better pay and financial stability. 

Accountancy provides opportunities to grow and learn and a competitive salary and what’s more, you can study for your professional qualification from home and fit studying around your life.

If you are keen to study for a new AAT qualification, or to further your studies, and you are concerned about the time and cost involved, you could consider an online course.

You can study for AAT via a course that is flexible and 100% online. For example, you could study in the evening when you have finished your full time job, or when the children are in bed, or in your time off or between shifts.

Fit your accountancy training course around your busy life

With the Covid-19 virus affecting office and college life, it may be difficult to find a course near you that is fully flexible and allows you to study for an AAT qualification when and how you wish.

One option is to begin your AAT professional journey with ICS Learn. It is an award-winning AAT centre and the courses are designed to help you study for AAT around your job, family, and life. ICS Learn has a Trustpilot rating of 4.8/5 from more than 5000 independent student reviews. The course offers unlimited one-to-one tutor support whenever you need it and interest-free monthly payment plans in order to make it easy to spread the cost.

As well accountancy training courses, ICS Learn also offers 100% online AAT Bookkeeping qualifications.

The benefits of an accountancy qualification with AAT

There are many advantages to having a professional accountancy qualification as accountancy is a profession that is respected, lucrative, and in high demand. There are opportunities in many different countries and varied industries. 

ICS Learn provides AAT Accountancy training at all three AAT levels, so you can study online for your first qualification, develop and deepen your existing skills or move to an exciting new career. 

An AAT qualification can enable you to get a job in finance, set up your own accountancy practice or fast-track Chartered Accountant status.

You do not need any previous experience or qualifications to begin your online course. Studying online might suit you if you already have a full-time job, you have family commitments, or you cannot travel to a college or venue.

What qualifications can I study for?

If you are starting out, you can choose the AAT Foundation (Level 2) qualification. Alternatively, your AAT training can be a stepping stone to ACCA, CIMA, and other Chartered Accountancy qualifications.

A student’s starting salary could be around £21,000, with senior management roles in the region of £43,000. If you join the AAT fast-track with a Chartered Accountancy body like ACCA or CIMA, you could earn more than £70,000 a year as a Chartered Accountant.

How do I study with ICS Learn?

Once you have enrolled, you set your own pace and work to your own hours. It is the first step to launching your new professional career, and the course can take between six to 12 months, depending on your other commitments.

For example, the AAT Foundation Certificate in Accounting covers 5 units and you study each unit online at your own pace but with the support of other students, live online classes, and your tutor. Your dedicated tutor is available for help and guidance whenever you need it.

You can start any time – you are not tied into term times which may be helpful if you have other commitments. You can also spread the cost of the course so you don’t need to be able to afford to pay everything upfront.

How do I pay for my course?

ICS Learn offers interest-free monthly payment plans make it easy to spread the cost. Some students find a job before they have finished the course and quickly cover the cost of the course.

How do I enrol?

You can enrol over the phone on 03339201565 or by email at [email protected] to arrange a callback.

What support will I get during the course?

“We have created the course so that it is really flexible and you can pick it up and return to it whenever you have some spare time. So, for example, if you have half an hour in the afternoon you can pick it up then,” says Dr Sean McCready, Director of Education at ICS Learn.

The course is broken up into small chunks to make learning more manageable so that you have bite-sized bits of learning. That makes it ideal for people who want to fit it around their working life.

He says it is available 24/7 and is designed to be pacey, so that you are not stuck sitting at the computer for hours. You can learn at your own pace, but you always have the support of your tutor to help or answer questions whenever you need advice.

“I have been involved in distance learning since its inception and we have adapted the course so that the interactive lessons are suitable for different learning styles,” he explains. “The three-way system of great learning systems, high quality content and well-qualified, engaging tutors help students push on with their programme.

“We have a great success rate – 93% of students have passed their assessments in the past three months and the figure was as high as 96% in July.

Learn when you’re ready

With online learning you learn when you want to, and that is the critical factor that makes the difference. You are not tied to having to be in class at a set time. It is about wrapping the learning around you and your lifestyle.

“We create one-to-one tutor relationships and student community so that learning is never lonely, and we have lots of additional material from other students about how to study and get the most out of your course,” says Dr McCready.

Support is directed personally to you so that you have what you need in order to achieve the qualification you are studying for. All support is timely, relevant and personalised to help you achieve your goals.

Case study: Lauren Field

“I maintained working full time at my job whilst beginning to study at home,” Lauren, a former ICS Learn student, says. “I found it easy to create a timetable and fit in enough hours spread over 2-3 days a week which meant I could easily move my study time around depending on other out-of-work plans and commitments.”

After getting halfway through the course, she began looking around for jobs within the industry that she could aim for once she had completed the course. 

“I applied for a handful of jobs, and to my surprise, I got an interview as an Accounts Executive. To my surprise and delight, I was successful and landed the job! It has really helped me to continue with my studies and am currently waiting to take my final exam ready to complete my Level 2 Foundation AAT.”:

Case study: Elina Bernane

“The qualifications led to being employed in a medium-level finance role with no previous experience which is very impressive,” says student Elina Bernane. 

“I have already earned back the money I spent in less than a year. I am currently working in the finance field and the AAT certificate absolutely helped to find my first job in finance. I had no previous experience in this field and my first salary is over £18,000.”

Case study: Alex Mellor 

“I chose to do an accounting course because numbers are a real strong point for me and I enjoy working with them,” says Alex Mellor, who fitted in study while playing professional rugby, and who wanted a career he could pursue once his sporting career was over. 

“I chose ICS Learn as it gave me the freedom to study when I could as I could work it around my job as a professional rugby player for the Huddersfield giants.”

Case study: Thomas Cruise

Thomas was signed by Arsenal Football Club Academy at age seven and played for Torquay United Football Club. He studied accountancy with ICS Learn because he wanted to find a career that he could pursue once his sporting job had finished and he was keen to enhance his skills and employability for the future.

“Being a professional footballer, I have a bit more free time to get my head down and crack on with these courses,” he said. “It’s not a typical nine-to-five job, so I’ve always got a couple of hours spare in the afternoon to get my head down and study.”

To learn more about studying AAT 100% online with ICS Learn, get your free course guide.

Further reading:

This content is brought to you by ICS Learn.

HMRC updates to support incomes during a second lock-down

Posted by & filed under HMRC updates.

Chancellor Rishi Sunak has announced a raft of changes to Government assistance schemes ahead of a second national lockdown in November.

Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme has been extended by a month until December. As a result, the Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends. This is now expected to be in March.

CJRS extension details:

  • The extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs. There will be a short period when we need to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.
  • The CJRS is being extended until the end of March. It will be reviewed in January. The level of the grant will mirror levels available under the CJRS in August, so the Government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
  • It will be open to new employers and employees.
  • As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
  • Further details, including how to claim this extended support through an updated claims service, will be provided shortly.
  • The Job Support Scheme will be introduced following the end of the CJRS.
  • Anyone was made redundant after 23 September – when the furlough replacement was announced – can be brought back on to the scheme.

Who is eligible?

Employers

  • All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
  • The Government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.

Resources

Guide: Extension to the Coronavirus Job Retention Scheme

The Government has decided to extend the furlough scheme on original terms, explained in this guide.

Templates: furlough letters for employees

Template letters are available in the coronavirus hub to cover full, flexible and extension of furlough situations.

Employees

  • To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
    *As under the current CJRS rules:
  • Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
  • Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
  • When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
  • For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

What support is being provided and employer costs:

  • For hours not worked by the employee, the Government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.
  • Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.
  • As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
  • The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.

Mortgage Holidays

Mortgage payment holidays will no longer end today. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

The FCA will announce further information.

Business Grants

Further business grants were announced on 31 October 2020.

Businesses required to close in England due to local or national restrictions will be eligible for the following:

  • For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
  • For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
  • For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

Self-employment Income Support Scheme

The Government has announced an extension for the Self-employment Income Support Scheme (SEISS).

The generosity of the Self-Employment Income Support Scheme (SEISS) Grant Extension will be increased from 40% of average trading profits to 80% of average profits – up to £7,500.

In addition, the opening of the service has been brought forward from 14 December to 30 November.

Further details in AAT Knowledge Hub

AAT says scrap tax exemptions and reliefs and resist populist measures to pay for coronavirus

Posted by & filed under News, Tax, Tax reform.

National debt is above £2 trillion for the first time in history, and it’s growing as the country continues to fund much of the economic impact of coronavirus (Covid-19). We all know this can’t go on indefinitely, but how will it be paid for?

In a comprehensive response to the current Treasury Select Committee inquiry Tax after Coronavirus, AAT has proposed several carefully considered recommendations for change, making an important contribution to the debate as to exactly how this enormous and unprecedented challenge can be met. Not all recommendations will be to everyone’s liking but the submission recognises the immensely difficult financial position the country is in and the need for action that may previously have been considered too drastic.

Recommendations include scrapping exemptions and reliefs for Capital Gains Tax, Inheritance Tax and VAT and for a small and temporary increase in the basic rate of income tax when it is fiscally prudent to do so – probably not until April 2022 at the earliest.

We have also suggested grasping the prickly nettle of National Insurance Contributions (NICs) by proposing an end to the NICs exemption for those in receipt of the state pension (1.2m pensioners are in employment and paying no NICs), which would raise over £1.5bn annually.

Similarly, with regard to the so-called “three-person problem” AAT firmly believes that if someone is undertaking similar, sometimes identical work, then whether that person is employed, self-employed or employed through a company, there is no reason why each of those individuals should not pay the same rate of tax and NICs.

Despite the obvious need to generate revenue, the response we submitted also urges the Government to resist the increasing demands for a windfall tax, a populist measure that punishes success and will inevitably be passed on to consumers.

Likewise, the vociferous minority calling for a new wealth tax should be ignored because it is unlikely to raise much money in the suggested format and could deter much needed investment in the UK – and wealth could be better taxed through reformed CGT and IHT as AAT has previously highlighted.

Although understanding and appreciating the likely controversy and the sensitivities of pensioners, AAT has also proposed scrapping the pensions triple lock and replacing it with a, “more predictable, established and reputable measure…” – the Consumer Price Index (CPI) measure of inflation. As the AAT submission explains, this would, “…continue to provide annual increases that ensure older people are able to live with dignity and the respect they rightly deserve whilst simultaneously saving £6bn for British taxpayers by 2024-25.”

As well as changes to existing taxes, AAT recommends the Treasury explore the viability of introducing a new tax on data control and usage. Often described as the new gold or the new oil, data is certainly not taxed as such. We are likely to establish a working group of external specialists to look more closely at this idea in 2021.

We have also recognised that our own sector should not be immune to change, again calling for Government to regulate the third of accountants and tax advisers who are currently unregulated with a view to reducing tax evasion, money laundering, unethical behaviour and simple mistakes that cost both individual taxpayers and businesses money. The simplest and most effective way of doing this would be to require anyone giving paid for tax and accountancy services to be a member of a relevant professional body.

The AAT submission should help to kickstart a debate around how best to tackle these enormous financial pressures but there remains much more to be said and done in this vital area of tax policy.

How to prepare for your synoptic

Posted by & filed under Students.

Here’s what you need to know about preparing for your synoptic assessment and what to expect…

Taking your synoptic assessments is an important part of your studies. Even though assessment centres may be operating in a slightly different way to how they normally would, you should be assured that you will be kept safe before, during and after your assessment. 

In order to adhere to social distancing guidelines, assessment schedules will be limited to ensure the correct distance is kept between each computer. It is advisable to book your assessment as soon as possible to secure your spot. 

Tracey Mosley, chief executive at EMA Training, says there are many students waiting to sit their assessments, so you may experience a delay in booking yours.  

Getting motivated to study again 

Nick Craggs, AAT distance learning director at First Intuition, says lockdown has been a testing time for students, as many have been trying to study at home while working, managing homeschooling, and dealing with other pressures. “It helps to remember why you are studying, and the real-world benefits you will get from passing your exams,” he says. “That might be career progression, a change of role, or working for yourself.” 

Nick recommends using the AAT learning materials to help, including the timed mock exams, and perhaps asking fellow students to mark your work, so that you have a more independent result than if you were to mark the paper yourself. You can also find support in the AAT forums, on Facebook, and with colleagues or other students. This will give you moral and mental support as well as technical help. 

“Students have a lot of external pressures to cope with – money worries, being furloughed, trying to fit in study with family commitments, and if progress is not as great as usual, try not to get too worried,” Nick explains. “You are still progressing in your career and you are trying your best. If you have not achieved what you have planned over the last year, try not to put undue pressure on yourself. You can only do your best.” 

Preparing independently for your assessment 

Simon Bell, director and founder of Careermap, says it can feel overwhelming preparing for your exams independently without any time in the classroom. However, he suggests that creating a structured home learning plan is key to succeeding. 

“Don’t leave it to the last minute to cram in all of your revision,” Simon explains. “It can be a challenge to get into a study mindset when learning from home – try to keep to a routine as best as you can. When revising on your own, it is easy to get distracted and lose concentration, which is why it’s important to create a timetable and stick to it. At the start of each revision session, write a list of everything you would like to cover and tick it off as you go along. Make sure you are realistic with your time.” 

Simon also advises students to schedule in time for breaks and exercise in order to avoid burnout. “Make a plan and stick at it,” he says. “Prioritise your topics – think about which areas you’re a whizz at and areas you’re not as confident about. If you are struggling, speak out and ask for help. Whether you need support from your tutor, lecturer or a friend and family member to lend a listening ear, remind yourself that people want to help and support you.”   

Taking a socially-distanced assessment 

James King sat his Management Accounting Costing Level 3 assessment earlier this year in Milton Keynes. He says staff at the assessment centre explained the procedures when he arrived, and it gave him confidence as they were taking it very seriously. “I had my temperature taken when I arrived – and before we could enter the building, we had to sanitise our hands,” he explains. “You had to wear a mask at all times in the building. In the exam room, the computers were spread out and had dividers.” 

A clear process to follow

Paulina Durak started her journey with AAT during lockdown and is currently studying Level 2. She sat her first two assessments, Bookkeeping Transactions and Bookkeeping Controls, earlier this year in Welwyn Garden City. 

Paulina says she felt confident before entering the assessment centre as she had received some information, rules and guidance at the time of booking. “It gave me a basic understanding of what to expect when I arrived and the rules that everyone was supposed to follow,” she explains. “There was social distancing (from the very beginning in reception, through my exam, to leaving the centre at the end). And everyone had to wear a face mask. Computer equipment was cleaned after each student and every other seat was empty.” 

Paulina’s advice: “Speak to your exam centre and ask for clear procedures. Try to point out what is important to you and your safety during an exam. Getting some knowledge will save you any added and unnecessary stress after arriving for your exam.” 

James’ advice: “Do a practice exam wearing a face mask for the whole time. It sounds silly, but I hadn’t been out much or worn a mask for more than 20 minutes prior to my exam, so I didn’t want the first long period of wearing it to be during the exam. You don’t want to be getting used to it and not concentrating on the exam and fiddling around with it or focusing on it being uncomfortable.” 

Synoptic top tips 

Synoptic assessments allow AAT to check that students have a good all-round knowledge and understanding of accounting. This means not only having a good grasp of the numbers, but also being able to explain what the numbers mean, what makes up the numbers and the impact that the numbers may have on a business in a real-life situation. Passing your synoptic assessment is a great way to enhance your career progression, move towards working for yourself, or to change your job role. 

Before you book

  • Complete all the mandatory units before you book your synoptic exam. If you are studying with a training provider, ensure you complete all the coursework provided. 
  • Take note of the feedback given to you from your tutor. The tutors are there to support you and to give you constructive feedback. 
  • Make use of the many resources available – AAT has valuable resources that will help you prepare for your synoptic assessment. 
  • Be consistent with your studies when preparing. Studying little and often is better than studying for long periods every so often. 

During your assessment

  • Read the question and understand it fully before you begin your answer. Don’t assume you know what the examiner is expecting. 
  • Plan the time you will spend on each task. Try not to spend too much time on low-marked questions, as you will run out of time and this can impact on your result. 
  • Make sure your answers are structured and the examiner can follow what you are saying. 

Further reading: