Why failing to limit company directorships could further undermine UK’s credibility

Posted by & filed under Members, News.

Government has come out against tighter controls on directorships in a move that could weaken the UK’s standing internationally.

Last year the Government consulted on the reform of Companies House. One of the questions was about whether individuals should continue to be allowed to hold unlimited directorships.

AAT’s view is that to achieve better company governance a cap on the number of directorships would help.

Why cap directorships?

Directorships bring certain obligations. High numbers of directorships do not just mean an individual is likely spreading themselves too thinly to meet their obligations, it is often, although not exclusively, a warning sign that an individual may be involved in some form of economic crime, especially money laundering.

International practice

Several other countries already limit the number of directorships that an individual can hold.

In Ireland, there is a cap of 15 directorships; while in France the maximum for public companies is 5.

In India, there has been a cap since 1956. It was originally 15 but was increased to 20 in 2013 (although this includes a further limit of 10 public directorships). This appears to work well, probably because there is a minimum 500 rupee (£30) per day fine for holding more than 20 directorships. This can rise to a maximum 2,500 rupees (£150) per day. The upper limit is more than the average monthly wage for a highly-skilled Indian employee and suggests that if a cap were introduced in the UK, meaningful penalties for failing to comply are essential to success.

AAT’s recommendation

If respondents to last year’s consultation supported a cap, they were asked to state what it should be.

Having considered the issue carefully, AAT was broadly supportive of a limit on directorships and made this clear in its response to the consultation.

As for the maximum number that should be allowed, this is a difficult balancing act.

A limit as low as 5, as in France, is likely to be too restrictive whilst a limit of 20 or more would likely be too generous and undermine the rationale for imposing a cap in the first place.

AAT, therefore suggested that a maximum of 15 directorships would be a reasonable approach.

Government rejects limitations

The Government finally published its long awaited response to the 2019 consultation last week.

Whilst some reform will take place, much will not, including a limit on directorships.

The response revealed that over 40% of respondents failed to answer this question at all, that 40% opposed a limit and that only 20% were in favour. As a result, the Government concluded;

“The Government will not proceed to introduce a cap on the number of directorships held by an individual at this point. We believe it preferable to verify identities and to provide more accurate linkage of records, thereby providing a more accurate picture of involvement with companies.

“Analysis of the register conducted by Companies House, together with comparison against other data sets and reporting of anomalies from obliged entities, will assist in identifying circumstances in which we believe the number of directorships poses a risk of criminal activity. This information will be shared with the relevant enforcement and supervisory bodies.”

Damage to financial credibility

This decision comes very shortly after the leaked FinCEN files showed that over 3,000 British companies were named in leaked Suspicious Activity Reports (SARs) – more than any other country in the world.

These activities have already damaged the UK’s international reputation as evidenced by a leaked US Treasury report describing the UK as a “higher-risk jurisdiction”.

The Government’s decision not to take action in this area looks not only badly timed but ill-judged and short-sighted.

However, AAT notes the door to reform has been left ajar with the statement that a cap will not be introduced “at this point” indicating that it may still be possible in the future. As a result, AAT will continue to press for change in this area and is sure others will join us.

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5 steps to kick start your career in accountancy

Posted by & filed under Job hunting, Recruitment.

Accountancy is a rewarding profession within which you can build a varied and fulfilling career.

But what’s the best way to get started and speed your progress up the ladder?

Here’s our five-step action plan to ensure your career in accountancy goes from strength to strength.

1. Get qualified – the right way

The qualifications you need depend on what type of accountant you want to be. But whatever area of accountancy you want to work in, AAT qualifications are a great place to start.

Craig Moore, is now a certified chartered accountant with his own practice – CJM Associates in Staffordshire.

“I started an apprenticeship with AAT after leaving school. It was a good way to get work experience while I trained.”

Options include stopping at AAT Foundation Certificate (level 2) that prepares you for entry-level roles. Or continuing all the way to AAT’s Professional Diploma (level 4) and become an AAT professional member MAAT.

You can also take your studies further after AAT with organisations such as, the Association of Chartered Certified Accountants (ACCA), or the Institute of Chartered Accountants in England and Wales (ICAEW) – both of which offer fast-track routes for AAT-qualified applicants.

“Studying to be a chartered accountant with the ACCA is a good option if you want to run your own practice,” Moore said.

“And having the AAT qualifications allows you to skip certain exams.”

2. Know your subject – and yourself

When applying for your first – or indeed any – accountancy position, it’s important to have a CV that is tailored to the role and highlights why you are a good candidate.

And while logic and numbers skills are obviously indispensable, communication skills may be more highly prized than you think, especially if it is a client-facing role.

Joanne Clark, a fellow chartered accountant who works in the tourism industry, said: “Being good with clients and colleagues is one of the main attributes you need as an accountant, so communication skills are key.” Before any interview, you should also research the company and the sector as a whole.

AAT has recently partnered with Filtered, who provide excel training for members and students. If you’re looking to improve your excel skills, from power functions to power pivots find out more here (login required). This excel training also counts towards your CPD.

3. Consider your options – practice or industry

Once you are qualified as an accountant, you can work “in practice”, which means taking a job with an accounting firm.

Or “in industry”, which means working for a company as an accountant.

Each alternative has its pros and cons.

Working “in practice”, for example, can mean dealing with lots of different clients, which makes the work more varied.

“Working on lots of different client portfolios should also give you a broader knowledge base, which can be useful later on,” Clark said.

However, working for lots of different clients can be stressful, especially if they all start making demands at the same time.

Opting for a job “in industry”, meanwhile, allows you to pick the sector you work in, but may limit your career choices going forward.

4. Try it out – find work experience

Having relevant work experience looks good on your CV, but that’s not the only reason to do it.

Seeing the reality of a working day can also help you decide what type of accountancy you want to do.

Summer internships with big firms can be extremely competitive and are generally only open to university students. But even shadowing someone for a day can give you a feel for the kind of accounting activities that would be best suited to you.

It may also help to convince future employers to support you through your accountancy studies.

“Employers are more likely to invest in someone who has work experience and has considered their career path,” Moore said.

5. Show willing – take a related role

If you’re struggling to find a job in accountancy, try to find one in which you can build up a transferrable skill set.

Many administrative roles, for example, involve inputting and processing financial information, while customer-facing positions will help you develop those all-important communication skills.

Lower-level jobs in areas such as payroll or bookkeeping can also prove a great stepping stone as they demonstrate you are happy working with numbers and can help you make more informed choices about your career.

“Taking on a entry-level job is a good way to decide what you want to specialise in,” Clark added.

Your five-step action plan

  • Consider what you want from your career in accountancy.
  • Research the qualifications that will get you where you want to go.
  • Make sure your CV is up to date and highlights your relevant skills.
  • Find some work experience or look for an accountancy related position.
  • Look for an employer who will fund any further training you want to do.

Opinion – Mark Farrar “Time is running short on Brexit”

Posted by & filed under Brexit.

In the middle of a pandemic, it’s easy to forget about the realities of Brexit. In fact, some serious change is just weeks away.

At the very start of the coronavirus (Covid-19) pandemic, I signed up to the .gov website to get updates as we went through the lockdown and its effects, to try to stay a step ahead of the game. 

It was a little fragmented at the start, but soon enough, I started receiving lots of email updates around Covid-19. Interestingly, I’d occasionally see an alert about Brexit fly past.

One in particular that caught my eye was about tariffs. Imported cars, it said, could carry a tariff of 10%. As people take up cycling to relieve the pressures of the pandemic, I also couldn’t help but notice we may also see tariffs of 7% on the inner tubes of tyres. 

“We’re going to have tariffs coming from left, right and centre,” I thought. This news has mostly been buried under the mire of Covid-19 updates, but in reality, none of the projected impacts of Brexit have really gone away. 

So much is still up in the air – we don’t know yet if we will have a trade agreement with the EU in January. In fact, we may well have no agreement at all.

It poses some challenges for businesses, particularly smaller businesses. They need to be aware of what might be coming their way, and they need to be preparing themselves. There is so much that is still uncertain – clarity on how the border of the new goods rules between Northern Ireland and the Republic will work, for example. Businesses there do not have enough information about what will hit them come 31 December.

So what do we actually know? We’re leaving the single market, the customs union, and the VAT area, all of which will have an impact on UK companies that trade with Europe. Take administration procedures, for example – the last HMRC public statement we’re aware of pointed at academic research suggesting that it will add around 8% to the cost of trade, which is either going to have to be absorbed by businesses or passed to the consumer.

We’ve all got used to just-in-time manufacturing or seamless delivery of perishable goods. Any delays in those areas for businesses, at a time when cash flow is already strained, could prove to be more than traumatic. VAT also applies to tariffs, and we’re coming out of the VAT area, so we’re looking at new processes there as well. We don’t know exactly what that will be – it depends on the agreement – and time is running short. 

We’re going to have a new trading relationship with the EU in a matter of weeks. The effects of lockdown will run into 2021, and Covid-19 may still be hanging over us.

We know further change is coming as a result of Brexit, which could cause plenty of confusion, cost and compilation, which will increase the thinner the agreement is. I’m not sure everyone has got their mind around that. In a smaller company, it will inevitably be the duty of the finance team to figure it all out. 

I will repeat this – it will be a big change, and it is a matter of weeks away. We’ve all been looking to survive week-by-week over the course of the lockdown. Now is the time to start planning for what’s ahead.

“There is so much that is still uncertain. Businesses do not have enough information about what will hit them come 31 December.”

Further reading:

What does your perfect accountancy role look like post Covid-19?

Posted by & filed under Coronavirus - students.

If you are in the middle of studying for your AAT exams, Covid-19 has meant that much of your studying has had to be done at home, and without the support of in-classroom learning.

At the same time, you may be trying to balance the new demands of childcare, working from home, and financial and time pressures. It can be hard to stay motivated when you are working alone, without the camaraderie of fellow students. At times like this it can be helpful to think about why you are studying in the first place, what skills you will acquire, and the exciting roles that await you when you are qualified.

Learning skills for life

“Accountancy will provide you with good self-motivation as you have to push yourself to study, to stand out, and to succeed,” says Sophie Tyler (MAAT), Accounting Team Manager at Dolan Accountancy. “You will develop skills in time management, as there are always urgent deadlines and things on your schedule to juggle around and prioritise.”

She says the profession offers a variety of interesting challenges. Accountants are skilled at working the mind with numbers and taxes while being mindful of the ‘social’ aspect of customer service. In other words, you are not simply hidden behind a desk. 

“Working full time plus studying is difficult, but you must make yourself a realistic study plan and then stick to it,” she says. “You should look at setting yourself weekly study goals and working to achieve those, and after each exam, take even just a week or two as a ‘break’ so you can enjoy your evenings and weekends again!”

She says it is important to think of the end goal and always keep that in mind; whether it’s a slightly different industry you wish to work in, a pay rise, a promotion, or even the feeling of having the letters after your name once you’re qualified. 

AAT professional membership: supporting your journey to career success

Our professional membership offers you flexible options whether you’re focused on bookkeeping, accounting, becoming chartered, or even want to run your own practice.

Find out more

The profession that is always changing

For students, companies in all areas of accountancy look for apprentices and study support is usually offered by most employers in some form. One of the most exciting aspects of the profession is that it is always changing.

“For example, each Budget there are usually new/amended taxes to consider and to update your own knowledge, so always something new to learn,” she says. “Due to the recent pandemic, there have been different styles of working – accountants working from home and not needing to stick to the general ‘stuffy’ atmosphere that some people assume accountants work in.

“I currently work in a niche market with contractors, so one-man limited companies and sole traders. I enjoy the technical side of the work and how I have been able to experience a breadth of experience in company accounts and also taxation.”

A fulfilling career

“The role of the modern accountant isn’t that of the stereotypical number cruncher who just works out profit and gets a balance sheet to balance,” says Sara Whitton, Client services director at My Management Accountant. “There are a range of roles that suit individuals who enjoy detailed analysis and mathematics, but it is also important that we listen to clients.”

She is AAT qualified and self-funded her studies when she was 21 (25 years ago) while working as a cashier at Symphony Group plc. 

“The industry has changed a lot in those 25 years, I used to keep a manual cashbook when I was cashier. Now I’m working in cloud accounting and my role and that of the modern accountant and business adviser has changed a lot too.

Strong communication skills are a must

As a company MMA presently employ three apprentices who are studying for AAT, and other members of staff who are also studying AAT.  

“Obviously we look to recruit candidates with good accountancy skills, but good communication skills are equally important to the company. The role of the modern accountant is to understand and assist as much as it is to deliver numerical data. Our team enjoys assisting owners and managers and helping them achieve their goals is enjoyable and fulfilling.  Accountancy is a whole lot more than adding up, as my children seem to think!”

Opportunities for growth

James Brent, Director at Hays Accountancy & Finance, says there is great potential for personal and professional growth in accountancy. Most graduates start off as accounts assistants and ledger clerks but after getting to grips with the basics, more doors quickly start opening up. Experience counts for a lot in this field and the more of it you get, the greater potential for you to grow.

“Working in accountancy can provide you with a varied and progressive career path, with many choices of jobs and industries from an Internal auditor role in financial services to a commercial director job for a premiership football club,” he says. 

A lucrative profession

It can also be a very lucrative profession to work in – you can earn an attractive salary and often receive generous company benefits including bonus and share options. In terms of studying, he says prioritizing really is a skill and the more you work on it, the better you will be able to manage your study and personal life.

“If you are feeling overwhelmed by your to-do list, start by ranking the importance of each item and how long you have to do it. This illuminates the things which you need to get done for that day and what you can leave for the next day. The key is to stop once you have finished that day’s priorities so you can enjoy your personal life too.”

His tips for staying motivated include pushing yourself outside your comfort zone so you can find out what you are capable of. Also, try to interact with positive, enthusiastic, ‘can do’ people and avoid those who are negative or who bring you down. Positive energy will rub off on you and help you feel more motivated.”

He says accountancy has given him the chance to work for a wide range of industries and jobs across the globe. As well as this, other opportunities include leading teams, being involved in projects and some generous salaries and bonuses. 

Digital transformation is changing entry-level jobs

“Automation in particular is reducing the manual tasks that entrants into the field often have to do, which is opening up opportunities for them to add human value to more strategic projects. The industry is changing to prioritise analytical and strong IT skills more than ever before” says James.

Although accountants are usually praised for their proficiency with numbers, more surprisingly, working in the field makes you a good communicator. Accountants need to explain their work to people who are not necessarily in the profession and tell the story behind the numbers.

“It’s no secret that accountancy requires ongoing study which means accountants also develop an enthusiasm for learning,” he says. “They invest in their professional development perhaps more than those in other industries and strive to grow in their role.”

A chance to lead and grow

“An experienced qualified accountant will have gained many additional skills over and above the accounting knowledge and application,” says Andrew Moss, Corporate Partner at DSG Chartered Accountants. “Team working and judgement are brought into play on an almost daily basis as well as negotiation and communication skills (both written and oral).  As you progress and take more responsibility, leadership skills are tested as well as motivating others.”

He says that once you have qualified there are numerous opportunities that can open up.  Salary will also increase over the course of the training contract and is often exam-related so that can motivate people.

In summary

Working hard for your exams will be worth it in the end! You have the opportunity to join a fast-moving and exciting profession that is well-paid, has lots of scope for learning and growing, and provides a huge range of different roles.

Investing in your skillset now and in the future will help you develop as an accountant and a leader. Don’t forget that communication skills are also important because the role of the accountant is becoming much more consultative and strategic.

Key takeaways

  • Rank the items on your to-do list by importance to help you feel more in control of your schedule
  • Stop once you have finished that day’s priorities so you can enjoy your personal life too
  • Challenge yourself to move outside your comfort zone so you can find out what you are capable of
  • Focus time and energy on tasks you perceive to be more difficult because accomplishing these helps you expand your skillset
  • There is a lot to learn from ‘failing’ and it often helps you stay motivated to keep at it until you succeed
  • Interact with positive, enthusiastic, ‘can do’ people and avoid those who are negative or who bring you down. Positive energy will rub off on you and help you feel more motivated.

Further reading:

AAT professional membership: supporting your journey to career success

Our professional membership offers you flexible options whether you’re focused on bookkeeping, accounting, becoming chartered, or even want to run your own practice.

Find out more

How to get the job you deserve

Posted by & filed under CV tips, Job hunting, Members.

You’ve got the qualifications, but suddenly it seems like everyone else does too… And when you’re competing for the top accountancy and bookkeeping roles, how do you stand out?

Are you experienced?

If your CV looks a bit thin on the work experience front, then this is a great place to start.

Appeal more to potential employers by taking temporary work or fixed term contracts to get some more experience under your belt. Many job seekers are looking to find a job for life, but modern careers don’t look like this any more, so keep an open-mind when looking at vacancies.

A great way of finding out whether you like a particular industry or role is doing maternity cover. You’ll have long enough to get your feet under the table and improve your CV in the process. And if you love the role and make an impact, your employer may find a more permanent role for you.

Or you could get started in a sector you’re interested in with some unpaid volunteering work or an internship. Read more on finding your first voluntary accounting role here. Any relevant experience will boost your attractiveness to would-be employers.

Qualifications are everything

The best way to get the job you really want is to ensure you’ve got the right qualifications.

James Brent, director at Hays Accountancy and Finance advises: “An accounting qualification is a key priority, and make sure to always put the initials of the qualification after your name on your CV.” 

AAT qualifications are sought after with employers looking to recruit for bookkeeping and accountancy roles. And qualifications will boost the salary you can demand too: according to the recent Accountancy Age Salary Survey 2018 those with formal accounting qualifications earned £64,220 on average compared to £45,974 for those without.

What are your selling points?

While accountancy professionals will always be in demand in the workplace (an Onrec survey from 2014 (pre-Brexit) predicted that the UK will need an extra 80,000 accountants by 2050), there’s healthy competition for the top roles.

You’ll need to stand out from the hoards of other job applicants.

“Presenting an impressive CV is central to any strong application. Having one or two unique selling points in the form of a high academic achievement or a successful project at work will make you stand out to a recruitment consultant and boost your prospects of being put forward for a role,” recommends Brent.

Digital skills are important

Having up to date computing skills will really boost your chances.

“Given the rise of digital transformation across accountancy and finance teams, outlining technical skills on your CV will boost your job prospects. Specifically, strong data and software skills, and general confidence with digital technology will position you as a strong candidate in an industry where this is a primary focus,” advises Brent.

A lot of accountancy and bookkeeping firms are still phasing in a more digitally connected way of working, so will be looking for confident computer users to help with this.

“Strong Excel skills, where at minimum you are confident with pivot tables and v-look ups, are essential,” says Brent. AAT has recently partnered with Filtered, who provide excel training for members and students. If you’re looking to improve your excel skills, from power functions to power pivots find out more here (login required). This excel training also counts towards your CPD.

One way to demonstrate and back-up your expertise is through the AAT’s Access Award in Accounting Software and Foundation Award in Accounting Software. These short qualifications take 6 weeks to complete and are the equivalent of a GCSE.

Show off your language skills

Language skills will help propel you to the top of the pile for multinational firms. This is where formal qualifications in languages will prove their worth, but even more ad-hoc skills are worth mentioning.

Perhaps you lived abroad for a few years and have conversational Spanish – this could be more experience than others on the shortlist.

Read more on working overseas here.

Don’t forget your soft skills

It’s not only formal qualifications that employers like. Your soft skills will make you more attractive too.

Soft skills like communication, working well in a team, and good time management should be highlighted in your application letter and CV. Give strong examples of projects which reflect these skills. These may be skills you take for granted, but if you don’t highlight that you have them, the recruiters won’t know.

And consider setting aside time to do some relevant voluntary work. It should be easier to find voluntary roles that will improve your soft skills, as these are relevant in all sectors. And at the end of your stint, you’ll have more evidence to prove your ability.

Organising and getting involved in community projects is another great way to develop your teamwork and soft skills. If you play on a sports team or are involved in amateur dramatics then make sure to mention it; these show teamwork and presentation skills which employers will like.

Network within your industry

Networking is a great way to advance your career. Not only will you potentially get ahead of the crowd on vacancy news, but getting yourself known might get you headhunted.

Just make sure you impress at such events – being up to date with current accountancy issues and news is essential.

And even though you’re working to get a job here, don’t forget that networking events are, after all, social occasions. Get to know people, relax, and make others feel comfortable – be charming but not unctuous, make eye contact and don’t monopolise conversations.

Should I get an MBA?

Having the letters MBA – master of business administration – after your name is impressive.

But the cost of studying for the qualification can be huge, with fees reaching £30,000 or more (Check out the top MBA courses in the UK here).

Brent adds: “While MBAs may be costly and won’t always guarantee you a job, they will no doubt improve your business and strategic thinking long term and therefore help progress considerably in your career.”

You need to decide if the expense of getting an MBA (and the not-inconsiderable amount of work involved) will pay off with your dream-job. Are MBAs important in your sector, or the firm you’re targetting?

In Summary

Having the right qualifications is the best way to boost your career. But you also need to think about what makes you stand out from others – is it your computer skills? Your proven ability to work as member of a team? Or perhaps it’s your expertise in languages. Treat yourself like a product you’re trying to sell, and focus on your unique selling points to get the job you want.

Further reading/things to take away

Why Distance Learning is your key to getting ahead and 38 tips for success

Posted by & filed under Students.

A downturn in the economy brings with it job losses and a more competitive recruitment landscape but it also favours the brave.

The ones determined to get ahead, to set themselves apart, and those who embrace the latest ways of doing things.

An attitude for getting ahead in a tough market 

The current climate presents the opportunity to focus on the direction you really want to go in and take time to think about what’s most important to you. You might be able to learn with fewer distractions or find yourself being more creative and flexible with how you approach things. 

Taking a stance of continuous improvement and personal development is a great way to be attractive to employers. And of course, qualifications are always going to help you to stand out in the crowd and future proof yourself. There are job vacancies and some industries are thriving so put yourself in the best possible position to be in their line of sight.

Advice from a finance recruitment expert

Emma Robinson, MD of Red Diamond Executive Headhunters, said that in the current situation, distance learning can play a key role in helping candidates get ahead of the pack. Emma said: “Financial services is a key area for us and we are seeing a gap beginning to form between those who have used the current situation wisely and those who haven’t.

As a business, we use videoconferencing technology every day and many of the benefits of this are similar to those of an online course. It’s time-efficient, you don’t need to worry about commuting or parking and it can be accessed from anywhere in the world – at any time.

Technology has enabled us to reinvent how we do business as well as how we learn. Those who are proactive and are willing to embrace these new ways place themselves in a stronger position and are more likely to catch the eye.

Future-proofing and keeping up to date with the latest technology are key qualities our clients look for in a potential finance director; embracing a new way of learning is a great way to demonstrate you have these attributes.”

Making the most of the distance learning study route

Here are 38 of the best ways to really make the most of distance learning as a study route. Most people won’t do most of these. To get ahead, don’t be most people. 

  1. Create a great study space for yourself.
  2. Make a commitment to prioritise your studies.
  3. Set an intention for yourself and write it down.
  4. Create a routine for yourself to bring your best self to your studies until it becomes a habit.
  5. If you are at work, have an open dialogue with your employer about how they can best support you and update them on your progress.
  6. Schedule in your study times in advance and try not to move them for other things. Make the other things fit in around them.
  7. Remove all possible distractions when you are studying (AKA your phone) so you can enjoy a period of deep work.
  8. Recognise your own procrastination techniques.
  9. Let your housemates or family members know when you’re working and explain that you need time, space, and quiet.
  10. Tell your friends about your studies and explain how important they are to you and share all your achievements with them. Surround yourself with the right people.
  11. Take regular breaks.
  12. Visualise your end goal and break it down into smaller steps to success along the way. Stick them on your wall where you study.
  13. Build a strong relationship with your tutor. 
  14. Ask for help whenever you need it (that’s what they’re there for).
  15. Join a Facebook group with other AAT students.
  16. Take good recommendations and advice when they are offered to you.
  17. Start small. Break it down into smaller chunks and don’t get overwhelmed by the whole thing – big is the same as small, there’s just more of it.
  18. Just start – this might be opening a book and reading the first page.
  19. Interact with the other students in your online class.
  20. Help others – a great way to learn is by teaching.
  21. Make an accountability group with one or more other people on a similar journey to you. The group can work however you want it to. Weekly check-ins with each other via email, a monthly call, whatever works for you.
  22. Ask questions. Be curious.
  23. Start revision and assignments early to avoid panic later on.
  24. Try out all of the resources offered to you.
  25. Make use of MyAAT which includes sample assessments, e-learning modules, Green Light tests, career and recruitment tips.
  26. Do the work.
  27. Embrace technology to help your studies. Make voice notes and videos for yourself. Capture ideas and notes in tools like Notion and Evernote.
  28. Save and back up all your work. If you work in Google Drive it will auto-save everything.
  29. Try working from new surroundings from time to time like a cafe. You might be surprised that you enjoy working from an environment like that even if you normally need silence.
  30. Try listening to music with no lyrics or “background noise”.
  31. Know what time you work best and try not to leave your studies to the times when you’re most tired. Reserve some of your best energy for your learning.
  32. But be prepared to be flexible with when and where you study if needed.
  33. If you miss some of your studies don’t worry. There’s more commitment in stopping then starting again than there is in simply continuing something.
  34. Make sure your studies are sustainable. Keep doing small things often.
  35. Reward yourself for all the achievements.
  36. Take some real time off. Enjoy some solitude. You will study harder for it.
  37. Get involved with other things to support your learning.
  38. Grab any great opportunities offered to you with both hands.

In summary 

It’s much easier to fit distance learning in around the rest of your life and schedule. You can choose exactly when and where you learn from and being online leads to increased interaction with other students. There is so much extra support available and lots of different resources on offer to help you whatever your learning style.

Distance learning is big for all students right now and many are finding it a more convenient and effective way to learn after they have had a short period of adjustment.

To set yourself apart from the crowd and start your AAT distance learning journey take a look at the AAT courses you can take. 

Further reading:

The UK should be an R&D world-beater and it all hangs on reforming tax credits

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

HM Treasury is currently consulting on the scope of qualifying expenditure for Research & Development (R&D) Tax Credits.

The consultation is welcome, not least because the last one was almost a decade ago.

AAT agrees with the Government that R&D tax credits must be optimised while continuing to deliver good value for money for the taxpayer.

In a modern, dynamic economy with a strong commitment to R&D investment,  all software costs should be recoverable for R&D. Likewise, all costs associated with the generation, processing or analysing of datasets should be recoverable too. They are not, which demonstrates the difficulty the Government has in ensuring tax credits are relevant to businesses.

Ambitious?

For several years the Government has repeated that it has an “ambitious” objective of reaching R&D investment equating to 2.4% of GDP by 2027.

The increase is welcome. But a more ambitious target is needed. The UK should aim to be one of the top ten countries for R&D spend by 2027. This is what AAT will be pushing for in our submission.

It’s easy to see why a bigger target is needed. The 2.4% target is well below what the  leading countries are investing (UNESCO Institute for Statistics):

  1. South Korea (4.3%),
  2. Japan (3.4%),
  3. Finland (3.2%),
  4. Switzerland (3.2%),
  5. Austria (3.1%),
  6. Sweden (3.1%),
  7. Denmark (2.9%),
  8. Germany (2.9%),
  9. USA (2.7%).

Put another way, the Government hopes that in 7 years’ time, the UK is investing the same percentage of GDP as Slovenia invests today.

If we are going to lead the world in this area, greater ambition is required.

Data

Start-up tech companies developing new products and services utilising machine learning and Artificial Intelligence can often only do so by investing large sums of money in what are ordinarily very expensive datasets.

These datasets cannot usually be claimed for under existing R&D tax credit definitions because they are not considered to be “consumables”.  This inevitably hampers the R&D activities of many of these small start-up companies.

Software

Many start-up companies utilise cloud computing providers for the processing power needed to interpret datasets and develop new algorithms when researching and developing their new products and services. So, for many start-ups, cloud storage is a very important R&D cost and to deny tax credits for such a vital piece of their R&D activity makes no sense.

This outdated approach is brought into even sharper focus when you consider the UK is now the sixth largest user of cloud based technology.

HMRC published new guidance on the applicability of R&D Tax Credits to Software in October 2018. This was most helpful as definitions and examples had become obsolete and many wrongly believed that claims could not be made as a result. Some companies did not claim at all, some under claimed and others may have overclaimed.

So, a commitment to publish updated guidance every two years (or annually if the need arises) would help to ensure legitimate claims are made and that no business, especially small business, is wrongly encouraged or discouraged from claiming due to outdated guidance. That’s another AAT recommendation that we will be making in our submission next month.

Indirect activities

Identifying potential savings in the R&D field is understandable in seeking to free up funds for more productive investment. It is also essential in the current financial climate.

That said, it is worth noting that a 2015 HMRC research paper evaluating the effectiveness of these tax credits found that between £1.53 and £2.35 of R&D expenditure was stimulated by every £1 of tax forgone.

This is an impressive return and not something that should be put at risk by a desire to reduce spend.

One area where a saving could certainly be made is in clamping down on unregulated tax advisers encouraging businesses to overclaim R&D Tax Credits. Late last year, this was estimated to have cost the taxpayer over £600m.

Only last month, AAT responded to the HMRC call for evidence on “Raising standards in the tax advice market,” and highlighted that the problem of unregulated tax and accountancy service providers could easily be solved if Government were simply to require anyone giving paid for tax and accountancy services, to be a member of any of the many relevant professional bodies. One of the numerous benefits of such an approach is that the likelihood of encouraging the misuse of R&D Tax Credits, or any tax relief, would be significantly reduced.

To have your say on the Treasury review of R&D Tax Credits please click here and submit your comments before 13 October 2020

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Your views: Are clients finally getting ready for Brexit?

Posted by & filed under Brexit.

With just over three months to go until the EU transition period ends, are businesses ready for it?

Brexit has finally forced its way into the headlines and is mounting a challenge to Covid-19 for our attention. The first trade deal has been signed, and once controversy abounds as the Government proposes to break international law.

With the Brexit transition period due to end on 31 December 2020, there will be massive changes to both business and finance operations. Whether the UK and EU sign off on a new trade agreement or we default to WTO rules, these areas are likely to be affected:

  • Supply chains (e.g. customs duties and imports/exports)
  • Immigration
  • Employment (current EU national employees and future hiring)
  • Tax and VAT
  • Audit and financial reporting
  • Business travel
  • Pensions

AAT has updated its Brexit guidance and is watching developments.

Businesses across the country need to be prepared for every eventuality, including a no-deal Brexit.  But are they?

Clients are beginning to panic slightly

Jamie Smith, chartered accountant, Tax Rebate Services

Clients have been mostly unprepared for Brexit because surviving Covid-19 has taken centre stage. But now that Brexit is imminent, we’re seeing a lot of clients panicking slightly and realising they may need to make changes. The uncertainty around Brexit is our clients’ main concern, as no one knows what the final deal will look like. Ireland is a concern too because trading there will be completely different should a no-deal Brexit go ahead. Clients are also unsure of how Brexit will impact their business.

Throughout the Brexit process, we’ve kept up a steady stream of communication and advised every client of changes they may have to make in order to deal with a variety of potential outcomes from the Brexit deal.

Next steps: We’re keeping clients up-to-date with all the latest industry changes while drawing their attention to areas they need to concentrate on should a no-deal Brexit occur. We’re also offering a free advisory service.

Verdict: Clients have been in survival mode during the pandemic but now they’re starting to look at the potential changes they might need to make.

Continued Brexit uncertainty is making some clients reluctant to prepare

Gerry Myton, partner and head of indirect tax, Streets Chartered Accountants

Some businesses are prepared for our exit from the EU, but many simply are not. We are starting to see that most are awakening to the reality of Brexit, but committing to doing something is proving more difficult given the current economic turmoil caused by Covid-19 and the associated costs involved in preparation.

Combine that with previous false dawns in the Brexit process last year and you can understand a reluctance given the lack of certainty regarding a free trade deal and the further indecision the Government provided earlier this week. Business needs certainty and at the moment, that is lacking.

The main issues we are finding centre on clients who sell B2C cross border into the EU. The postponement of the Import One Stop Shop until 1st July 2021, at the earliest, is causing concern and particularly, how to minimise disruption for customers in the first six months of 2021.

Next steps: We have put together a number of podcasts plus factsheets to assist in helping them understand the situation.

Verdict: Uncertainty around Brexit trade deals has made it difficult for clients to adequately prepare and the lack of face-to-face time with clients to explore issues and provide solutions hasn’t been helpful.

Businesses are rushing to Brexit-proof their overseas e-commerce operations

Nick Farmer, international advisory partner, Menzies LLP

The ongoing trade negotiations and withdrawal agreement are now headline news again, and this has brought Brexit back into focus, so there’s a lot of activity.

We have seen UK businesses looking to strengthen their e-commerce operations and wanting to reach into overseas markets for the first time. This has led to them seeking advice on cross-border tax and VAT implications.

Importers and exporters are also seeking help to digest the new Border Operating Model that sets out the UK’s approach to the border from 1 January 2021. This is a complex document, dealing with customs declarations, duties and VAT. There are various actions businesses should take now to prepare for the staged introduction of these customs controls in order to avoid post-Brexit disruption.

How accountancy gave new starts to two career switchers

Posted by & filed under Career.

The coronavirus pandemic is causing an increasing number of people to consider a career in accountancy to achieve financial stability.

Here are two stories from people who have successfully made a career switch.

“I had a feeling I was going to be made redundant – and now I’ve found a new role in accountancy”

Dan Purnell, former recruitment consultant

When 28-year-old Dan Purnell was furloughed from his recruitment consultant role due to the Covid-19 pandemic, he felt that he quickly needed to improve his skillset.

“I had a feeling that I was going to be made redundant – which was confirmed in July,” Dan explains. “My role was specialising in recruitment for engineering and aviation, two sectors which have been hit especially hard by Covid-19.”

Dan, from Fareham, Hampshire, put his furlough time to good use. He started the foundation level of AAT’s (Association of Accounting Technicians) accounting qualifications back in June, in the hope of finding a role in the finance sector.

And he has made quick progress.

“I thought it would be beneficial to use the furlough period to study for a new qualification. I’ve gone on to pass the first two units already and have secured a new job at a small accountancy practice which I’m due to start later this month,” Dan says.

“I’ve really enjoyed studying, often getting up early whilst my 8-month-old son Phoenix is still asleep. Meaning once I’ve done my studying, I get to spend the day with him.”

“While studying during lockdown was a struggle, the flexibility of being able to study AAT at home while looking after a young family was a huge benefit to me.”

And Dan’s new employer, Inn to Profit Limited, has been supportive of his studies before he has even taken up his role as an assistant accountant, helping him fund his next qualification.

 “I feel like accountancy has given me a second chance”

Gareth Jones, automotive worker

Gareth Jones, 53 from Bristol, has worked on a production line for Ford Motor Company for nearly 20 years, assisting in the manufacturing of car engines.

But the Bridgend plant where Gareth works is being closed at the end of September. As a result, Gareth is losing his job.

“After being told I was to be made redundant, I decided on a whole new change of career,” Gareth says. “I could have taken an easy route and trudged around looking for the same, uninspiring factory work. Instead, I chose accountancy.”

 
Gareth started studying at home for AAT (Association of Accounting Technicians) accounting qualifications in March, with Ford paying for his accountancy training as part of Gareth’s redundancy package.

He has averaged about 95% in the assessments he has sat so far, with further assessments taking place this month.

 
“I’m taking six months out when my redundancy kicks in, in order to study full-time to gain the full professional accounting qualification,” Gareth adds.

“Hopefully, despite my age, I’ll be able to secure a job and start a brand new career in accountancy. It’s quite rare to have such a sharp turn in your career path at 53, but circumstances have intervened, and I’m really looking forward to it.”

“I feel like accountancy has given me a second chance.”

Further reading:

1 in 5 workers are switching career to feel secure again after Covid-19

Posted by & filed under Career, News.

New research conducted by AAT shows that recession is causing a spike in workers seeking a change of career.

One in five employees is currently considering a new career as the economic impact of the coronavirus pandemic bites. A similar number see accounting as one of the ‘most secure’ sectors, behind health and pharmaceuticals, and teaching.

The research surveyed 1000 adults currently in employment.

19% of workers believe their job is at risk due to the coronavirus (Covid-19) pandemic; while 23% expect to leave their current job during the next year.

Increased job security will understandably be a high priority –  32% cited this as a goal once the pandemic comes to an end.

A second complementary survey looked at trends among job seekers.

The poll took in 500 UK adults and found:

  • Half were looking for a job because of the Covid-19 pandemic.
  • 6 out of 10 are moving in order to find work in a more secure sector.
  • 85% would be willing to retrain in order to make a career change

With sectors including travel, hospitality and the arts hit especially hard by the pandemic, retraining opportunities, largely provided by vocational qualifications including apprenticeships, are rising in popularity.

Rob Alder, Head of Business Development at AAT, said:

“The impact of Covid-19 has acted as an accelerator for important career decisions, with many people across a vast spectrum of industries facing the prospect of losing their jobs, and in some cases seeking employment in more secure sectors.

“This backs up what we’ve seen recently, with nearly one in three people who’ve contacted AAT about our accounting and bookkeeping qualifications telling us that they were looking for a career change into the finance industry.

“And while a significant chunk of this is due to people losing their job, with many using their redundancy money to fund their studies, others are viewing accountancy either as a more secure career path, or are hoping to gain new finance skills to improving their chances of employability.”

Further reading: