Property owners given just 30 days to pay CGT

Posted by & filed under Tax.

New rules have come into force that mean property owners must pay Capital Gains Tax (CGT) much faster than they have been used to.

As of Monday 6 April 2020, property owners must inform HMRC of any CGT liabilities using an online service and pay amounts due within 30 days of selling the property.

Previously property owners have been able to declare any CGT liabilities in their next annual tax return, effectively giving them in excess of a year to settle.

UK residents disposing of UK residential property

The changes for UK residents only apply to disposals of UK residential property. From 6 April 2020, a UK resident disposing of a residential property in the UK making a gain which is liable to CGT will have 30 calendar days from the date of completion to tell HMRC and pay any CGT owed. They will be able to do this using a new online service.

This doesn’t apply if the residential property is the person’s home and it’s been used solely as their private residence during the time it was owned. This is because the disposal will be covered by Private Residence Relief. You can read about Private Residence relief on GOV.UK.

Non-UK residents disposing of UK property

Non-UK residents must continue to report sales or disposals of interests in UK property or land regardless of whether there is a CGT liability, within 30 days of completion of the disposal.

This includes disposals of residential properties, non-residential properties and indirect disposals.

From 6 April 2020, there is no longer an option to defer payment of CGT via a SelfAssessment return, and any tax owed must be paid within the 30-day reporting and payment period. From 6 April 2020 non-UK residents will be able to use the new online service, which will replace the current reporting service.

Tips for moving from classroom to remote study

Posted by & filed under Coronavirus - students.

As lockdown continues, many students, trainees, and apprentices are adjusting to studying at home rather than in the classroom, at college or in the workplace.

So what is the best way to study remotely, and how can you make the most of your time at home? We look at the options for examinations, and how to stay motivated when there is no specific exam date.

The current situation

  • All AAT assessments worldwide have been suspended since 22 March 2020
  • As soon as the current government restrictions are lifted, assessments will be made available as soon as possible
  • With the exception of two synoptic assessments (Level 3 and Level 4), all our assessments are available on-demand
  • There are currently no changes to the development and launch of AQ2021, our new accounting qualifications set to replace AQ2016 next year
  • All AAT events are cancelled until 30 June

Looking to the future

Until the government decides how and when the current restrictions will be lifted, AAT is not holding exams. Once the restrictions on educational institutions are lifted, AAT will talk to training providers about synoptic assessments. These changes will be published on the Results webpage and will also be advertised via SummingUp and AAT Weekly – our training provider and student e-newsletters. 

Where to find more information

AAT is aware that members need help and information, so we have increased our online offering to help AAT members and student members. This includes:  

Where to find updates

We will be publishing further updates in Summing Up for training providers and AAT Weekly for students. You can follow AAT on Twitter and on Facebook for updates.

How can I keep the motivation going?

One of the biggest challenges for students is not knowing the date of their exam. Having a specific date in mind helps to concentrate your studies and gives you a deadline to work towards. Without this, planning and studying can be more challenging. So what do the experts suggest in this uncertain time? Here are their top ten tips for remote study:

1. Be disciplined

“Take time to get accustomed to a different setting. Be disciplined about remote study,” says leading education and learning expert Murray Morrison, founder of Tassomai.

“That doesn’t mean working 10 hours per day – but it does mean putting together a routine and having certain red lines: these are the hours when I study; these are the times when I rest and play. Communicate your routine with others you live with so that they can support it, not disrupt it, and can help you stay accountable to it.”

2. Create your own deadlines

“To set deadlines, you need to break down your tasks to get from now to your exams, and then assign them dates,” says Chloe Burroughs, Graduate Ambassador for the Open University and author of The Return to Study Handbook. If you don’t know your new exam dates, plan for the earliest possible date and then push back your deadlines as more information becomes available.”

3. Break it down into chunks

Sometimes staring into a really big task can seem really overwhelming. When we can’t see past the enormity of it all, can start to feel unachievable, says Nathan McGurl, founder of revision aid The Study Buddy. But, there’s a simple trick to tackling any big project: look at it like a collection of smaller tasks. 

“The important thing is to use your time effectively, rather than equating time spent in front of your books as being time well spent,” he says. “A well thought through the plan can reduce levels of anxiety, giving students a clear sense of purpose. Not knowing where to start is one of the things that leads to feeling out of control and that can result in anxiety or simply giving up.”

4. Build in pace and timing

“Motivation is important – but also think about pace and timing,” says Murray Morrison. “If we think of those athletes preparing for the Tokyo Olympics, they will have had a cadence and a pace of training in the lead-up to the event. Now it’s postponed, they’re not going to carry on as they were, extending for a further 12 months.

They’ll reset, rethink, and pace themselves to the big event in 2021. Just so with exam preparation: plan for the future date and work backwards to set your milestones. If you’re a bit further away from the exam, now would be the time to recharge and to focus on some gentle consolidation of your foundational knowledge.”

5. Keep testing yourself

“The more times you test your knowledge of a concept and retrieve it from your memory, the stronger the connection becomes,” says Chloe Burroughs. “So, although you may feel panicked to hear your exams are postponed, use your additional time to revise your concepts more often and you will recall more in your exams.”

“To boost your chances of achieving high grades, focus on active learning which requires participation,” she says. “This includes answering practice questions or past papers, testing your knowledge with flashcards or quizzes, or applying a concept to a real-life scenario.”

6. Don’t burn out

“You’re unlikely to be at your best if you go at it really hard now and burn out,” says Murray Morrison. “Put time into good solid study – retrieval practice and consolidation of notes, application of knowledge in exam practice, but don’t overdo it. If you have more time than you thought you would, rather than fill it with more intensive work, space it out a bit so you can focus also on health and relaxation. Not only will you be more mentally equipped for the coming months, but the work you do each day will be more solid if it is given time to percolate through your brain a bit.”

7. Boost your motivation

“The two key problems of studying on your own are motivation and getting stuck,” says Chloe Burroughs. “Firstly, think about the small, everyday things you need to feel motivated and learn effectively – then make them happen. For example, a clean desk, great snacks, focus music, or the promise of your favourite TV show afterwards. Secondly, create a plan for what you’ll do if you get stuck and don’t understand something, which will help you push through rather than give up.”

8. Focus on quality study time

It’s easy to slip into a habit of procrastination but creating a structured timetable so you’re doing the same tasks at the same time every week is useful for maintaining focus says Kelly Burwood, Head of Student Support Services at the University of Law.

 “Once you know the specific task you are about to do, it’s important to dedicate uninterrupted focus to this. The Pomodoro Technique is a time management method used to break work down into 25-minute intervals, separated by short breaks. Set a timer on your phone for 25 minutes and do your best to focus solely on your set task during the interval, not interrupting yourself. After each 25-minute burst, take a short break to grab a drink or have a walk around the house. Do four of these pomodoros then take a longer 20-30-minute break.”

9. Visualise success

“Think about the grades you want to achieve and then consider the student who could achieve those grades,” says Chloe Burroughs. “What habits could you implement to become that student? And what’s the easiest first step you can take to kick-off those habits? For example, the first step to more focused study sessions is to put your phone in another room.”

10. Take care of your health

Taking care of your mental and physical health is vitally important. Bearing in mind lockdown rules, getting some daylight and exercise is great for a change of scenery and to get your heart pumping. Even soaking up some spring sun in the garden for a few minutes can do wonders for your wellbeing, says Kelly Burwood.

Further reading:

How coronavirus will affect employment and what you can do about it

Posted by & filed under Coronavirus - students.

Coronavirus (Covid-19) has changed the world faster than any of us ever thought possible. The way we live our lives, work and study has had to shift dramatically.

Nobody can say exactly how or when it will be over or what changes will be seen in the world of employment longer-term as a result but we can make some assumptions.

How the world of employment will change 

One thing is for certain and that is that Covid-19 is bad for the economy. The prediction is that we are in the early days of a recession. Some industries have been affected much more adversely than others and there is a question over how quickly these will recover, even after lockdown measures have been lifted. 

Every business has had to make major changes and fast. Whether that has been altering services offered, furloughing people, working entirely remotely or the acceleration to digitalisation. Companies have been forced to conduct in-depth financial analysis and have much tighter control over headcount and work performed. 

There will be lasting workplace changes including the closures of offices, efficiencies from digital tools, a leaner workforce and stricter accountability for spending. Finance departments will be more important than ever and employees will be favoured who are qualified, adaptable and have transferable skills.

Making yourself more employable 

One of the best ways to figure out the wisest moves for you to make right now is to split things up into those that you can control and those you can’t. Here are steps you can take straight away to improve your chances of employment and career development in the midst of Covid-19. 

Get qualified 

Having relevant qualifications is the easiest way to set yourself apart. If you’re currently studying then keep going and use this time to complete assignments, revise and iron out any weak spots. Through your MyAAT account, you can access loads of study resources including: 

  • Practice assessments
  • E-learning modules
  • Green Light tests
  • Qualification specifications
  • Study support and skills webinars
  • Skills checklists

If you’re studying, the latest updates from the AAT with regards to Covid-19 can be found here. 

Get digital

Technology presents opportunities for efficiency and scale, not to mention social distancing! If you’re not totally au fait with the online world and relevant accounting software then now is a good time to get up to speed. There are great online guides, blogs and courses to teach you how to do almost anything.

Make connections 

You may not be able to meet up face to face but people are spending more time online than ever and are desperate to create connections with other humans. Be active on social media and join relevant groups. The best way you can make lasting contacts is by being generous with your knowledge and offering to help them with something. 

Gain experience 

Don’t let lack of experience ever hold you back. Whether it’s by taking qualifications, continued professional development or volunteering, there’s no excuse as to why you can’t continually learn and add to your portfolio, whether you’re currently employed or not. Want to be known as an expert in a certain area? Start a blog or vlog about it and learn as you create content for others. 

Shout about it 

Use some time to update your CV and LinkedIn profile so they reflect you in the best possible light. There is no harm in looking at how other people are doing this to use as inspiration. Make sure you keep a record of everything you’ve done so you can give examples in interviews or when you’re going for a promotion.  

Target industries thriving not surviving 

Industries that have been hit particularly hard include travel, hospitality,  bricks and mortar (and speciality) retail, recruitment, property, and manufacturing (especially the automotive sector). If you are looking for a new job then businesses still with strong demand include tech companies, supermarket chains, healthcare providers and online retailers.

Key takeaways 

  • Use any extra time you have now as effectively as you can to make yourself more employable.
  • Get qualified, study, revise and focus on any weak points.
  • Make new connections and volunteer your help to get experience on your CV.

Summary 

Nobody knows exactly how Covid-19 is going to play out in the UK or globally but if you can keep motivated to complete tasks that will make you more employable then this will only be of benefit to you. 

Further reading:

Why you should seriously consider moving on to ICAEW’s ACA after AAT

Posted by & filed under Career.

This content is sponsored by ICAEW.

ICAEW and AAT have collaborated to offer a Fast Track route to allow you to progress at an accelerated pace after completing your Level 4 AAT. 

With the potential to gain credits for prior learning and count some work experience towards the ACA, this route could see you fully qualifying in as little as two years after your AAT. 

The ACA is a great option after you have completed your Level 4 AAT. You can also begin to prepare for it if you’re at Level 3 AAT. 

Why the ACA?

Moving on to ICAEW’s ACA qualification to become an ICAEW Chartered Accountant will open up a breadth of opportunities to you. Here are five reasons why the ACA could be the right qualification for you:

  • You’ll be fully supported as an ACA student, all the way into membership and beyond.
  • ACA students have a high first-time pass rate across all exams
  • The ACA provides high-level business skills that organisations need now and in the future
  • 83 of the FTSE 100 companies have an ICAEW Chartered Accountant on their board

As an ICAEW Chartered Accountant, you will be part of a global network, opening up opportunities to develop and choose different career paths.

AAT to ACA real-life experience 

We spoke to AAT graduate, Phoebe Cranmer, who will qualify as an ICAEW Chartered Accountant this year, about why she decided to continue on to the ACA and the support and benefits that have been afforded to her.

Why did you decide to continue onto the ACA after AAT?

I always had the intention to continue my studies because I knew how many opportunities it would bring. Being AAT qualified gave me many options but I knew once I completed my ACA I would have a Master’s level qualification and the world would be my oyster. There’s always the need for a chartered accountant!

What opportunities will completing the ACA open up to you?

Qualifying as an ICAEW Chartered Accountant will mean I’m able to explore many career paths or progress further within the accountancy practice where I work. This will result in more responsibility, a pay rise and a higher amount of credibility. 

Is your employer supporting your studies?

My employer has supported me from AAT Level 3 and is continuing to do so as I begin my final Chartered Accountancy exams. My studying is fully funded by my employers as are my travel and food expenses for study days.

Most of my studying takes place in Leeds with a great training provider so I get to have a taste of city life before going back to my home town Grimsby. Most employees at my firm have worked their way up from AAT so I always have my colleagues to help me if I have any questions, as well as being able to ask the teachers and other students. 

When will you be fully qualified? 

I began in July 2015 and will be qualifying this year (2020). I started working for Forrester Boyd straight from A-Levels after choosing to get started working rather than going to university. This is a decision I have never regretted as I was still able to visit my friends at university and I had the money to be able to do it. 

I have had a lot of support from other members of the team to progress and gain more responsibility. I now train other employees and have good relationships with the clients.

What are the main differences between AAT and ACA?

The exams do step up in terms of difficulty but having AAT gave me the base knowledge that I needed for the ACA qualification. I was also able to carry across my revision and exam skills that I had developed at AAT.

The AAT exams are quite specific, ACA exams set you up for real-life scenarios so towards the end of studying for the ACA qualification it is very much about the application of knowledge rather than the knowledge alone.

What support is available as an ACA student?

ICAEW provide a huge amount of support to the students in terms of the study materials and resources, student societies and awards. They even have a charity (CABA) that supports the wellbeing of students and the whole Chartered Accountant community if you were to ever need it.

The helplines are always there for support and even the magazines I receive in the post are helpful and they give you a sense of community by reminding you that you are part of a professional body. 

How you can get ready for the ACA 

If you are working while studying with AAT, preferably at Level 3 or Level 4, and your organisation is not yet authorised by ICAEW to offer ACA training, speak to your employer about getting authorised. 

If you are not currently employed then you can apply for a training vacancy.

In summary 

  • Qualifying as an ICAEW Chartered Accountant can open up a vast range of career opportunities and benefits for you.
  • Take the AAT-ACA Fast-Track route to accelerate your learning.
  • If you’re working, you can study part-time and your employer will often fund your training.
  • There is an enormous amount of support available to you when training with ICAEW and after you qualify.

Further reading:

This content is sponsored by ICAEW.

Hi-tech solution for self-employed hit by Covid-19

Posted by & filed under Coronavirus.

Self-employed workers whose profits have been hit by the coronavirus (Covid-19) outbreak have been promised up to £2,500 a month from the government. 

But to qualify, they must somehow prove they have lost income as a result of the pandemic. How? London’s fintech community thinks it has the answer: Covid Credit, an online service that uses Open Banking to gather information on self-employed peoples’ incomes over the last 12 months.

Freddy Kelly, chief executive of credit referencing service Credit Kudos and member of the Covid Credit team, says: “The process features self-certification combined with impartially retrieved banking data to deliver a comprehensive view of someone’s income. 

“In this way, we hope, the government will be able to assess the self-employed in the same way as the full-time employed.”

The Self-employed Income Support Scheme

Britain’s 5 million self-employed workers are among the hardest hit by the financial fallout of the Coronavirus lockdown. Even among those able to work from home, the impact on industries ranging from travel to catering has left many with no work to do.

The government’s Self-employed Income Support Scheme aims to offset some of their losses by providing a taxable grant worth 80% of their average monthly profits over the last three years, up to a maximum of £2,500 a month.

The funds are expected to be available in June and will cover March, April, May, and June (though the government may expand this period) while those who are eligible should be contacted automatically. Sue Whitter, a self-employed accountant based in France, says: “In practice, if you have been self-employed since before April 2019 you do not need to make a claim, HMRC will contact you.”

Important update!

Late on Friday 17 April, the Government announced the scheme will be extended until 30 June and rushed out further guidance ahead of the launch at 8 am on Monday 20 April. We will update this page soon. Meanwhile, here are the links:

However, the scheme has numerous conditions:

  • Recipients cannot be company directors and must earn the majority of their income from self-employment.
  • Their 2018-19 earnings (or the average of their earnings between 2016-17 and 2018-19) must not exceed £50,000.
  • Recipients must prove they have been adversely affected by the coronavirus crisis.
  • They must have filed a 2018-19 tax return and be planning to continue trading in the 2020-21 tax year.

“Company directors can see if the Coronavirus Job Retention Scheme (CJRS) will work for them, but this is only the case if they have been paying themselves a salary and not dividends,” Whitter adds.

How Covid Credit can help

Currently a “proof of concept”, Covid Credit will allow sole traders – and potentially small business owners – to generate a self-declaration of loss of income due to coronavirus, backed up by banking data. All they have to do is fill in a simple online form including questions such as, “Have you had agreed work canceled due to Covid-19?”

Then give their consent for Covid Credit to securely access twelve months of data from their bank account, using open banking to demonstrate both historic incomes and potential losses.

The proposed tool has been welcomed by the FCA and is currently being considered as part of the HMRC and Treasury’s plans for administering the government’s Self-employed Income Support Scheme.

“The FCA has been hugely supportive, and the conversations we have had with HMRC have been very positive,” Kelly says. “The ball is in their court now.”

How accountants are guiding their sole trader and small business clients

Accountants up and down the country are working hard to meet demand from worried self-employed clients struggling to understand the various government schemes. “Now is the time for accountants to prove their worth to their clients,” says Steven Sandford, a partner at Davis Grant Accountants in Ilford.

His advice is for those affected to take a methodical approach to understanding what is available. “First, identify all the grants the company can claim, including on business rates and by furloughing employees,” he says. “Then look at the options to defer short-term tax payments such as VAT and July self-assessment payments on account. “Finally if cash flow is still an issue, look to the company business interruption loan scheme.”

The unprecedented circumstances have also forced firms to find innovative new ways to communicate with their clients, including webinars, Q&As, and claim templates. “We’ve been receiving a lot of questions about the CJRS,” says Craig Moore at CJM Associates in Cannock. “So we have sent out a template furlough letter for guidance purposes.”

In summary

A number of schemes have been launched to help self-employed workers and small businesses get through these challenging times. However, those affected must jump through a long line of hoops to claim the grants or loans available.

Fintech tools such as Covid Credit could speed up the process, but self-employed clients will continue to need lots of support and guidance from their accountants over the next few months.

Further reading:

HMRC reveals 20 April start date for Coronavirus Job Retention Scheme

Posted by & filed under Coronavirus, News.

HMRC has announced that the web portal for handling Coronavirus Job Retention Scheme claims will go live on 20 April.

Under the scheme Government will cover 80% of the salaries of ‘furloughed’ workers, up to a total of £2,500 a month (further details).

Important update!

Late on Friday 17 April, the Government announced the scheme will be extended until 30 June and rushed out further guidance ahead of the launch at 8 am on Monday 20 April. We will update this page soon. Meanwhile, here are the links:

The kick-off date was revealed by HMRC Chief Executive Jim Harra who appealed to accountants and bookkeepers to help prepare employers for the launch.

“We need your help in this important work. Your influence and your reach across the business sector are instrumental in helping us ensure employers know what they can do to get ready to make their claim.”

Above all, HMRC wants to spread the word that claims should not be made by phone –  only via the web portal.

It is believed that up to 9 million workers could be furloughed – three times more than the Government originally envisaged.

Such huge numbers of applications would totally overwhelm HMRC’s dedicated coronavirus hotline, which is meant for general queries.

“Claims should not be made by phone, it will be an online service,” stressed Harra.

More details of the scheme

HMRC has announced that businesses, and agents that are authorised to act on behalf of clients for PAYE matters, will be able to claim. However, file-only agents, including payroll bureaus, will not be able to access the service due to data protection reasons.

Harra said:

“If you are a file only agent, we still need your support. You will need to help your clients, as you might hold information that they need to make their claim. Businesses will need the following information on each of their furloughed employees: National Insurance number, salary, National Insurance and pension contribution information that allows business to calculate the claim amount.”

Service launch

Harra confirms the scheme will be ready this month:

“We are ready to launch on 20 April. This will be made public shortly, at which point we will be contacting businesses to advise them what they need to do. We would welcome you also contacting your clients and offering yourselves as vital support during this process, either directly, if authorised, or indirectly if you are a file only agent.

“We are expecting phone demand to be beyond our capacity to offer a normal service. Therefore, the service is designed to be self-serve with guidance in place. Again, your support in helping us achieve this is called on.”

Read more on Knowledge Hub

HMRC warns NHS staff of coronavirus tax scam

Posted by & filed under Coronavirus.

Health workers returning to the NHS could be heavily out of pocket if they fall prey to illegal tax scams, HMRC has warned.

Unscrupulous promoters of tax avoidance schemes are targeting workers returning to the National Health Service (NHS) to help respond to the coronavirus (COVID-19) outbreak.

HMRC was forced to publish an alert as tens of thousands of former-NHS staff answered the call to return to work in response to the coronavirus outbreak.

How the schemes work

HMRC warns that unscrupulous agencies or umbrella companies are seeking to sign up returning NHS staff by tempting them with arrangements that they claim to be legitimate, tax-efficient ways to allow the contractor to take home as much as 85% of their gross salary and reduce their paperwork, without explaining the risks associated with the scheme.

These ‘disguised remuneration’ schemes may work in different ways but the companies that provide them will nevertheless attempt to disguise the true level of the individual’s earnings which would ordinarily be the subject of income tax and NICs, while seeking to assure the user that the scheme is tax compliant.

Umbrella companies

Typically the NHS returner, who may be engaged through an umbrella company, will receive their remuneration as two payments:

  • the first will be declared as earnings and pass through the provider’s payroll in the normal way albeit often at around National Minimum Wage levels or at a low flat rate such as £100/week, from which income tax and NICs have already been deducted; and
  • a second, larger payment, received simultaneously or with a slight delay, and possibly from a different account. This payment will be referred to as something other than pay, and will be said not to be taxable because it relates to a loan, annuity, shares or even a “payment derived from a revolving line of credit facility”.

However, the second payment is actually no different to normal income, and tax and NICs are payable in the normal way. In most cases, the basic rate of income tax is 20% with NICs additionally due on earnings.

The risk to NHS staff

The legal obligation to pay the right amount of tax sits with each individual.

Previous users of tax avoidance schemes have learned the hard way that the risk of HMRC challenging them is extremely high.

HMRC will raise an enquiry to seek the recovery of unpaid tax, National Insurance contributions (NICs) and interest, and possibly additional penalties, from users of these schemes.

What victims can do

HMRC is advising NHS returners who think they may have been caught up in such schemes to urgently seek independent advice or to compare their net pay after income tax and NICs have been deducted with the results of HMRC’s online tax calculator – which will give an approximate indication of what an individual’s take-home pay should properly be.

Criminal inquiries

HMRC is clamping down harder on tax avoidance throughout this year. And it will be even keener to ensure fair play, given the massive sums the Government is investing to fight coronavirus.

HMRC has been taking more criminal action against the creators of illegal tax evasion schemes. As recently as 27 February, more than 100 HMRC officers searched business and residential premises and arrested four men and a woman suspected of fraud in connection with ‘disguised remuneration avoidance schemes’.

At the time, HMRC confirmed that it had more than 200 suspected ‘enablers’ of these schemes under criminal investigation.

This article was written by Andrew Sackey, partner of Pinsent Masons, and first appeared on the company’s website.

Read more from AAT on coronavirus:

AAT’s practice assurance and anti-money laundering monitoring activity continues

Posted by & filed under Coronavirus.

AAT’s Professional Standards Team recognise that coronavirus (Covid-19) is creating exceptional circumstances for everyone but we will be trying to continue with our compliance monitoring activity where possible.

We appreciate that this is a time when all of us are dealing with completely unprecedented, and very difficult, changes and challenges so we will try and be as flexible and supportive as possible.

Why are you still carrying out reviews during the Covid-19 outbreak?

The reason for us continuing to do so is that it has been made clear to AAT by regulatory bodies such as OPBAS and ICO (responsible for enforcement of anti-money laundering and data protection respectively) that there is no change in their expectations of AAT when it comes to ensuring our licensed members are meeting the associated practice standards, particularly in respect of our role as an anti-money laundering supervisory authority. 

If you have recently been contacted to tell you that your firm has been selected for a review, please do not worry. This is for AAT and our representatives to start planning in dates and times. You will not be contacted by the scheduling team for a few weeks, and scheduling will be agreed at a convenient time to you, obviously considering any ongoing situation. We will, of course, be happy to defer reviews in the interim if necessary or where circumstances change.

What will happen if I am due to have an onsite visit?

Following recent Government guidance, we will not be carrying out onsite monitoring reviews for the foreseeable future. If your firm was scheduled to have an onsite review in the next few months, a member of our representative’s scheduling team will contact you shortly before the planned review date to explore whether the monitoring review can be performed remotely.

If it is not possible, your monitoring review may have to be deferred slightly until later in the year. In these cases, you may be asked to provide documentation and information so our reviewers can undertake a desk-top review in the meantime.

If you need to discuss your review because your business has been affected by Covid-19, please email us. Alternatively, some licensed members have asked if their review can be brought forward, given increased capacity. If you would like to bring forward your firm’s monitoring review, please let us know.

Further reading:

5 accountants defying the stereotypes 

Posted by & filed under Career.

Every profession has its associated stereotypes but is there such a thing as “a typical accountant”? We certainly don’t think so.

Accountancy is an exciting and challenging career for everyone as these five AAT members prove.

Edwin Samu 

“I’m a trained British soldier having been deployed on operational tours with the British Army and I’m now an AAT member in practice. I’m always recommending AAT to people, it is such a great opportunity.”

Edwin completed his AAT qualifications in 2004 and then joined the British Army as an Accounts Assistant but also had to train as a soldier. He was posted to Afghanistan in 2010 supporting the 40 Commando Royal Marines with logistics, using bespoke systems to supply millions of pounds worth of materials and equipment. 

In 2012, Edwin made the tough choice to leave the Army with a third child on the way. He did a resettlement programme and worked for a few accounting firms and then moved into industry. He then decided to start his own practice, Edmil Accountants, with the incredible support that the AAT offers with their branch events, templates, resources and CPD and he hasn’t looked back. 

Amanda Lang MAAT 

“You could say I left one set of figures for another when I moved from being a fitness instructor to an accountant. I’ve never worn a suit to work or worked for anyone else and have gained most of my knowledge through experience and AAT.” 

Fitness never left Amanda and she competes at a national level in kettlebell sport holding two UK records and runs a canicross group with her husband and their border collie, Bauer. 

Amanda took up accounting in 2007 when she started helping her mum with her bookkeeping business and then decided to get some finance qualifications. She became a full member in 2014 and is now MAAT and will be FMAAT by the end of the year. She has over 200 clients with her business Maccass and Lang. 

Clare Kaye 

“Being an aerial hoop and pole teacher isn’t that different from being an AAT member. I had to do the training, have the correct qualifications, keep up my CPD and insurance, work hard, be professional representing my studio, the sport and the professional body we study with.”

Clare did home study AAT, fully qualified in 2014 and now runs Clare Kaye Bookkeeping. After she finished spending all her evenings studying AAT, she wanted a way to keep fit that wasn’t going to the gym. She found a little pole fitness place in Salisbury and dragged her friend and sister along. They loved it and five years later they are still going. Two years ago the owner of the studio mentioned in passing that Clare should learn to be an instructor and a year later she was a beginner’s instructor in pole and hoop. 

Libby Walklett 

“I’m hugely into DIY and have now fully refurbished four properties. My most interesting hobby and passion is probably amdram. I’ve played lots of lead roles and am now trying my hand at directing for the first time.” 

Libby completed her AAT qualifications in 2016 at the same time as studying an Open University degree. She then began teaching AAT Levels 2 and 3 after she’d really enjoyed helping three other students on her course and her tutor spotted her potential. She is currently setting up her own practice to enable her to work from home so she can have more choice over her working hours to support her family. She has also recently achieved diplomas in manicure, pedicure, gel polish and a certificate in nail art, which she may turn into a small second business.

Patrick van Aalst FMAAT

“I spend summer weekends camping in fields at bike festivals listening to music and drinking beer and being told that ‘you don’t look like an accountant!’”

Patrick runs his own accounting consultancy as well as another business, The Laundry Company. During the week he is a dedicated accountant, helping his clients with a range of business issues. At the weekend he likes nothing more than real ale, music, and motorbikes with his partner and friends. At the moment he rides a V Max Trike. His passions overlap as he has volunteered as the Director of Finance for the Federation of European Motorcyclist’s Association as well as the National Finance Officer for the Motorcycle Action Group.

Further reading 

Study tips: discounts posting (foundation bookkeeping)

Posted by & filed under Foundation Certificate, Students, Study tips.

Discounts series (Foundation Bookkeeping)

This is the third and final article in our series about discounts. 

In part 1, discount types, we discussed what they are and how we calculate them.  In part 2, discount calculations, we looked at how each type of discount is shown on an invoice, how those invoices are entered into the accounting records at the point they are sent to the customer, and then how the accounts are updated once a payment is received.

For trade and bulk discounts we saw that once the discount had been deducted on the invoice it had no further effect on the accounting records.  Invoices that include the offer of a prompt payment discount (PPD) though, do not have the value of the discount deducted from the invoice total. This is because it is the customer’s decision to take the discount or not. 

If the discount is not taken then, like the other two types of discount, there will be no effect on the accounting records. However, if the discount is taken, the result will be a discrepancy between the amount invoiced and the amount received.

Invoices that offer PPD

When processing receipts for invoices that offered PPD, the first step is to check that the payment was received within the timescale specified and therefore the deduction of the discount is valid. In order to do this we need to know:

  1. The invoice date
  2. The PPD details

A review of the invoice provides these:

The invoice date is 21st May.

The PPD is deductible if the payment is received within 7 days. Therefore, to calculate the date the invoice needs to be settle by, we start with 21 and add on 7, which means the receipt needs to be received by 28th May.

In part 2 we processed the invoice and entered it into the accounting records and then jumped forward to 26th May to when we banked the receipt. A comparison of the dates tells us the deduction of the discount is valid.

Checking the deduction

Next we need to check the correct amount has been deducted. As PPD is a percentage of the invoice total, the calculation is:

£5,940 ÷ 100 x 3 = £178.20 (discount)

£5,940 – £178.20 = £5,761.80 (expected receipt)

The amount received into the bank account is therefore correct:

Now we have to deal with the discrepancy between the amount invoiced and the amount received, in other words the discount allowed.

This is done by raising a credit note for the value of the discrepancy. 

Be mindful of the fact that, as the discount was based on the invoice total, it includes VAT and therefore this needs to be reflected in the credit note:

The credit note is then entered into the accounting records via the daybooks.

The sales daybook cannot be used as the value of the sale we originally recorded there is correct. We cannot use the sales returns daybook either as, even though we have raised a credit note, none of the goods have been returned.

We want to record that fact that the customer has been given a discount in return for paying the invoice earlier than the standard terms. The result of that is that the income that has not been received from Love Outdoors Ltd has become an expense to Snow Days, in other words, it is the cost of incentivising the prompt payment.

The discounts allowed daybook is the correct daybook to use in this situation:

The final step is to post the discounts allowed daybook into the accounts:

The accounts in both ledgers now accurately reflect the value of the sale, the cost of getting the customer to pay the invoice promptly and that fact that the invoice has been settled in full.

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