Download your study timetable

Posted by & filed under Ready Set Go (Advanced).

Whether you’ll be classroom-based (after lockdown), attending live-streamed lectures, or using a blend of study methods, we’ve got advice from the experts on how to make the absolute most of it.

Study methods and skills series

If you haven’t been in formal education for a few years you may be expecting things to go a certain way. Maybe the teacher explains a topic, you make notes and, at some point, you answer questions.

To really get the most out of your classroom learning though, there are a few key things you can do to take things to the next level.

Be open to constructive feedback

If you’ve chosen tutor-based learning, then the most important resource you’ve got is the tutor. And one of the big drivers in quality education is feedback. 

If you currently study AAT via distance learning, skip to part 3 of this series here.

It’s not surprising that if the tutor gives constructive feedback, you perform better in the long run. Feedback should include how to improve, not just what you did wrong, and should be followed up with additional support via supplementary questions and discussion.

It’s important therefore that you’re receptive to getting feedback in the first place. 

Evidence shows that if you sit an assessment and are given a score alongside a constructive comment, you’re most likely to ignore the comment and focus on the score. Even worse, you may go on to compare scores to the rest of your group, to justify where you sit in the spectrum of responses. 

The study skill you need here is to focus on the feedback and follow instructions to improve. Don’t get complacent if you got the question mainly right, or don’t have the lowest score in the group.

Feedback with blended learning

When following blended learning programmes, which combine online learning and face-to-face interaction, it’s often the case that the process is flipped. You follow the online programme and, when you have a classroom session, the tutor is not teaching a new topic, but is reinforcing learning and focussing on weaknesses or difficult errors. 

Again, they should give you personal feedback on where you’re doing well and where you’ve struggled. Focus on the feedback that enables you to improve, as well as soaking up any praise.

Train your attention span

When the tutor is imparting knowledge, perhaps through a short talk or through group feedback, are you listening, or checking your phone?

Often when a student asks a question, the rest of the class switches off. But the tutor wants to feed back to the whole group, so it’s important that you continue to listen, and make notes. After all, they may cover something that you were confused by too.

This is particularly essential when you’re attending an online lecture as you’re more likely to be distracted. However, one of the advantages of online sessions is that you can usually listen to it all over again the next day (if you want to!).

Engage and ask questions

Whichever way you’re accessing contact with the tutor, do ask questions. 

Some students are more comfortable asking questions online, from the safety of their home desk, than in a classroom, but the main advantage of having a tutor present (in whatever form) is that you can actively ask questions and gain personalised answers.

You may want to have two notebooks to keep track of everything:

  • one for writing down explanations from tutors, learning points and theory, copying examples from the board or from the screen. This way, you start to compile your own textbook. 
  • and one notebook for practice examples and active working out.

Working it out yourself

One of the required skills for accountants is to be able to sort information out and use that which is relevant.

As part of your lesson, you’ll have to complete questions and tasks. 

It’s essential therefore that you don’t expect the tutor to spoon-feed you the numbers you need for the calculation, but that you take the time to puzzle out the problem yourself.

Actively engaging with the work like this will also help you to focus in class.

Studying with others

Another study skill is working with others, or collaboration, which is important in a classroom and more importantly, the workplace. 

This is potentially challenging when online, depending on how the session is managed, and the flexibility of the software. But strive to log some time working with others, even if it’s over Skype or Zoom, to get into the habit.

Some software does allow students to talk directly to each other, away from the ‘main room’. So, if available, puzzle out the problems in pairs or groups over Zoom – but don’t fall into the trap of passively allowing the clever student to tell you what to do! If you’re the clever student, ask the others questions to actively draw them out.

Developing your writing skills

Written questions are always the bane of the accountancy student’s life. 

The reality is, when you’re working you’ll have to communicate with clients and managers in writing quite a lot. Develop your self-discipline and get practising your writing skills – because practise here is just as important and effective as practising numerical calculations.

If you’re learning via live-streamed lectures, find out how the tutor is going to give individual feedback, and make sure to seek it out. Guidance on honing your writing skills will serve you well in the long-run.

Your AAT study timetable

We’ve reviewed some key tips to make the most of your classroom or tutor based learning above. But one key tool to help you really tackle your studies is the AAT study timetable.

Schedule out your days to factor in when you’ll be in classes or self-studying, but also when you’ll be at other commitments like work. Your tutor’s plan of study will tell you what you need to study each week, but you are in charge of when.

A well-planned schedule is one of the keys to successful study. It’ll enable you to space out the required number of study hours per unit, factoring in ‘down time’ for your brain to relax and unwind. Download the AAT study timetable now

Read the next article in this series now to download your free AAT unit and overall revision plans, which work well with the AAT study timetable to help you take charge of your overall studies.

In summary

In the first article in this series, Choose the best study method for success, we advised you to combine classroom-based learning with self-study or homework in order to get your full learning hours in.

The next article will focus on study skills for home study which all students need to engage in, but is particularly important for those who choose non-tutor based programmes of study. You’ll be able to download the AAT unit and overall revision plans in our final article, which bring everything together.

Read more on study methods that work:

Preparing for your AAT advanced studies

Posted by & filed under Ready Set Go (Advanced).

When starting your advanced level journey it may seem intimidating learning a new course and balancing your studies with everyday life.

However, there are many people who can help, and some simple methods to help make studying easier.

Taking notes

Whether you have a tutor or you’re studying in your own time as a distance learner, you will want to make notes.

Don’t try to write everything, as you’ll lose the benefit of what you’re learning. A common method here is to use a mind map approach, linking keywords and maybe some thoughts, by arrows to a central topic.

Also remember to take part in class, ask questions, engage in discussions, share your understanding.

Weekly Notes

Each week as part of your study plan, write up these notes into something more useful for revision. 

Many students find that colour coded postcards work well. On one side you have the term, for example ’Double Entry‘, on the reverse you have your pneumonic, for example ‘Dead Clic’ or ’Pearls’. You can then add notes to make these postcards personal to your learning. 

Top tip

Some students use different colours for different things for example, green for accounting terms, or red for techniques.

Each week practice questions. Make sure you understand clearly the principle and can use it. If not ask your tutor , no question is ever stupid if it helps clear up your understanding.

Active learning is proven to be the most successful way of learning, but it encompasses many methods.

A dog is man’s best friend

During lockdown we’ve all done our fair share of daily walks, some students have said explaining an accounting principle while out walking has helped them retain information.

The dog has endless patience, a great way of getting a complex process or theory clear in your head, but don’t expect him to correct you so check against your books later!

Top tip

  • get active, ask questions
  • write notes
  • do questions
  • record your own revision notes to play back on your phone
  • there are many ways of active learning

Study Plan

Start your study plan immediately. 

A diary is useful, on sticky pads write a task such as:

  • Write up notes from Monday
  • Do question 1-4 in revision text
  • Revise Chapter 1

Make them small and achievable tasks.  Then stick them in days in your week, remembering you have a life outside accounting too.

When you achieve a task you remove the note, if you miss a task on a day you can move it to another, so it’s flexible and works with you.

In the diary you can write inflexible dates such as assessment dates and home study if given. Achieving a diary with no notes is heaven!

Use resources available to you

Don’t forget to use your MyAAT resources such as, AAT e-learning, also many book suppliers give you extra online resources which are great for more question practice.

Online student groups are another source of support and can help if a certain topic is not working for you. Sometimes we need things explained in a different way, if you have class colleagues give them a call and ask them too.

The final piece of advice is to trust your tutor, although it may be overwhelming now, it will come right in the end.

Browse the full range of AAT advanced level resources here

Coronavirus: tax implications of working from home

Posted by & filed under Coronavirus, Tax.

For many, a period of enforced working from home is now inevitable as we fight the coronavirus (Covid-19).

It won’t be everyone’s first consideration but there are tax implications in doing so.

Here’s what you need to know.

Employees

For a start, most employees should be able to claim tax relief for some of the bills they have to pay because they must work at home on a regular basis at the request of their employer.

These include things like a portion of lighting and heating costs, business-related telephone calls and so on.

However, it is important to note that an employee cannot claim any of this tax relief if they choose to work from home rather than being asked to do so by their employer.

Employers can currently pay employees up to £4 a week, rising to £6 a week from 6 April 2020 to cover additional costs if an employee must work from home and pleasingly, the employee does not have to keep any records to prove any of these costs.

The self-employed

The self-employed will have various running costs for their business, some of which can be deducted to work out their taxable profit.

Two options are available to do this.

Firstly, the “simplified” option for the self-employed, which means they can calculate their allowable expenses using a flat rate based on the hours worked from home each month.

This will be attractive for many because it means self-employed individuals will not have to work out the split between personal and business use. For example, how much lighting was needed for personal use as opposed to business use and so on. Telephone calls are the only exception to this simplicity – they will still need to be broken down, so the actual costs are accounted for.

This “simplified” option is only available to those working more than 25 hours a month from home and results in;

  • a flat rate of £10 a month for between 25-50 hours worked
  • a flat rate of £18 a month for between 51-100 hours worked
  • a flat rate of £26 a month for 101 hours or more

The downside of the flat rate scheme is the individual may not get as much tax relief as they would pursuing the more labour intensive second option available, that of calculating the actual running costs.

In calculating the actual running costs, HMRC states the self-employed must do this on a “fair and reasonable basis”.

HMRC suggest a reasonable way of doing this is to divide the costs by the number of rooms used or the amount of time spent working from home.

For example, a self-employed individual has 2 rooms in their home, one of which is used as an office. Their gas and electricity bill is £200. They can claim £100 as an allowable expense because this is £200 divided by the number of rooms. If they work 5 days a week from home, they could claim £71.42 (£200 divided by 7 = £14.29 x 5= £71.45).

Following this formula, the self-employed can similarly claim for the interest element of their mortgage payments (not the capital repayment), council tax, rent (if renting rather than owning their own home), utilities, telephone and broadband and even a percentage of any property repairs.

Getting advice

For some this will be a straightforward calculation but for others it can quickly become complicated. AAT therefore recommends anyone who is uncertain about what to do get in touch with their nearest AAT licensed accountant by utilising its “Find an AAT licensed accountant” service.

Get the latest on the Covid-19 situation:

Why becoming a finance business partner is a popular career choice

Posted by & filed under Future Finance.

Getting stuck in with other departments, interpreting raw data and not seeing your desk in days. It’s accountancy – but not as we know it. Here’s what you need to know about being a finance business partner.

When Robin Kiziak recalls his first days working in a finance business partner (FBP) role  at a DIY firm, he describes the experience with one word: “scary”. Suddenly, he was required to deliver PowerPoint presentations to head honchos and get chummy with strangers from different departments. 

Yet, for those that venture outside their comfort zone, like Kiziak eventually did, a finance business partner’s (FBP) role is arguably one of the most exciting jobs a mid-level accountant can do.  

In recent years, the FBP role has increased in popularity at a rapid pace, particularly in larger organisations. It is quickly becoming an essential cog within the finance function. But what do they do, exactly? 

Project-based work

Finance Business Partners are often to be found on project-based work. Theirs is a vital role in large organisations, working closely with various departments, usually. They interpret financial information or raw data and investigate new revenue streams before presenting their analysis to company stakeholders and leaders. The insights and business intelligence they gather helps companies make crucial decisions and drive efficiencies. 

“Finance people are no longer back-office bean-counters,” says Matt Weston, UK managing director at financial recruitment firm Robert Half. “Now, they rotate around the business, sitting with different departments. For businesses today, finance is at the heart of every decision-making decision. FBPs are integral to their strategic importance.” Thanks to this 360° approach, FBPs argue it’s one of the most wide-ranging roles in accountancy.

Rapport building

The ability to develop a rapport with different stakeholders is essential for anybody hoping to become an FBP. 

“For many accountants, becoming an FBP will require a personal transformation, because you’ll be out of your comfort zone,” says Liu-Lindberg. “When many of us enter the financial industry, it’s because we enjoy sitting in front of a screen working on Excel Dashboards all day long, sending emails because we’re frightened to talk to people. Given many of our tasks will be automated or available through the cloud, the only thing left for us to do is go out and talk to business leaders about how the numbers are moving, and what they can  
do about it. That’s difficult.” 

Beth Rowan, who currently hot-desks between offices in her role as senior finance business partner at PRS for Music, says the role doesn’t feel like work. “When I first started, I spent so much time chatting to people rather than being at my desk. I felt I was being unprofessional,” she explains. “To be an FBP, you need the confidence to speak to people, rather than hiding behind your emails.” 

Encourage strategy

It was the 2008 financial crisis that really “fired a starting gun” for the explosion of FBP roles, according to Anders Liu-Lindberg, finance business partner at AP Moller-Maersk. With revenues and profits nose-diving, it suddenly became imperative for companies to cut costs wherever possible. With an FBP lurking in their midst, it meant that departments had to become more strategic and leaner.

Now that FBPs permeate all areas of the business, you’re less likely, say, to see a marketing team lavish thousands of pounds on ill-advised publicity campaigns seen by four people. “Decisions now needed to be made [within companies] that were fact-based, rather than from the gut,” Liu-Lindberg explains. 

Weston says finance people used to be a corporate function, only working as scorekeepers who kept end-of-year accounts. “But you’re now seeing them in every department; they’re now involved in every meeting, budget and communications plan. Businesses are missing a trick if they don’t integrate finance into everything they do.” 

Understand the organisation

A capacity to wholly “understand” an organisation, from who-does-what in the fusty facilities team through to the minutiae of the last quarterly report, is another essential part of the FBP role. 

To learn more about the DIY firm, Kiziak suggested shadowing warehouse staff, often turning up for 6.00am shifts to heave boxes from the back of a truck. As he points out, enmeshing yourself with a different team can lead to a re-evaluation of previously ignored or misunderstood departments. 

“You can sit in meeting rooms and talk about productivities all day, but unless you see what’s happening out there, you won’t understand the challenges,” says Kiziak. “Listening to people is the key to understanding the business.” 

Rowan notes that the things you overhear and chat about to people are important, too. “Making a coffee and chatting to somebody from a different department can be just as important as attending meetings,” she explains. “You pick up on little things that can turn into something bigger.” 

Communication and advisory

The prospect of presenting at management meetings or translating tricky fiscal concepts to disinterested non-financial staff can make many accountants feel uneasy. Being a good speaker hasn’t traditionally been part of an accountant’s job description. Still, communication and advisory skills are now predicted to be indispensable for those accountants who want to navigate the automation-heavy workplaces of the future. 

Liu-Lindberg admits he didn’t have these skills when starting at AP Moller-Maersk in 2014. “I acquired them by pushing myself out of my comfort zone,” he says.  

In his spare time, Liu-Lindberg co-runs the Business Partnering Institute consultancy from his Copenhagen hometown and regularly blogs about the subject. For him, being an FBP is exciting. “You have an impact,” he says. “If you’re a finance controller reporting numbers and putting up nice schedules for an auditor, you honestly have little influence. But an FBP is like the glue [holding together] different stakeholders within the business.” 

In summary

There’s no general career path to becoming an FBP, but usually two or three years’ experience is needed first. It’s worth bolstering your CV by “getting heavily involved with project-work” says Weston. “Put your hand up for everything, develop softer skills and make sure you understand your business.” 

Further reading:

Has the Budget done enough to support businesses through the coronavirus?

Posted by & filed under Coronavirus, Tax.

When businesses face change or uncertainty, they inevitably look in the direction of their accountants for help.  Now they need help in the middle of a global health crisis.

After Making Tax Digital, IR35 and Brexit, COVID-19 coronavirus is the latest issue confronting businesses. In a remarkable Budget, the Government announced a raft of measures designed to ease the pain of small companies and help them survive the pandemic.

The overriding aims were to keep businesses and individuals solvent and to make it possible to cope with a wave of sickness absence.

 “Small businesses are undoubtedly at the sharp end of the shock to the UK economy. We welcome this very pro small business budget and the use of fiscal and monetary policy to support them,” commented Sonali Parekh, Director of Policy at the Federation of Small Business.

She added that accountants would be pivotal in helping business access benefits and support.

“As more support becomes available over time accountants will become an important conduit of advice to small businesses.”

Here are the main Government initiatives designed to support businesses during the coronavirus pandemic.

Support through statutory sick pay

Where workers are not able to work because of the virus, the Government will refund the cost of statutory sick pay for up to 14 days. This applies to firms with fewer than 250 employees. It will also apply from day one rather than the usual day four of illness — even if individuals have no symptoms. 

At a cost of £2bn, this step isn’t cheap but is seen as important removing some of the financial burden of the workers having to self-isolate.

Question: how will payments be made? The Government must find a quick mechanism to deliver rebates, or cash flow will suffer.

Help for the self-employed

The picture for the nation’s 4.8 million self-employed and ‘gig economy’ workers is less rosy. The Chancellor made it easier to claim Universal Credit by removing the minimum income floor for those affected by coronavirus. This will help those with fluctuating incomes. Claims can also be made from day one instead of day eight. For those who fall through the safety net, there will be a £500 million hardship fund.

Question: could more direct help be given to the self-employed workers? An online petition asking for them to be included in the statutory sick page scheme during coronavirus has quickly gathered 200,000 signatures – enough to force a Parliamentary debate.

Business rate relief for key sectors

Businesses in the retail, leisure and hospitality industries are most likely to suffer as people avoid public gatherings. To support them, the Chancellor announced a one-year business rate holiday on premises with a rateable value of up to £51,000.

The idea was based on the retail discount scheme, which provided limited relief from business rates. It will be a welcome help and provide an even bigger shot in the arm for hard-pressed high streets and town centres.

Question: how will businesses gain this relief? Under the retail discount scheme some local authorities gave automatic relief. Others made businesses apply.

Measures to ease cashflow

HMRC’s Time To Pay arrangements will be scaled up to support firms struggling with cashflow issues. HMRC will make decisions on a case by case basis and is employing an extra 2,000 staff to run a dedicated COVID-19 helpline.

Question: if decisions are on a case by case basis, what are the ground rules?

Banking support for small businesses

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch in a matter of weeks to support businesses to access bank lending and overdrafts. The aim is to make sure banks continue to support SMEs if times get tough. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders confidence in continuing to provide finance.

Is Government doing enough?

The Budget has been well received for the scale of its investment in areas like infrastructure and the health service.

But the immediate concern is how businesses and individuals can be safeguarded given the prospect of a shutdown of parts of the economy.

“This is a really positive first step but we need to see how coronavirus plays out and whether these measures are sufficient, or if additional support is needed,” says the FSB’s Parekh.

 “We do think the Government needs to monitor the situation to make sure that they support smaller business in managing their cash flow at this most challenging time.”

Given the scale of support for business, some were surprised that fine print of the Budget confirmed that IR35 would still be introduced in April.

Further information:

Excellent advisory: key questions to ask in a meeting

Posted by & filed under Future Finance.

Whether it’s a brand new client or an existing one, it’s essential you spend time getting to know them when you’re first exploring advisory services.

“You need to find out what motivates and interests them, and what they’re trying to achieve in their business and personal life – find out about their family situation. It’s about knowing where they are now and where they want to be in the future” says Dean Shepherd, lead product manager for compliance at Wolters Kluwer.

“This stage needs to be all about the client. You don’t bring in the hooks and solutions yet. All your questions need to be about them” says Steve Freeman, head of motor at MHA MacIntyre Hudson.

Proactive communication – without bugging the client 

According to Freeman, proactive communication is working out spontaneous ways to touch base with people, which can add value to the client. It’s about being timely, valuable and unprompted.

For Freeman, this means keeping the client appraised of developments in their industry, deals and opportunities, as well as sharing thought leadership pieces that might be useful to them and arranging networking events and functions. Directly asking the client can be immensely helpful, too: 

  • How do you want me to interact with you? 
  • Am I contacting you enough or too much? 
  • What else do you need from me?  

Walker places considerable emphasis on cloud data and its role in enabling real-time insight. “Having access to cloud data means we can proactively notice when something looks unusual or indeed when it looks great, then we can get in touch at that moment,” she explains. “That’s much more valuable than waiting to have a meeting about year-end accounts.” 

3 Key questions to ask

  1. What is your budget?

“Other industries are unashamedly asking clients this, but accountants tend to feel uncomfortable charging different clients differently for the same service,” says Dean Shepherd, lead product manager for compliance at Wolters Kluwer. “But it’s acceptable to charge based on the value clients place on advisory.” 

2. What keeps you awake at night?

“The most important questions are the ones you wouldn’t think to ask,” says Lynne Walker, head of business advisory at Johnston Carmichael. “The issues keeping clients awake at night could be the ones they wouldn’t necessarily talk about but need addressing.” What are your expectations? 

“This allows the client to confirm they’ve understood the advisory process,” Shepherd notes. “Often you think you’ve explained something clearly, but it’s misinterpreted. You can then manage expectations if they want more than you’re able to offer.” 

3. Do I have the right level of interaction with you?

“Never assume,” says Steve Freeman, head of motor at MHA MacIntyre Hudson. “Regular feedback sessions are essential because there isn’t a one-size-fits-all approach.”

Body language  

Shepherd explains: “Body language is essential for establishing rapport and instilling confidence. If you’re experiencing a lack of eye contact or signs of distraction, it could be because you’ve not engaged them enough, or you’re not asking the questions that are resonating.” 

  • Keep a polite and understanding tone 
  • Maintain eye contact (but don’t stare at them – just be attentive)
  • Smile
  • Keep your hands on your lap or desk

Emotional Intelligence

Soft skills like emotional intelligence are essential for advisory, says Steve Freeman, head of motor at MHA MacIntyre Hudson. High emotional intelligence means you can put yourself in someone’s shoes and adapt to different situations. “Those with high emotional intelligence can read situations and adapt to how they behave.

It’s about modifying behaviours depending on the situation,” he explains. “Not everyone has emotional intelligence. It’s not something that can easily be taught, so it’s a key skill I look for when I’m hiring.” Like with IQ, everybody sits on a scale of emotional intelligence, or EQ. While some people are naturally more emotionally intelligent than others, you can work on certain things to improve your EQ.

Emotional intelligence can be broken into four major attributes:

  • Self-awareness
  • Self- management
  • Social awareness
  • Relationship management

In Summary

Clients now expect proactive, real-time advice and insight. “Clients want more than just numbers,” says Lynne Walker, head of business advisory at Johnston Carmichael. You need to find out what motivates and interests them, and what they’re trying to achieve in their business and personal life – it’s about knowing where they are now and where they want to be in the future.

Businesses that fail to embrace advisory could face a “dramatic fall in revenue”, warns Steve Freeman, head of motor at MHA MacIntyre Hudson.

Further reading:

How to plan for continuity in the face of the coronavirus

Posted by & filed under Coronavirus.

The coronavirus (COVID-19) is spreading quickly and many businesses are likely to be affected in the coming months. Each accountancy practice will face unique challenges if they are affected by the virus.

Here is our guide to continuity planning in relation to the outbreak, how to help staff work effectively from home, and five points to consider when you are drawing up a strategy.

1. Assess your exposure

What is your current situation, and does your business have any contact with the most severely affected countries? You should be advising staff members to self-isolate if they have been to an affected country and/or are showing signs of the symptoms of coronavirus.

If the UK is forced into a total shutdown, what plans do you have in place to help your staff to continue working? If you are an owner/manager, what can you do to ensure the business continues to run smoothly if you are ill and forced to take time off?

“If employers have a staff member who has been advised to self-isolate, they would be best advised to allow that person to stay at home,” says Danielle Ayres, partner, and employment specialist at Gorvins Solicitors. “They not only have to think about the health and safety of that one individual but the rest of their employees too,” she says.

An employer can instruct an individual not to come into the workplace – the employee’s contract may contain an express provision that the employer can oblige them to stay out of the workplace (such as a garden leave clause), or if they have the health and safety of that individual or their workforce in mind. 

2. Communicate with staff

Explain the sickness policy, emergency procedures, the measures you are taking to reduce risk, and what staff can do on a personal level to stay well. Let them know what your procedures are for sick pay, what the workplace healthcare plan covers, and how you will support them if they need to take time off to care for sick dependents.

“Any absence from work by an employee who self-isolates should be treated as any other type of sick leave,” says Danielle Ayres. “If an employer obliges the employee to self-isolate, this would be seen as a form of suspension from work, and in those circumstances, the employee would be entitled to receive their normal pay for any such period,” she says.

The only issue is the risk that an employee comes into work, even after being given medical advice to self-isolate, as they do not wish to lose out on pay.  ACAS is, therefore, advising that it would be ‘good practice’ regardless of the party enforcing the self-isolation for the individual to receive normal pay during their absence.

“No matter how many employees the SME has, they should consider altering the workplace to take precaution,” says Lisa Townsend, Consultant Solicitor of Employment Law at Richard Nelson LLP. For example, including posters in bathrooms advising employees and visitors on how to correctly wash their hands, and offering hand sanitising stations to all who enter the building. 

3. Review your remote working capabilities

Do you have the necessary IT infrastructure for all your staff to work remotely? It is time to review your data protection and IT security to check that your business is not exposed to data breaches, especially if employees use their own laptops or home networks.

It is important to try to keep staff motivated and productivity high. Employers should check to see if their employees are contracted for a minimum number of working hours per week and are fulfilling those working hours at home and are available to be contacted, says David Sheppard, a senior associate in Capital Law’s employment team. 

As an employer, you will need to find ways to ensure productivity remains as close as it would in an office environment.

“Employers should also stress and remind employees of their data protection policies and the need to uphold these standards at home,” he says. There are several measures they can put in place to avoid security and data breaches.

These include ensuring that employees use private and secure wifi connections, that any personal and other confidential information stored on a device is encrypted, that paper documentation is stored securely in a locked cabinet when not in use, and that business telephone or video calls are taken in a quiet room or home office, away from other family members or residents.  

4. Monitor government and global health advice

There are regular UK government updates on guidance within the UK and advice on travel from the FCO on places it recommends Britons do not visit. Make sure you are up to date on health and travel advice and communicate any new information to your staff.

Mini Setty, a partner in employment law at Langleys Solicitors, has the following recommendations for employers:

  • send guidance to staff on the best ways to stop the spread of the virus
  • provide tissues and hand sanitisers for staff to use
  • monitor whether work-trips to areas hit by the virus should proceed
  • ensure that anyone who comes back from an infected area does not come into work if they are symptomatic
  • consider the safety issues of ‘high risk’ individuals such as the older people, those with underlying medical conditions and pregnant women.

5. Uphold your duty of care

Most employees usually only work from home for ad hoc short periods, such as childcare cover. But with the prospect of having a longer duration of home working as a result of the coronavirus, both employers and employees need to be aware of their legal obligations when working from home for prolonged periods, says David Sheppard.

Employers owe a duty of care to ensure their employees’ health, safety and welfare “so far as is reasonably practical”. Most home working is usually low-risk office-type jobs. Nevertheless, employers should ensure that appropriate risk assessments are conducted at the start of a homeworking arrangement and periodically thereafter.  

Equipment and liability insurance

As with working in the office, employers might have to provide equipment as part of reasonable adjustments for employees with a disability when working at home, he says 

In terms of insurance, employers will have compulsory employee liability insurance, protecting them from workplace accidents. They need to check these policies, to consider whether any extends to accidents occurring in the course of work undertaken at home and using equipment supplied to the employee.

If there is any gap in their insurance cover, employers should consider extending it, or request the employee to make their own home insurance arrangements to cover such risks and agree to meet any additional premium as an expense that can be reimbursed by the employer, he says.

In summary

Points to consider from Steve Thompson, Founder of Forward Role – a marketing, digital and technology recruitment agency. 

  • Think about what might happen if the outbreak gets worse.
  • Identify any employees who may be at a higher risk from the virus and take extra steps to minimise their risk in the workplace.
  • Communicate all of the health advice coming from the NHS on how to protect yourself and others from transmitting coronavirus.
  • Ensure your tech is up to scratch to keep your business moving. Platforms that allow video conferencing, such as Skype, would offer an effective solution to canceled face-to-face meetings; even interviews could be held remotely.
  • Can your team access the files they need with a remote connection to your server? Do they have the kit and internet capabilities to be able to set up a home office so they can keep working?
  • Have an action plan in place to ensure you’re ready to adopt more cloud-based way of working, whatever level the outbreak might reach.

For more information:

Why your clients should know how to cash in on R&D tax credits

Posted by & filed under Tax.

As many as nine out of ten companies eligible to claim Research and Development (R&D) tax relief are failing to do so.

This is obviously a large and untapped opportunity – both for the companies concerned and the UK economy. Accountants are well-placed to put that right by offering appropriate advice.

How much can companies get?

When a business spends money developing new products, processes or services; or improving existing ones, many of the costs could be eligible for R&D tax relief.

SME R&D relief allows companies to deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction!

It also enables the qualifying company to claim a tax credit if the company is loss-making, worth up to 14.5% of the surrenderable loss.

R&D claims the easy way

Are your clients eligible for research and development tax credits? If you’re an AAT Licensed Accountant, you can now refer your clients to randd UK, who will manage their claims free of charge and give you 10% of the commission.

Learn more

Who can claim?

It’s not just trendsetting tech companies or pioneering pharmaceutical firms that are eligible. Manufacturing and engineering companies are popular recipients. In fact, any business that is creating – or enhancing products, processes or services can probably show it is carrying out activities that could be eligible for R&D tax credits.

The scheme is intended to benefit small and medium-sized companies. So there are some relevant criteria:

  • The company can claim SME R&D tax relief if they have less than 500 staff and a turnover of under €100m but the company project must meet HMRCs definition of R&D.
  • The definition requires that the work that qualifies for R&D relief is part of a specific project to make an advance in science or technology (not an advance within a social science like economics). It can be researching or developing a new process, product or service or even improving on an existing one.

8 costs companies can claim for:

Here is a list of the things that can be claimed for:

  • Direct Staff costs
  • Externally provided workers
  • Subcontracted R&D
  • R&D consumables
  • Software
  • Clinical trial volunteers
  • Contributions to independent research
  • Prototypes

How to make a claim

A claim for R&D relief can be submitted up to 2 years after the end of the accounting period it relates to.

You can claim the relief by entering your enhanced expenditure into the full company tax return.

Read more in HMRC’s online guide.

Advising your clients on selling to the EU post-Brexit

Posted by & filed under Brexit.

More than a million UK SMEs sell to customers in the EU, but with Brexit scheduled for 2021, these business-owners are plagued with questions. As their accountant, it’s time to arm yourself with the facts.

When will Brexit start to change things?

On 31 January 2020, the UK stopped being a member of the European Union, ushering in a transition (aka “implementation”) period that is scheduled to end on 31 December 2020.

The UK and EU have until 1 January 2021 to negotiate a new trade agreement. During the transition period, the UK will remain subject to EU rules and still be a member of the Single Market and Customs Union. Existing rules concerning the free movement of people and goods between EU countries and the UK will remain until 1 January 2021.

As a new agreement hasn’t yet been negotiated, we don’t know what will change, or to what extent, although the free movement of people and goods is likely to end on or before 31 December 2020.

How many UK SMEs will be affected?

Exports – The UK exported £291bn of goods and services to other EU countries in 2018, amounting to 45% of all UK exports.

Imports – The UK imported £357bn of goods and services from the EU, accounting for 53% of all UK imports.

According to government estimates, about 8% of UK SMEs export to the EU, which is roughly 530,000 businesses, out of a total SME population of 5.9m.

A further 15% (885,000) SMEs are in the supply chains of other businesses that export to the EU. So, about 1.4m UK SMEs could be affected by trade rule changes that result from Brexit.

We don’t yet know what will change or how, but let’s consider a few likely scenarios and their implications for your UK SME clients that sell to customers in EU countries.

Questions your clients might ask

Will my business have to pay new tariffs?

If UK and EU negotiators fail to reach a new trade agreement, the UK and EU will have to trade using basic WTO (World Trade Organization) rules. This scenario means tariffs would be applied to most goods which UK businesses sell to EU customers.

As explained on government website GOV.UK: “The tariffs on your exports will vary by country. Each country decides [its] own import tariffs. If you are exporting a product to a country that the UK has no trade agreement with after the transition period, the importer will pay the non-preferential tariff rate applied in that country to its imports.”

Tariffs would make UK goods more expensive for customers in the EU, and they may instead try to source cheaper alternatives, either from within the EU (where no tariffs are applied) or other countries (whose suppliers may be able to undercut UK SMEs).

Tariffs would also be applied to goods entering the UK from the EU, which would make imports more expensive.

What if I sell services to EU countries?

The UK will no longer operate under the European Economic Area (EEA) regulations for cross-border trade in services from 1 January 2021.

How could new border checks affect my EU sales?

The UK government has confirmed its plans to introduce import controls on EU goods at the border, after the transition period ends on 31 December 2020. This is likely to be reciprocated by EU countries.

Because the UK will no longer be in the EU Customs Union, new compliance border checks for goods will be introduced, which could, to a greater or lesser extent, lead to delays (some have predicted bottlenecks at ports). This could have more serious implications for some UK sellers rather than others, for example, those who sell fresh produce or other perishable goods.

Your clients may also need to consider whether a customer could take legal action against their business for failure to supply to a deadline set out in their supply contract. Now might be the time to revisit the terms of such contracts.

What about currency fluctuations?

The pound to euro exchange rate has averaged about €1.33 over the past 20 years. At its highest, it was about €1.75 in May 2000 and at its lowest, in August 2019, £1 was worth just €1.09. It has since recovered somewhat, and in February 2020, £1 was worth about €1.20.

We don’t yet know whether the pound will strengthen or weaken against the euro after the end of the transition period. And, potentially, there are pros and cons to each. A weaker pound might make the things your clients sell more attractive to buyers in the EU, but their sales will be relatively less profitable.

Alternatively, were the pound to strengthen against the euro, their sales would be more profitable, but it could affect demand. Your clients may also have to take into account whether they purchase goods or services from the EU, of course.

What about customs declarations?

According to GOV.UK:

“From 1 January 2021 you will need to make customs declarations to move goods into and out of the EU. You should:

A freight forwarder, customs agent/brokers or fast parcel operator may be able to help your client get their goods through customs in EU countries. But it might be wise for your client and their staff to get additional training on customs and export rules post-transition.

What if I’m distance selling to the EU?

Distance selling means selling goods or services through digital TV, by mail order or by phone or text message.

In this instance, your client should register for VAT in the country to which they’re selling, if the total value of goods exceeds that country’s distance selling threshold (€35,000 for most countries) and they’re selling to consumers (not businesses).

What else should I do?

The Institute of Export recommends communicating “with your EU customers” to “reassure them of your commitment in the face of potential changes”.

It also advises UK businesses to “review sales to non-EU countries where the EU currently has Free Trade Agreements in place. Assess whether sales are dependent/influenced by duty preferences and may be at risk when the UK loses access to them”. The European Commission website lists these countries.

As regards technical barriers to trade, according to the government: “There should be provisions to address regulatory barriers to trade in goods, providing for cooperation on technical regulation, standards, conformity assessment procedures, and market surveillance, building on the WTO Technical Barriers to Trade Agreement.”

The government would like this to be part of a free trade agreement between the UK and EU. It might be worth seeking further advice on specific regulations and standards your client’s business uses, to find out about any post-transition changes.  

In summary

Brexit will impact all of us, and people will turn to their accountant for advice on what to expect and how to deal with it. Start compiling a list of the basic need-to-knows for your clients now, and you’ll be ready when the questions come.

Stay tuned for more on the real-world effects we’ll start seeing from Brexit, and how you can best advise your clients on dealing with them.

Read more on Brexit and the finance landscape:

Forging a finance career from a women’s refuge

Posted by & filed under Inspiring stories.

Ria-Jaine Lincoln was living in temporary accommodation through a women’s refuge, 12 years ago, when AAT became a lifeline.

She studied the qualifications while looking after her autistic son in the refuge, trying to build a new future for them both.

Tough times at Deloitte

Part-way through her studies, Ria-Jaine landed a role in the cash team at Deloitte. Eager to learn as much as she could about the full accounting function, she took on extra tasks to stretch her skills and eventually became part of a select group dedicated to looking after the partners’ tax affairs. But while her career looked in gleaming shape, her family life soon re-entered choppy waters.

“When I was in the tax group,” she says, “I fell pregnant with my third son. He had a really difficult birth, then had an operation at ten weeks and was poorly for the first two years of his life. That involved a lot of hospital visits. I needed to adjust my hours and, fortunately, Deloitte is quite big on agile working. But even so, it was hard.”

A car crash, and mental health issues

Lincoln’s eldest son was also struggling with his mental health, which she had to juggle with her youngest son’s hospital appointments. Around the same time, a drunk driver ran into her car – luckily, no one was seriously hurt. “There were lots of things happening all at once, not to mention a wedding and house move. Looking back, it’s no surprise I ended up struggling with my mental health and needed a lot of time off work. I’d probably go as far to say I had a nervous breakdown because I literally couldn’t do anything but sit at home.”

A turn towards beauty

“I needed either something I could do from a hospital bed – because that’s where I was spending most of my time – or a job I could weave flexibly around my family. That’s when I looked at the beauty industry, and thought: that’s what I’m going to do.”

While Ria-Jaine trained up in nails, lashes and waxing, offering beauty treatments on a self-employed basis during the last chunk of her time at Deloitte. “All through my beauty training, I couldn’t get away from the fact that I was an accountant,” she explains. “When you introduce yourself in groups as an accountant, suddenly you get loads of questions, like ‘How do I set up?'”

Starting the practice

Lincoln was looking at her training providers’ Facebook groups and websites. She noticed that none of them said anything about how to register your business – even though there was tons of advice about getting insurance.

“I reached out to a lady I knew who had her own academy and some salons, and persuaded her to include a sentence about business registration in her training manual. After that, she said, ‘If you want to do any workshops for my students, or create some information for them, I’d be happy with that.’ Which took me right back to accountancy.”

Volunteering her story

Remembering her time in the women’s refuge, Ria-Jaine is  also a voluntary family-support worker for the community charity Home-Start UK. “I found out about them through a Facebook post my sister tagged me in,” she says. “I remember what it was like when I came out of the refuge, living off a budget of £20 a week, with holes in my shoes.

So I thought that, because I’d been there, I could really bring value and help families that are facing day-to-day challenges. Relevant personal experience can be incredibly useful for building trust and rapport.”

The 10-week training programme included a session on domestic abuse, and that was when Lincoln began to share her story. “Mainly to help my fellow volunteers if they felt abuse was happening in any of the families they worked with. It’s so important not to say the wrong thing: someone could be on the verge of getting help, and then just one-off comment could completely shut them down. And that’s really, really dangerous.”

Looking after families

Following her training, Home-Start gave Ria-Jaine her first family to look after. “I’d visit them once a week,” she says. “They weren’t getting out of the house very much because their son had additional needs. So that enabled me to draw on my experience of raising my eldest.”

Lincoln provided them with some strategies that she had used for managing difficult behaviours. She also advised them about other charities that could help them – for instance, Family Fund, a brilliant charity for people with disabled children. “They can help with buying things for the house, for the child, for holidays.”

A new lifeline through accountancy

Reflecting on her career, Ria-Jaine says: “In a speech I gave at a recent domestic abuse event, I said that when I considered how the refuge had supported me into accountancy, it didn’t seem right to just give up on the profession. I was homeless, but studying AAT. After all that, I couldn’t turn around and say, ‘No – that’s not for me.'”

In summary

Ria-Jaine had several difficult hurdles to overcome before she set up her successful beauty industry accountancy practice, Ria-Laine Accounts. Her story is an inspirational example of how resilient people can be when facing extreme hurdles and how AAT helped her along her journey.

Further reading: