Time to go? What to do when you want to resign

Posted by & filed under Career, Members.

You’ve been offered the job of your dreams. Or maybe you’ve decided to take the plunge and set up on your own. How do you resign – and what should you do when you’re on notice?

Slow down

Don’t resign on a whim. It’s better to leave when you have a role to go on to, whether that’s another job, self-employment or going back into education.

Walking out of a job could leave you with a gap on your CV you’ll have to explain to would-be future recruiters. With no job to move straight into as well, you’ll add unnecessary pressure to your job hunt.

And even if someone makes you an offer, don’t take any action until you have it in writing. A verbal offer could always be rescinded.

Think ahead

If you are determined to leave without arranging a new post, then you’ll need to do some contingency planning.

Assess your situation as a first step; do you have enough in savings to keep you going until something comes along? Have you signed up with recruitment firms? Updated your LinkedIn profile? Told contacts you are looking for a new opportunity?

Think ahead to get on top of things.

Pros and cons

Once you’ve resigned, that’s it: even if you do change your mind and stay, you’ll have altered your relationship with your boss. They’ll know you could still be looking for a new opportunity. So do make 100% sure you want to leave first.

Make a list of the good and bad reasons for staying or going. Good reasons for moving could include better opportunities for career growth or an easier commute. Bad reasons might be linked to personality clashes; don’t forget, wherever you work there’s a chance you might not get on with everyone.

If you want to leave just to get more money, then negotiate a pay rise rather than move jobs.

Taking notice

So you’ve decided you want to go. You’ll need to write a resignation letter and tell your boss you want to leave.

Before you do either, check what notice period you are on and whether you have any outstanding holidays to take.

Timing is everything

Ideally resign on a Friday afternoon so both parties have the weekend to think about it. Keep your resignation letter short and professional: don’t use it as an opportunity to air grievances.

And Angela Cox, a Mindset Mentor at Ask Why adds: “It’s courteous and respectful to tell your boss before you tell your colleagues.”

Should you stay?

If your boss tries to persuade you to stay, then ask for time to think about the offer: another reason why Friday is the best day to resign.

If they offer you a pay rise then you might choose to stay. But if you were planning to leave because of the company’s values, management style or chances to develop your career then those reasons are still valid even if your pay packet is larger.

If you change your mind and stay, you might regret it later for not going when you had a good job offer elsewhere.

What to say

What you say when you resign is important. Cox advises: “If you have another job, you need to show you are moving on for a reason; maybe the opportunity for professional development or the opportunity to grow your career.”

“If you offer any reasons for leaving, then be constructive, not emotional. You might say that the culture of the company no longer fits with your values, but it’s not advisable to use your resignation or the exit interview as an opportunity to complain about other employees. Focus on the positives.”

You will likely need someone at your current company to provide you with a reference later on, so let go of any little grievances and focus on the big picture.

“Say that you’re grateful for what you’ve learned and achieved but that to progress your career, you need to move on.”

Leave with integrity

“Always leave them wanting more,” said the greatest showman, PT Barnum.

The way you handle yourself while working through the last few weeks/months of your contract is important – remember that reference you’ll need.

Cox says: “Stay focussed on the job in hand until your last day. Start each day of your notice period with a deliberate choice to work hard and be a great co-worker. It’s all about leaving your job with your head held high.”

Handover

Unless you’re put on gardening leave (where you’re asked to stop coming into the office, but will still be paid) then you’re going to be working in the office while on notice.

“It’s worth asking when you resign what’s expected of you before you go, what tasks or projects need completing to ensure that the handover to your replacement goes smoothly,” says Cox.

“It’s understandable that you will be focussing on your future job when you are on your notice period but actually, it’s best to switch your focus to your current colleagues’ needs.”

Garner a little positive karma by offering to write a full description of your job for your current company’s recruitment efforts. You could also provide a list of useful contacts and emails. If your replacement already works for your company, you could offer to mentor them so they understand the new role. 

Exit interview

Many companies will want you to attend an exit interview – although unless it’s written into your contract, you aren’t obliged to go. But it’s best to go, unless you’re feeling a lot of anger/frustration at the situation. You need to have a level-head.

Plan in advance what you’ll say when asked why you’re leaving: try to accentuate the positives.

No regrets?

Starting a new job can be exciting. But what if you think you’ve made a mistake and shouldn’t have left your previous job?

Bear in mind that everyone has doubts and it’s perfectly natural to miss your old job at first. Try not to look back and don’t email former colleagues. You’ll settle in soon enough. “Be forward focussed. And remember, you owe it to your new colleagues to be professional in your current role,” adds Cox.

In Summary

Make sure your reasons for leaving are well-considered and not purely emotional. If possible, line up a job to go to and get it in writing before you resign. Only allow yourself to be persuaded to stay if you’re sure you won’t regret doing so in the future. And when you are on notice, make sure you work hard and keep focussed: you want your former boss and colleagues to remember you in a positive light.

Further reading

Get a head start in management with AAT’s eBook

Posted by & filed under Leadership, Members.

Moving into a management role is more than just a title change. We’ve put together a ‘how to’ guide so you can hit the ground running and keep improving.

Our free eBook, which you can download at the bottom of this article, will support you in your transition from employee to manager, and lead you on towards becoming a strong leader within your organisation.

How do I go from employee to manager?

Moving from an employee role to a management role involves a real shift in mindset. Your focus has to expand outwards now and include the team that you’ll be managing. Navigate this change confidently by checking out our guide.

What are the top traits of effective managers?

When you’ve settled into your managerial role, and feel like you can take things a step further, it’s time to dive into the next section of the eBook. Here, we explore the wider responsibilities of the role and the bigger picture.

How do I develop leadership goals?

As you progress with your career development, there will come a time when you feel ready to look to the future. You’re secure in your managerial role now, but where is it leading?

We take a more long-term view of things now. We’ve spoken with three accountants on their personal and career goals to see how they’ve structured their career path, and what we can learn from them.

Setting SMART targets and goals may set your eyes rolling with memories of secondary school, but it’s been shown to be an effective tool. Give it a try and see how you get on.

How do I managing culture and lead change?

With your plans for the future in place, it’s time to start steering things within your business.

Maybe the culture isn’t what you’d like it to be, or you can see some improvements to be made in the general attitude to work. You’ve seen things from an employee level, a new manager level, and now you’re established in your position. You have a unique insight to offer, and a voice; it’s time to speak up.

In this section of our eBook, we met with Stuart Hurst and discussed how he brought cloud technology into an initially reluctant firm. Learn from his experience to bring about the change you want to see.

Download our free eBook now; The new manager’s guide to leadership

In summary

Congratulations on your promotion to manager, and we hope our eBook helps you to succeed!

Be sure to click through to the related resources in the PDF, which will link you to further articles on AAT Comment. And if you do find our eBook useful, please share it with anyone else it might help.

Read more on leadership from AAT:

Study tips: how to calculate VAT

Posted by & filed under Foundation Certificate, Students.

Let’s be honest, nobody is a fan of Value Added Tax (VAT).

As members of the public, we know that we pay it but we don’t think about how it’s been calculated. All that changes when you work in accounts. Suddenly VAT rates, knowing whether figures are inclusive or exclusive and how to calculate them accurately becomes vital to your work.

This article is going to concentrate on two main calculations that affect vatable figures.

  1. Calculating the VAT on a net figure
  2. Extracting the VAT from a gross figure

These are fundamentally different calculations, yet ones we regularly mix up, therefore we’re going to think about what they actually mean before we look at how to calculate them.

If we understand them better we’ll stop getting them confused.

Let’s start with terminology

What is the difference between gross and net? When I searched online I found this explanation:

“Gross refers to the whole of something, while net refers to a part of a whole following some sort of deduction. For example, net income for a business is the income made after all expenses, overheads, taxes, and interest payments are deducted from the gross income.” *

The fact that most definitions of  net refer to what’s left over after deductions, may be the source of confusion when it comes to VAT calculations.

What’s left over makes sense in relation to the example of net income and also works for net pay; where we start with a gross figure and deduct tax, national insurance, pension contributions and the like, to arrive at the net amount we actually receive.

However, making deductions isn’t what we do when we calculate VAT for a net sales or purchases figure.

From a practical point of view, we do the exact opposite. We calculate the VAT as a percentage of the net figure and then add it onto the net amount to arrive at the gross.

The result is the same because the net figure is the amount without the VAT but the starting point is different as we’ve had to add the VAT during the calculation.

So, in terms of VAT calculations it’s easier to think of the net as the amount before the VAT has been added.

If we think about when we calculate VAT in this way, it’s usually when preparing sales invoices. These include:

  • the net value of the sale, the amount that belongs to the business**
  • the VAT, which belongs to HMRC
  • the gross amount or invoice total that will be paid by the customer

To successfully calculate the VAT on a net figure we need to combine this understanding with the skills needed to calculate percentages. This can be a tricky area too, so if you find it difficult have a read of this article on percentages first.

Using a % table to calculate VAT

We’re going to use a % table to help accurately perform VAT calculations. 

It has the three component parts (net, VAT & gross), a column for values and a column for percentages. We won’t have all the information needed to complete it, so we’ll need to use our understanding of the relationships between the three components, and percentages to work out the rest.

vat 123

When calculating the VAT on a net figure the net amount represents 100% and the VAT % is added to calculate the gross.

Let’s imagine we’ve made a sale worth £4,682, which is vatable at 20% and we’re preparing the figures for the sales invoice.

Using the table we can complete four of the boxes with figures we have and our understanding of VAT calculations:

vat576

Now we can calculate the missing values. The easiest method is to calculate 1% first, scale that up to 20% to calculate the VAT, then add the VAT to the net to calculate the gross.

76475 vat

Let’s think about what these figures mean before we go on.

We started the calculation with the net amount, which doesn’t include the VAT, so is a VAT exclusive figure. We then calculated 20% of it to tell us how much VAT was chargeable.

By adding the net and the VAT we calculated the gross amount. This is the invoice total that the customer will pay.

The gross amount now includes VAT, so it’s a VAT inclusive figure.

Extracting VAT from a gross figure

Now let’s look at extracting VAT from a gross/inclusive figure.

Whilst all the definitions stay the same, the calculation for extracting VAT from a gross figure is fundamentally different, as now we’re starting from a figure that represent both the 100% net and the VAT % i.e. 120% **

**Assuming this is a VAT registered business making standard rated vatable supplies (20% at the time of writing).

Dealing with VAT inclusive figures is usually part of the purchase process when we’re checking invoices we have received from suppliers.

Let’s suppose we received a purchase invoice for £669.60 inclusive.

The % table would be completed as:

v1a1t

The calculations now just work in a different order and fit the definition of the gross being the ‘whole’ and the net being ‘part of that whole’ after the deduction of VAT.

v2vat

Once we understand the definitions of gross and net we can use them to check our calculations and ensure the figures look reasonable.

In summary

As VAT is a percentage added to the net, the gross should always be more than 100% regardless of whether the VAT is being calculated from a net figure or extracted from a gross figure.

As the end consumer suffers the VAT, it’s reasonable to always expect that the invoice total will be more than the net sales or net purchases.

Read more from AAT Comment:

Browse the full range of AAT study support resources

AAT’s stance on the Scottish Tourism Tax

Posted by & filed under Members, News, Tax.

Earlier this month, the Scottish Government launched a public consultation on the introduction of a tourist tax in Scotland.

Edinburgh Council has already said it wants to introduce a flat rate, £2 per person, per night tourist levy on visitors to its city. Others have similarly suggested imposing a flat rate tax like this is a good idea, primarily because it is seen as being “simple”.

In contrast, AAT has called on the Scottish Government to ignore these requests and instead introduce a fairer, easier to enforce, less burdensome tax, in the form of a percentage of the overall cost of accommodation.

Establishing whether or not a tourist tax is needed is a helpful starting point.

Is a tourist tax necessary?

AAT agrees with the Scottish Government that introducing a small tourism tax will, “…help deal with local pressures associated with sustained high numbers of visitors” but it should do more than this.

By raising money solely for tourism related matters – effectively a hypothecated tax – there is likely to not only be increased money for maintenance and improvements of tourist areas but increased spending on promotion. This is clearly in the best interests of Scotland and could well help to increase rather than decrease visitor numbers as sceptics fear.

There is also something to be said for the psychological power of ensuring visitors know that their visit can have a societal cost and making the tax a visible part of the bill will help to make this link.

The policy argument that this will promote greater local decision-making, because it will be up to local councils in Scotland to decide whether or not to introduce the tax in their area, has some merit but whilst this may be a key reason for the Scottish Government introducing these proposals, it is not an overriding factor in determining AAT’s position.

The overriding factor for us is that such a tax encourages, promotes and helps ensure tourism in Scotland is sustainable.  

So, what form should this tax take?

AAT surveyed its licensed members in Scotland on this issue and of the four options given, they were split 50/50 between two – a fixed flat rate fee per person on the grounds of simplicity as suggested by Edinburgh Council, and a more progressive percentage of overall accommodation costs. The fact AAT members were split directly down the middle was referenced in our consultation response but on balance we opted for the overall percentage model because it will be:

  • simpler to administer and enforce – given a per person charge requires the recording and reporting of how many people are staying in a room and their details
  • allows the levy to automatically reflect any seasonal adjustments to accommodation pricing
  • future proofs the tax from the impact of inflation, unlike a fixed per person fee
  • is more progressive e.g. someone staying in five-star accommodation will make a greater contribution than someone staying in a youth hostel whereas under the flat rate fee they would be paying exactly the same.

AAT has suggested the rate at which this tax be set is 2.5% of the overall cost of accommodation.

What is the actual cost to tourists?

According to research from PwC, in 2018 the average daily revenue (ADR) of a hotel room in Glasgow was £76.52; in Edinburgh it was £103.72 and in Aberdeen £54.14.

So, applying a 2.5% “Scottish Tourism Tax” would mean an extra £1.35 per night on average for a room in Aberdeen, £1.90 on average for a room in Glasgow or an extra £2.60 on average in Edinburgh.

There are some, most notably the Scottish Tourism Alliance, who argue that tourism in Scotland is extremely price sensitive and that any tax, no matter how small, will result in a decline in tourist numbers.

To take just one example, AAT does not believe that a tourist currently paying £76.52 a night in Glasgow is going to cancel their holiday or reduce the length of their stay if faced with an increase to £78.42 to incorporate a Scottish Tourism Tax of 2.5%. To suggest otherwise is simply not credible.

The Tourism Alliance also highlights that the Travel & Tourism Competitiveness Report 2019 recently published by the World Economic Forum, shows that the UK (not specifically Scotland) has fallen to 140 out of 140 countries on price competitiveness. If Scotland was the 140th most visited country in the world, then there would certainly be some merit to this argument, but it is not. In fact, with 15.3m visitors a year, Scotland continues to be one of the top 25 most visited countries in the world. Given these facts, such a narrow focus on price competitiveness gives a far from complete picture of the situation.

What is undoubtedly true is that setting the tax too high will have a negative impact. The recent introduction of €8 per person, per day tourist tax on visitors to Amsterdam adequately demonstrates this – it has decimated their tourist industry with the worlds largest cruise liners all avoiding the city. Likewise, the recent doubling of the tourist tax in the Balearics has led to a big reduction in visitor numbers.

The Scottish Government needs to ensure that the tax is successful enough to raise sufficient funds for investment in sustainable tourism, whilst not so high as to discourage tourism. A 2.5% tax on the overall cost of accommodation achieves this.

Further points from AAT on the Scottish tourism tax

As part of its consultation response, AAT also;

  • opposed the introduction of any day visitor charges as they are likely to discourage tourism
  • requested that the Scottish Government at least considers exempting Scottish residents as such an idea was not referenced in their list of potential exemptions
  • made clear that third party platforms like Airbnb must be responsible for the collection and remittance of the tax where they are involved in taking payments
  • urged the Government to require quarterly remittance of tax to coincide with VAT reporting requirements rather than the shorter or longer periods of time provided for in the consultation
  • suggested that the name ‘transient visitor levy’ be replaced with “Scottish Tourism Tax” to aid transparency and understanding, and that using the word “Tourism” also reinforces the link between the tax and its purpose.

The consultation is open until 2 December 2019.

You can submit your own response here.

8 quick ways to get organised as an accountant

Posted by & filed under Members.

Advances in technology mean it’s never been easier to get organised; there’s gotta be an app for that, right? But what about when you’re running a business? We spoke to the most organised accountants for the inside scoop.

1. Get the right tools

Steph Rickaby, Managing Director of Sunflower Accounts, is a firm believer in using the top tools available.

“We try to use the best of the breed in software to ensure a smooth running of the practice for diary management and to do list management,” says Rickaby.

“It’s also about having a good system and process in place for the team to follow. This is always evolving as technology is improving, so these systems and processes need to be reviewed regularly.”

Key tip: “I recommend calendly as a scheduling tool, and Senta or Trello for to-do lists and to help keep track of how long you’re spending on tasks,” says Rickaby. “Calendly can send a link to your diary to clients and it also connects with MS Outlook, which prevents the endless games of diary tennis.”

2. Stop multitasking

Neil King, Director of Cedar + Co accountancy, says people should focus more on individual tasks rather than trying to do everything. “Everyone falls into the trap of multi-tasking and trying to do too much,” he notes, which tends to result in feeling overwhelmed and overworked.

Key tip: Try to break things down into individual tasks. Create a to do list each week and focus on getting each item ticked off the list before moving on to the next one.

3. Delegate and learn to say no

Learning to say no to things can be tricky at first but learning how to delegate and turn things down are important skills to master, says King. You need to become aware of your own limits so that you can do things to the best of your ability.

Key tip: “Just because you’re invited to something, it doesn’t mean you have to go, and not everything requires a meeting,” King says. “Sometimes it’s better to try and work out which things can be covered by a quick phone call or e-mail.”

4. Turn off email alerts

Donna Bulmer, Managing Partner of accountancy firm Haines Watts advises: “Turn off email notifications to help prevent getting distracted during the day.”

When you’re trying to focus on one task at a time, it won’t help with your efforts to have emails popping up continuously trying to drag you in different directions. But if turning the notifications off for a day sounds like insanity, just try it for an hour at a time to see how it goes.

Key tip: “Do what you plan to do and set aside times to check in and respond to emails afterwards,” says Bulmer.

5. Schedule in set days for meetings

Meetings can take up a considerable amount of the working day and prevent you from catching up with other work. So you have to ensure they’re worthwhile.

Consider only holding meetings on certain days and having a very clear agenda.

Key tip: “Have effective meetings,” says Bulmer of Haines Watts accountancy. “Set out a plan, stick to an agenda, and send details in advance so meetings are not being used to exchange information, which can be read in advance.”

6. Plug into a great CRM system

Investing in a CRM (Customer Relationship Management) system can help you run your business smoothly, advises Della Hudson FCA, author of ‘The Numbers Business: how to grow a successful cloud accountancy practice.’

You and your team would use this alongside your to-do list/task management system like Trello, mentioned earlier by Steph Rickaby of Sunflower Accounts, as they fulfil two very different functions.

“CRM systems can send reminder emails automatically or just prompt you to pick up the phone and make a call,” Hudson notes. “They also hold all your standing data and track email correspondence so that you don’t need to be CC’d on everything ‘just in case’.”

Key tip: “Consider Senta and Accountancy Manager. Both are great CRM system options for accountants as they come with suitable workflows for compliance work,” says Hudson.

7. Use software that connects

“Share your diary and ditch the paper,” Hudson goes on to advise. “This way people can see what you are working on and when. Have your diary accessible on all your devices so that it’s always up to date.”

Keeping everything in one, easily accessible place, makes it smooth and efficient to keep on top of your schedule. It’s not ideal if you know you write a few things in a book, schedule some meetings in one system, and schedule a few other meetings in a different system. Reduce the risk of missing something by bringing it all together in one place.

Key tip: Use software which connects with other people and saves time inputting the same data. “If you don’t have integrated software then choose one (perhaps your CRM or tax software) as the main repository for your data and only duplicate essential information into other systems,” Hudson advises.

8. Make sure you manage your time effectively

Arriving punctually is courteous and ensures you make the most productive use of your time.

Della Hudson advocates managing your time as one of the key ways to stay organised. With a little forward-planning, there’s no need for rushing around and keeping people waiting; this is something within your control.

Key tip: “Be punctual and always make sure you allow enough time to travel,” Hudson advises. “Not only is it courteous but it means that you’re not wasting other people’s time.”

In summary

We’ve heard from some high-performing people on how to get organised. And it all boils down to getting some robust processes in place, along with the right tools, to control the things you can control.

Among the 8 tips from our experts, were recommendations to use a tasking tool, CRM, and a digital diary to digitise your office management. This might have you tensing up, but just remember that getting started with a new tool is often the hardest part; you’ll be glad you put the time in when it’s up and running.

Get in touch via Facebook or email and let us know what helps you to get organised.

Further reading on running your business as an accountant:

How to deal with difficult staff

Posted by & filed under Leadership, Run your business.

If you’re managing an employee whose behaviour becomes challenging it’s best to take action quickly before it escalates. But how do you minimise the impact on morale?

Of course, situations like this can be difficult and stressful to handle.

It can affect your enjoyment and ability to do your own job, and worse still, it can make you question your own judgement and ability as a manager.

Just remember that you can’t control how someone behaves but you can control how you respond to it.

What is a difficult employee?

A member of your team could be doing (or not doing) various things to make them ‘difficult’ including:

  • not acting professionally
  • being rude, having a bad attitude or gossiping
  • coming in late often
  • not completing their work by set deadlines
  • not taking direction or constantly challenging authority.

If this is the case with any of your team members then it needs addressing appropriately.

How to deal with a difficult employee in the first instance

First and foremost, it’s really important that you don’t take the situation personally and make sure you leave it at work. Easier said than done, but taking on the situation in a professional and process-driven manner will help this.

Initially, ask yourself if this is a one-off or if there’s a clear reason why it’s happening. Sometimes behaviour can seem unreasonable when it’s someone else doing it and we don’t know why, even though we might well act the same in a similar situation.

Give them the benefit of the doubt and remember that everyone is different. Ask for a second opinion from someone (another manager or HR) but don’t gossip.

If you can’t see it from their perspective or it’s a recurring issue then you will need to speak to the employee. Make sure you are in the right frame of mind before you begin and be willing to really listen.

Key takeaway: Think carefully and objectively about how to best deal with the situation before you jump in.

Possible root causes for challenging behaviour at work

Before you meet up with the employee, consider what the root causes of the problem might be and the possible solutions. Poor performance could be caused by the employee:

  • not fully understanding their job role or responsibilities
  • not having had adequate training or supervision
  • being unclear about expectations or deadlines
  • having an illness or personal difficulties.

The process for dealing with a difficult member of staff

Following a process will help you deal with the circumstances objectively and logically, not emotionally. Consult your company’s policies and procedures if they have them or ask your HR department or advisors for support.

The process you should follow is likely to involve:

  • discussing the issues with the member of staff and listening to their perspective
  • giving clear feedback and telling them what you expect and how they can bridge the gap
  • giving them ownership of resolving the problem and asking them to create an action plan
  • helping them to remove any barriers
  • monitoring their progress and following up with them.

When you begin the process make sure you go through with it consistency so it’s fair and everyone involved knows what to expect. Document all of the conversations. If nothing has improved after this procedure has been followed then the next steps would be disciplinary action and ultimately fire them.

Patty McCord, the former chief talent officer at Netflix and the author of ‘Powerful: Building a Culture of Freedom and Responsibility’ draws us back to the bigger picture; “Your goal is to build a great team that does great work and to do that you need productive, engaged employees.”

Prevention not cure

Even the best managers will never be able to completely eliminate all issues with employees but cultivating a great team culture can help ensure a happy workforce and prevent issues from occurring in the first place. Cultivate a great culture by:

  • putting time and effort into the recruitment process
  • having an open-door policy
  • conducting regular one-to-ones with your team
  • investing in and prioritising training
  • working in a healthy and flexible environment

In summary

The best way to deal with difficult staff is to do just that and deal with it. Don’t ignore the issue and hope it will go away.

It’s frustrating to have time taken away from doing your own activities but as a manager, supporting, developing and supervising your staff should take up a good percentage of your time in order for the whole team to thrive.

Further reading on managing staff:

MTD: the secret boost for bookkeeping

Posted by & filed under Bookkeepers, Making Tax Digital.

The MTD roll-out shifts the focus from end-of-year filing to ongoing, real-time bookkeeping submissions. So now’s a great time to start offering this service if you don’t already.

Making Tax Digital for Business (MTD) came into force on 1 April 2019, starting with MTD for VAT. From that date, the majority of VAT-registered businesses with a turnover above the £85,000 threshold must keep digital bookkeeping records and file VAT returns using “functional compatible software”.

This has forced mandated tax payers to either purchase the software and do the bookkeeping and filing themselves, or turn to their accountant. But what if their accountant ‘doesn’t do bookkeeping’?

Increased demand for bookkeeping services

Zoe Whitman runs bookkeeping practice But the Books: “We’ve seen increased demand for our services since MTD – businesses who might have been prepared to manage their own VAT affairs prior to MTD now see the value of hiring an expert.”

The time investment required to learn how to submit your taxes digitally, on top of making sure you do it correctly, is just giving some businesses that final push towards outsourcing their books.

“Some clients call on us because their accountant can’t, or chooses not to, support them with bookkeeping,” continues Zoe, which is great news for self-employed bookkeepers.

Embrace change or lose out

If the accountant doesn’t offer this service, it’s usually because they’re not MTD-ready themselves, they don’t have the resources, or they think bookkeeping isn’t worth their while as a service.

Natasha Penny introduced cloud-based MTD-ready software into her practice Busy Books back in April 2017.

She says: “We are both bookkeepers and accountants and we’ve had a lot of new business this year. The majority of it has been clients moving away from old-school accountants who aren’t embracing changes like MTD cloud-based software and don’t provide everything under one roof. If they don’t flex to their clients’ changing needs, they will indeed miss out on custom and fees.”

Penny definitely doesn’t think bookkeeping fees should be so easily dismissed by accountancy practices, and her business is reaping the rewards as a result; “My return on complete packages that include bookkeeping is indeed greater than that on accounts alone.”

AI is streamlining bookkeeping

Rebecca Roberts, accounts manager at UHY Nottingham, says that MTD cloud-based accounting software increases efficiency with bookkeeping, making it a far more viable offering.

“It harnesses the power of automated intelligence, removing the need for manual input on tasks like posting invoices and reconciling bank accounts.”

Rebecca Trudgett, director and founder of SwitchFoot Accounting, points out that because bookkeeping can now be done using fewer staff hours, this leaves more time in the budgets to deliver more added value services alongside bookkeeping.

“You can now do more with the data available, so there are lots of opportunities to deliver new service lines off the back of that data.”

How to get more bookkeeping clients

In the run-up to the introduction of MTD for VAT, UHY reviewed all their clients to understand who would be impacted and when.

Roberts, Account Manager at UHY, says: “From this process we identified that some clients now required a full bookkeeping package because they had no time, desire or skills to maintain this function internally. So, in many cases where we historically only helped clients with annual statutory accounts, we now undertake their bookkeeping and the preparation of MTD compliant VAT returns as well.”

For those clients that remain unaffected by MTD for VAT, think about their future needs. What is their projected turnover? Which ones are likely to have to register for VAT and when?

Plan ahead and move any remaining reluctant clients to bookkeeping software – sooner or later, all will be affected by MTD (although HMRC has stated tax payers will not be required to keep digital records or update HMRC quarterly for income tax and corporation tax until April 2021 at the earliest).

Trudgett, Director of SwitchFoot Accounting, leapt on this golden opportunity: “I set my practice up to offer Xero consultancy and training and have helped lots of clients to migrate the data. Some have decided to outsource their bookkeeping and accounting to me as a result.”

Become a go-to expert for MTD

Position yourself as an MTD-compliant software expert to garner even more business.

Trudgett says: “I advertise through social media and talk about Xero and the changes coming with MTD at networking events. I’m now known as the local Xero expert.”

Busy Books are a Gold partner of Kashflow software. “We’ve had some clients find us through the Kashflow software accountants and bookkeepers directory where we’re listed,” Natasha Penny of Busy Books says.

You may also consider running MTD-themed workshops and webinars to attract new clients, or add value for existing ones.

Finally, touch base with your clients regularly.

Penny says: “We promote monthly and quarterly packages to encourage clients to come and see us more often, with their paperwork and with their business plans. Accountancy has shifted so much over the past few years – it’s not just about seeing people once a year now in a mad rush to do the accounts. Instead, it’s about frequent communication and, now, regular MTD reporting.”

In summary

MTD for VAT, the related software, and increased demand make bookkeeping more viable as a service, so it’s a great time to polish up your efforts if you currently don’t support your clients in this way.  

Read more on MTD and tax as part of our #AATPowerUp Tax 2020 campaign for September and October:

AAT: a strong alternative to university

Posted by & filed under Inspiring stories, Students.

Going to university used to be the ultimate achievement for many young professionals, and the only way to secure a successful career. But times are changing.

Since the advent of UK tuition fees in 1998, university has become increasingly too expensive for many students.

But in the last few years a number of prestigious employers, including PwC, Penguin publishing and Ernst & Young, have recognised this and broadened their recruitment schemes to include school leavers and apprentices.

Shifting mindsets

This more inclusive approach is also happening on an international level.

In Malaysia for example, some bright young students are opting for AAT courses over university and many employers are recognising that graduates aren’t the only talent.

Pui San had to give up university due to financial constraints. She’d been awarded a university scholarship, but this only covered the costs for the first year. Pui had no way to continue and ended up leaving to start a full-time job when she was 20.

Flexibility with AAT study

Pui San found the AAT course much more flexible than university, especially when it came to taking exams.

“Students are allowed to set and arrange their own exam date (except the synoptic assessment) which allows part-time students, like me, to be well-prepared and to fit it in around work,” she notes.

After embarking on her AAT course, Pui San found that she was able to take on additional responsibilities at her work. “My job scope has become wider, not just doing the data entries but also involving closing accounts for audit and tax submission purposes,” she says.

Thanks to part-time study alongside working, Pui is putting her studies into practice which will help strengthen her overall understanding.

Pui San has also seen her own confidence and efficiency improving. “I didn’t have any sort of accounting qualification before studying AAT but now, with this qualification, I can expand my future career opportunities.”

What employers want

AAT tutor Meiyoke Pak, says employers in Malaysia are focusing more on an employees’ skill set and attitude rather than their academic qualifications now.

“Employers do appreciate candidates from reputable universities but professional qualifications are very much sought after too as employers recognise that these also adhere to high standards,” she notes.

And AAT doesn’t just train students in bookkeeping and accountancy, but also gives students transferrable skills, which means they can hit the ground running at work.

“One of the most valuable lessons students learn would be identifying problems at work, and recommending solutions and actions e.g. standard operating procedures to tighten the processes,” she notes.

Such courses can also help when it comes to analysing and interpreting the accounts for business improvement and understanding credit management.

“Credit management is key to today’s businesses especially for local businesses here, where it is so competitive that businesses are finding it hard to pay their bills,” says Pak.

Grow in confidence

Pak, who has been an AAT tutor since 1994 and is a former CEO of an education group, says taking an AAT course has had a significant impact on Pui San.

“Pui San acknowledged that AAT had increased her confidence and abilities at work; as she sees relevance of her study to work, and it was easy for her to apply her knowledge and relate it easily to situations at work,” she notes.

“It’s also really helped her English and report-writing skills.”

Having to quit university because of financial issues would have been very tough, but Pui has taken charge of her life and is creating the career she wants thanks to AAT.

In summary

Increasing numbers of students like Pui San are finding university costs too prohibitive and are opting for alternative vocational courses like AAT to help further their skills and career. What feels like an ending, can in fact become a whole new start.

And the positives continue. AAT courses are very flexible, and can be run in the evenings, or fit in alongside a full-time job; you just need to choose the way that works for you. They can also help students progress more rapidly in their career, with the ability to train alongside work experience.

And the icing on the cake is that AAT qualifications are internationally recognised, so the sky’s the limit.

Check out approved training providers for AAT worldwide here

Further reading on alternatives to university:

Opinion: how VAT can be re-shaped after Brexit

Posted by & filed under Tax 2020.

As part of our AATPowerUp series on tax, we ask two experts for their views of the options for VAT after Brexit.

VAT is often controversial and complex. It’s not going to disappear after we leave the EU but there will be an opportunity for change.

Vaughn Chown, head of VAT at Gabelle

Post-Brexit, I think we may see a flat VAT rate of around 8% levied on all goods and services, reducing the level of VAT fraud. It means that newly incurred VAT is balanced out by savings made elsewhere. It’s pretty much a no-brainer.

Standardisation across the board

Michael Gove suggested abolishing VAT. I’m not sure anyone would go that far. However – imagine if there was only one rate of VAT.

A single rate would mean no exemptions or differentiation for financial services, transport, books, healthcare, etc. There would be just one rate of VAT on everything, payable by the final consumer and collected by suppliers.

You might think there would be an uproar when VAT is introduced on previously exempt items (the row about the ‘tampon tax’ was not that long ago). Yet has anyone found that the price of children’s shoes is ever 20% less than those of adults? 

Moreover, if VAT was reduced on alcohol, sweets, ice cream, chocolate biscuits, fizzy drinks, fast cars and motorbikes, would the price remain the same, with no consumer benefit?

Lowering the VAT rate

Reducing the standard rate of VAT reduces the profitability of VAT fraud (see point 3.4 here). One study showed that a 1% increase in VAT reduces VAT compliance by 2.7%.

We may need to retain a lower or nil VAT rate on basic foodstuffs, but where do you draw the line between a cake and a biscuit or a supply of catering hot food? The complexities start again.

If a VAT rate of around 8% levied on all goods and services reduces the level of VAT fraud and means that, where VAT is newly incurred, it is balanced out by savings made elsewhere, then why not?

Problems occur in the current VAT system when charging and recovering VAT between businesses, as is inherent in the system. Slowly, we are waking up to use of the reverse charge.

Potential savings

Simplification offers savings for the Government – no need to waste taxpayers’ money on cases concerning whether financial services are exempt, or whether you can claim the VAT back or not. HMRC would need fewer civil servants to police VAT, and what a relief it would be for business owners to no longer pick up the phone and hear: “I’ve got the VAT man on the phone for you”. 

Glyn Woodhouse, VAT partner at BDO LLP

Since the EU referendum, the focus of business has been on the immediate impact of a potential no-deal Brexit. This does, however, leave the wider question: how will VAT change, and can it be shaped to provide a more equitable and competitive environment after the UK’s exit?

The UK is free to decide for itself

The UK VAT system derives directly from European law. This means that, even though the EU VAT Directive is transcribed into UK law, the government and the courts are obliged to consider matters in accordance with EU jurisprudence. In cases of disagreement, it is EU law that takes precedence.

Once the UK is no longer part of the EU, it will be able to decide for itself how transactions in the UK should be taxed.

This will give the government an opportunity to address a variety of issues that it has never quite agreed with. The hated ‘tampon tax’ is one example, and it is likely that sanitary protection will finally be made zero-rated.

Another obvious example would be the VAT exemption for financial intermediaries. The UK has been at odds with the EU for more than 15 years, following the Arthur Andersen EU court decision. It is hoped that business may finally be able to take a view on this without the threat of that judgement being brought into play.

Creating confidence

While many will look to the government to reduce the burden of tax, a more realistic hope may be that, by making VAT law more responsive to UK businesses, policymakers and the public, greater clarity will emerge. It is hoped that business confidence in how the government will tax its transactions will be the real prize.  

Read more on VAT as part of our #AATPowerUp Tax 2020 campaign for September and October:

How to become an accountant in later life with AAT

Posted by & filed under Inspiring stories, Students.

Changing career direction mid-life may seem daunting, but it could be just what you need. Accountancy and bookkeeping are ideal for career-changers, and AAT is here to help.

You’re not alone

If the last time you took an exam was at school, then the thought of learning a new skill could be frightening. But if you’re thinking of a career change to accountancy, then you’re not alone; a Kaplan survey found that 55% of accountants started out in different careers.

Many AAT students are studying in mid-life: why not join them?

Richard Matthews MAAT

Richard was 37 years old and working for HMRC when he decided he wanted to move into an accountancy role. HMRC paid for his studies, and he was able to continue working full-time and study in his own time. Matthews got the promotion he wanted upon completing his AAT Professional Diploma (level 4).

“Before, I was always someone who just treated work as a day to day commitment: work was just something you did. Now I’ve been promoted I find my work really fulfilling and intellectually stimulating. All the hard work studying was so worth it,” says Matthews.

Why study accountancy?

Bookkeeping and accountancy aren’t just for those who love working with figures.

You could use your accountancy qualification to work in any sector, because they all need finance professionals. On this path, you could even use your accountancy qualifications to climb the standard career ladder; for example, chief executives often have accountancy backgrounds.

Or you could simply want the kind of career which allows you to work for yourself, letting you creating your perfect work-life balance.

The Kaplan survey mentioned earlier also found that the top three reasons given for swapping to an accountancy career were better career progression, better earning potential, and enjoying working with numbers.

You’re as young as you feel

Going back to learning can be a challenge, but an exciting one.

Catherine Littler, Head of Learning and Development – Accounting at Mindful Education says that a lot of her AAT students are career changers; “Some may not have done that well at school. They might have had other jobs or they might be parents who have had time out of the workplace.”

Speaking personally, she adds: “I took my AAT qualifications because I wanted to change direction. I was in the sports and leisure industry. I didn’t want to be a sports centre manager but wanted a career which allowed me to stay in touch with customers.”

Richard Matthews MAAT, recently completed his Professional Diploma (level 4) with AAT at the age of 42, and he reminisces: “I hadn’t been involved in education for nearly 20 years when I began my AAT journey, passing each level as I progressed was a great achievement.”

There will be plenty of important, valid reasons behind your decision to pursue, or not pursue, your career change, but don’t fall under the illusion that age matters. Learning new skills can be an invigorating and empowering thing; read more from other AAT career changers here.

Is it for you?

Studying for any worthwhile qualification demands dedication and hard work. Says Littler: “A successful student is one who has considered why they want to move into accountancy work. And there’s nothing wrong with needing the income as a motivating reason.” 

James Duggan MAAT had a fantastic career as a chef, cooking professionally around the world for the likes of the Royal Family, and more. It was everything he’d dreamt of, but something had to change when he realised how much he was missing out on his children’s lives. He got started with AAT to move into accountancy and build a more balanced life.

“The simple answer is my two daughters, Lillie and Olivia. I loved my old career, but it had downsides, the biggest of which was the lack of family life. I spent so much time away from home that sometimes I would go weeks, sometimes months without seeing my children, and anyone who knows me knows everything I do, I do for them. So when the little ones where approaching five and three years old, I essentially snapped. I had missed out on so much of their lives and I hated catering for that.”

He’s now a manager of a multi-million pound firm and spends more time with his children; “what more motivation could you want?”

Back to school

Perhaps the last time you studied or sat an exam, you were wearing a school uniform. And maybe you found schoolwork difficult and boring. But time changes everything.  

Littler adds: “What’s important is this: maybe you left school 10 years ago with no GCSEs. In that time, you might have brought up a family or had a job. You’ve changed in those 10 years and just because you didn’t like studying when you were at school doesn’t mean you won’t now. As long as you are determined, then you can learn and enjoy doing so.”

Hayley Lavens FMAAT started out as an administrator before completing her AAT qualifications, and she never expected to have a career in finance:
“I didn’t get on well with maths at school, although I ended up doing well in my GCSE’s I found it very hard work to get to grips with it so I thought, ‘well numbers aren’t for me.’ How wrong I was!” she says.

And of course, your experience of life will help you in your work: if, for example, you’ve worked in a shop then you’ve got customer-facing skills which will serve you well when looking for an accountancy or bookkeeping job.

How will it affect your life?

If you’re returning to studying in mid-life then it’s likely you’re going to have to juggle responsibilities.

You might have to combine studying with work, caring for children or elderly relatives or other commitments. But if you’re dedicated and determined, you can do it.

Richard Matthews successfully paired his studies with a full-time job: ” I did all my studying online, in the evenings and weekends. At the time, my daughter was just two years old and I’m a hands-on dad – but what helped me was going to my parents’ house when I needed quiet in order to study.”

So your life will definitely be affected, but you can take charge and find a way to make it work around your life.

With AAT qualifications, you can choose to study completely online, or you might prefer a combination of distance learning and part-time college attendance. Click here to search for an AAT course provider.

Family and friends

With a little help from those around you, studying for your AAT qualifications will be much easier and more enjoyable.

It can be a good idea to schedule set times during which you’ll be studying and times when you’re not, therefore, you know when you’re free to spend time with friends and family guilt-free.

And, adds Littler, be good to yourself: “Give yourself little rewards for studying: it’s an important motivational tool.”

Which course?

The AAT offers a range of courses, and you can search for which course would suit your career goals here.

For those looking to pursue a career in bookkeeping, or maybe even use it as a starting point for now, there are five dedicated bookkeeping qualifications in total. It starts off with the Access Award in Bookkeeping (Level 1), which is an entry-level qualification for those with no previous bookkeeping knowledge or experience. The next level is the Foundation Certificate in Bookkeeping (Level 2), which leads on to the Advanced Certificate in Bookkeeping (Level 3).

The Advanced Certificate is roughly equivalent in study terms to doing an A level. With this qualification, you could progress to professional AAT Bookkeeper status (AATQB). There are also Level 1 and Level 2 qualifications in accounting software.

The sky’s the limit

For mid-life students wanting a career in accountancy, there are separate courses which cover more topics than the bookkeeping equivalent, start with the Foundation Certificate in Accounting (Level 2).

Once completed, you could progress to the Advanced Diploma in Accounting (Level 3), and at this point you have the option of swapping over to the professional AAT Bookkeeper qualification if you prefer (AATQB).

The final course in the AAT accountancy qualification is the Professional Diploma in Accounting (Level 4), which can lead to professional AAT Accountant status (MAAT). In studying terms, this is a similar level to a foundation degree.

Once you’re AAT qualified and have the studying bug, you could progress onto a chartered accountancy qualification through awarding bodies like CIMA or ACCA.

In summary

It’s a big thing to consider changing career and studying for accountancy qualifications in mid-life. But it’s also an incredibly exciting opportunity.

Keep an open mind and shrug off your assumptions; even if you’ve never been a ‘school person’, accountancy could be something you really enjoy. Access your free online AAT course guide, which is chock full of information on our full range of courses and qualifications, and choose the course that’s right for you.

And our members have said it’s much easier when you have a support system around you, so make sure to involve your nearest and dearest in your decision: you’ll need their support when you study. Focus on the prize ahead and you will soon have AAT letters after your name and a new career ahead of you.

Read more about studying with AAT and hear from real AAT members;

  • Money – Earning potential can be a major motivator for studying: check out the AAT Salary Survey 2019 to hear what those in accountancy and bookkeeping are really earning
  • Inspirational stories – Have a look at real stories from our members talking about their career paths here 
  • Study help – AAT will support you in every step of your journey, with plenty of online resources, webinars, videos, articles, and our essential guides for your studies.
  • And if you want an idea of what kind of accountant you could be once you’ve got your qualifications, try this quiz