How I spread my wings with my accountancy qualification Posted 10/22/2018 by CIMA & filed under Inspiring stories, Students. This content is brought to you by CIMA Frances Holloway, senior management accountant at Network Rail Telecom (NRT), never thought she would end up working in finance but, after a short stint in the hotel industry mingling with footballers and celebrities, the accountancy sector beckoned. She also worked at Grant Thornton as an accounts assistant at the same time, but when the hotel manager offered her a full-time job running the conference and events team, she jumped at the chance. Starting off with AAT Frances really enjoyed the buzz of the hospitality industry, but decided to go along to an open morning at a nearby college to learn a bit more about accountancy. She began doing an AAT course and has, as they say, never looked back. “I was never a fan of writing long essays at school but was good with numbers. A colleague introduced me to AAT and, after having a break from studying when I left school, I wanted to learn something new that could open up some career opportunities. Little did I know that there is a lot of report writing that goes with the job, but I actually find that presenting and business partnering are the most enjoyable elements of my role now.” Becoming chartered Half way through her course, she moved jobs and joined the Northamptonshire County Council’s Treasury Management department and started her CIMA qualification. “All my colleagues were working towards CIMA or ACCA. At the end of the technician stage, I wanted to continue my studies and CIMA was the obvious choice!” She then joined the head office of Avon Cosmetics in Northampton, who sponsored her CIMA studies. “I supported their IT, marketing, distribution, reporting, revenue and returns and investment optimisation departments in various roles. This aligned really well with my practical experience for CIMA and I was able to use the transferrable skills I learned to work in these areas.” Frances got to meet a few famous faces at the iconic make-up brand too. “Tess Daly, Alesha Dixon and Jamie Redknapp were our brand ambassadors.” Frances stayed at Avon for several years after completing her CIMA qualification, but then started getting a little restless. “After spending a few years post qualification at Avon, it was time to spread my wings again and I felt very lucky to have a few job offers on the table,” she says. Experience the variety that accountancy has to offer She began working in the Home Retail Group financial services team as a senior planning analyst, which gave her a taste of the retail and financial services sector. She then joined Network Rail as a senior management accountant in the telecom’s department, part of the group’s digital railway team. “Working at Network Rail is really varied and interesting because it’s such a big organisation which has gone through lots of changes,” says Frances. Perhaps unsurprisingly, Frances says it hasn’t always been easy, especially combining her studying with a full-time job. “At the time it was hard work, studying for exams and working full time in a demanding role at the same time, but it felt like a great achievement once I got my exam results,” she says. Deciding on the next steps Frances focused on passing her exams first time around and studied in three-month bursts. She is now investing her time in doing more fun things. “I’m a trustee for The Northampton Theatres Trust (NTT) and am now learning to tap dance having finished my CIMA studies,’ she says. Going forward, Frances would like to broaden her skills and look for opportunities within commercial contracts and procurement. “I’d like to utilise the transferable skills I’ve learned, as well as gaining new skills in similar areas that are focused on achieving good commercial outcomes for the business.”
Be MTD-ready, get AAT’s free ebook Posted 10/19/2018 by David Nunn & filed under Making Tax Digital. There are just five months left for finance professionals and businesses to get ready for the introduction of Making Tax Digital for VAT (MTDfV). In response to questions from bookkeepers and accounting professionals, AAT has prepared a special ebook and software review, which is now available to download. Software review One of the most common questions from finance professionals is, what will the new software and processes be like? To help provide answers, we have explored many of the products from MTD-compliant manufacturers, including bridging solutions. View the software review in the guide. Managing clients Many businesses and non-profits have not yet heard of Making Tax Digital for VAT, and are unaware that anything is changing. A recent survey of AAT members estimated that only 50% of customers will be fully ready by the time MTDfV is introduced on 1 April 2019. Good planning and helpful messaging can improve this situation. That’s why we have a section on how you can prepare your clients. MTD experiences The theory is all very well, but the reality is what matters. What will it be like to go digital? And how easy will it be to file VAT returns? We’ve been finding out by talking to finance professionals who have been involved in HMRC’s MTD pilot scheme. You can read experiences of MTD from accounting professionals in the ebook. What is the best way to become compliant? The answer depends on the circumstances. Inevitably some will be late to the party and will need an easy and convenient way to get up to speed. For others, this is the time to plan for the future and start the transition to becoming fully digital. We hope you enjoy the free guide, follow up content and resources that we will be making available. Please download your copy using the button below. One final request, please share this resource with anyone you feel would benefit from it, including non-members. Download the guide
Four common myths about accountancy Posted 10/19/2018 by ICS Learn & filed under Accountancy resources. This content is brought to you by ICS Learn Accountancy is a misunderstood profession. People who don’t know much about it can be quick to make judgements based on stereotypes. Some people have held on to the outdated trope of the accountant as a rather boring, bookish figure that sits behind a desk all day and crunches numbers. We know that this is absolutely not true! Accountancy is a fantastic career option that deserves recognition beyond tired jokes about grey suits. Join us as we debunk 4 common myths and misconceptions about accountancy. Myth #1: Accountants are boring We’ll start with the myth with the most sticking power and before you say anything we know Maths was boring in school – but a successful career in finance is nothing like slogging your way through 4th period with Mrs. Fraser. There are an incredible variety of accounting jobs. Every organisation and industry needs sound money management, so your possibilities are endless. Want to experience different cultures? Accountants within international businesses travel the world, all expenses paid. Aiming for the top? Accounting is the place to be – over half of all top UK CEOs are from a finance background. You can even start your own practice and get the freedom to choose your own clients and working hours, giving you more flexibility over that coveted work-life balance. Plus, with the high salary you can earn, your free time will be decidedly un-boring. Want to take a luxury holiday or build your dream house? Accountancy can make it happen! And even if you do end up working within a ‘regular’ accountancy job, you’re likely to find it’s a lot more interesting and rewarding than you expected. Many fulfilling jobs sound dull on the surface – don’t let it put you off exploring what could be your ideal career. Myth #2: You need a university degree to be an accountant You wouldn’t be alone if you assumed that a university degree is a must-have if you want to work as an accountant, but guess what? That’s another myth. You can have a successful career in accountancy without ever setting foot inside a university lecture hall. Professional accounting qualifications are a great alternative and the beginner levels, such as the AAT Foundation certificate, often have no entry requirements. These qualifications are highly desirable to employers as they give you practical, industry-focused knowledge that you can use from day one. They can also be studied online, allowing you to keep your current job or get some work experience while you learn. All the major UK chartered bodies have a fast-track path for AAT graduates, so if you’re aiming for chartered status, you could potentially get there faster than by going straight to university. Accounting apprenticeships are another brilliant option, again often allowing you to become fully chartered in less time than the university route. Myth #3: Accountants have to be maths geniuses We can see why this myth has come about – when most people think of accountancy, they picture spreadsheets full of numbers and equations, but most accounting roles only require basic maths skills. The job often involves more report writing than number crunching, so having a good grasp of written communication is more important than being a mathematician. There are actually a whole lot of skills that are more valuable to an accountant than being able to do complex maths. These include: problem solving analytical skills time management. So, don’t be put off a career in accountancy if you’ve never been top of the class in maths. Myth #4: All accountants are tax experts Nobody would expect a cardiologist to be an expert in brain surgery and, like medicine, accountancy has many specialist areas – yet we often still expect all accountants to be able to dish out advice on taxation. If the thought of spending your days filing tax returns fills you with dread, then fear not! Luckily, accountancy is so varied that you can be an accountant without so much as touching a tax form. You could become a forensic accountant and CSI your way around financial records, ensuring they are compliant with laws and uncovering any errors, omissions or outright fraud. Or why not become a cost accountant? In this role, you get to examine and streamline organisations’ expenses, making them more efficient and effective. These are just two examples. There are so many different career options in accountancy that you’ll never be limited to doing something you find boring. Love the sound of accounting? Kick off your career in finance with an ICS Learn online AAT course.
Meet the mentor: Paul Lindley founder of Ella’s Kitchen Posted 10/18/2018 by Christian Koch & filed under Inspiring stories, Students. We have paired one AAT student, Bianca Maconchy with entrepreneur and qualified accountant Paul Lindley. Bianca Maconchy previously worked as a skydiving organiser, doing jumps everywhere from the Arctic Circle to southern Italy. There’s only one other activity that gives Bianca a similar buzz: creating spreadsheets. “I love spreadsheets!” she exclaims. “I create spreadsheets for fun!” In fact, she’d like more opportunity to work with Excel, which is partly why she spends 90 minutes studying AAT every night after her day job as an administrator for a fitness-club chain in Oxford. Her current role involves invoicing and profit and loss statements and, having taken to that element of her work, she wants to take her accounting knowledge further. What skills are needed to run your own business? Bianca: When you do a job you love, you don’t view it as work. Should I pursue something I’m passionate about or a more comfortable career path? Paul: When I started in accountancy at KPMG, I knew it wasn’t my passion, but it was setting me up to pursue my passion. I saw it as a stepping stone, a way of getting a qualification. Then I got a job as Nickelodeon’s financial controller. The CEO there was also my mentor, and saw the potential in me to be commercial as well as financial. So I wasn’t just looking after accounts and processing; I was also involved with business strategy and negotiating contracts with Sky. So at Nickelodeon I moved from being an accountant to thinking about consumers and becoming a marketeer. Those two things [accounting and marketing nous] gave me the confidence to set up my own business, along with passion. Bianca: So you needed your accountancy background when setting up Ella’s Kitchen? Paul: Yes. For the first time, I was putting things into practice using my money, such as filling out VAT returns. Because it was my money, I had to work out the best ways of spending it. How did you deal with progression? Bianca: I love the company I work for, but I feel there’s not much for me to learn unless I move forward. What would you do if you felt you couldn’t progress? Paul: I think you’re in a good position; you feel you’re in a work culture that’ll listen to you. Have a conversation with somebody, such as a manager or HR person, and ask: ‘Where am I going?’ At Ella’s Kitchen, we try to have an honest conversation with people. Sometimes, it’s time [for staff] to leave. Some employees will only spend two years there before moving on. I think we get the most out of that person if we help them move on. It saves dishonesty, stress and the shock of leaving. Bianca: I’m also unsure about the right [accounting] position to go for. How do I choose the right path? Paul: What drives you to become an accountant? What drives you to look after your daughter, be with your husband, do your skydiving and then have the energy to learn from webinars in the evening? The thing I always ask myself and others is: ‘Why?’ When I started Ella’s Kitchen, I wrote down the question ‘Why?’ and the things I wanted to achieve. None of them was to make myself rich. What should I do next? Bianca: What do you recommend I do now? Paul: In the short term, I’d worry you’re going to run out of energy! It’s important to take time out to reflect and evaluate. Secondly, write down your long-term vision of where you want to go. As long as you’ve got broad direction, plus energy and confidence, you should find that you’ll be alright. I think you’re an entrepreneur who’ll set up your own business one day. Bianca: I hope so! Paul: Make sure you use your AAT training. It’ll benefit you in ways you don’t realise now. There’s a discipline with working with numbers and a logic with spreadsheets. But numbers aren’t everything – they’re the code to understand what’s really happening and why people buy things. This article first appeared in our Autumn 2017 issue of 20 magazine.
Setting up payroll for the first time Posted 10/17/2018 by Julie Hodgskin & filed under Pensions and payroll. A happy client is a joy to have and worth cultivating. But when the client’s business expands, and the owner wants to take on employees, the agent or bookkeeper needs to consider the time and skill implications required for the additional work. Making the payroll decision The first question that must be answered is ‘Do you want to do it?’ If the answer is yes, then is the client going to be charged for what may initially be one employee or is the cost for that employee going to be absorbed by the bookkeeper? Whether the costs are charged or absorbed there will need to be an agreement setting out the parameters of the work to be done. The agreement should preferably be in writing but, is often verbal. To maintain a good relationship with the client it is suggested that a written document outlining the points agreed be sent to the client as a reminder of the conversation. If the verbal agreement was a while ago, a review of the situation is recommended, and then written up. Organising a contract between you and your client The contract should specify the costs for each payroll run, the payday and the deadline by which the information should be received so that the payroll is completed on time. Considering the right software choice The next decision to be made by the bookkeeper is one of software choice. It may be that it is only the one client that will need payroll services. In which case, investing in expensive payroll software may not be cost effective, and Basic Payroll Tools (BPT) as supplied by HMRC may be suitable. But if the accounting software used offers payroll software as an add on, then that should be considered. Proprietary software can be expensive, however, there is also a spreadsheet that is made available on The Pensions Regulator . The latter is free, but it is only a spreadsheet. It cannot be integrated into payroll software. The benefit of this needs to be weighed up against other available products. Setting up the right procedures Payroll is defined by salary, age and deadlines. Procedures will need to be set up, for example, to review each employee pay against minimum wage limits. Apprentices should only be on the apprentice rate for the first year. After that, the minimum wage for the relevant age range should be used. Payslips are legally required to be available to employees on or before the payday and should contain, at the very least, the minimum information required by law. Meeting the Full Payment Submission (FPS) deadline, and prompting the client to pay the tax and national insurance liability to HMRC every month will become the bookkeepers’ responsibility. Electronic prompts and other similar methods should be utilised to ensure that these important duties are met. Automatic enrolment – pension payments Along with payroll duties there may also be automatic enrolment requirements. All organisations are now required to automatically enrol their employees for pensions. Again, the action to be taken is dependant primarily on age, though other employees can opt-in, and any employee who has been making automatic enrolment payments can at any time opt-out. All this will need to be managed. For new employers the requirement is from day one. The contract for this duty will need to be specific as to what the bookkeeper’s duties are, and what the employer will be responsible for. The negotiations should encompass such tasks as, who will send out the notifications and letters informing employees of rights, responsibilities and options. Who will be the main recipient of employee communications, and if the recipient is the employer, then how will the information be communicated to the bookkeeper? What pay should the pension contributions be based on? Basic pay? Basic pay plus overtime? Basic pay plus bonus? All three? It is important to document and get confirmation of which amount to use, from the client. When will the deadline for pension information be? It may or may not be the same time as the payroll information. Which pension company should be used? The client will have to contact pension companies and make the decision. The bookkeeper cannot advise. All the above, and other points need to be discussed, as the client will usually be unaware of the complexities involved. Discuss with the client, and while there, inform of the costs for this tax year and the increase in employer and employee contributions due in the next tax year. Procedures The bookkeeper will in probability be the one to set up the pension with The Pensions Regulator. Though the employer will have supply information, the bookkeeper will no doubt be the one to process the automatic enrolment duties. The bookkeeper will also need to complete the Declaration of Compliance at the end of the process. Failure to meet The Pension Regulator Requirements can lead to notices and penalties. Enrolling, opting in and opting out are all options available to the employee. Records of their decisions, of enrolments and of the pay used need to be kept. Who keeps them? Review every month of the age and pension status of each employee needs to made. Payments need to be deducted, recorded and paid to the relevant pension company. The bookkeeper will need to decide whether to take on the payroll and pension work, whether to outsource or whether they advise the client to find another bookkeeper. If the decision is to take on the extra work, written records of discussions, contracts, agreements and procedures will prove invaluable in ensuring that the happy client remains happy, and the bookkeeper satisfied that a good job is being done.
Clock ticking for late payments Posted 10/16/2018 by Phil Hall & filed under AAT news. There can be no denying that late payment is a big issue for SMEs. In fact, for some small businesses, it isn’t just a case of late payment but often “no payment”. The Association of Independent Professionals and the Self-Employed (IPSE) recently confirmed that 43% of the self-employed (many of whom may be operating on a limited company basis) have never been paid for work that they have undertaken and invoiced for. Indeed, even those with respectable payment terms of 30 days may still not pay their suppliers within the agreed terms. This point was far from uniquely demonstrated by Grainer & Worrall Engineering who paid suppliers within agreed payment terms in just 4% of cases for the six months from June to December 2017. The impact of late payment Almost a quarter of insolvencies (23%) are caused by late payment issues. Even for those companies that manage to absorb late payment, the loss of income can stop small businesses from investing and growing, it can also damage productivity and generally has a very negative impact. Of course, that’s to say nothing of the often severe mental health implications that late payment can have on both business owners and sometimes other members of staff. Why AAT? 60% of AAT’s 140,000 members either work for or run their own SME and its 4,250 licensed accountants provide tax and accountancy services to more than 400,000 British SMEs. It’s a big issue for AAT members and an even bigger issue for members clients. Similarly, with so many AAT members working for large organisations – 80% of the FTSE 100 has an AAT apprentice in their finance function – raising further awareness and agitating for change in those big organisations is key. Solution The Prompt Payment Code was introduced in 2012 to try and address this problem. This voluntary code requires large companies to pay their suppliers within a maximum of 60 days. Only 2,000 companies have signed the voluntary code but even some of these signatories are in breach of it because they have payment terms beyond 60 days. There is very little enforcement of the code and no financial penalties are imposed for a failure to comply. What next? Earlier this month, the new Small Business Minister, Kelly Tolhurst MP, who has thankfully already expressed some interest in getting to grips with this thorny issue, launched a public call for evidence on the subject. AAT has today responded to the Department for Business, Energy & Industrial Strategy (BEIS) call for evidence by highlighting that the past decade or so has seen a stream of tweaks, voluntarism and reliance on big employers to do the right thing, all of which have failed to address the problem of late payments. AAT therefore believes that the time has come for Government to legislate to solve the problem once and for all, and has made three key recommendations to solve the problem. These are: that the Prompt Payment Code should be made compulsory for companies with more than 250 staff that payment terms should be halved from a maximum of 60 days to a maximum of 30 days that a clear, simple financial penalty regime for non-compliance should be introduced and enforced by the Small Business Commissioner Support These recommendations have already won the support of a diverse range of SMEs. For example, Peter Humphrey of Kesblade Ltd, a property management firm based in Rochester, said; “At some stage, late payment will be a problem for most small businesses and despite voluntary attempts to fix the problem through the Prompt Payment Code and Small Business Commissioner, the problem remains stubbornly high. I’d certainly support AAT’s recommendations for the Code to be put on a statutory footing for all companies with 250+ employees, for payment terms to be no longer than 30 days and for fines to be introduced for companies who fail to do this. This would help tens of thousands of SMEs and could hardly be considered a burden for large companies.” Leanne McConnell of Virtually Perfect, an Eastbourne based SME, is another business owner keen to see reform. Speaking to AAT last week she said; “My business partner and I have sometimes had difficulties getting money owed which probably wouldn’t have happened if there was a legal requirement to pay within 30 days and the realistic threat of a meaningful fine if it wasn’t paid. That’s why I support the AAT recommendations for change and really hope the Government is listening.” Meaningful action is required AAT has focused on the impact that developments to the Prompt Payment Code are likely to have on AAT’s members, members clients and employers and with this in mind will continue to press for change at every available opportunity. It’s important we do so for the millions of organisations like Zip Us In who alerted us to their views on the subject just a few days ago. Kate Bell, founder and Director of Zip Us In, an SME owner based in Salisbury, highlighted her concerns as follows; “As a start-up company, late payment caused me several difficulties but even now, as a firmly established and successful company, late payment can have a big impact on me and my company. AAT’s recommendations to halve maximum payment terms from 60 to 30 days and to require all companies with 250+ employees to sign the Prompt Payment Code are definitely steps in the right direction. Enforcement is also key because although imposing obligations is great if companies meet these obligations, there needs to be strong enforcement action against those that don’t – an initial warning followed by a fine for non-compliance would seem like a sensible option.” Previous efforts to tackle the scourge of late payment have made little difference, the time for meaningful Government action in this area is long overdue and so, with the clock ticking, AAT is urging the small business Minister and her department to give serious consideration to AAT’s recommendations and to act without further delay.
The impact of automation on gender equality Posted 10/16/2018 by Georgina Fuller & filed under Accountancy resources. More than six million workers are worried their jobs could be replaced by machines over the next 10 years, according to a recent government report. The Institute for Public Policy Research (IPPR), estimates that 44% of jobs could be automated in the next two decades. But what impact will automation have on gender equality and will it help or hinder women when it comes to creating a more level playing-field in the workplace? Level playing field Clark Boyd, digital marketing consultant and research director at ClickZ tech publication, says that technology usually reflects the outlooks and biases which are prevalent at its time of creation. “Automation sounds impersonal, cold, and mechanical. It creates a sense of distance from people, as though it were removed from us altogether,” he notes. “However, any technology springs from our current reality and tends to mirror existing biases. In some cases, it only serves to entrench them further.” Automation could create a more level playing-field, but only if we design the systems to do so. “The World Economic Forum predicts it will take 217 years to close the global gender pay gap and technology alone will do little to bridge that chasm,” says Boyd. “Those best placed to take the new jobs will know how to work alongside technology to maximise output. Men are more likely than women to have this expertise as they currently hold the majority of high-tech jobs and could therefore be in a better position to avail of automation.” The impact of automation on accountancy In order to prevent a gender imbalance, we need to ensure we address the issue pre-emptively, Boyd advises. “Should automation place a premium on advanced skills, it is essential that this training is provided to avoid an extension of the current gender imbalance in terms of pay and opportunities,” he says. Automation will have a significant impact on most industry sectors, but especially finance and accountancy. “It will take over a range of time-consuming, laborious tasks. In turn, this will free up valuable resource for accountants to analyse data and work more as a strategic adviser,” Boyd predicts. Annabel Kaye, director at Irenicon employment law specialists, says gender equality is always affected by technological change. “Moving from home-based industries to factories during the industrial revolution had a profound effect on the work women (and children) were paid to do,” she notes. “The more recent shift away from heavy industry and physical muscle towards service sector jobs has benefited working class women compared to working class men, since the women have adapted to service sector roles.” How will gender equality be affected? Technology has already had a significant impact on the accountancy and bookkeeping sector, and this will continue with the onset of automation. “We are already seeing the impact on the bookkeeping side, with self-service expense apps and semi-automatic sales and purchase invoice systems integrating seamlessly into books,” says Kaye. It is, she believes, possible that data-entry bookkeeping roles will disappear altogether over time. It will take 217 years to close the global gender pay gap The question is, what impact will this have on equality? “There are lots of opportunities for women to create new skills sets and roles, spanning the gap between understanding the tech and how it applies to accounting, and actually understanding the client and what they want,” says Kaye. Upskilling in the workplace Women who have already mastered accounting should not have no difficulty in adding into that a working knowledge of apps, software platforms and AI, she adds but it is up to employers to ensure women are properly represented and to provide training programmes to upskill them. “All too often men are taught about the new technology from the point of view that they will understand it, control it and even repair it and women are taught about it simply as users,” she notes. “Employers need to be proactive and make sure they are not embedding this kind of divide into the new technology. Finding historic and current role models to show women that this is something we can all do is going to be as important as making the training available.” Leaders need to set the tone Professor Binna Kandola OBE, senior partner of business psychology firm, Pearn Kandola, believes that top-level roles should remain largely unaffected by automation but that women in less senior roles may be hindered. “If the roles towards the bottom of the organisational ladder are the most likely to be lost, recent data on the gender divide in senior positions suggests that women will be the first out of the door. PwC, for example, reported earlier this year that four-fifths of its partners are male.” Ultimately, says Kandola, it will be up to those in leadership positions who set the tone “Business leaders are less likely to believe that their jobs could possibly be automated which means they will look to the more junior roles – which are usually female dominated,” he notes. “It’s a continuation and manifestation that men are inherently more capable of complex decision making – a sexist belief that has been around for centuries.”
Get digital skills early to support your career Posted 10/15/2018 by AVADO & filed under Career, Students. Much has been written about the impact of automation and the so-called Fourth Industrial Revolution and accountants with digital skills will be in greater demand than ever before, according to a recent report. Eight in ten small firms are actively recruiting more staff with cloud-based accountancy skills, according to Xero’s Accounting and Bookkeeping Industry Performance Report. The study of 940 practices, published earlier this year, found that the trend continues for mid-sized firms – with nine in ten companies with more than 300 online accounting clients looking to recruit new staff compared with 59% for firms with fewer than five. Having the right skillset Laura Holden, communications executive for Reed recruitment firm, says that, in a competitive job market, it’s more important than ever for accountants to show they have the right skillset. “Having the right training behind you shows prospective employers that you’re an expert in the field – meaning you’ll stand out from other applicants,” she comments. “And with companies willing to pay higher salaries for employees with the right digital knowledge, you’ll ensure your skills are always in demand.” Zoe Whitman, founder of But The Books accountancy and bookkeeping practice, says taking an online course helped her understand the basics of how accountancy software works. “When I set up my practice, it felt important to become affiliated with one or two software providers, and to achieve adviser status,” she says. “I found it a valuable process to go through as I think it’s important to understand how the software you’re going to use actually works.” Getting an edge over the competition Ben Rendle, financial controller at Plymouth Argyle Football Club, says that taking an online skills course helped give him the edge over the competition. “The course I did has really helped in terms of my career prospects,” he says. “I am also about to launch my own practice alongside employment so the efficiencies of the cloud will allow me to do this when I may have struggled previously.” Rendle says it may, however, be easier for ‘digital natives’ (people born after 1981) than ‘digital immigrants’ to adapt to such programmes. “Whilst digital natives will likely adapt to this technology quicker than digital immigrants (like me) they are likely to have a different set of challenges,” he notes. “Increased automation will mean that there are fewer of the traditional entry level accounting jobs which have historically relied on data-entry, meaning that the new generation of accountants will need to develop their non-technical advisory skills at a faster rate.” Show the benefits Whitman says even people who aren’t necessarily that tech-savvy can probably benefit. “Cloud-based accounting is designed in a way which aims to make bookkeeping accessible, even to people who say they’re not digitally minded,” she notes. “I took my accountancy exams back in the early 2000’s when everything was paper and text book based. Things have changed a lot even in the 12 years since I qualified as an accountant and I’ve had to adapt a lot too.” So how can employees encourage their employer to help them invest in digital skills training? Show them how much value it could add to the team and the firm, says Holden. “Whether it’s how the new skills could improve your day-to-day tasks or the amount of money your company could save by having these skills ‘in-house’, showing how the training will benefit the business as a whole is a key part of ensuring you get internal buy-in.” Future proofing your career Online training provider AVADO have noticed the increasing need for digital skills among accountants. They recently entered into a partnership with Xero to provide a free Xero Advisor Certification included with all their finance courses, including AAT. Amy Crawford, managing director at AVADO, says when you invest in a training programme, you are essentially future-proofing your career. “The accounting sector is being impacted just as much as any other by digital transformation, so it’s more important than ever for today’s accountants to stay ahead of the curve,” she notes. “Which is why we’ve partnered with Xero: to ensure that graduates from our accounting courses are confident in using cloud-based accounting technology and are kept up-to-date with the latest advances in their industry, significantly boosting their employability.” Mike Day, director of UK education at Xero, says that “upskilling” is no longer a “nice to have” but an essential part of developing your career, especially if you run your own business. “Our bookkeeping and accounting practices tell us that recruitment, followed by up-skilling is their biggest barrier to success. And with the government’s initiative Making Tax Digital on the horizon, the demand for these skills is only going to increase. So it’s not a question of whether to start – it’s when.” Click here if you’re interested in developing your finance skills online and claiming your free Xero course
How to become a successful introvert Posted 10/12/2018 by Jessica Bown & filed under Career. Introversion is an often misunderstood personality trait, assumed to mean a person is simply shy or lacks social skills. However, further understanding over introversion has revealed there’s so much more to consider. Coming from Latin, intro meaning ‘inward’ and vertere meaning ‘turning’, there is more of a desire for introverts to focus on their internal feelings, than openly express themselves as an extrovert might do . Scientist Albert Einstein, businessman Bill Gates and author JK Rowling have made their mark on the world, challenging work in their respective fields, they are also self-proclaimed introverts. Proof that your introversion doesn’t need to hold you back in life. But while there is no doubt that introverts can be just as successful as extroverts, sometimes they need a bit of extra encouragement to really shine in the workplace. Introverts vs extroverts According to the Cambridge English Dictionary an extrovert, meanwhile, is “an energetic, happy person who enjoys being with other people”. If you don’t feel this describes your personality, you might feel you are at a disadvantage when it comes to getting a job and advancing in your career. But that is not necessarily the case, there are many famously successful introverts – others include former US President Barack Obama and Facebook founder Mark Zuckerberg. While they consider themselves to be introverts, they posses the necessary qualities that can make them highly effective leaders. These qualities include: They plan ahead, allowing them to avoid making rash decisions They form deep, meaningful relationships; rather than charming many, they gain the trust of a few They work independently, meaning they don’t need their hands held They listen to colleagues and take their ideas on board They tend to be better at managing their emotions They have original ideas, often because they are less concerned about following the crowd They do “one thing well” rather than being constantly attracted by new initiatives They share the glory; introverts do not generally seek the limelight Here are some pointers on how to harness these great qualities and make your natural reserved nature work in your favour. Having a defined role to play helps reserved people to feel more confident about being heard Play to your strengths Some may feel that certain jobs could be more suited to extroverts than to introverts. Sales roles, for example, that require constant contact with other people, are almost certainly more likely to appeal to outgoing, gregarious individuals. A computer-programming role, on the other hand, is more likely to interest those who enjoy their own company. However, while most people are happiest in a role that suits their personality, being naturally introverted does not have to determine what sort of job you do. Now a dentist, Saavan Shah was very reserved as a young man but has found talking to patients has helped him to overcome his shyness. “It was a part of the job I found very difficult at first,” he said. “But I actually now enjoy chatting to my patients, and think being forced to be more sociable in my working environment has made me a lot more confident generally.” Find your true calling Having to talk to people at work can make it easier for introverts such as Shah, to enjoy interacting with others. But a lot of people who are very successful in their working lives continue to be struggle in social situations. According to psychologists, this is because having a defined role to play helps reserved people to feel more confident about being heard. That was certainly the case for former American First Lady Eleanor Roosevelt, another self-proclaimed introvert. Withdrawn and lacking in confidence as a young woman, after discovering a passion for social causes she became a United Nations delegate, a human rights activist, and a lecturer who averaged 150 speaking engagements a year throughout the 1950s. Bill Gates too believes being able to work in a field he was passionate about was key to his success. “If you’re lucky when you’re very young, you find something you’re passionate about,” he told a reporter who asked him about being a successful introvert. “I did when I was 13 years old. I found computers and software. It took me another five years to figure out that was my life’s primary work, but that’s a lucky thing.” Don’t ignore your need for “me time” Spending time alone is a great way to get your creative juices flowing. As Einstein is widely quoted as saying: “The monotony and solitude of a quiet life stimulates the creative mind.” So don’t be afraid to ask your boss if you can work alone on a creative project or a problem that needs solving if you think it will yield better results. Human resources manager Sarah James said: “Some people work better alone; others work better as part of a team. “I have both types working for me, and I would always encourage them to go about a task in the way they feel is best suited to them. “I also try to ensure the more introverted members of the team get the chance to air their views, even if it’s in a one-on-one chat after a meeting rather than in front of everyone.”
PAYE settlement agreements Posted 10/11/2018 by Julie Hodgskin & filed under Pensions and payroll. A PAYE Settlement Agreement (PSA) can be a very effective way to give a benefit to an employee without the employee having to pay tax and national insurance on that benefit. Instead, the employer shoulders the cost. This can also be a very efficient way to reduce the administration involved in producing P11Ds, which is where the tax and NICs on the benefit would normally be declared. So, given the convenience of the PSA, what benefits can be included? And how is the tax and national insurance calculated? Legitimate benefits Before rushing down the PSA route, there are other options available to the employer to consider, and these, if the benefit qualifies, would mean that the income tax and national insurance costs are no longer relevant or payable. The other options are: • Qualifying business expenses, and • Trivial benefit Qualifying business expenses These are costs incurred ‘wholly and exclusively’ in the course of the business, and as such can include genuine work-related expenses such as business travel and subsistence. Trivial benefits The statutory exemption for certain types of benefits costing £50 or less. All of the following must apply • it cost you £50 or less to provide • it isn’t cash or a cash voucher • it isn’t a reward for their work or performance • it isn’t in the terms of their contract PSA To qualify for inclusion in a PSA it must be for items that are ‘minor, irregular or impractical’ to allocate to individual employees and that cannot be included in either of the above categories. Examples of the above Below are some examples of the above categories. A group of employees are working late. The manager orders food and drink for them and, as the employees are working late into the night, a taxi to run them home. As neither of these costs can be allocated to each individual employee in a way that is logical or conducive to employer/employee relations, it is much more cost effective for the employer to pay the tax and national insurance on the amounts. However, a gift of a bottle of wine, or a gift voucher, provided the cost is below £50, should be considered as a trivial benefit, not an item suitable for PSA. And the cost of a Christmas tree and decorations for the shop front, along with the taxi fare to go and collect it would be considered a qualifying business expense. Exceptions to a PSA Items that cannot be included in a PSA are: • Cash payments • Benefits regularly given to an employee • Allowances • Shares • Items that have already had PAYE deducted • Items included in an employee’s tax code • Profits Employee Car Ownership Scheme payments Now that the choices of classifications have been identified and the costs allocated, the tax and national insurance can be calculated. Calculating the cost of a PSA A PSA is calculated at an employee’s marginal rate of tax. For the tax year 2018-19 this means that the income tax due on Scottish tax payer benefits will be different to that of the rest of the UK. The differing rates are shown below. So, if an employer, as a reward for all the employees’ hard work done this year buys the staff Christmas gifts worth £60 each, the amount of tax and national insurance due per gift would differ depending on the tax code of each employee. Calculating the income tax due An employee with a Scottish prefix, paying the intermediate rate of tax would incur tax of £60 ÷ (100-21) x 21 = £15.95 (to the nearest penny) An employee with a marginal tax rate of 45% would incur tax of £60 ÷ (100-45) x 45 = £49.09 (to the nearest penny) So, the income tax cost to the employer for both gifts would be £15.95 + £49.09 = £65.04 Calculating the national insurance contributions The national insurance contributions (NICs) for each gift is calculated on the gross amount. The Scottish tax payer’s gift cost in total the net amount plus the tax £60 + £15.95 = £75.95. It is this amount that would be used to calculate the employer and employee NICs as follows: Employer’s NICs £75.95 x 13.8% = £10.48, employee’s NICs £75.95 x 12% = £9.11. Total cost to the employer would be £95.54 (gift of £60, tax of £15.95 and NICs of £10.48 and £9.11) The cost for the non-Scottish (additional rate) tax payer would be £60 + £49.09 = £109.09 plus employer’s NICs of £15.05 and employee’s NICs of £2.18, giving a total cost of £126.32. Total cost to the employer for both employee gifts: £221.86. Conclusion Used appropriately PAYE Settlement Agreements can be an efficient and effective way of rewarding staff for those one-off occasions. Just be aware of the tax status of employees when calculating the tax and NICs due.