Accounting Excellence Awards 2024 highlight AAT members’ achievements Posted 09/23/2024 by AAT Comment & filed under Community, Events, Members. The awards recognise contributions to accountancy, so it’s no surprise its shortlists feature more than a dozen AAT members. Now in its 19th year, the Accounting Excellence Awards look to host their biggest event yet at this year’s ceremony, which takes place on Tuesday 8 October at Camden Roundhouse. More information and remaining tickets are available for purchase here. The Accounting Excellence Awards recognise accountants who have demonstrated excellence in their work, pushed the boundaries of innovation and made remarkable contributions to the accounting profession. They highlight the most ambitious firms, teams and individuals in accounting and finance. So it’s no surprise that AAT members are represented in so many categories. “The sheer breadth of recognition in this year’s Accounting Excellence Awards showcases the exceptional talent within AAT – but it also reflects our inclusive professional community. We’re incredibly proud of all finalists and the positive impact they’re making across the industry every day,” Sarah Beale, CEO, AAT Shortlisted members Rosie Berridge – Bookkeeping Team of the Year Annabel Barnes – Bookkeeping Team of the Year Michael Clifton – Bookkeeping Team of the Year Grace Hardy – Breakout Star of the Year Libby Walklett – Client Transformation Award Alasdair McGill – Employer of the Year (Small Company) Sam Gooding – Employer of the Year (Small Company) Becky Glover – Finance Director of the Year Lee Thomas – New Firm of the Year Kirsty Heywood – Pride Award – DEI Sam Nicholson – Progressive Payroll Team of the Year Max McHugh – Small Firm of the Year (London and South of England) Paul Donno – Small Firm of the Year (Midlands, Wales, and East of England) Isobel Chaplin – Sole Practitioner of the Year AAT’s involvement AAT is also proud that Claire Bennison, Executive Director of Customer, Partnerships and Innovation at AAT, is invited to judge the Breakout Star Category. She says “The Breakout Star Award is particularly exciting as it showcases emerging talent in our industry. These finalists represent the future of accounting, demonstrating creativity and innovation that will help shape our profession moving forward.” The awards will take place at Camden’s iconic Roundhouse, London next month. More information and tickets are available for purchase here.
Using assessment centres to recruit finance staff Posted 09/20/2024 by Christian Doherty & filed under Employers, Members, Recruitment. How larger corporates are changing their recruitment practices to find and engage the best talent. Finance staff are always in demand. But good finance staff, with the qualities most prized by employers in larger corporates – technical skill, comfort with technology, well-developed leadership capabilities – are even more sought after, particularly by larger organisations with increasingly complex needs. That partly explains why the old methods of finance recruitment are changing. The UK’s top employers are moving from parcelling out vacancies to recruiters, placing ads in trade publications, doing the milk round for grads or relying on word-of-mouth referrals to a more rigorous and professional approach. If you build it, they might come Spencer Harrison is head of Learning and Development at convenience retailer EG Group. As with most other businesses, EG relies on the injection of fresh energy that new finance staff provide. However, he acknowledges the recruitment challenge facing the business: EG’s Blackburn HQ location can sometimes be a block on attracting bright young things to join the finance team. “As philanthropic as it is, us having our head office here, and investing in the locality that the business originates in, and very honorable and very worthwhile, it can be difficult to attract talent to Blackburn,” he says. “We know that we can’t compete in terms of perception or penetration into the market with organisations like Kaplan and KPMG,” he says. “We recognised that, so we’ve moved to an assessment centre model to put us in the same sort of market. “We do know if we can get people on our site then the kudos and gravitas of ‘Head Office’ will dispel any concerns that those people have and then when we present the company to them that removes many of those barriers.” Meeting on location Once on site, Harrison and his team have prioritised in-person recruitment strategy that focuses on developing rapport and engagement with candidates. And he points out that despite the changes wrought by Covid-era home working, getting candidates into the office early on is critical. “Running recruitment in-person makes it a little bit more compelling and personalized. Although we’re still meeting digitally and remotely nowadays, what we’re finding is, if we want to retain talent – and financial talent is difficult to retain because it’s a very competitive market – having that social interaction is much more beneficial in the short, medium and long term.” In common with its peers, EG Group now invites candidates to a session at the assessment centre where they tackle three components. ”We’ve simplified it in many ways,” says Harrison. “There’s a half an hour introduction to the business, and the key stakeholders within the team and so on. Then the psychometric testing takes an hour. Finally, we move into what is essentially a soft skills assessment in terms of interface with other people, personality skills, problem-solving in a realistic environment, presentation skills, social interaction and so on. And there’ll be group tasks,” he says. And, rather than throwing people together at random, Harrison says each team is created based on the previous test results. “That’s so we can see how people will respond to each other, or how someone more capable will work with someone that’s perhaps less capable.” A comprehensive model for a well-rounded cohort The holistic assessment model is used at many large corporates aiming to attract well-rounded finance staff. One is Network Rail. “There are a few different areas that we focus on,” says Annabel Allen, Apprentice & Graduate Programmes Manager for Group Finance at the body. “I would say ability to work in a team is a big thing, to demonstrate collaborative skills. Then I would say the passion for the scheme and for the industry. There’s so much that anyone can find about the rail industry and Network Rail before they come to an interview. That’s quite a basic thing that we expect people to have researched because we do have a presence out there. “Then finally, a natural skill for finance is good but that doesn’t necessarily mean you have to be a maths genius. It just means that you’ve got that financial flair in the way you think.” Having adopted the assessment centre model, Allen says the testing regime is constantly honed and improved with one key factor in mind: the needs of the business as a whole. “Our early careers team are already reviewing and building on the exercises for next year’s assessment centres,” she explains. It’s an area that the recruitment and careers departments tweak based on what the most recent intake may be lacking, or what assessors say the team should consider focusing on. “All of our assessors are from the finance function, so they’re always really engaged and they come back to us afterwards and critique the exercise, and tell us which parts could be better.” Bringing recruitment practices in-house That level of detail explains why more corporates are moving away from using recruiters in favour of developing bespoke in-house teams targeting in the right talent for the business needs. “I’m not being disrespectful to recruiters, because that’s the nature of that industry and it’s commission driven, and since we’re a commercial business we understand that,” says EG’s Harrison. “And some are better than others. But we run those figures to see how much we are spending on recruitment, how much we’re doing on advertising, how much are we doing to our own website. When we look at those metrics and see which is successful, it’s a little bit of a spiky profile. “When making spend more efficient, recruiter systems aren’t necessarily aligned to what we’re looking for. As much as we articulate that to them, there’s always a distortion because their interest is in selling us a product that sometimes doesn’t meet our need. Taking it in-house means we’re in charge of our own needs now.”
Accountants discuss pros and cons of new benefits-in-kind reporting requirements Posted 09/19/2024 by Annie Makoff & filed under Members, Pensions and payroll. Benefits-in-kind changes are intended to simplify reporting requirements, but they will place demands on financial service providers. Here’s what you should be aware of. The new benefits-in-kind reporting requirements come into effect from April 2026. They require significant changes to payroll processes and systems: from this date, it will be mandatory for benefits-in-kind to be included on payroll, removing the need for annual P11D forms. Examples of benefits-in-kind include: company cars private health insurance childcare vouchers gym membership travel expenses. Currently, benefits-in-kind are reported via P11D or P11D(b) forms for tax purposes. The employee receiving taxable benefits either pays relevant income tax through a self-assessment form, or HMRC collects the tax through a tax code adjustment via PAYE. The outstanding Class 1A NIC due to HMRC is then paid by the employer. It’s already possible to payroll certain benefits-in-kind, but there is still a requirement to complete a P11D(b) form. P11Ds can be labour-intensive and time-consuming so it’s hoped the latest regulatory changes, which will scrap P11D forms altogether, will reduce the admin burden. The changes, which aim to simplify income tax reporting, feed into HMRC’s Making Tax Digital drive. Accountants and finance teams will need to make changes to their systems and processes to get ready for the April 2026 start date. We asked accountants, tax and payroll experts for their views. More time, money and resources will be needed to manage reporting requirements Clair Williams, Tax Partner, Azets UK Payrolling of benefits-in-kind will become mandatory from 6 April 2026, meaning that Class 1A NICs and income tax will be collected in real-time via payroll. This removes the requirement for submission of P11Ds and a P11D(b) at the end of the tax year. Employers can register with HMRC for voluntary payrolling of benefits-in-kind before it becomes mandatory. But currently, not all benefits can be payrolled and the Class 1A NICs are not collected throughout the tax year, so there still remains a P11D(b) requirement post-year-end. P11Ds will be required in respect of certain benefits. Under the new requirements, benefits will have to be valued and reported digitally via payroll software during each pay run. This will require new software investment or upgrading existing systems to handle real-time reporting and integration with HMRC’s digital services. More time, money and resources will be needed to track and report benefits and manage the increased reporting requirements to ensure that all relevant benefits are captured accurately. The risk of errors in reporting may increase, leading to potential penalties and fines from HMRC for inaccurate or late submissions, particularly as some benefit-in-kind arrangements are complex and non-standardised. Increased costs relate to software, training, and potentially recruiting additional staff to manage the new processes. Real-time reporting and NIC payments might also impact cash flow management within the organisation. We recommend: Regular monitoring of HMRC announcements and guidelines around P11D changes. Consulting tax and payroll experts. Keeping comprehensive digital records of all employee benefits and expenses including value, period covered and relevant calculations. Verdict: More time, money and resources will be needed to track and report benefits and manage the increased reporting requirements. The change won’t simplify reporting because tax analysis for underlying benefits is still the same Neil Maslen, Senior Manager, Private Client, HW Fisher Finance teams within organisations will need to identify taxable and non-taxable benefits in ‘real time’ so that they can provide this to their payroll team/supplier. However, these changes won’t simplify matters because the tax analysis for the underlying benefits remains unchanged. They could, if anything, result in payroll reporting errors that weren’t there before. Given the short window to analyse the information and seek professional advice where necessary, it will be interesting to see how HMRC applies penalties for inaccuracies. One would hope for a ‘soft touch’ or a ‘soft landing’. We need to ensure that the payroll software in place allows for benefits to be included. Beyond this, it is ensuring that there are processes and policies in place that allow a business to identify taxable benefits as they arise. It may seem straightforward, but if an exempt benefit is structured incorrectly, it can easily become taxable. Significant training may be needed not only on the new systems but also to remove common mistakes, such as treating exempt benefits and personal reimbursements alike. Verdict: The changes won’t simplify things because tax analysis for the underlying benefits remains the same. Employers should assess potential impact of mandatory payrolling on their systems now Kerrie Given, Associate Director, Prime Accountants Group From April 2026, employers will need to report and pay income tax and Class 1A National Insurance Contributions (NIC) on benefits in kind through payroll. Essentially, all benefits that would normally be reported on a P11D will be integrated into the payroll under the new system. Businesses must register for payrolling benefits through HMRC’s online service, and must be completed before the start of the tax year in which they wish to implement payrolling. Employers should start assessing the potential impact of mandatory payrolling on their systems and processes now. This will help ensure a smooth transition to the mandatory payrolling benefits system. Failure to prepare could result in incorrect tax reporting, leading to penalties and interest charges from HMRC. Additionally, employers may face increased administrative burdens in trying to rectify errors retrospectively. The new system will: Reduce administrative burdens for employers. Simplify the tax reporting process by integrating benefit taxation into the regular payroll. Reduce the need for separate P11D submissions. Provide clearer and more immediate tax deductions for both employers and employees, ensuring that employees pay the correct amount of tax on their benefits in real-time. Help HMRC improve compliance and streamline tax collection. Verdict: There are many benefits, but employers should assess the impact of mandatory payrolling on their systems now. The changes will simplify annual reporting, but systems will need updating Vipul Sheth, Chartered Accountant and MD, Advancetrack The changes set to be imposed by the incoming Benefits-in-Kind payroll reporting (BIK) in April 2026 shouldn’t be a cause for concern. Accountants may tentatively welcome them first and foremost for their purpose of simplifying annual reporting – reducing the burden of the annual P11D process, streamlining reporting and bringing it into line with monthly payroll. That’s as well as aligning reporting with PAYE, which may help avoid unexpected tax bills at year-end. But it’s also sure to add challenges for certain businesses, not least those with more complex benefits structures, where gathering accurate BIK data from employees and relevant departments before payroll deadlines could risk becoming a frantic process, leading to potential payroll delays or inaccuracies. Businesses and accountants will need to look at making several adjustments: Update payroll systems, ensuring timely information sharing between departments. Invest in staff training. Facilitate coordination between payroll, HR, and other teams to ensure benefits information is communicated accurately and on time each month. Start preparing early by reviewing existing systems and processes, ensuring payroll software is up to date for real-time BIK reporting, and engaging with advisors to ensure a smooth transition. Starting the process now will help businesses avoid any last-minute complications as that deadline approaches. Verdict: The changes will simplify annual reporting, but systems will need updating. Employees with benefits-in-kind face a ‘double tax hit’ Jack Dale, Payroll Manager, Kreston Reeves Just as auto-enrolment pension legislation impacted the processing of payroll, benefits-in-kind will present similar challenges. It will be even more necessary to ensure payroll and benefits staff have the necessary skills set to handle these challenges. Employers will need to know the benefit value for each employee in a timely manner to meet payroll cut-offs. Employees expect payslips to be correct and to be paid on time. If mistakes are made, this can affect the employer-employee relationship. In the first year employers make the switch to payroll benefits (compulsorily by 6 April 2026), employees will have a ‘double tax hit’. That’s because they’ll be paying for benefits from the tax year 2025/26 via a tax code change on their last remaining P11D and the ‘on payslip’ calculation on each payslip in the tax year 2026/27. There are additional complications, too: The inclusion of figures within payroll mean that the payroll data needed will be greater. Annual statements for employee benefits will still need to be provided at the tax year-end. P11Ds may still need to be filed for some employees/directors and a P11D(b) for Employer’s National Insurance will need to be calculated, submitted to HMRC and paid. There’s a real need for more clarification so employers can start planning and communicating with staff – especially those who may see a big change on their payslip. Verdict: Employees will be hit with double-tax, so employers need clarification urgently.
How SmartSearch can help accountants mitigate the risk of working with international individuals Posted 09/16/2024 by SmartSearch & filed under Members. This content is brought to you by SmartSearch. Accountants working with international individuals can face a significant risk of encountering money laundering activities. The complex nature of cross-border transactions and varying compliance regulations in different countries can make it difficult for accountants to properly verify the true identities of clients located overseas, as well as conduct necessary due diligence checks required by law. Failure to adhere to AML regulations, (both domestic and international), can result in severe consequences for accountancy firms, including fines, reputational damage, and even criminal prosecution. It is therefore essential that accountants working with international clients stay informed about the differing global AML requirements, and that they implement robust compliance measures to safeguard their businesses against financial crime risks. To overcome these challenges, and help regulated firms have more confidence in working with non-UK customers, SmartSearch recently launched ‘International Individual Check’ – a new solution that enables organisations to perform robust and reliable checks on international individuals with the same accuracy as a UK check offers. What are high risk International Individuals? Under the UK’s Anti Money Laundering (AML) regulations, “any business relationship with a person established in a high-risk third country must be subject to enhanced due diligence (EDD).” This is because individuals or businesses based in those jurisdictions have a much higher risk of being involved in money laundering, bribery, fraud and other financial crime. Therefore, when it comes to running identification and verification checks, any non-UK residents – i.e. ‘international individuals’ – are classed as a higher risk, and must be subject to much stricter checks. However, there is an issue – while international individuals do pose a much higher risk, running thorough customer due diligence and screening checks on them can actually be more difficult. This is because many businesses do not know which sources to use when trying to verify an international client, and even when they do, may struggle to access or interpret the information. As a result, checks take longer and are often not carried out to the same standard as the checks being run on UK customers, meaning the risk of inadvertently working with a ‘bad actor’ is heightened. How can SmartSearch’s International Individual Check solution help? By partnering with leading global financial markets infrastructure and data provider LSEG Risk Intelligence – SmartSearch is able to ensure access to extensive international data coverage from over 200 global data sources, providing an industry-leading solution. The service currently has access to over 40 countries and when combined with in-depth local knowledge, is able to offer robust and accurate verification of an individual’s name, address, date of birth, and national ID against best-in-class reference data. Key features: Comprehensive coverage – Validate individuals in over 40 countries and easily access centralised data. Enhanced Verification – Using advanced technology and local registry sources. Real-time screening and monitoring – Includes screening for politically exposed persons (PEPs) and sanctions with continuous monitoring and alerts. Seamless Integration – The solution can be integrated using the latest API technology. Why did SmartSearch feel the need for an International Individual Check solution? “Escalating geopolitical tensions mean that UK businesses that operate globally are facing increasingly heightened risks, making comprehensive due diligence essential,” explains Fraser Mitchell, Chief Product Officer at SmartSearch. “Our International Individual service has been developed to address these challenges and marks a huge step forward for identification and verification solutions. “By leveraging cutting-edge technology, data analysis, artificial intelligence and global data partnerships, we are able to offer unparalleled Global coverage, giving businesses the confidence to work with international clients, safe in the knowledge their verification process will alert them to any potential risks before they happen.” Discover more about SmartSearch’s International Individual Check solution here. *This is a sponsored post from SmartSearch. We are pleased to bring these products to your attention, which we believe may assist with your AML compliance, but please note that this does not constitute a recommendation from AAT. Liability for AML compliance ultimately remains with you when it comes to your firm demonstrating that any customer due diligence conducted by a third party meets anti-money laundering legislation.
Working the room Posted 09/16/2024 by Christian Doherty & filed under Career-boost, Members, Networking. Networking is essential to career success, and while technology is part of the mix, it’s important to keep the human touch. Networking: it’s a word that strikes fear into some people. Walking into a room full of strangers, business cards in hand, waiting to make smalltalk. However, it doesn’t need to be so difficult – becoming a better networker can be done with practice, patience and even smart use of tech. Networking is the most successful way of finding a meaningful job and attaining career success. It’s essential to career success according to 80% of professionals, and almost 100% believe that face-to-face meetings build stronger long-term relationships. Additionally, 41% want to network more often. And it’s true that technology has become a part of the networking mix. Largely thanks to Covid, most of us are now used to some kind of ‘get to you know’ Zoom sessions that have supplanted the traditional face-to-face element. Connect with your community at AAT Connect Exercising the networking muscle But the importance of face-to-face hasn’t completely disappeared. So how can you improve your networking skills? Jamie Veitch is a consultant, project manager, trainer and mentor to businesses. As a seasoned worker of the room, he warns not to think of networking in terms of what it can do for you and your business. Instead, “Go with the motivation to learn and listen.“ Which means: “attend events with speakers or topics you’re interested in,” he says. “Then whether you’re shy or extroverted you’ve always got something to discuss with other attendees. Then I’d say, bring curiosity to every encounter, and rather than treating conversations as places to put yourself forward, really listen instead of interjecting to sell. And be an introducer: can you put people you meet in touch with people you know?” As a serial investor, a big part of Scott Mackin’s work relies on connecting people – investors, start-ups, banks, lawyers, accountants. He agrees, and says to keep it simple. “Ask questions and actively listen. Be kind. Connect people to others that may be helpful for them.” Grace Hardy set up her own accounting firm three years ago and has prioritised networking as a way of developing a client base and professional knowledge. She says it’s key to keep things organic: “Networking is about genuine conversations, not forcing contact for no reason and not necessarily to sell. “Then I’d say think about shared goals. The best reason to collaborate is a shared objective. If you want different things that relationship is probably not going to be productive.” Her final principle centres around building knowledge. “Everyone has their own expertise and building a network of people who can teach each other is more beneficial than an echo chamber of identical skillsets and personalities and this can help benefit your clients as you can help them in other areas of their business, eg insurance, legal etc.” A hybrid approach Therefore, AAT has designed its new flagship event, AAT Connect, as a hybrid between online and in-person. AAT’s lead marketing manager Deborah McIsaac explains that AAT will build on a solid foundation of AAT events: “Traditionally we’ve had an AAT professional member conference for all of our 50,000 professional members,” she explains. “So they’ve gone to a conference place in a hotel and stayed over, and there’s been sessions throughout the day. And then during COVID, we transitioned to a digital-only version, and people really liked that, really engaged with it. Now we’re introducing a hybrid.” The drive behind this approach, with pre-event groups set up online to encourage connections to form before members arrive, is to encourage members to marry their digital networking via LinkedIn with face-to-face meetings. “There was a fear during and after Covid that the skill of in-person networking had withered away,” McIsaac says. “So we’re saying to members this matters – and you can’t do everything through LinkedIn.” “What networking’s about now is knowing your own goals and finding a community that can help.” “In addition, when you connect with peers it helps you to be better, helps you to understand other people’s stances on things, it helps you to debate how to do things. It’s about enriching yourself as a finance professional through the community.” Keep it real The importance of organic and authentic interaction is also a big part of Pri Hancock’s approach to networking. She’s a veteran of CFO roles and is currently Head of Finance and Partnerships at CyanoCapture. “I am truly interested in what other people have to say, in meeting new people and understanding their perspectives and life stories,” she says. “As a result, I walk into a networking situation telling myself that it’s all about having fun and spending an enjoyable few hours with fellow humans.“ Having understood how perceptions have changed around networking – how it works, what it’s for, what good looks like – McIsaac is keen to point out that AAT Connect has been put together to open up networking to a new cohort. “We’re seeing a down-shift in the age of our new members, to their early 20s. So we’re looking at people who have probably come into the job sector at the weirdest possible time for networking.” “As a result I think there may be a slight fear of our networking for that group. Not everybody has the skills to chat, not everybody feels comfortable going up to people and asking these questions, so there’s something unique about this format of this event in that it’s not so strict, it’s not so traditional, and some of the more traditional or formal things can be left aside. “Ultimately this is about connecting in a way they want to connect”. Connect with your community Enjoy inspirational talks from leading experts on the subjects that matter most to you, ask your questions in our one to one clinics and connect with your fellow community at the AAT Impact Awards. Find out more AAT Connect takes place in London on Friday 8 November 2024
What you need to know about UK Sanctions Posted 09/16/2024 by AAT Comment & filed under Anti-money laundering, Anti-money laundering, Members. What are UK sanctions, and why do they matter to your firm? Sanctions are restrictive measures that can be put in place to fulfil a range of purposes. According to GOV.UK, these include complying with UN and other international obligations, supporting foreign policy and national security objectives, as well as maintaining international peace and security, and preventing terrorism. The UK implements a range of sanctions regimes through regulations made under the Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act). The Sanctions Act provides the main legal basis for the UK to impose, update and lift sanctions. Types of sanctions include: trade sanctions, including arms embargoes and other trade restrictions financial sanctions, including asset freezes immigration sanctions, known as travel bans aircraft and shipping sanctions, including de-registering or controlling the movement of aircraft and ships. What does this mean for my firm’s customer diligence measures? Firms must comply with any restrictions implemented under the UK sanctions regime. Therefore, it’s vital firms include sanctions checks on their clients and their clients’ beneficial owners as part of their onboarding and ongoing customer due diligence procedures. In some cases, an exception may exist or, for certain activities, a licence may be issued. Please refer to the guidance issued by the Foreign, Commonwealth & Development Office (FCDO) for more information around exceptions and licences. Where firms are unclear as to whether an exception exists or licence can be issued, they should seek independent legal advice. How do I know if a client is subject to a sanction? There are two sanctions list firms can use as part of their customer due diligence measures. The UK’s sanctions list is published by the FCDO and contains all individuals, entities and ships specified/designated under the Sanctions Act. The list includes all those designated under the types of sanctions including financial, immigration, trade and transport. Sanctions regularly change so firms should use the most up-to-date list available online. The Office of Financial Sanctions Implementation (OFSI), which is part of HM Treasury, also issues a list of all those subject to financial sanctions imposed by the UK – known as the consolidated list. Find the financial sanctions search here. Both sanctions lists are included in AAT’s AML checklists and templates. AAT monitors how firms are complying with their obligations during our practice assurance review monitoring activities. What do I do if my client is subject to a sanction? If you find out that a person or organisation you’re dealing with is subject to a sanction, you must immediately stop dealing with them and consider whether you need to disengage them from your services. If the person or organisation is subject to a financial sanction, you must also: freeze any assets you’re holding for them inform OFSI as soon as possible. How can I keep up-to-date about the UK sanctions regime? AAT publishes updates and risk alerts in the Anti-money laundering and ethics Knowledge Hub, which is accessible to members. Firms can also subscribe to FCDO’s e-alerts. AAT’s AML helpline AAT’s AML helpline offers advice for AAT-supervised firms on all aspects of complying with the Money Laundering Regulations, such as advice on how to report suspected illegal activity. To discuss any questions you might have, call us on +44 (0)20 7367 1347 or email [email protected].
The effects of the first AAT Impact Awards Posted 09/13/2024 by Marianne Curphey & filed under Community, Inspiring stories, Members. One year on, we follow up on how our AAT Impact Award winners are progressing, and find out how winning has affected their lives and careers, and the lives of others. The winners of the first-ever AAT Impact Awards were announced during the online launch of the AAT 2030 strategy, watched in over thirty countries. The Awards celebrate the best in the AAT community and recognise the contribution that individual members and students are making. This year’s Impact Awards will be presented at AAT Connect. Join us there to celebrate the winners. “AAT Award has boosted recognition for the charity and spurred on fundraising efforts” Excellence Award: Mark Clayton In early 2023 Mark won the inaugural AAT Excellence Award in the UK highlighting his strong leadership skills and social purpose. Based in Guangdong, China, Mark joined manufacturing and sourcing company C2W in 2007, after completing his AAT Level 4 at just 20. He helped grow the company, which has a $15mn turnover, building the finance function from scratch. He is now group CFO and says that the professional and ethical standards which AAT instilled in him have guided him in the 19 years since he qualified. In 2011 Mark set up an NGO which helps children living with autism and underprivileged children to learn social and work skills to be able to join the workforce when they leave formal education. Thanks to his AAT training, the charity that he runs is fully financially transparent, which has created a high level of trust among donors and supporters. “The charity was set up to give back to the community where we live,” he says. “We are transparent with our finances and our accounting, and we account for everything, right down to the pens we buy, with zero salaries or administration costs.” He says winning the AAT Award has helped boost recognition for the charity and spurred him on to continue with fundraising efforts. “I was expecting last year’s charity musical festival event to be quite small in way of donations, because after Covid, China was not really in a good situation economically,” he says. “But we raised more in 2023 than we did in the previous two events, and that is because of the drive that the Award gave me. “The award doesn’t just belong to me, it belongs to all my colleagues at C2W, and the people that I founded the charity with and everyone that helps out with support and mentoring.” On a personal level, he says the Award gave him “a real confidence boost” and a real desire to give back to the community he lives in. “The AAT award meant so much to me, to know that what I’m doing is meaningful and inspiring,” he says. “I was so honoured to win the award that it pushed me to take my charitable work to another level, to try and get more people involved. I wanted to use it to try and inspire more people to join what I’m doing or replicate what I’m doing.” Another positive consequence of the award is that it gave Mark the boost he needed to finally become CIMA qualified, and a year on, he is now a Chartered Management Accountant. “Winning the award reconnected me with AAT, and I had always wanted to go on to the next level,” he says. “I had been a student member of CIMA for 19 years, but never got round to doing the qualification. Finally, I did the Fasttrack course and passed in November 2023, becoming a fellow in December 2023. It was a qualification for people who have experience in other ways, as I had been in a CFO position for over 15 years. Now I’m putting my finance manager through the same qualification.” Mark has also been inspired to put himself forward as Chairman of the British Chamber of Commerce in Guangdong, China, as he is currently vice chairman. “I’d like to step up and use everything I’ve learned to help British businesses here,” he says. “I have gained the confidence to go on and do bigger and better things.” One to Watch Award: Adrienne Davis This Award is for an early-career individual already making an outstanding contribution to their workplace and showing exceptional progress. Adrienne Davis moved from South Africa to the UK, starting AAT at Doncaster College at age 18, and completing AAT Levels 2 to 4 in three years while working full-time. Adrienne is now AAT qualified at 21 and aims to pursue ACCA self-funded, with aspirations to work in London, possibly at PwC or EY. Her talent for teaching was first noted by tutors within weeks of her starting AAT Level 2 at Doncaster College, when she helped her fellow students. She is now considering going back into part-time teaching. “I was really honoured to win the Award, and it was great to be recognised for my hard work,” she says. “It’s been a busy year, I’ve just qualified at AAT Level 4, and I am now progressing on to ACCA. My college is currently looking for someone to step in to help out part time, because quite a few of our AAT lecturers are retiring, so I have put my name forward for that.” The Award also gave Adrienne a career boost. Shortly after winning she decided to move from the company she had started with and gain more experience in a bigger company. “I now work for a global company with a 5bn€ turnover, and having the Award did help, because people understood that I am willing to put in the extra effort,” she says. “I am going to be funding the ACCA course myself, because I like having my options open. I am hoping to move down to London next year sometime and work for PwC or EY. In the long term, I would really like to have a role as a CFO. I have gained the confidence to go on and do bigger and better things.” “Winning the Award has raised visibility and opened doors” Inspiration Award: Eve Jones The Inspiration Award recognises someone who’s inspired others to level up their careers, going beyond their remit with passion and dedication, and keeping the profession relevant and high standard. Eve Jones FMAAT, Life Member is Chair at the AAT Birmingham Branch and works with Birmingham Metropolitan College (BMET) to support and inspire her students. Before she became a tutor, Eve was a company director for a subsidiary of Toyota, initially in France and later the UK. For Eve, receiving the Inspiration Award was the “proudest moment” of her career. “I have reached the stage where I have done all I want to do in life in terms of my career, and now I want to give back to the community,” she says. “In my tutoring, and in my wider work with companies to open doors for AAT, and as Chair of the Birmingham Branch, I’m trying to give back as much as I can. “The response has been great. Winning the Award has raised visibility and opened doors in so many ways. I have had more speaking invitations, it has improved attendance at our events, and I am contacted by people who have never heard of AAT before, and who want to know more.” She has appeared in AT Magazine and was interviewed by Mindful Education, who filmed one of her lessons and interviewed some of her AAT students. She has been approached by various organisations to attend seminars and conferences and actively participate, such as CIPFA and CIMA, and has been able to attract prestigious speakers and CEOs to speak at local events, boosting attendance. “BMET is supporting us by giving us free, safe and accessible venue to hold our events, attracting more students and members alike,” she says. “Winning the award attracted more confidence and recognition, and for the first time AAT Birmingham Branch has the opportunity to visit and hold events at prestigious firms including EY, KPMG and Weightmans, where attendees found out about apprentice opportunities.” She is also working with a local employment agency to promote AAT and open the opportunities for students and members alike to apply for jobs successfully and has lined up an exciting programme of events for the Birmingham Branch over the coming months. “Winning the Impact award has served as a catalyst for further achievements, given me greater recognition and more opportunities to expand my influence and make a greater contribution to AAT as whole,” she says. Celebrate the Impact Award winners with us This year’s Impact Awards will be presented at AAT Connect. Find out more
Accountants give their views on how to fill the £22bn gap Posted 09/12/2024 by Annie Makoff & filed under Members, Tax. The government must raise money, but does it have to come from taxes? Labour spent much of the election campaign promising the public they would not raise taxes on ‘working people’, including income tax, national insurance and VAT. But shortly after forming a government, the new chancellor Rachel Reeves announced they’d discovered a £22bn gap in the UK’s public finances, so would have to look at tax increases after all. The announcement made just three weeks after the election created alarm in the business community and among the general public. Since then, speculation has been rife as to how the government are likely to address the £22bn shortfall and which taxes they could target. The Autumn Budget is not expected until the end of October, but PM Keir Starmer has repeatedly made it clear that ‘tough decisions’ will need to be made. Independent thinktank The Resolution Foundation recently told The Guardian that tax rises are often increased in the first budget of a new government, although these increases will need to go further to address the deficit. The thinktank has put forward its own recommendations such as raising capital gains tax and inheritance tax as well as national insurance. The tax areas the chancellor is likely to look at could include: Capital Gains Tax. Inheritence tax. Business rates. Stamp duty. Business Asset Disposal Relief (formerly Entrepreneur’s Relief) So what do accountants think? We asked three accountants which fiscal areas they believe the government should target – if any – to help raise revenue. Target tax avoidance schemes and the unregulated umbrella companies market to recoup Paul Newsham, Chartered Accountant, CEO, Payroll Compliance Authority (PCA) Based on what has not been ruled out in previous pledges, it seems probable that Capital Gains Tax and inheritance tax might be targeted, as well lump sum pensions. Entrepreneurs’ Relief could be another victim. Aside from the difficult and unpopular move of increasing taxes, Reeves should take a harder stance on tax avoidance to recoup money that should rightfully already be in the pot. For example, cleaning up the umbrella company market. A lack or regulation of payroll firms operating within the assignment-based contractor supply chain, known as umbrella companies, has led to widespread non-compliance in the sector with a significant number of these companies operating tax avoidance schemes. As well as cheating HMRC out of taxes owed, it’s the workers across a range of sectors, including education and healthcare, who are then at risk. They could find themselves in receipt of an unpaid tax bill that they cannot pay. Cracking down on illegal activity through regulation is the obvious solution. It would protect workers, which fits with government pledges, and it would recoup some of the glaring public funding shortfall. A form of regulation via a due diligence regime was mooted by the previous government and I expect is still in the pipeline, but we have not had any update on this since Labour came into power. Verdict: Take a harder stance on tax avoidance schemes such as the umbrella company market. Preferential rates for entrepreneurs are essential Stephen Gibbens, Director, Accountech Solutions The Labour Government is saying their number one priority is growth. To achieve this, they need to encourage technological progress and innovation.That means increasing R&D expenditure and encouraging more people to become entrepreneurs, inventors and scientists and create tech startups. Ways to do this would include: Preserving or improving existing incentives such as EMI options and R&D tax credit relief. Protecting the SEIS and EIS tax incentives that encourage investors to invest in tech start-ups. It seems inevitable that Capital Gains Tax will increase but if it does, there needs to be relief like the current Business Asset Disposal Relief (once called Entrepreneurs’ Relief) which gives a preferential rate for entrepreneurs selling their businesses. To do otherwise, would change the risk-reward balance for entrepreneurs and risk causing the opposite effect to what is intended. I’m fairly neutral about which other taxes the government increase as they will just divide the “economic pie” in a different way. Just don’t increase taxes that discourage innovation and shrink the pie! Verdict: Increasing taxes will discourage innovation and will only shrink the ‘economic pie’, so reliefs for entrepreneurs are essential. There are likely to be increases in inheritance tax, capital gains tax and an introduction of a wealth tax Rebecca Jones, Corporate Tax Director, Dains Accountants The government has said it won’t touch income tax, VAT and NICs while the Resolution Foundation have said the government should increase capital gains tax. If this happens, capital gains tax could rise to levels of income tax rates. We also predict inheritance tax reliefs such as business property relief could be reduced or restricted and stamp duty may also be targeted. A wealth tax has been rumoured, too. However the implementation of this would be a huge change and could come with a number of variations, for example, who would it target? What would the rate be? Given that we expect capital gains tax to be the main driver of tax increases, there may also be a focus on addressing the shortfall through other reciprocal schemes, such as increases in reliefs for business owners. An example of this is business asset disposal relief, which was previously set at £10m (when it was known as entrepreneurs’ relief), but it now stands at £1m. These business incentives can help to encourage investment in the UK and create favourable conditions for businesses and entrepreneurs to stay. Verdict: There could be increases in inheritance tax, capital gains tax and an introduction of a wealth tax.
Why “a bookkeeper is an essential foundation of any finance team” Posted 09/12/2024 by Christian Koch & filed under Bookkeepers, Employers, Members. With their vigilance of client accounts and their tech prowess, bookkeepers have plenty to offer organisations. Here employers tell us the reasons why they seek out qualified AATQBs. In just four years, Reading-based accountancy firm striveX has generated a £1.5m turnover, employed 22 staff from scratch and built an enviable social media following of 62.3k Insta followers. It’s a meteoric rise, but what’s truly interesting is the team behind this success: nearly half (nine) of the striveX workforce are qualified bookkeepers. Solid bookkeeping is the nuts and bolts of any business; it would be difficult to decipher any company accounts without it. The benefits they can bring to an organisation can be immeasurable. “We’ve taken on some people who’ve gone into chartered qualifications straight from school but have missed bookkeeping qualifications,” says striveX Founder/Director Rachel Harris. “If we take on somebody like that, I’ll guarantee within six months they’ll be asking to do a week’s work experience with our bookkeeping team, because they don’t understand what’s going on at a basic level, such as debits and credits.” “Every business can benefit from a skilled bookkeeper,” says Victoria Cooper, Principal at Cambridgeshire-based Red Shoes Accounting. “They handle the day-to-day financial tasks that keep everything running smoothly, allowing accountants to focus on the bigger picture. Depending on your business size and needs, an accountant can add additional value, but a good bookkeeper is an essential foundation for any successful finance team.” Meanwhile, the advent of Making Tax Digital and cloud accounting means many businesses are seeking qualified bookkeepers who can prepare and interpret financial statements in real-time. It’s a volte-face from the traditional perception of bookkeepers. For many years the profession has been saddled with an unfair reputation: many employers believing it to be the ‘less fun’ part of accountancy, largely involving mundane data entry on Excel and only needed when preparing year-end accounts. This couldn’t be further from the truth: today’s bookkeepers play a vital role safeguarding the financial health of businesses and their clients, as we discover here. Bookkeeping vs accountancy: what’s the difference? Bookkeeping and accountancy might seem highly related, but their responsibilities differ in many ways. Of course, any qualified accountant should know how to manage the books, but they’ll also be involved with creating reports from transactions, interpreting data, advising clients, completing audit processes and other year-end work. On the other hand, bookkeeping is essential for maintaining the day-to-day financial health of a business. Put simply, bookkeeping involves keeping records of a company’s receipts, invoices, VAT claims and corporation tax. Their daily tasks could include preparing sales/purchase invoices, working on payroll journals, ensuring staff are paid correctly by updating PAYE tax codes and checking pension payments. “While there’s some overlap, the distinction [between bookkeepers and accountants] lies in the depth of focus,” says Cooper. “Accountants often don’t have the time to delve into the minutiae of record-keeping, which is where dedicated bookkeepers excel. Our bookkeepers meticulously maintain client records which ensures high standards of accuracy and allows our accountants to focus on interpreting that data and providing strategic insights to our clients.” Why hire bookkeepers? Bookkeepers provide essential support to accountants Red Shoes Accounting has two dedicated AAT-qualified bookkeepers: Annie (who joined from college 11 years ago) and Alex (hired earlier this year). Thanks to Annie and Alex working on bookkeeping duties full-time, Red Shoes accountants are able to “focus on the broader compliance aspects of our services” says Cooper. “Accurate record-keeping is is the backbone of financial reporting, and the bookkeepers’ ability to maintain precise records ensures our accountants can prepare accurate financial statements and tax returns without unnecessary delays.” Because bookkeepers are more involved in company accounts, they’re in a prime position to spot anything that doesn’t look right. As such, they can act like ‘early warning systems’, flagging up potential problems such as cashflow problems or late invoice payments to an accountant before these issues escalate. Bookkeepers know exactly what’s going on with clients’ accounts “Because bookkeepers are involved with clients’ day-to-day work and raw financial information, it gives them an opportunity to feel close to the client in terms of storytelling – they get to see what these highly successful businesses are spending money on,” says Harris. “Bookkeepers know so much about what’s coming in and going out of a company’s account, it’s almost like looking through their underwear drawer!” Annie from Red Shoes Accounting works on clients’ books. “Our clients benefit from her expertise in maintaining precise records, which in turn, makes the accounting process faster and more accurate,” says Cooper. “It’s a win-win for both us and our clients. By entrusting their bookkeeping to us, clients can focus on growing their business, knowing their financials are in good hands.” When it comes to preparing year-end accounts, the intel that bookkeepers gather from working with client accounts can be invaluable. “Because bookkeepers get to speak with clients more frequently than year-end accountants – who probably only do this once a year – they know exactly what’s going on with that business over the past year,” says Harris. “If one of our bookkeepers calls one of our accountants, they can give them the full story.” Having an eagle-eyed view of accounts means bookkeepers can highlight issues that might need quick decisions. Harris gives the example of one striveX client (an OnlyFans creator) who wanted to claim breast augmentation as a business expense. “We needed to find out what the HMRC view was, plus if it could claim any tax efficiencies,” she says. “It wasn’t the kind of decision that could be parked somewhere and left for the year-end team. Because it was flagged at bookkeeping level, we could deal with it straight away.” Bookkeepers are on the frontline of new accounting tech Many accountancy firms find that bookkeepers are the most tech-savvy people in their workplaces and are whizzes on Xero, QuickBooks and Excel. Red Shoes Accounting’s Cooper notes that Annie is “our go-to expert for new tech in bookkeeping. She keeps our accountants informed about the latest software updates and advises on how these tools can save time and improve accuracy. She also offers advice and troubleshooting to clients with their bookkeeping software, a service they find invaluable.” “As technology evolves, the role of the bookkeeper is becoming even more critical, moving from manual data entry to a more strategic position,” says Cooper. “Our bookkeepers are also embracing new tech such as Hubdoc [which captures data such as bills and invoices automatically] to help improve efficiency.” The skills of bookkeepers are expected to be a natural fit for blockchain technology too. Why I hire AAT-qualified bookkeepers Cooper, Red Shoes Accounting: “The AAT qualification provides a robust foundation for aspiring bookkeepers. The Level 2 modules cover the essential technical knowledge, while Level 3 dives deeper into business structures, account preparation, VAT, and payroll. This comprehensive training means that when Annie prepares our clients’ books, she’s not just keeping records—she’s laying the groundwork for accurate, timely financial statements. It’s a crucial role that ensures we can provide top-notch service to our clients.” Harris, striveX: “The AAT bookkeeping qualifications have some great modules which are useful in practice, such as on Excel and cloud accounting software. Some of our bookkeepers are able to take credit control processes they were taught in a textbook with AAT and implement them within our firm.” “As somebody who has recruited 20 members of staff in four years, I know that as soon as I see AAT on somebody’s CV, they’ve done research into the best qualifications and have real dedication. If you’re hiring a driver, you wouldn’t hire them without knowing they’ve got a driving licence. It’s the same with AAT.” Career progression for bookkeeping talent “At striveX, there’s no disparity in income between our bookkeepers and accountants,” says Harris. “We encourage our accountants with bookkeeping qualifications to put AATQB as well as MAAT after their names. We want to set the tone that bookkeeping has no difference in earning potential than being a fully qualified accountant.” Finally, is bookkeeping boring? “No!” says Harris. “Bookkeeping is the juiciest part of accounting. If you are curious about other people and love building relationships with people, it’s a great way to see why some businesses are outperforming others.” AAT’s bookkeeping courses AAT Level 1 Award in Bookkeeping: gives a solid grounding if you have no experience as a bookkeeper. AAT Level 2 Certificate in Bookkeeping: for skills and essential knowledge up to trial balance standard. AAT Level 3 Certificate in Bookkeeping: for experienced bookkeepers to embellish their skills. More info on costs and requirements here.
AAT members discuss how they nurture strong client relationships Posted 09/11/2024 by Annie Makoff & filed under Client relations, Members, Run your business. Working dynamics are changing. Here’s how bookkeepers and accountants create and maintain good partnerships with clients. As digital technology, automation and AI transform the role of accountants and bookkeepers, the need to nurture client relationships has never been more pressing. People skills have always played a critical role in the sector, but increased use of technology means the accountant needs to work differently, becoming more of a business advisor than a number cruncher. Points of contact vary between accountants and bookkeepers, with bookkeepers typically communicating more frequently with their clients (often weekly) while accountants – traditionally – touch base once a month – or less. But things are changing and most accountants now recognise the importance of prioritising client relationships and keeping in regular contact. But is that enough? We asked four AAT members (two bookkeepers and two accountants) how they go about building mutual trust and fostering strong client relationships. Find the right clients and work together to improve processes Libby Walklett FMAAT, AATQB, Director, The Ethical Bookkeeper Finding the right clients in the first place is crucial to the success of my business. Ideally, I only want to work with clients who are eager to work with me to improve processes and efficiencies together.Some of the clients I have worked with for years have become used to our processes and these now work like clockwork. We both know how the other works, it becomes a very efficient model, and I know when and if I need to chase anything. We check in on average once a month, but he also knows he can call me if he needs to discuss any other matters. In fact, he usually calls me before he calls his accountant, because he know he’ll be able to speak to me straight away! Other clients have weekly Teams meetings – particularly when there are changes in process, workload, new projects etc. We chip away at issues in smaller chunks to avoid overwhelm. I often find Teams better for the body language and eye contact.I’d advise accountants and bookkeepers to try to find clients preferred methods of communication right at the start – you’ll find you get a better response rate from them. Investing time and effort into building those relationships and trust are really important in the early stages. I tell every client that the more you share, the more I can help – even sharing personal finance issues or future plans for retirement so we can look at ways of supporting these plans through the business. Verdict: Invest time and effort into building client relationships right from the start. Finding the right clients that are willing to work with you to be more efficient is helpful. We prioritise transparency and regular, supportive contact Caroline Carter FMAAT, Director, Carter Clear Accounting We prioritise clarity and transparency from the very beginning of our relationship with clients, outlining our services, what we need to complete the work, and what steps we will take to get the job done. This helps set expectations and reduce any potential confusion. As our relationship develops, we educate clients on tax and accounting matters so they become more comfortable and knowledgeable over time. We tell clients we don’t do ‘secret wizardry’- everything is clear and straightforward. Additionally, we acknowledge successes and provide support during challenging times, often through sending cards. Maintaining regular contact is crucial to ensuring a strong client relationship. We check in frequently with clients, notifying them when work has been completed or filed, offering quarterly catch-up calls and visiting clients in person at least once a year. The quality of our work is ultimately reflected in client satisfaction. If a client is unhappy, there may have been a breakdown in communication, so we seek feedback, address issues promptly and make necessary adjustments. One key lesson we’ve learned is that clients don’t always appreciate being contacted by multiple staff members for the same piece of work, which can create confusion. We had to do this recently due to staff absence. We’ve taken this feedback to heart and now ensure that clients are informed in advance if there will be a change in their point of contact, along with an explanation of how long the change will last. Verdict: We priotitise clarity and transparency right from the beginning and maintain regular, supportive contact throughout the year. I send clients monthly videos of their financial reports and account books Alison Bryan FMAAT FIAB, Owner Flourish Accounts It’s all about communication. I state early on what clients can expect from me and I’m consistent about what I ask for each month. I take time in our first calls after onboarding to discover what they struggle with, their contact preferences and where they want to be in their business. I make myself available, but I also have a separate work phone, so there are clear boundaries for non-working time. This also means they can message me on my work phone whenever they want and they won’t be disturbing me. I send my clients a video each month with their profit and loss reports, balance sheet and debtors and creditors. I talk through each area and point out anything they might need to look into. After the video they are invited to book in for a call if they need more information. I think the ‘once a year’ accountant touch point should be a thing of the past. You can’t help people when you are talking about events in their business that happened months ago. My advice is to be consistent. Ask for the information you need every month or week, around the same time so clients become used to you asking and it keeps things manageable. No-nos for me are to become too familiar. Be friendly, yes; ask about family, yes; even send birthday cards – but remember that you are providing a professional service. Verdict: I send clients monthly videos of their financial reports and account books, and keep in regular, professional contact. Maintain strong client relationships with genuine understanding Lydia Read-Potter FMAAT MD, BookSmart Accounting For us, the key to maintaining strong client relationships is empathy. Really understanding the person and what their goals and priorities are. We want to help our clients use their businesses as vehicles to achieve their personal goals. We speak to clients as often as they need us to. For some clients that is every week, for others that is once per quarter. If we hadn’t spoken to a client for a few months, we drop an email or a call to check in. It’s really important that your client relationships are genuine. We work with clients who we genuinely believe in and have the necessary knowledge to support. The relationship is meaningful and clients feel like we are a key part of their business success. The only thing I would advise against is allowing the relationship to get too casual – don’t add clients on social media (other than LinkedIn) or spend time with them outside of working hours. Verdict: Maintaining strong client relationships is about deeply understanding the person’s goals and pirorities.