Beneficial Ownership: 8 Red Flags to Detect Money LaunderingPosted 01/28/2025 by SmartSearch & filed under Anti-money laundering, Members.This content is brought to you by SmartSearchCriminals do their best to hide their beneficial ownership to protect their illegal activities. Here are the signs to watch out for.In the world of anti-money laundering (AML) compliance, understanding who truly controls a company or financial entity – known as the beneficial owner – is crucial. Beneficial ownership refers to the individual or group that ultimately owns or controls an asset, even if it is registered under someone else’s name. Criminals often conceal beneficial ownership to mask illicit activities like money laundering, terrorist financing, or tax evasion.Identifying the true beneficial owner isn’t always straightforward, especially in today’s globalised economy where complex corporate structures and offshore entities are common. This is why FATF Recommendations, particularly Recommendation 24, emphasise the need for financial institutions and other regulated entities to identify and verify beneficial ownership.In this post, we’ll explore eight red flags that may indicate hidden or suspicious beneficial ownership.1. Unclear or Complex Corporate StructuresOne of the most common methods for hiding beneficial ownership is through overly complex or opaque corporate structures. These can involve multiple layers of ownership, often spread across different countries with lax transparency requirements. While some complexity is legitimate, overly convoluted structures are a red flag.Red FlagComplex ownership chains make it difficult to determine who actually controls a company or asset. This complexity is often used to obscure illicit activities or evade tax laws.What to DoEnhanced due diligence (EDD) for entities with multiple ownership layers, especially if they cross jurisdictions with weak AML regulations.2. Use of Nominees or Third-Party AgentsNominee shareholders or directors are often appointed to act as the legal owners of assets, but they do not have real control. This separation between legal and beneficial ownership can be used to shield the true owners from scrutiny.Red FlagWhen the entity’s shareholders or directors appear to have no legitimate connection to the business activities or lack expertise in the industry, it could be a sign that they are simply “fronts” for the actual owners.What to DoScrutinise the relationship between the nominee and the entity. Conduct Know Your Customer (KYC) on both the nominee and any entities they represent.3. Use of Offshore Accounts or Shell CompaniesShell companies and offshore accounts located in jurisdictions with limited transparency requirements are common vehicles for hiding beneficial ownership. Criminals often use these entities to obscure the flow of funds, making it difficult to trace illicit activities.Red FlagIf a company is based in or owns subsidiaries in offshore tax havens, particularly where the legal system does not require disclosure of beneficial owners, this should raise concerns.What to DoVerify the legitimacy of the offshore entity and the necessity of its involvement in the corporate structure. Use automated screening systems to monitor transactions linked to high-risk jurisdictions.4. Frequent Changes in Ownership or ManagementFrequent or unexplained changes in the company’s ownership or management structure can indicate an attempt to disguise the true beneficial owner or avoid regulatory scrutiny.Red FlagIf changes in shareholders, directors or other key management positions occur often and without a clear business rationale, it could be a sign that someone is trying to stay under the radar.What to DoInvestigate the reasons behind these frequent changes. Conduct a thorough review of past and current owners to ensure that the company isn’t engaging in illicit activity or deliberately obscuring ownership.5. Unexplained Source of Wealth or FundsBeneficial owners with large amounts of wealth but no clear explanation for its origin can signal potential money laundering. Financial institutions must be vigilant in verifying the source of funds and the source of wealth for high-risk customers.Red FlagWhen individuals or entities control significant assets without a documented, legitimate source of income, this could indicate that the assets were acquired through illegal means.What to DoImplement enhanced due diligence, requiring detailed documentation and proof of the source of funds, particularly for high-net-worth individuals and high-risk clients.6. Unusual or Inconsistent Business ActivityCompanies whose business activities don’t align with their stated purpose or whose transactions are inconsistent with typical behaviour for their industry or size can signal suspicious beneficial ownership. For example, a small company engaging in multimillion-dollar international transactions raises red flags.Red FlagIf the entity’s transactional patterns don’t make sense for its industry or if its activities are not consistent with normal business operations, this warrants further investigation.What to DoImplement robust transaction monitoring systems to detect unusual behaviour. Train staff to spot discrepancies in business activity.7. Reluctance to Provide Beneficial Ownership InformationWhen a customer or entity is reluctant to provide beneficial ownership information or delays the process without justification, this is a major red flag. Legitimate entities should have no problem disclosing this information.Red FlagIf you encounter resistance or vague responses when requesting beneficial ownership information, it could indicate an attempt to conceal the true owner.What to DoEscalate the case to your compliance team and apply enhanced due diligence to verify the ownership information independently. If necessary, consider filing a Suspicious Transaction Report (STR).8. Politically Exposed Persons (PEPs)Politically Exposed Persons (PEPs) pose higher risks due to their positions of influence, which could be exploited for money laundering or corruption. FATF’s Recommendation 12 emphasises the need for enhanced due diligence when dealing with PEPs or their associates.Red FlagIf a PEP is found to be the beneficial owner of a company or asset, particularly in high-risk jurisdictions or industries, this should trigger enhanced due diligence and closer monitoring.What to DoScreen for PEPs and their close associates using automated screening tools and implement ongoing monitoring for any changes in PEP status.ConclusionUnderstanding beneficial ownership is a critical component of AML compliance. These red flags serve as important signals that further investigation may be required. By implementing robust due diligence processes, staying vigilant to signs of suspicious ownership, and complying with FATF Recommendations you can better protect your organisation from the risks of money laundering, corruption and other financial crimes.Ensure your AML program is equipped to handle complex ownership structures, offshore accounts and beneficial owners that may not be immediately apparent. With enhanced due diligence and a comprehensive compliance framework, your organisation will be better prepared to identify and mitigate the risks posed by hidden beneficial ownership.To discover how SmartSearch can future-proof your organisations AML and compliance process, speak to an AML expert today.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.
How one AAT apprentice is building a rewarding careerPosted 01/28/2025 by Christian Doherty & filed under Apprentices, Community, Members.Celebrating Stephanie Goodsell’s outstanding progression, and the work that made it possible.Stephanie Goodsell’s career is off to a great start. She completed her AAT Level 3 as an Accounts apprentice, was nominated for the FAB awards Apprentice of the Year in 2024 and won AAT Apprentice of the Year 2024.Stephanie has maximised her development by leaving her comfort zone and embracing new opportunities.“When I joined my employer, I had limited understanding of what the journey was going to be,” she says. “The position I am in now with the range of responsibilities I have is more than what I envisaged, and the variety in accounts work that I see was not expected.”That breadth of work includes joining a second office alongside her initial one as an opportunity to adapt to new approaches and to gain more experience.Find the right apprenticeship for youWe’ve launched the UK’s only dedicated accounting apprenticeship job board, where employers post listings for all sorts of qualifications and career goals.Search nowApprenticeship elementsStephanie says she initially found it hard to manage the two core apprenticeship elements: class and work.However, that changed within the first 8 weeks. “I began to look at schedules that build year-end accounts – I started to see the full picture on how the bookkeeping classes linked,” she explains. “I was pleased with how my first exposure to accounts work was quite soon.”Stephanie eventually found that blended learning suits her best. “I am gaining much more knowledge than if I was just classroom-based, and I am pleased I did not consider studying finance as a degree course. The experience from an apprenticeship is hugely beneficial as I also have quality, proven work experience.”Since finishing Level 3 and starting Level 4, she has been supporting the company’s new apprentices. Acting as a mentor, answering questions and delivering training has grown her confidence hugely. She’s gone from being very quiet to discussing, leading and directing where her mentees’ work needs to change.My communication with clients has surpassed what I imagined I was capable of. I am much more confident to deal with a client directly; I now know how to handle each client on an individual basis and will adapt my approach to each.Wider perspectiveMuch of Stephanie’s work as a Level 3 apprentice involved dealing with a broad range of accounting tasks for clients. For instance, she mastered the art of producing VAT Returns for different currencies, including working with a large client who deals in USD, a process that required carefully handling invoices and payments.“I really like the variety of accounts. And while all jobs are different, it is the same process in a way, but each client has different needs and will need different reports that relate to industry-specific clients,” she says.Stephanie has good knowledge of accounting software. She’s helped one of the offices she works in move from a more paper-based approach to a more digital one, introducing software such as Xero, Hubdoc, Sage and Taxcalc to support clients. And it’s not just clients who have benefitted from Stephanie’s tech skills: her experience of software-based accounting procedures has led to her supporting many senior team members, even training some on these procedures.Taking opportunitiesIn doing so, Stephanie has shown that get ahead in accountancy, it helps to build a strong network both within the business and beyond.“The chance to physically work across the two practices after the acquisition increased my knowledge significantly,” she says, reflecting on the challenge of adopting and addressing the different practices’ approach.“One was much more traditional, so I know the level of exposure I have been given is not very common and not a chance all apprentices get. I had to work hard to get used to two environments – one very manual, where the team helped me deal with the challenge of clients by showing me how I can work hard to get their trust.” That was especially important with longstanding clients, some of which had dealt with a single contact for over 10 years.Extra effort – and supportive managementStephanie deftly managed building new relationships, embracing different approaches and settling into new environments. She navigated these challenges in spite of her autism spectrum disorder (ASD), which makes handling changes to routine especially taxing.For instance, dealing with ad hoc tasks in the apprenticeship can disrupt the routines Stephanie is most comfortable with. Since beginning her apprenticeship, however, she has worked hard to set up a process of personal and professional development that accounts for possible disruptions. This helps her adjust without being overwhelmed. She also recognises the help her employer gave her when settling in.“I definitely feel the general support started on day one and continues – at the beginning I was very nervous and they recognised this, slowly drip-feeding me clients to work on,” she says.Personal recognitionSam, Stephanie’s manager, says “Steph has shown remarkable development, both professionally and personally. In her professional capacity, she has grown into her role with confidence and competence, consistently excelling in all areas. Her strong accounting knowledge is clearly reflected in the high standard of her work.”It’s not just Stephanie’s colleagues and clients who have been impressed with her impact.Claire Bennison, AAT Executive Director of Customer, Partnerships and Innovation, says Stephanie “is an exemplary role model and it’s amazing to see her commitment to supporting others by showcasing leadership in her workplace.”And while Stephanie remains modest about her achievements, she does allow herself a hint of pride. “It has been good to have external recognition – it shows what determination and a strong work ethic, commitment to the apprenticeship/studies can give anyone,” she says.She also points out the value of the recognition as someone that did not set out to work in finance. “I had a journey to get to my first role, and I had been advised by a recruiter to look at business admin apprenticeships.”Shared successStaff at Peak Accountancy Training, Stephanie’s Training Provider, work hard to meet student needs. Tutors there adapt their style of delivery to all students and individualise taught sessions, and Stephanie’s work-based advisor Suzanne Hardy quickly established a working relationship that suited Stephanie’s style.Suzanne says it feels “incredible” to see one of her students achieve so highly. “I believe in apprenticeships and the opportunities they provide – I am lucky to work with not just Steph, but an amazing bunch of young and mature learners.“Apprenticeships are not as valued as I think they should be. Personal development is important, and to see the journey Steph has been on has been incredible.”Finally, Stephanie credits the vital role of her support network: “That includes the family around me that have helped with studies and adapting to a full time role, my employer for giving me the opportunity to work on many varied projects, and giving me the time to develop my knowledge, and the tutor support team at Peak Training, who showed me what can be achieved, and how to get success.”Find the right apprenticeship for youWe’ve launched the UK’s only dedicated accounting apprenticeship job board, where employers post listings for all sorts of qualifications and career goals.Search now
“My daughter would not be the confident business-owner she is today if she’d attended university”Posted 01/28/2025 by Christian Koch & filed under Apprenticeships, Members.Apprenticeships are a win-win for young people, providing a full-time job and degree-level education without the debt. So why do many parents worry about their value? Here, one mother and daughter tell AAT about their apprenticeship journey.“Mum, I’m going to apply for an accounting apprenticeship.”When Grace Hardy came downstairs one evening with this announcement, her mother, Caroline, was taken aback: she’d never heard her daughter talk about accountancy before.Parental concernsFor other parents, such news might trigger feelings of confusion: why an apprenticeship over a degree? Although more school-leavers increasingly view apprenticeships as a viable career option – nearly half (46%) of GCSE students considered apprenticeships according to UCAS – the biggest barrier to young people starting an apprenticeship is their folks.One recent Talking Futures survey of 2,000 parents with children aged 11-18 found 17% believe apprenticeships were poorly paid, with 9% concerned they could limit future career flexibility. It follows previous government research which found more than 60% of parents with children aged 13-18 feared their child could be stuck “making the tea” if they opted for an apprenticeship.These worries don’t tally with the reality. Today’s degree apprenticeships (or graduate apprenticeships in Scotland) are the equivalent of a university degree, without the student debt.Apprenticeships have excellent job prospects too: 92% of apprentices stay in employment after completing their apprenticeship; only 61% of university graduates are in full-time work 15 months later. As for accounting apprenticeships, the average AAT apprentice will earn around 78% more than somebody on a minimum wage.Watching your child make decisions about their education and career that could impact the rest of their lives is never easy. But in Grace’s case, it turned out to be the right decision: two years after starting her AAT apprenticeship at top 10 accounting firm Mazars, she qualified as an accountant.In 2023, aged just 21, she started her own business Hardy Accounting. Here, mother and daughter explain how an apprenticeship was the key to helping Grace flourish.Weighing up apprenticeships vs. universityCaroline: “I’d grown up with the idea apprenticeships were trades-focused, for electricians or plumbers. However, in my job as a nursing university lecturer, I started working with apprentices and immediately thought apprenticeships were a brilliant idea. Over the years, I’ve seen so many people who thought they’d never go to university do an apprenticeship then thrive as healthcare assistants.”Grace: “At school, the GCSEs/A-levels/university/job route was drilled into us. Yet, I was diagnosed with dyslexia at primary school and frequently felt stupid and dumb thanks to teachers and others putting limiting beliefs on me. Sometimes I’d be in tears thinking, ‘I can’t do this’. I still got good A-levels (ABB) and a place studying politics and social policy at the London School of Economics and Political Science (LSE). However, I declined the offer. I knew university wasn’t for me: it’d just be an extension of school. I told my mum, who suggested apprenticeships…”Caroline: “It’s a real challenge for any 18-year-old when deciding what they want to do. I’ve got two daughters and told them both, ‘I just need you to get a further education qualification – it doesn’t need to be a university degree.’Grace: “I then visited the school careers adviser. I asked what apprenticeship level I should study and they said, ‘I didn’t even realise there were levels!’ At that point, I knew school wasn’t equipped to help me navigate this journey.”Caroline: “Grace and I attended an apprenticeship careers fair. She’d never talked about accountancy, so when she came downstairs one evening and talked about an accounting apprenticeship, it wasn’t on my radar at all. However, I knew some apprenticeship qualifications are equivalent to degrees. I also knew apprenticeships are hard work, so we talked about the challenges of working and studying at the same time. Grace seemed as keen as ever that this was what she wanted to do.”Confidence and communication skillsCaroline: “Once Grace started her apprenticeship at Mazars, I was impressed how she hit the ground running. Within the first few months, she was out auditing other businesses and shadowing experienced employees.”Grace: “Apprentices are thrown in at the deep end. During my first fortnight, I had a one-to-one with a client. I had no idea what I was doing, but you eventually learn and adapt by asking questions and being an adult… One of the biggest myths about apprenticeships is people think they’re easier than university… Many of my friends at university only attend two days a week!”Caroline: “The confidence Grace picked up during the three years of her apprenticeship was fantastic. She’s 22 now and looking at the confidence she has with clients or networking… I don’t think she would be the same person had she gone to university.”Grace: “I picked up so many soft skills during my apprenticeship that I might not necessarily acquired at university. I can work to deadlines, communicate with clients, work under pressure and problem-solve – all have been instrumental in my business.”Money mattersCaroline: “Grace also became more financially savvy during her apprenticeship. Earning her own money gave her a real boost and pushed her to work even harder. Although she initially lived at home with me (which was nice!) she moved into a flat with other apprentices. When looking for a place to rent, Grace knew exactly how much she could afford. I was impressed! Earning her own money gave Grace freedom – it wasn’t bad money either!”Grace: “I started on £20,000 as an 18-year-old. When I finished my apprenticeship, I was on £40,000. During this time, I bought a Mini Cooper, and have now got an Audi A1 – my dream car since I was 14. I’ve saved too and ploughed money into my business.”Caroline: “As a single mother, it was helpful [not supporting Grace at university]. Living with her friends also meant she didn’t miss out on the kind of social life that university students enjoy.”Grace: “All my friends went to university. Many of them have now left and can’t find grad jobs because the market is so oversaturated. Sometimes they say to me, ‘You’ve got three years’ work experience, an income and aren’t in debt, whereas I’ve just paid loads of money!’”Caroline: “When Grace came home one night and announced she wanted to start her own business, I thought it was a great idea. I said, ‘If it doesn’t work out, you’ve still got a formal qualification and you can come back and live at home’. I’m pleased to say she hasn’t.”Advice for parentsCaroline: “Do your homework. Fortunately, there’s so much information available online about apprenticeships. Attend careers fairs too. When I attended with Grace, it was a great opportunity to ask questions – not just to employers, but existing apprentices too.Above all, I think it’s important to look at your kids as individuals and work out what would suit them. My other daughter took the university route, but apprenticeships couldn’t have been more perfect for Grace. Apprenticeships are one of the best ways to get a qualification, partly because they’re so difficult! I’m incredibly proud of Grace. And I couldn’t have a more positive view of apprenticeships.”Find the right apprenticeship for youWe’ve launched the UK’s only dedicated accounting apprenticeship job board, where employers post listings for all sorts of qualifications and career goals.Search now
How to prevent legacy systems frustrating new ways of working – and employeesPosted 01/27/2025 by AAT Comment & filed under Digitisation, Members, Mental health.With burnout a looming risk to business, technological issues should be high on employer agendas.In the finance industry, many issues stem not from the workload itself being too high but from technical issues with legacy software disrupting productivity. This is according to a report from business software and services provider Advanced.But almost a third of decision-makers in the industry aren’t making moves to adopt Cloud software.Burning up goodwillA survey of more than 5,000 senior businesspeople across the UK found that 85% are currently working more hours each week than they should be. Around 40% said that they couldn’t complete the amount of work they are given any other way.Barriers to working from homeThe report finds the boundaries between work and home life blurred by remote and hybrid working, which is not helping overtime.While workers typically say they’re more or equally effective when working at home compared to working in-office, responses from financiers buck that trend. In fact, 60% of finance workers say they have difficulties accessing their work software from home, and 77% say they get more done in an office environment as a result.Survey responses showed a sustained employee demand for flexible and remote working, despite frustrations around outdated software in some sectors.“Employees are crying out for flexibility, about how and where they work. They want choice. They want to be empowered to be productive and to work in a way that best suits their personal preferences – however, those preferences may change – whilst supporting the goals of the organisation”, says Victoria Robinson, Hybrid Workforce Strategy & Culture Leader at PwC UK.Technological glitchesInefficiencies caused by legacy technology are at the crux of the issue. Employers moving to hybrid and remote working during the pandemic have not always succeeded in ensuring that the systems and processes their teams are using are still fit for purpose now that the change has become permanent.Indeed, just 20% of businesses in the finance sector have adopted Cloud-based solutions to support their new ways of working. Worryingly, 29% of decision-makers in finance said that they are not planning or considering plans to adopt Cloud software.Alongside issues accessing systems, roughly one in five finance workers also said that their working days are disrupted by ‘small tasks that take a long time to complete’. A lack of real-time reporting and file-sharing is also cited as a recurring issue.A tech skills shortage is also to blame, with 41% of survey respondents across all industries saying that they currently have to outsource some or all of their IT requirements due to a lack of in-house expertise.Financial pressuresAdvanced’s annual business trends report highlights that business leaders are primarily concerned with profitability and cash flow in the year ahead. ‘Employees, managers, leaders and business owners are all feeling the pressure to make ends meet’, the report states. ‘Companies are doubling down on their key strategies to achieve growth and profit, and employees are at the heart of this.’That probably explains why employers are reluctant to spend on Cloud computing software. But saving money on functional systems could be a false economy in the long-run.System supportAccording to Robinson, “the winners in all of this will be those organisations able to take a human approach to understanding these challenges and opportunities. They can then apply the framework, technology and support needed for a more customised approach that works for different employees, while optimising their productivity and the productivity of their teams.”Advanced notes that technology can support increased productivity, enabling people to get more done in their contracted working day so they don’t feel the pressure to work extra hours and risk burnout. Their report says ‘businesses will need to invest in tools that support employees wherever they are based’.
Study tips: the best way to work through an assessment Posted 01/23/2025 by AAT Comment & filed under Students, Study tips.We spoke to AAT tutor, Gill Myers and former AAT student, Jess Brindle to get the most effective techniques working through your AAT assessments.What AAT tutor, Gill says:1. Practice writing – no matter how boring you find itAs a tutor, I’d often set written tasks as homework. However, it’s these assignments students often seemed to ‘not have time to do’, because they found them challenging.Accounting students will always prefer numbers to words.Before the synoptic assessments were created, you could get away with this. But now, explaining complicated things to non-financial readers is important.Practise as much as you can.2. Brush up on key wordsMany students struggle in the assessment because they’ve misunderstood the ‘command words’ that crop up in the exam questions.Here’s a refresher:• Identify: Pick out several key points or assets from a list. There’s no need to be over-descriptive.• Describe: Detail the features of a subject/object.• Explain: This means you have to include a ‘why’ or ‘because’ element. Simply outline how or why something happened.• Compare: Talk about the similarities and differences between two or more objects.3. Read the entire questionSometimes students will only answer half the question.The question might be: ‘Identify X and describe with examples’.If you haven’t included the ‘examples’ (which many students don’t), you won’t get full marks for that question.4. Scrub up on spreadsheet skillsAt the advanced level, the big issue is spreadsheets. The students who have dealt with spreadsheets throughout the year are the ones getting good results.If you’re not being taught spreadsheets, mention it to your tutor as soon as possible. You need to be using Excel on a regular basis to do well in the assessment.5. Don’t forget the ‘standard’The standard is the assessment syllabus, which students can access at aat.org.uk. You should be able to see from the standard what topics will come up, and be able to go into the assessment armed with that knowledge.Very few students are taking advantage of this – many don’t know it’s available.What AAT student, Jess says:1. Use the resources availableThe practical assessments on aat.org.uk are great. They’re similar to the real thing, especially with the question structuring.Read these and you won’t enter the exam thinking: “What questions will be where?” Everyone gets exam nerves, but using these papers beforehand will make you more confident going in.The best thing is the AAT Green Light tests for each unit, which uses a ‘traffic lights’ system to tell you how you’re faring in different subjects.Get an amber light and you’ll need to do more revision, while a red light means you don’t understand it at all. I once got a red light on business tax, which really helped me focus on my revision.2. Assume the examiner knows nothingThere’s a lot of writing in the advanced exams, which can be daunting. Just remember to explain everything as if the person you’re addressing (the examiner) doesn’t know anything about finance.I used some technical words in my own exams, but provided explanations alongside them to prove to the assessor that I knew what I was talking about, and hadn’t just plucked out words that sounded good.3. Book your assessments wiselyI always tried to make sure I booked my assessments shortly after I was scheduled to finish my lessons. I always booked my assessments for the mornings, too.Whenever I did afternoon assessments, I usually spent all morning stressing about them.4. Remember: the assessment is similar to other exams you’ve takenMany students describe the synoptic as this big, scary thing. But it’s no different from any other exam I took.To be honest, it was easier than my GCSEs.Because the assessment is split into different exams, you can identify which bits you need more revision on, as opposed to GCSEs, where it’s just one end-of-year exam.5. Cramming doesn’t workYou just end up stressing out, because you start worrying about what you don’t know rather than focusing on what you do.In summaryThere are a few different kinds of exams with AAT. Read the question, look out for key words, explain things, and do your best.Further readingThe one thing that can help you manage exam stressStaying up late to study? 7 tips to help you switch off and get a good night’s sleepHow to overcome exam anxiety and succeedBrowse the full range of AAT study support resources here
“Not one you want to miss”: Here’s what to expect from AccelerAATePosted 01/22/2025 by AAT Comment & filed under Events, Members, Students.Our must-attend student conference is approaching.AAT’s FREE student conference AccelerAATe takes place from 29-31 January this year. You can sign up here.“Not one you want to miss”Award-winning AAT Tutor Will Boardman MAAT says “there are a variety of extremely useful sessions to get involved with and of course be sure to attend my session on day 2 at 1:30pm where I’ll be taking you through the best ways to prepare for your exams. It is not one you want to miss. I will hopefully see you there.”The programmeOver the three days, students will get together to learn about and discuss:Where can an AAT qualification take you?Qualified AAT accountants took students through their journeys, inspiring listeners with their experiences, sharing how they turned challenges into successes, giving advice on how they achieved their goals and what to think about when starting your career.Using social media to land your dream job, with Reed RecruitmentHow to use different social media platforms to represent yourself, gave tips on how to manage your online persona, and showed how to use social media to enhance your job search.Communicating finance to non-finance peopleData analysis and interpretation, scenarios you might face at work and how to present and explain your work and data in a business environment.Exam preparation: tips and tricksStrategies to maximise exam prep and performance, with actionable tips to help students succeed.From study stress to success: Ideal School’s ultimate strategies to unleash your potential and ace your examsSimple but powerful techniques to manage stress and boost study skills.Making the most of your AAT resourcesShowcasing everything AAT has to offer, giving advice on making the most of resources and discussing how to overcome study barriers.Employer panel on the skills needed for future accountants [link to OnDemand vid from Ant]Employability is an essential part of what AAT qualifications can give you. In this employer panel, BKL, EG Group and Network Rail joined us to discuss the key skills and attributes employers need from their finance staff. The panel looked at the future of accountancy and how finance roles might change, including how to future-proof your skills.Mastering workplace relationsThe conference wrapped up with a session from professional trainer Joanna Gaudoin on the importance of building professional workplace relationships.
How your accountancy practice can use software to achieve process excellencePosted 01/22/2025 by Xero & filed under Automation, Members, Technology.The modern software-powered processes that can help you deliver quality work, faster.This content is brought to you by XeroWe’ve all been there – you set out with a list of jobs, only to get stuck on a single task for the whole day. When accounting tools don’t work as they should and information is hard to find, practice operations grind to a halt.Fortunately, modern software-powered processes can help you deliver quality work faster. Let’s explore how.Why practices need software-powered processesProcess challenges vary from practice to practice, but many accountants and bookkeepers will recognise the following:Manual processes and repetitive admin: Data entry and reconciliation tasks are non-stop and time-consuming. They also keep practices from spending time with their clients and delivering personalised services like advisory.Tricky task delegation and accountability: Who should be doing what? When tasks are spread across multiple platforms and there’s no single system for delegating work, it’s hard to know what’s getting done. Meeting deadlines and keeping up with regulations: Every year, practices face multiple deadlines for every client. This is made harder when changing regulations mean desktop accounting systems become outdated, or expensive to upgrade.Where to start with streamlining your accounting processesSmall changes can make practice life much easier.Start by automating repetitive admin tasks like bank reconciliation, invoicing, and reporting. Modern accounting software can take care of these jobs accurately and quickly – giving you more time to work closely with clients.For example, Xero’s bank reconciliation predictions recommend matches for statement lines based on past transaction data. Another way you can save time is by using the repeating invoice feature for regular clients, so that an invoice is sent on the same day or date every month. Next, facilitate task delegation and collaboration with a system for assigning and tracking work. With Xero Practice Manager, you can assign tasks and track progress from a single dashboard, and set up customisable access levels and permissions so only the right people are working on tasks and projects that they have been granted access to.Finally, use dashboards to manage deadlines. You can see client obligations for personal tax, company tax, company accounts and VAT in a single view with Xero Tax Manager. And Xero is automatically updated in line with changing regulations so you can be confident your software is always compliant.Building on better processesOnce your practice is running like a well-oiled machine, you can focus on growth. Drive more efficiency with templates for regular practice tasks. Or integrate third-party apps that help you deliver specialised services. You could even explore reports that show progress against KPIs and areas for improvement. The choice is yours.Successful practices don’t happen by accident, and the right software can help you achieve success on purpose. Xero helps you build an effective practice with a library of features and supporting apps to automate tasks, improve team efficiency, and better serve clients.If you’re not yet a Xero partner, visit our Xero Partner Programme where you can find out more about becoming a partner and join over 200,000 accountants and bookkeepers using Xero in their practice. Get the tools and resources you need to succeed.
Research & Development tax relief changes fallout for SMEsPosted 01/21/2025 by Christian Doherty & filed under Members, Tax.What’s happened since the R&D tax credit shakeup in 2024? We take a look at the consequences for HMRC and small- and medium-size enterprises.The UK’s position as a leader in innovation has been the subject of much debate in recent years, particularly post-Brexit. And while disagreement rages over the details, all agree that British firms must be encouraged to develop new and innovative products and services. Since its launch in 2000, one of the key vehicles for that has been R&D Tax credits.2024 saw a major shake up the administration of R&D tax credits, with the biggest change being the creation of a merged scheme R&D expenditure credit (RDEC) and enhanced R&D intensive support (ERIS) replacing the old RDEC and small and medium-sized enterprise (SME) schemes for accounting periods beginning on or after 1 April 2024. So, unless companies have a shortened accounting period, the chances are they won’t have seen any of these things take effect yet.“Seismic shift”But changes are afoot: “The merger will bring the SME scheme and the RDEC scheme together to basically say that we’re going to only incentivize businesses to claim above the line, like a 20% rate,” explains Akshay Thaman, IP and Policy Lead for Source Advisors.“So what they’re basically saying is if you’re a customer, i.e. the business that’s contracting that R&D out, then you’re most likely to be able to claim because you’ll take the financial risk. You should be aware of what R&D activities you’re contracting out, and so you’ll be the one to claim, but there are some exceptions around that rule, but it follows the old SME rules rather than the old RDEC rules.”The second main change under the new regime covers overseas expenditure on R&D, which is no longer allowable. “That means if you’re contracting out R&D activity to an overseas entity, then you won’t be able to, in most cases, claim for those costs back to using this scheme,” says Thaman.It adds up to a seismic shift, says Jennifer Tragner, Partner, R&D Incentives Advisory at Evelyn Partners and a seasoned observer of the R&D relief space. “Although I’m not sure I’ve got any benchmark for what a small year looks like, it has been a busy period, in terms of culmination of the consultation and the implementation of the merged scheme.“That’s along with an increase in awareness around compliance activity and the debate around the impact of that, with around 10 tribunal judgments in one year. If nothing else, I think that makes it quite a big year.”HMRC’s new approachThe most immediate impact has been a significant change in tone and intensity of HMRC’s implementation of its compliance activity and how it assesses claims. And that has not been met with universal approval, with a growing consensus that more claims are being rejected, often unfairly.“There seems to be a presumption of the claim being incorrect at the beginning,” says Thomas Hayden, Research & Development Director at Moore Kingston Smith. “That means the inspector is not there to determine what the correct answer is, but rather is there to argue the point that the claim is invalid. And this seems to be regardless of any sort of logic or real substance behind these arguments.”Jenny Tragner argues this could have been handled better. “Had HMRC ensured that it had sufficiently experienced compliance officers to deploy that level of increase in compliance cases and keep the service levels high, then I think they could have managed the collateral damage much better,” she says.“I expect HMRC would say that something had to be done at scale and very, very quickly. And the cost of that was that we ended up with very inexperienced case workers on those compliance cases, largely unsupervised, and we had lots of instances of poor-quality work.”“Perception of a hostile environment”Many agree a stronger approach to compliance should tackle the issue of fraud. This includes putting out of business some of the boutique firms indulging in speculative and spurious R&D relief claims.But there is another side to it: “We’ve already seen quite a few cases of businesses dropping out of inquiry just because it’s too much effort,” reports Akshay Thaman.“I’ve had people write to me saying that we’re not going to be claiming any more because of what HMRC is doing. We’ve also got a couple of examples of businesses that have gone abroad as a result of the changes. I don’t know if that’s completely the reason, but it’s probably one factor as to why they decided to do that.Tragner is keen to point out that it’s too soon to tell what the changes will mean in the long term, but does draw some conclusions as to whether the changes have had the desired effect: “I think when it comes to those changes specifically targeted at reducing error and fraud, it probably depends on your viewpoint.”“I’m convinced that there were fewer fraudulent and speculative claims submitted than previously.“However, having supported businesses with dispute resolution, I’m also aware that there are plenty of cases in there of claims being reduced or rejected entirely incorrectly by HMRC because of poor compliance activity.“And I’ve spoken to businesspeople who have said that they’re going to opt not to claim relief for work that they believe qualifies just because of that perception of a hostile environment.”Landscape for accountantsThe changes won’t just affect businesses claiming (or deciding against claiming) R&D relief – accountants will also probably feel the impact. “I think that there will still be a need for R&D advisors while the relief is still available, but in all likelihood the claims will continue for the larger companies and maybe we’ll see a reduction in smaller scale SME claims,” says Iain Wheat Senior Tax Manager at UHY Hacker Young.“But I still think many SMEs do undertake perfectly legitimate R&D expenditure, and if the claims are significant enough and warrant the work involved, I’d hope the level of claims do not reduce too much as this would be detrimental to SMEs. However, it is possible that accountancy firms may need more specialist R&D advisers due to the new guidance, complexities and HMRC raising more and more enquiries.”What’s nextBut despite that, Wheat believes things will get worse before they get better: “We’re currently not really seeing claims within these new rules just yet, but I would expect HMRC to continue their aggressive approach the more we see. I have been aware of enquiry cases in which HMRC may not have covered themselves in glory – it appears it is more a case of HMRC finding ways to reject claims rather than being helpful with them.”Thomas Hayden sums up the worry many feel around the chilling effect the changes may have on smaller firms in particular: “Anecdotally I know of companies that are confident they qualify and have had inquiries go in their favour. In spite of that, they’re not going to bother making future claims because it’s just not worth the effort if it does go to inquiry for them again.“It feels SMEs are being clobbered from that perspective. And then, they’re also being clobbered from the perspective that HMRC are far more likely to open the inquiry on an SME in the first place. So it’s a double whammy.”
Identity verification and Authorised Corporate Service Providers (ACSPs): what you need to knowPosted 01/21/2025 by AAT Comment & filed under Anti-money laundering, Members, Policy.An essential update on UK company law from the Professional Standards team.As part of changes to UK company law under the Economic Crime and Corporate Transparency Act 2023, Companies House will be required to verify the identity of anyone submitting information to the public register, including those acting on behalf of a company, from Autumn 2025.Who needs to verify their identity?As detailed on the gov.uk website, all new directors and people with significant control (PSCs) will need to complete identity verification. Identity verification will also apply to other registration types. For example, any members of a limited liability partnership (LLP) will also need to verify their identity.For existing companies, all directors (or equivalent) and PSCs will have a 12-month transition period to verify their identity with Companies House. The transition period will start from Autumn 2025.From Spring 2026, anyone acting on behalf of a company will also need to verify their identity before they can file information with Companies House.How will identity verification be carried out?Directly with Companies House online,or through an Authorised Corporate Service Provider (ACSP).What is an Authorised Corporate Service Provider (ACSP)?Authorised Corporate Service Providers (ACSPs) are individuals or organisations that undertake anti-money laundering (AML) supervised activity, such as: accountants company formation agents solicitors chartered secretaries and governance professionals.From Spring 2025, anti-money laundering supervised firms and sole traders will be able to apply to become ACSPs. More information about the standards to become an ACSP can be found on this Companies House blog and further information about the registration process will be published, once available.How will this affect AAT licensed members?If you’re an individual that is subject to identity verification, you will need to have your identity verified from Autumn 2025.If you wish to carry out identity verification checks on behalf of a company client, you will need to register with Companies House as an ACSP once the registration service becomes available in Spring 2025.If you wish to act on behalf of a company client, you will also need to have your identity verified from Spring 2026 in order to file information with Companies House.Information for AAT licensed members wishing to act as an ACSPIf you do register as an ACSP, the following information will be important to you.When registering to become an ACSP, you will be asked for an AML number. This will be your AAT membership number.Your firm information held on AAT’s records, such as your business name and address, must match the information you’re providing to Companies House, otherwise your ACSP application will be rejected. It’s therefore important that you ensure your business details held by AAT are always up-to-date, particularly if you are changing entities and require AML supervision for the new entity. For example, changing from a sole practitioner to a limited company.Identity verification checks by ACSPs must meet the same level of assurance as those who verify directly with Companies House, and firms will need to allow additional time for these checks when providing services to company clients, such as company formation. Guidance for ACSPs around identity verification requirements will be published by Companies House in due course.Draft legislation suggests there will be a requirement for ACSPs to keep records for a period of seven years and there will be offences in relation to record keeping. The draft legislation also sets out duties of persons to provide information to the registrar and/or ACSPs to notify the registrar of certain changes within set timescales, along with relevant offences for failing to provide such information. AAT recommends firms keep up-to-date with announcements on the changes to UK company law web page.Changes to our Fair Processing NoticeFrom February 2025, if your firm (this includes sole practitioners) is supervised by AAT for AML purposes, we will share the following data with Companies House every two weeks:AAT membership numberRegistered Company Name (for limited companies and LLPs only)Company Number (for limited companies and LLPs only)Trading NameFirst NameLast NameDate of BirthBusiness addressIf you wish to register as an ACSP, we recommend you do so after two weeks of your AAT licence and AML supervision being granted. This will ensure your data has been sent to Companies House and can be verified as part of your application. If Companies House are not able to verify your AML supervision, your ACSP application will be immediately rejected.Our Fair processing notice: Licensed members will be updated on or around 04 February 2025.AAT’s AML helplineAAT’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]
Alert: HMRC text scamPosted 01/20/2025 by AAT Comment & filed under Anti-money laundering, Anti-money laundering, Members.Several members have contacted us to say they’ve received a text message from HMRC asking for confirmation of their Agent Services Account.HMRC has confirmed that a text message, where the sender appears as ‘TaxGateway’ and asks the recipient to click on a link and confirm details of their agent services, is fraudulent.Warning signsWe understand the message includes a link that looks very similar to what you would expect from a legitimate HMRC communication. However there are two significant red flags:the domain ‘gov’ is incorrectly replaced with ‘qov’the domain appears to be from outside of the UK ‘.com.es’What to do nextIf you receive this or a similar text message or email, please do not click on any links. Instead, report it to HMRC and delete the message immediately.Before you open links, you should always check the list of recent text messages sent from HMRC here to help you decide if a text you’ve received is a scam.