Could we be a cashless society within a decade?

Posted by & filed under Future of accounting, Members.

Five out of every six payments are now cashless – what does this mean for finance professionals and businesses?

When future historians look back at the early 21st century and pinpoint exactly when physical currency lost its importance, they will most likely conclude Covid-19 slammed the final nail in the coffin for this material financial exchange that has existed for 100,000 years. 

Cashless payments were already rising rapidly before the pandemic, but Covid-19 catapulted its usage into a new stratosphere. The shift to online shopping during the lockdowns, an increase in the contactless upper limit to £100, plus fears of virus transmission (since discredited) have created a situation where today only one in six payments uses cash (compared with half of all transactions in 2011).

Nowadays,  13.7m of us lead a ‘cashless life’ – double the number in 2019, according to industry body UK Finance. Some predict cash could account for just 6% of transactions within a decade.

“Covid-19 has accelerated the adoption of digital payments by around three to four years,” says Jonathan Westley, chief data officer at credit reference agency Experian. “For businesses, it’s a cheaper way of operating and therefore serving the customer.” 

More business, lower costs 

Certainly, the business argument for cashless is compelling. One of its biggest boons is that it reduces costs – operating fewer tills means organisations don’t need to shell out for equipment, premises or staff. 

Graham Mott, Director of Strategy at national ATM network Link, gives the example of Apple stores, which run by “ripping out physical infrastructure, replacing it with iPads that process scan-and-go payments.” 

Cashless operation also allows businesses to process more payments. Think about your local pub on a busy Friday night. Instead of bartenders fumbling with banknotes and counting loose change, customers simply wave their contactless card, and staff can swiftly move on.  

Less data entry 

For bookkeepers and accountants, cashless means less time spent on data entry or manually reconciling cash transactions. By integrating third-party apps such as Stripe with Xero or QuickBooks, compliance becomes more streamlined and accurate, giving finance teams more time to analyse datasets of the digital payments their customers have made. 

As digital payment and online transactions become more interconnected, real-time information will become the norm in finance departments.

Greater insight 

Using advanced analytics tools, this archived payment data can give brands a real-time overview of their finances, allowing them to forecast cash flows or assess whether an increase in profit margins is needed. 

It also gives them insight into customers’ purchasing habits, which can inform decisions about what products to sell, or offer more targeted adverts and personalised offers. 

“It allows businesses to create new relationships with customers,” says Experian’s Chief Data Officer Jonathan Westley.  

Time to jump on board?

For most businesses, it seems inevitable most transactions will take place in the digisphere. For those organisations yet to update their systems, now is the time to act.  

“If you don’t move, you’ll be left behind and risk ostracising 80-90% of your customer base,” warns Westley. 

Even so, reports of cash’s demise are exaggerated – a blanket ban is unlikely to happen in any country, as people will probably resort to another physical commodity to replace it. 

As we inch closer towards a cashless society, not everyone feels enthusiastic about the demise of physical currency.

As the cost-of-living crisis bites, a recent money.co.uk survey found 42% of people prefer cash because it allows them to budget more effectively. This is what behavioural economists call the psychological “pain of payment” – the tangibility of cash means we notice it when it’s gone, rather than subscriptions or in-app purchases which exit our bank accounts almost invisibly. 

“Cash is a great way of budgeting – you can’t spend money you haven’t got,” says Mott. “If you’re on a tight budget, it prevents you from being overdrawn and accumulating bank charges. Many find it useful because they can count out the money for what they need to spend that week on rent or food, which is easier than analysing spending on a smartphone or bank statement.” 

Such factors have fed into the Government’s plans to introduce a Financial Services and Markets bill, aiming to preserve cash by ensuring “continued access to withdrawal and deposit facilities”. 

Privacy concerns 

With our every financial transaction recorded by banks or payment firms, privacy campaigners have raised concerns about how this data will be harvested. Cash is also anonymous, which for some people, such as those suffering domestic abuse (see box, right), is safer than digital payment trails appearing in their bank account. 

Still, as cashless advocates argue, digital audit trails can help prevent all manner of crimes: money laundering, bank heists, tax evasion (reducing the £32bn tax gap is one of the reasons why HMRC is pushing Making Tax Digital) or making lone shopkeepers feel less nervous about locking up tills late at night.  

Cents and sensibility: The five million ‘left behind’ 

Whatever the virtues of digital payments, around five million people risk being ‘left behind’ in a cashless society. They include the following groups: 

Those without a bank account 

Around 1.3m adults in the UK don’t have a bank account, according to the Financial Conduct Authority. This includes those with a poor credit history, digital refuseniks, people mistrustful of the banking system, or refugees unable to open an account without a fixed address. 

The elderly  

Only 18% of over-64-year-olds have home internet access, while just one in five over-75s own a smartphone – charities such as Age UK argue they’d be disenfranchised by a cashless culture. 

Small business owners, gig economy workers and freelancers 

In 2019, research from Accenture found 80% of people in the UK pay small business owners such as taxi drivers, window-cleaners and gardeners with notes and coins. However, digital payment systems may not always be beneficial – smaller retailers usually pay high transaction fees whenever their customers use contactless payments. 

People with accessibility issues 

Paper banknotes and coins are recognisable for visually-impaired people, who can find digital displays for card/contactless payments difficult to read. Meanwhile, those with learning disabilities may only understand arithmetic for cash, rather than digital payments. 

Those living in rural areas 

The shift to cashless has raised fears people living in remote locations may no longer access cash when unprofitable ATMs are closed. To combat this, Link has a financial inclusion programme subsidising cash machines in rural areas. 

Victims of domestic abuse 

Sufferers of domestic violence often collect emergency cash unbeknownst to their abusers, who often monitor their bank transactions and restrict their access to credit and debit cards.  

This cash could prove indispensable should they get the opportunity to flee to safety. 

Charities 

Scrapping coins for contactless payments would damage smaller charities that rely on bucket collections, as small change accounts for most donations, according to the Charity Finance Group. 

How accountants should support clients in the cost-of-living crisis

Posted by & filed under Energy crisis, Members, News.

As the Government strives to regain control of the crisis, we talk to accountants about how they are advising clients

Research by BDO earlier in the year warned that nearly 60 per cent of UK businesses were likely to struggle from these three major threats over the next few months. It also warned that around 18 per cent of businesses fear that these threats (high inflation, high energy bills and supply chain issues) could create more business disruption than the Covid-19 pandemic.

Accountants play an increasingly important role in supporting their clients during this time, not just in terms of value-add services and value for money, but also on a strategic level: risk-adjusted forecasting and planning as well as cash flow forecasting.

Accountants may also want to consider looking at the following areas with their most vulnerable clients:

  • Business costs: including staff costs, spending and investment, overheads and third-party contracts: can current payment terms be re-negotiated? Are there any unnecessary spending areas which can be minimised or reduced?
  • Forecasting: Including risk-adjusted forecasting, and future and cash flow forecasting.
  • Funding opportunities: existing government schemes, grant funding rounds and so on.
  • Tax relief: including R&D tax credits and small business rate relief (SBRR).
     

We spoke to several UK accountants to find out how they intend to support their clients over the coming months.

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Maintain regular client communications and stay up to date with tax reliefs and funding opportunities

Yvonne Cooper, Head of Finance, Access2Funding

Our clients within energy-intensive sectors such as hospitality and manufacturing are the ones most affected by increasing business costs, particularly spiralling energy costs that will further increase during the winter.

Government tax relief support can help offset some of the increasing costs businesses are facing, from R&D tax credits to capital allowances and grant funding.

Our continuous support for clients includes:

  • Regular communication:  providing insightful updates and analysis of the ongoing cost-of-living crisis, with solutions we see that could help businesses.
  • Advising clients to seek advice from experts, including ourselves, on how to lower overall business costs.
  • Notifying clients of any relevant tax relief or grant funding rounds
  • Maintaining a pragmatic approach by considering alternative funding sources.

Many of our clients are futureproofing their businesses by innovating with renewable energy sources, for example implementing carbon recycling or reducing, reusing and recycling their business waste to lower grid payments.

Next steps: Accountants with vulnerable clients should maintain open and transparent communication, keeping abreast of current affairs and issues that directly affect their business. Export your knowledge and your network with them to highlight you are there for them.

Verdict: Clients within energy-intense sectors are likely to struggle the most – so keep in regular contact, updating on relevant tax relief or funding opportunities.

Review client overheads for scaling back opportunities

Craig Billington, Chartered Accountant, Kirkwood Wilson

There are two sides to the issue: the rising cost of gas and electricity for businesses but also, how businesses can support their employees through this period. Supporting team members invariably means wage increases, thus bringing further cost pressures to businesses.

The best way to help clients is to sit down with them and help them understand where their overheads can be scaled back. Management accounts, in particular, help clients compare costs quarterly or monthly, allowing the business owner to make informed decisions about areas that might have room for improvement cost-wise.

Next steps: Be available for clients whenever they need you – let them know you care, and never dismiss a phone call.

Verdict: Consider scaling back overheads.

Carry out an independent 360-degree business review including financial performance and practical strategies

Brian Burke, Managing Director, Restructuring & Insolvency, Quantama

The cost-of living-crisis is being felt by businesses, their customers and by those in their supply chain. Costs such as borrowing, goods and materials, labour, fuel, and energy are all rising rapidly.

To date, many have absorbed the costs as much as possible to protect their customers from the full impact of their increased costs but every affected business is analysing the impact of rising costs on profit margins and cash flows.

We are advising clients to:

  • Ascertain how much they can absorb before having to pass the increase on to customers, then consider the impact on customer demand.
  • Review and consider their financial position regularly utilising real-time management financial information.
  • Minimise unnecessary expenses.
  • Review essential costs and suppliers and identify areas where you can negotiate, source more cost-effectively and create savings.
  • Review buyers, suppliers and funding – keep on top of any business debts or customers with outstanding invoices.
  • Revise your terms with your suppliers to spread costs or secure flexibility on payment timescales.
  • Proactively engage with customers to ensure timely payments or identify those who may be struggling.
  • Review staffing costs and reassess current structure whilst protecting and retaining talent but be honest if cutbacks need to be made.
  • Review your portfolio – not all products or services will be equal in terms of profit potential.

Next steps: Carrying out an independent review (including financial performance and recommended strategies) to provide a candid picture of the business can be a real turning point.

Verdict: Carry out an independent 360-degree review of the entire business, including financial performance and practical strategies.

Offer clients cash flow forecasting sessions to help forward planning

Andy Smith, Abbeygate Accountancy

There is likely to be a rise in pay increase requests due to struggling employees who are also likely to struggle with travel costs to and from work.

At Abbeygate, we’re planning to run sessions with our clients on cash flow forecasting to help clients plan ahead, replicating what we did at the start of the Covid-19 pandemic. This will support resilience in uncertain times.

We’re also providing support with budgets and business growth to counteract any rise in fixed costs.

Next steps: Pick up the phone, talk to your clients, and don’t just do the traditional job of the accountant – Advise, Support, Help!

Verdict: Provide cash flow forecasting sessions with clients to help forward planning.

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This expert-led virtual training is proving to be as popular as ever. Don’t miss out on hours of expert insight and advice, interactive training and in-depth analysis of all the latest taxation issues.

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How an accountancy firm boosted annual recurring revenue by £250k

Posted by & filed under Members.

This content is brought to you by Ignition.

One automation tool helped Abbeygate Accountancy increase its client base by 70% in one year.

Bury St Edmunds-based accounting, bookkeeping and advisory services firm Abbeygate Accountancy have a simple outlook. Its team works hard to be excellent accountants and business advisors, with an optimistic culture and an ability to help its clients’ businesses succeed.

When Andy Smith founded Abbeygate Accountancy, it was a small practice in a small town, but Andy had one clear mission in mind: growing the practice. But this wasn’t just about bringing on as many clients as possible.

The Challenge:  Identifying areas that could be automated to save time and grow client base

Andy soon realised there were two key elements to successfully growing the practice: people and processes.

He needed to make sure the practice had the right team, that they were attracting the right sort of clients, and that both employees and customers alike were supported by rock-solid back-office processes.

To achieve this, Andy began identifying the end-to-end customer journey, from a client agreeing to their proposal right the way through to them paying for the firm’s services.

“I wanted a centralised solution that allowed us to all sing from the same song sheet and follow the same approach. We wanted to make sure that even if one of our team wasn’t in the office, a colleague could instantly pick up a conversation with one of their clients.”

The Solution: A centralised tool to stay on top of all their clients

Andy implemented Ignition because it ‘just felt like the right tool’ for his needs. He found it so comforting implementing a centralised tool that helped him stay on top of all his client activity, including the proposals, the services the firm offered, customer payment details, billing schedule, and more.

Andy’s main concern now is getting clients on board. Ignition allows him to rapidly send out personalised proposals that even include a personalised Loom video. New clients have told Andy that this personal touch was a major differentiator between Applegate Accounting and the competition.

Andy is also a huge advocate of being able to see when a client has opened a proposal or viewed a video. There’s nothing worse than being in the dark, unsure as to whether or not a client has even taken the time to read what you’ve sent over.

The Result: Significantly grew client base and added extra £250,000 annual recurring revenue

Abbeygate Accountancy has grown their client base from 22 to 176 companies in roughly two years – and they increased their annual recurring revenue by £250,000e.

The team is able to serve more clients, more effectively by virtually eliminating the time spent on creating proposals, setting clients up in various systems, and managing payments.

They’re now able to set up automated monthly payments with all their clients, providing the firm with a consistent cash flow. This has had a major influence on the team’s strategic decision-making. They know what their future revenue looks like, which helps them to forecast accordingly, and they no longer have to manually manage a debtor book.

Ignition allows Abbeygate to get on with their day job: serving clients. Throughout every stage of the customer journey, from sending a proposal to receiving payment, Ignition has provided both Andy and his clients with a seamless, automated experience.

Discover how Ignition makes it simple to engage clients, get paid and run your accounting or professional services business on autopilot. Free-up to focus on what matters most –- your clients. 

Try our interactive demo to see how.

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Top 3 ways to help your company with the cost-of-living crisis

Posted by & filed under Students.

As the cost of living crisis continues to bite, many businesses are in need of more help. Here’s how their accountants and finance teams can assist… 

With inflation at the highest rate for 30 years and energy bills soaring to record highs, many businesses are currently feeling the strain. In fact, more than half (53%) expect to stagnate, shrink or go bust in the next year, according to data from the Federation of Small Businesses (FSB). 

If you’re an accountant working for a troubled company or advising a struggling firm, there are a few ways you can help. 

1. Have monthly meetings 

“In times of stress, it’s important to ensure the basics of good financial management are taken care of,” advises Lee Marshall, partner and head of accounting and business advisory at RSM UK. “Detailed and accurate management information coupled with robust budgeting and rolling forecasts should be discussed with management at least monthly.” 

Additionally, make sure you present the figures so bosses can understand them. 

“It’s crucial the business has high-quality, timely data that allows its owners/bosses to make informed decisions,” Lee notes. 

“Set up their chart of accounts so they can easily analyse income and costs across departments and revenue streams. This will help the business make quick decisions on what lines of business are worth investing in – and which parts of the company need attention.” 

2. Invest in forecasting software 

With the ever-changing economic landscape and costs likely to change throughout even a one-year forecast, Lee points out that it’s more difficult than ever to accurately predict profitability. 

“Rolling forward old Excel-based forecast models may lead to error through typing mistakes or incorrect assumptions. Luckily, there’s now a range of affordable forecasting tools, which can be integrated with cloud-based ERP systems such as Xero or QuickBooks. These can be linked into the accounting system, so it updates with actuals each month.” 

3. Undertake reviews 

Reviewing fixed-rate contracts is a good place to start, Lee suggests. 

“Any business that has a fixed-price contract with their customers/clients may need to assess how profitable these contracts are. Because of rising costs, these contracts might become difficult with their losses provided for in their financial statements.” 

Reviewing energy usage is also important: “When companies measure and report their carbon usage, they often see ways they can reduce their environmental impact,” says Lee. Unfortunately, however, raising prices may be unavoidable. 

“Businesses may need to pass their energy costs onto customers. If they don’t, they could risk profitability, which may lead to insolvencies and closures.”   

Further reading:

I’m not one to meditate, but I can get lost in a heavy guitar riff

Posted by & filed under Mental health.

Sophie Shepherd, AAT’s Head of Human Resources, set up a wellbeing group so employees could share their approaches to wellbeing, mental health and resilience. Here she shares what helps her.

Why did you volunteer to be a wellbeing champion?

The quick answer: because I set up the group…

The real answer: Wellbeing wasn’t something I actively thought about until a few years ago when I experienced a lot of grief and loss over a short period of time. I exercised because I enjoyed it but otherwise hadn’t given consideration to the fuller side of my own wellbeing. Going through a transformative period in my life meant I learnt a lot more about how to look after myself and I want to help other people whether that is by sharing information or being someone to talk to.

How does work potentially affect your wellbeing?

For me I can find it hard to switch off unless I am on top of my to-do list: I find myself thinking about work when I shouldn’t be. It’s therefore important for me not to procrastinate on the tasks I least want to do and prioritise my workload; just get it done rather than let it play on your mind!

How do you try to maintain your own good health during the working week?

For me I make sure I get outside before I start my working day, even if it’s pouring with rain and I’m working from home. I also enjoy an after-dinner walk to get the metabolism going, I’m grateful for the sunny evenings so I can get away from pavement pounding and into greenery. I also try to fit in yoga a couple of times a week – I wouldn’t have believed the physical and mental strength it builds. I have a couple of nights without TV, all I do is fall asleep on the sofa anyway (but maybe I’m watching the wrong programmes!).

What do you like to do in your free time that helps support your overall wellbeing?

I love listening to music and can find myself getting lost in a heavy guitar riff. I also try to spend as much time outside as possible, and if I can combine that with seeing family and friends all the better. I’ve never been one to meditate, but I find when I am outside my mind relaxes. I also really find yoga beneficial, although I only tend to notice the benefit if I’ve missed a few sessions.

If you could offer up one piece of advice, what would it be?

When things start to feel a bit much, take a step back and don’t be too hard on yourself. Talking to others about what you are thinking can often really help, when you say things out loud it releases them from your mind and can feel a whole lot more manageable.

How to get the most from your CPD

Posted by & filed under CPD, Students.

Whether you’re currently studying with AAT or a professional member, you’ll understand the importance of continuously updating your knowledge to have a more fulfilling career.

Being a lifelong learner is a mindset held by people who are ambitious and know that having this attitude will lead to more opportunities opening up in front of them.

What is a lifelong learner?

A lifelong learner is someone who is never stagnant when it comes to self-development and growing their skillset. They are always looking for the next subject to improve their knowledge in, and they prioritise their continued professional development (CPD).

A lifelong learner knows that weaknesses don’t need to be seen as a negative – they are something you know you could be better at and, once recognised, are an area you’ve identified that you can work on. Often they are seen as experts in their roles and enjoy supporting others by passing on their wisdom, which in turn helps to solidify their own learning.

7 characteristics of a lifelong learner

1. Curious

They will ask questions and be open-minded.

2. Committed

They will choose action over distraction and often prioritise education over entertainment.

3. Interesting

They are well-informed, have more to talk about and are up to date with the latest trends and developments in their field.

4. Fulfilled

They will be a more competitive business owner or desirable candidate for new jobs and promotions and more engaged at work, bringing increased job satisfaction.

5. Inspirational

Ideas will come more easily to the lifelong learner.

6. An expert

They will be known as a ‘go-to’ person.

7. Confident

The added opportunities learning opens up for them will bring a positive mindset and increased self-esteem.

6 habits you can implement to become a lifelong learner

  1. Set goals.
  2. Create a learning timetable.
  3. Take care of your mental health for a positive mindset.
  4. Teach others to actively reinforce your learning.
  5. Know how you like to learn. You can learn in unexpected ways and do things that other people in your industry aren’t typically doing to make you stand out and put you a step ahead.
  6. Have one place to keep all your notes, plans and resources.

The AAT Lifelong Learning Portal

The AAT Lifelong Learning Portal is available to all students and professional members and is an ideal hub that you can use for all your learning.

You will find all of these AAT resources in one place to help with your studies or if you need a refresher:

  • Videos
  • Practice assessments
  • Real-life scenario e-learning
  • Green Light tests
  • AAT Learning Pods (podcasts)

They are organised by unit, level and type, and you’ll find lots of useful resources in there, no matter your learning style. Not only that, but you can bring in any of your own resources like blogs you love, links to YouTube videos or materials from your training provider to create your own personalised library. And you can add personal review notes for each resource, so you don’t have to go between websites or try to remember which ones worked best for you.

There’s an advanced keyword search tool so that it’s easy to find the resource you’re after in the portal. Watch the video: How to search for resources in the portal. 

Or you can choose the unit you’re currently working on and see all the resources available to you to try out. Watch the video: How to access your support resources.

You also use the portal to plan and organise your learning time by adding due dates to resources which will rearrange the order in which they appear in your dashboard. Watch the video: How to add a due date.

The AAT Lifelong Learning portal will allow you to do all of this to manage your learning effectively: 

  • Access your AAT study support resources
  • View your current learning activity
  • View your previous learning activity
  • Add review notes to resources, so you know which were useful to you
  • Add reminder dates to resources so that you don’t overlook them
  • View recommendations on topics that may interest you
  • Bring in resources from other locations, such as from your training provider or favourite blogger, to help you with your learning.

Start exploring all the ways you can use The AAT Lifelong Learning Portal now.

Further reading

MTD for ITSA: How to market your practice

Posted by & filed under Making Tax Digital.

This content is brought to you by Xero.

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA), will come into effect in April 2024. For it, sole traders and landlords with an annual gross income of £10,000 or more will be required to comply with MTD for ITSA rules.

This article explores how you can market your accountancy practice to clients who will be impacted by the new legislation in six easy steps.

How will MTD for ITSA affect sole traders and landlords?

The new MTD for ITSA rules will require self-employed and landlord clients earning above £10,000 annually to use MTD-compatible software to keep digital records and submit updates to HMRC. From April 2024, they will be required to submit:

This will replace the current annual Self Assessment Tax Return. You will still be able to make submissions on behalf of your clients. However, you’ll no longer be able to use the online HMRC portal, or the paper (mail) filing system to submit their return.

Why is MTD for ITSA a good opportunity for accountants?

MTD for ITSA offers you the opportunity to streamline your processes, embrace digitalisation and save time. The previous Self Assessment system required annual reporting of income and expenses to HMRC, whereas the new MTD system requires quarterly reporting, which is automatically compiled by MTD software.

While it may take some time for your clients to adapt to the change, it should mean the previous workload of one annual Self Assessment is more evenly spread. Your clients should also find they’re able to better plan their finances and cash flow, as they’ll be able to see an estimate of their annual tax payment throughout the year.

For accountants, MTD for ITSA also offers you the opportunity to grow your practice. The new requirements present an opportunity for increased service offerings, such as support with choosing MTD software that best meets their needs.

How to market your practice for MTD for ITSA in five easy steps

Now is a great time to segment your clients and market your practice to those impacted by MTD for ITSA. Here’s how to begin marketing your practice in five easy steps.

1. Position your practice as experts on MTD for ITSA education

Many clients may feel uncertain of the upcoming changes, so it’s a good time to position yourself as an expert on MTD for ITSA and support them through the transition with educational resources communicating what the legislation means in plain English.

Start by providing education to your clients on what MTD for ITSA means for them, including specific changes to their tax returns process, like the new End of Period Statement and Final Declaration requirement. It’s also worth spending some time explaining the digital link rules. Xero’s MTD for ITSA resource hub contains a range of guides to help clients understand the changes.

2. Provide guidance on choosing MTD software

Your clients also will need to use HMRC-approved cloud accounting software to keep digital records. Some may be unfamiliar with cloud accounting software and digital record-keeping. It’s worth spending some time exploring the best options for your clients, based on their specific needs.

Xero, for example, makes a good choice for both landlords and sole traders. You can also become Xero certified to help your clients with onboarding and provide the best support throughout the MTD transition.

3. Highlight your MTD services on your website

Ensure you’re highlighting your services and how you can support clients with MTD compliance on your website. Your Search Engine Optimisation (SEO) strategy also plays an important part in attracting clients to your website.

A landing page targeted to ‘Making Tax Digital’ keywords can help your services rank well on Google. Be sure to include content and keywords targeting the most common MTD searches on Google.

4. Tap into your existing client network

Existing client networks can be a great resource in marketing. Ask your clients to review your practice on your Google My Business profile and any other popular accountancy review sites such as Trustpilot and Yelp.

It’s especially worth asking for reviews from clients that you’ve already supported with MTD for VAT. Or, if you’ve started supporting clients with MTD for ITSA, such as by signing them up for HMRC’s ITSA pilot with a participating software such as Xero, get in touch with them for reviews or quotes you can use across your website or marketing collateral.

5. Host an MTD for ITSA webinar

Creating video and webinar content is a great way to market your practice’s expertise. You can help sole traders and landlords prepare for MTD for ITSA by running an educational webinar on MTD for ITSA.

Use webinar or video content to educate existing and potential sole trader clients about the upcoming changes and how you can help. Provide an overview of the overall Making Tax Digital timeline, along with a look at the MTD software options that can support them with the transition.

6. Join the Xero Partner Programme

Become a Xero Partner today and list your practice on the Xero Advisor Directory. Creating a Xero advisor directory listing can help potential clients find your practice and the services you offer. It’s a good way to attract landlords and sole traders who may be looking for support with the transition to Making Tax Digital for ITSA.

Get your practice ready for MTD for ITSA today. You can learn more about how to prepare for MTD for ITSA and access resources to support your clients with the transition by browsing the resources on Xero’s MTD for ITSA content hub.

This content is brought to you by Xero.

Workstation Pilates and a walk every day have helped me stay strong

Posted by & filed under Mental health.

Shauna Massey, AAT Internal Communications Manager, shares her wellbeing tips.

Why did you volunteer to be an AAT Wellbeing Champion?

In previous jobs, I have seen the difference between organisations that are genuine about looking after their staff’s wellbeing and those that merely pay lip service to it, so I wanted to be part of the team that helps to prioritise and promote wellbeing… and what a great team the Wellbeing Champions are! I’m also passionate about neurodiversity and helping ensure everyone has the opportunity to fulfil their potential.

Have you been affected by ill mental health either yourself or by someone close to you?

I think having experience of ill mental health is part and parcel of all our lives now whether you or someone you know has a diagnosed mental health condition, is suffering from a physical impairment, has financial worries, is stressed or feeling low, for example. We are all affected in one way or another at times. One of my two daughters has autism but both struggled mentally during the early stage of the pandemic during which time they turned 21 and 18 respectively. Helping them to stay strong and to work through unhelpful ways of thinking has paid dividends for all of us as we are all more resilient as a result. They are both really thriving now.

How does work potentially affect your wellbeing?

Sitting at my desk for long hours without having a break can give me a headache and make my joints feel stiff. I follow ‘Pilates at your desk’ on Instagram and always try to regularly stretch my arms and legs. If you see me wiggling about at my desk in the office, you’ll know why. I try to take regular breaks to make a cup of tea and I try to take at least a half-hour lunch break away from my desk to recharge.

How do you try to maintain your own good health outside of your working day?

Nature, exercise, relaxing and connecting with people. Whatever the weather, I walk my dog in our local park every morning. This way I get fresh air and exercise, see greenery and hear the birds. Also, I almost always end up chatting with someone as all the dog walkers know each other. This sets me up for the day even if I’ve gotten soaking wet from the rain or snow (the picture above was taken last April when we had an unusual snow shower). Some evenings, I do Pilates or spinning and I try to swim at the weekends. I also read a lot and make sure I see friends regularly and have a laugh!

If you could offer up one piece of advice, what would it be?

Everyone says it but taking a few slow deep breaths really does make you feel calmer when you are angry, stressed or anxious. Remembering to do it is the hard part. And if I can sneak in another … many a problem can be solved when shared with someone over a cup of tea and a biscuit (or something stronger).

Axing the Office of Tax Simplification is a mistake

Posted by & filed under Members, News, Tax.

AAT believes abolishing the Office of Tax Simplification (OTS) is one of a number of missteps in the Chancellor’s Growth Plan that will affect accountancy and the economy.

Last week’s major fiscal event may not have carried the official title of Budget, but to all intents and purposes, it served as a clear statement of action and priority for the new Liz Truss administration.

Aside from the top line measures picked over by political pundits – there are three key areas of Chancellor Kwasi Kwarteng’s plan that are worth highlighting because of their relevance to accountants.

Surprise end for the OTS

First, the Chancellor’s unexpected decision to wind down the Office of Tax Simplification is significant and stood out even in the swathe of tax cuts.

AAT’s position on the OTS  was made clear in response to the recent HM Treasury review consultation. We view it as a successful contributor to the tax reform agenda. In fact, it’s fair to say the number of successful tax simplifications over the past decade would be significantly lower without the OTS’s input.

Equally importantly, the OTS has introduced some stability in a volatile area of regulation.

AAT’s report Time for change, towards a fairer, more efficient tax system argued for stability and a longer-term approach to changing the tax system. The OTS could have been a force for good towards that end.

That’s why we argued for more resources and an enhanced role for the OTS – not just in advising on existing tax structures, but also contributing to the development of new taxes. We have also maintained that the OTS was an ideal forum for independent and dissenting views to be heard alongside the political dialogue of the day, something with added value in these extraordinary times.

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Why the OTS should have remained

The OTS has marshalled broad and deep insights that have significantly contributed to the tax debate.

One of its early reports – reviewing tax reliefs – paved the way for the abolition of dozens of reliefs. The OTS’s work on approved and unapproved share schemes recommended changes that were subsequently accepted and benefitted the UK’s two million employee shareholders.

These are real achievements, and they underscore our belief that the OTS’s service could in fact play a more active role in scrutinising and improving the effectiveness of future tax reform. And at a time when instability appears to be the new normal, the stability offered by the OTS was immensely valuable.

Its abolition, therefore, is both concerning and puzzling.  

Stamp Duty – a dissenting view

The second area of concern is stamp duty. The Chancellor set out his plan for a permanent stamp duty cut, with no tax to be paid on properties up to the value of £250,000. Again this is an issue where we have advocated for a different approach to the current set-up: to switch liability from the buyer to the seller. Doing that would create a fairer, simpler and more effective system.

We have long argued that Stamp Duty can act as a serious barrier to housing mobility. Reforming it would remove first-time buyers from Stamp Duty Liability, reducing their upfront costs and allowing them easier access to the property ladder. It would also take cost out of the property ladder further up, freeing up starter properties for first-time buyers. Effective reform is never simple but that one measure, we believe, would deliver lasting benefit.

How to fund social care

Finally, the issue of health and social care remains urgent. There appears to be unanimity on the need to increase both the levels of investment and the impact of funding; however, how to pay for it remains a thorny topic. The Chancellor has indicated he intends to cancel the Health and Social Care Levy, and has reversed the decision to increase National Insurance. These are decisions that have their merits.

We have been firm in stating that reform is necessary. The commitment to retain funding at the same level is welcome – but we question whether borrowing to fund this is appropriate. There is no magic bullet to such a daunting structural challenge, but if the Levy is to be ditched, there are alternatives – we have suggested reforms to Capital Gains Tax or reductions in Inheritance Tax – that could be considered. Simply shifting the funding burden by borrowing more without tackling the root of the problem only stores up difficulty further down the line.

Ultimately, times change, and politicians are always faced with difficult decisions. That makes it imperative that the voice of the profession is heard in order to provide context, certainty and stability. We invite you to speak up and tell us how these reforms might affect your business and your clients.

Times like these require strong voices and clear thinking to navigate the road ahead.  

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AAT offers opportunities for all, says new president Christina Earls

Posted by & filed under AAT news.

As Christina Earls (FMAAT) takes up her new role as President of AAT this month, it is the latest step in her journey, which started ten years ago when she joined AAT.

Having never had the opportunity to study with AAT when she was younger, her accountancy route came via working in the public sector and membership of CIPFA.  She joined the CIPFA council in 2010 and from there was invited to stand as a co-optee from the CIPFA council to the AAT council. Not long after, she formally applied to become a member of AAT. Five years later, she became a fellow of AAT, something of which she is very proud.

She is also proud of AAT and the wealth of opportunities it has given her and its other members, no matter what stage of their life or career they join.

“With AAT, there is no age or cultural barrier, and that is what’s so appealing,” she says. “For example, there might be Level 3 and Level 4 students in their 40s or 50s who have never been given the opportunity to do this type of training before. At the other end of the scale, AAT appeals to young people who are interested in apprenticeships and for whom the foundation level is a springboard to an exciting and fulfilling career.”

Social mobility is a key objective

She says that one of her main objectives as incoming president is to encourage social mobility. Her own early life experiences made her acutely aware of how important it was to make the most of any opportunities available. Coming from a relatively humble upbringing, Christina had to work to gain her A levels and a place at Hull University to read Politics. She was the first member of her family to go to university, and the resilience and determination needed to get there have also served her well during the rest of her career.

“It is about giving people the opportunities and skills they need at entry-level qualifications right through to Level 4,” she says. “It is also about ongoing learning – how to ensure that all our members are able to develop professionally and personally and keep their people skills and technical knowledge up to date, even those who have been qualified for a while and are now in their 40s and 50s.”

One of her priorities will be to talk to employers and colleges about the benefits of AAT as an entry-level qualification for students and the opportunities to employ students in apprenticeships to fill the employment gap that is emerging.

The importance of ethics in learning and working

Another key objective is to help students develop a personal ethical code which will help them through the many challenges they are likely to encounter during their careers.

“It is about engaging with the hearts and minds of students right from their first exams,” she says. “Helping them to apply what they are learning to real-life examples.”

This dovetails with the revamped AAT student curriculum, which puts ethics and professional judgement at the centre of all that trainee technicians learn.

AAT’s new qualifications, Qualifications 2022 (Q2022), incorporate a greater emphasis on the fundamental principles of professional ethics from the very first levels. This has become a core part of the curriculum, running through every module at every level.

“We get students really thinking about ethics, framework and rules,” she says. “It helps AAT members and students exercise professional scepticism and work through practical scenarios to understand how to apply the highest levels of professional judgement.”

The new qualifications also look at how AAT can help technicians at Level 3 and Level 4 develop a deeper understanding and confidence in the ethical dilemmas they may encounter later in their careers, she says. Having worked in the public sector, she is acutely aware that decisions that she made affect the public purse and are accountable on several financial and moral levels.

“In terms of ethics, I’ve been challenged several times in my career, and I think having a robust ethics policy is very important,” she says. “The industry is changing, and new challenges are coming up. The concept is to make ethics less of a dry subject and help students look at how they can put it to practical use. Professional integrity is about doing the right thing when no one is looking.”

Making the AAT sustainable

It has been a challenging couple of years for the profession, and accountants and students have had to work through the challenges of Covid-19 and hybrid working.

Having worked in the public sector, Christina has learnt about value for money and sustainable business decisions, and this is a specialist area of knowledge that she hopes to bring to her role as AAT president.

“The public sector is well used to being sustainable and giving value,” she says. “Along with this theme, I will also be looking at how what we do in our professional lives impacts the climate.”

Communication and empathy

For students, learning communication and empathy as part of a portfolio of skills which includes technical knowledge is very important.

“You need to be good at communication as well as understanding the changes that technology has made to our profession,” she says. “Students and members are now facing lots of challenges, for example, Artificial Intelligence and Making Tax Digital, which will impact the way they work. In addition, they will need to develop new skills around networking, better communications, and problem-solving to complement these new technical skills.”

A key objective is also to bring to the forefront of people’s minds an understanding and empathy for mental health and how it impacts people both on a personal and professional level.

Christina’s AAT journey

After university, Christina got a job in Revenues at Leeds County Council and joined AAT 12 years ago.

“When I was 21, I never thought I was going to be an accountant, but it was the best job that I could have done,” she said “I was the first in my family to do A levels I had to work at weekends to fund them. I had to take a year off and save for university because my family couldn’t afford it. Now at age 63, I’ve worked for five different local authorities and five different departments.

“I am so supportive of AAT and all that it does because it can be a life-changing qualification for people who didn’t necessarily get opportunities earlier in their life or who are looking for a qualification which can help them start a second career. I am looking forward to my role as AAT president and am keen to provide my skills and knowledge to really make a difference.”