9 great TED Talks to watch to while you’re studying AAT

Posted by & filed under Students.

TED Talks are short, powerful talks where all manner of people with different expertise share their ‘ideas worth spreading’.

The talks have been given all over the world and are available to watch on YouTube. Almost all of the talks are five to 18 minutes long so they are concise, attention-grabbing and inspirational.

They are a brilliant way to get you sat down at your desk to get started and motivated to learn. Or you can use them as an incentive to get a chunk of revision done and then watch one as part of your break. There are over 50,000 talks(!) so we’ve compiled this list of nine of our favourites that you can work your way through that will educate, stimulate and get you in the zone to study.

1. How to find work you love by Scott Dinsmore (17 minutes)

Scott breaks it down into three steps how you can find a job that’s fulfilling, explaining how to understand what actually matters to you, what inspires you, what you are passionate about and how important it is to surround yourself with the right people.

Watch now

2. How to make stress your friend by Kelly McGonigal (14 minutes)


Reframe how you view stress, seeing it as your friend instead of your enemy. Kelly presents scientific data to show that stress only negatively affects you and your health if you believe that it is bad for you and she shows how you can change the way you perceive and deal with it.

Watch now

3. The power of introverts by Susan Cain (18 minutes)

Author of the best-selling book ‘Quiet’ Susan Cain argues how much introverts can bring to the world and gives strategies for how introverts can excel in environments, most of which are seemingly created for extroverts.

Watch now

4. Abandon the idea of being good and just try by Charlie Mackesy (16 minutes)

The artist Charlie Macksey tells us about how he got into drawing, meeting the Queen Mother drunk and encourages us to make a mess and have the courage to do things because we want to and not think we have to be perfect at everything.

Watch now

5. What do top students do differently? by Douglas Barton (14 minutes)

Douglas has been observing learners for years to find out the things that all students can do to create better learning habits and get better exam grades. He talks about 13 variables that are within everyone’s control that all trump IQ in terms of being able to predict how well a student will do in their tests and are what the majority of top students do differently. Spoiler alert: the number one factor is doing practice exams.

Watch now

6. How a student changed her study habits by setting goals and managing time by Yana Savitsky (5 minutes)

A short video on what Pomodoro is and how the method changed Yana’s study cycle from undetermined and fairly unproductive to now making the most of her time to achieve her goals by being kept recharged and restimulated throughout the day.

Watch now

7. A simple way to break a bad habit by Judson Brewer (9 minutes)

Why is it so hard to pay attention even when we really want to? Judson explains the theories of positive and negative reinforcement and the process of trigger, behaviour, reward. He then goes on to talk about how we can tap into this natural reward-based learning process and add a twist to it to create better habits. He talks about how to notice the urge, get curious, feel the joy of letting go, and repeat.

Watch now

8. Inside the mind of a master procrastinator by Tim Urban (14 minutes)

A funny and light-hearted look at what goes on inside the heads of procrastinators and he introduces us to the brain’s Rational Decision Maker, Instant Gratification Monkey and Panic Monster.

Watch now

9. How to stay calm when you know you’ll be stressed by Daniel Levitin (12 minutes)

Neuroscientist Daniel Levitin knows that becoming stressed can cloud your judgement and make you think with much less clarity than normal due to the cortisol that is released into your bloodstream. He talks about systems that we can put in place to help you to still think rationally and with logic even when you are in a situation that could be perceived as stressful.

Watch now

Further reading

Why is neurodiversity important in accountancy?

Posted by & filed under Social mobility.

Neurodiversity can be a huge advantage for finance teams, yet people with autism are often marginalised. Rosie Weldon, an accountant with autism, shares her story.

When Greta Thunberg described her Asperger’s syndrome as being like a “superpower”, it confirmed what many organisations with a neurodiverse workforce knew all along – employing people with autism spectrum disorder (ASD) can boost business. For starters, just look at the high-profile business people with ASD (Elon Musk has Asperger’s, banker Charlotte Valeur) or those rumoured to have it (Bill Gates, Steve Jobs). 

Valuable additional skills

The traits shared by many people with ASD, such as brilliant long-term memory, problem-solving (one University of Montreal study suggests people with autism are 40% better at solving problems than people without) and shockingly good pattern-spotting skills, are all valuable when working in accountancy.  

Yet, because ASD is a developmental condition that also affects social interaction, many struggle with job interviews and with workplace communication. An estimated one in every 100 people in the UK has autism, yet only 22% of adults with autism are in full-time employment. 

As more businesses (such as the Big Four) begin to embrace a neurodiverse workforce, experts believe more can be done.

Rosie’s story: The diagnosis

Here, 30-year-old Rosie Weldon, a Dorset-based accountant for Zodeq, tells us how her career has benefited since being diagnosed with autism five years ago: 

“I’d always wanted to be an accountant. But when I was asked to do a five-week work placement at a finance firm as part of my degree course, I had a massive breakdown. I just couldn’t do it. The thought of going into a different environment and speaking to new people was completely undoable for me. My dreams of being an accountant were crumbling. If I couldn’t even do a five-week placement, how would I ever find a job? 

“Around the same time, I received job interview feedback that told me about my lack of eye contact. Something then clicked in my mind – could I be autistic? My eye contact has never been great. I’d often find myself staring at the floor when speaking with people. But other signs of autism had been there my whole life. I’ve always found it difficult ordering drinks at a bar, I am touch-averse, I avoided group work and presentations at university, and I am always wearing the same clothes. People just put it down to shyness or being socially awkward. But as a later diagnosis revealed, I am autistic. 

Understanding my condition

“The diagnosis has since opened so many doors for me. Now, when somebody knows I’m autistic, it’s like giving them a manual to understand my behaviour – these weird things that I do make sense when looking at it through the lens of autism. 

“What’s more, these traits are exactly the skills you need in accountancy, such as being able to hyper-focus. There’s no emotion or subjectivity with a set of accounts. Things have to be crystal-clear – a number eight is a number eight, it can’t be anything else. Yes, I can be occasionally direct, but maybe it’s a good thing as an accountant, as it ensures I get the job done.  

“I’m working for a wonderful employer. My boss ensures I can work from home and has previously given me a quiet desk in the corner of the office. However, not every workplace is so welcoming. I previously worked for a large organisation who pushed me with long hours. I ended up having constant panic attacks and wasn’t sleeping or eating. It ended up pushing my brain so far, I developed a neurological disorder where I temporarily lost the ability to walk. 

The benefits of a diverse team

“Having a diverse team – whether it’s neurodiversity, age or ethnicity – is a great thing. What’s the point of having 11 goalkeepers in a team? Neurodivergent people think differently and offer an alternative perspective, which could solve a lot of business problems. 

“Today, I’m also an autism advocate, writing a blog and some books. It’s good for me to reach students through 20 magazine too. In 2016, when I was a student, I was told I could never be an accountant because of the way I communicate with people. If you’re neurodivergent and others tell you can’t work in finance, ignore it – there’s absolutely no reason why you can’t succeed.”  “Neurodivergent people think differently and offer an alternative perspective, which could solve a lot of business problems.”  

Why professionals with autism make great accountants 

Laurel Herman from Aspierations, a company that helps people with ASD find jobs, tells us more about why professionals with autism make great accountants 

Q. Why do you think neurodivergent people make good accountants? 

Many neurodivergent people have analytical qualities, a talent for memory retention and an ability to form patterns – all of which means they work quicker. Many also like repetitive tasks. Although some accountants might be bored doing routine bookkeeping tasks, some people with ASD enjoy it, even getting obsessive about it – if a spreadsheet is missing 5p, they will find it! 

I also spoke with a senior tax expert at a Big Four firm recently – he was saying that tax is a great area for people on the ASD spectrum, because many love rules. Given there’s a skills shortage and war for talent at the moment, businesses need to realise they have to be diverse and inclusive. 

Q.  What should you do if you suspect you might be neurodivergent? 

There’s an online test developed by world-leading autism expert Simon Baron-Cohen, which you can find at aspietests.org. It isn’t definitive, but can give an idea. You can also apply for diagnosis at the NHS, but it can be a long process that takes up to 18 months. 

If you have been diagnosed, you can legally ask for reasonable adjustments, such as having a quiet zone in the office, exam assistance or noise-cancelling headphones. 

Q. How can people support neurodivergent fellow students? 

Make them feel part of the team. Gently invite them to team events but remember many neurodivergent people may not want to come. And realise what they can achieve – they have potential, but unfortunately the world is passing many of them by. 

Here’s what you need to know about Qualifications 22

Posted by & filed under Students.

Later this year, AAT is introducing new versions of its bookkeeping and accounting qualifications. Here’s everything you need to know about the new qualifications and how these changes will affect your study.

On 1 September 2022, AAT will introduce Qualifications 2022 (Q2022), new versions of its bookkeeping and accounting qualifications. The new Q2022 bookkeeping, and accounting qualifications will replace the current AQ2016 Access, Foundation and Advanced level bookkeeping qualifications, and Foundation, Advanced and Professional level accounting qualifications. 

Your top Q2022 questions answered

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What’s changing? 

Qualification names 

The names of the qualifications are changing from using Access, Foundation, Advanced and Professional to Level 1, Level 2, Level 3 and Level 4. 

Three qualifications withdrawn 

AAT is not replacing the current Access Award in Accounting Software, Foundation Award in Accounting Software and the Foundation Diploma in Accounting and Business. If you were considering studying any of these qualifications, you must register for them before 31 August 2022. You’ll then have until 30 September 2023 to complete the qualification. 

Qualification grading 

The Level 2 and Level 3 Certificate in Bookkeeping qualifications for Q2022 will be graded – in the same way that the accounting qualifications are graded. The final grade will be calculated based on the weighted results from the unit assessments and you’ll be awarded an overall qualification grade of either a Pass, Merit or Distinction. 

Synoptic assessments 

Currently the AQ2016 Foundation, Advanced and Professional accounting qualifications all include a synoptic assessment. For Q2022, the only qualification that will include a synoptic assessment is the Level 2 Certificate in Accounting. All other unit content will be assessed by individual unit assessments. 

Membership fees 

The annual membership fee that students currently pay is being removed for students studying Q2022 qualifications. AAT understands that their qualifications often take longer than a year to complete, so instead students will pay a one-off registration fee, which will give them lifetime access – i.e. access to the qualification for its lifetime (typically 4-5 years).

As well as registering you for the chosen qualification, the one-off registration fee will enable you to sit your assessments, give you access to AAT’s study support resources via the Lifelong Learning Portal, as well as other benefits. You’ll still have to pay for your assessments when these are booked. 

Re-sit restrictions 

There are currently re-sit restrictions on the three AQ2016 accounting qualifications for students aged 16-19 years. The only Q2022 qualification that may have a re-sit restriction will be the Level 2 Certificate in Accounting. The restriction will only apply to students aged 16-19 years old. AAT will confirm how the re-sit restrictions will be applied in due course. 

Wider learning 

In addition to updates to the technical aspects of the qualifications, Q2022 units will incorporate learning around four key themes within an accounting context: ethics, communication, technology, and sustainability. These themes are introduced in the Level 1 qualifications and built upon as the levels increase. 

AQ2016Q2022
Access Award in Accounting SoftwareBeing withdrawn and not replaced
Access Award in BookkeepingLevel 1 Award in Bookkeeping
Access Award in Business SkillsLevel 1 Award in Business Skills
Foundation Award in Accounting SoftwareBeing withdrawn and not replaced
Foundation Certificate in BookkeepingLevel 2 Certificate in Bookkeeping
Foundation Certificate in AccountingLevel 2 Certificate in Accounting
Foundation Diploma in Accounting and BusinessBeing withdrawn and not replaced
Advanced Certificate in BookkeepingLevel 3 Certificate in Bookkeeping
Advanced Diploma in AccountingLevel 3 Diploma in Accounting
Professional Diploma in AccountingLevel 4 Diploma in Professional Accounting

What you need to do 

When AAT launches the new versions of the qualifications on 1 September 2022, you’ll have two options for completing your qualification: 

1. You can continue with your studies on the current, AQ2016 version of your qualification. 

If you choose this option, you’ll need to continue to pay your annual membership fee and successfully complete all the assessments by 30 September 2023. 

  • If you’re unable to complete your qualification by the last assessment date, you’ll then have to register and pay for the Q2022 version of the qualification. You’ll need to sit additional assessments for units that weren’t completed and/or haven’t been transferred. If your student membership is active and you’ve achieved at least one of the assessments on your current AQ2016 qualification, you’ll be eligible to pay the one-off transfer fee, instead of the one-off registration fee. 

2. You can transfer your current qualification onto the equivalent Q2022 qualification. 

Most assessments achieved on the AQ2016 qualifications will automatically transfer over to Q2022, however there are some exceptions. 

  • If a student wants to transfer to the equivalent Q2022 qualification, they may be eligible to pay a one-off transfer fee, instead of the one-off registration fee. To be eligible, they must have an active student membership and have successfully completed at least one of the assessments on the AQ2016 qualification they are studying. 

For students that have completed assessments on AQ2016 and transfer to Q2022, the results will transfer at the percentage result they’ve achieved. There are some exceptions to this where multiple AQ2016 units are combined into one Q2022 unit. 

Consider your options and discuss them with your training provider to make the right choice for you – your training provider knows you and how you’re progressing with your studies, so it’s important to speak to them about your options before you make a decision. 

For more detailed information on the changes to the AAT bookkeeping and accounting qualifications, and to find out how the units transfer, visit the AAT website.

Key dates 

  • 31 August 2022 – The last date for students to register for an AQ2016 Foundation, Advanced or Professional level accounting and bookkeeping qualification, and the Access Awards in Accounting Software, Bookkeeping and Business Skills qualifications. 
  • 1 September 2022 – The first date students can register onto the new accounting and bookkeeping qualifications – Level 1, 2, 3 and 4, under the banner of Q2022. 
  • 30 September 2023 – The last chance for students to sit an assessment on any of the current AQ2016 Access, Foundation, Advanced and Professional level qualifications. 

Your top Q2022 questions answered

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AAT opposes proposals for an Online Sales Tax

Posted by & filed under Policy, Tax reform.

Head of Public Affairs & Public Policy, Phil Hall, walks through the proposals and explains AAT’s objections.

The Government is currently consulting on the case for and against implementing an Online Sales Tax (OST).

AAT has previously said that the business rates system is broken and that fundamental reform is needed, but government proposals for an Online Sales Tax are not the answer.

Whad do you think about taxes?

AAT wants to know what members think about the ideas in its report: Time for change, towards a fairer, more efficient tax system. Click the link to join the debate.

Give feedback

Missed opportunity

As AAT highlighted in its 2021 Budget response, it supports the decision to explore the arguments for and against a UK-wide OST but agrees with former government adviser, Iceland and Wickes Chief Executive Bill Grimsey who questioned why a sales tax should only apply to online retailers. His study suggests that a “sales tax” of 2% on all UK retail sales would produce the same amount of revenue for the Exchequer as that produced by business rates in the retail sector. As a result, the current government consultation represents a missed opportunity to look at the wider advantages and disadvantages of an all-encompassing sales tax that could more effectively help level the playing field between online and bricks and mortar retailers by enabling business rates to be scrapped for all.

If a sales tax is to be introduced, it is highly questionable as to why this should distinguish between online sales and any other form of sales. This is not simply as a principle of fairness (would it be fair for customers to pay different rates for the same item, from the same shop simply because of the nature of the purchase) but recognises the numerous cliff edges, avoidance measures and unintended consequences that an OST would generate. These include but are far from limited to concerns around definitions e.g. does click and collect count as an online sale?

Defining an Online Sales Tax

Whether the distinction is based on the method of ordering, the degree of in-person interaction or the timing and location of the sale, the complexity in defining an OST and how it applies is substantial, the opportunity for distortions and avoidance considerable and the degree of unfairness great.

If an online reservation is made but payment and collection takes place in store, is it reasonable that this consumer pays more than someone who telephoned to reserve an item or reserved the item in person on a previous visit? Likewise, as retailers increasingly operate omni-channel sales, Government will not simply be distinguishing between high street retailers and online only businesses like Amazon and eBay but between the same customers using the same company but who might make purchases in different ways.

Looking to the future, the issue of definitions is only going to get more complicated. For example, an increasing number of consumers are undertaking live video shopping supported by in-store assistants, would that be covered by an Online Sales Tax?

Avoidance of the tax

At a recent meeting of AAT Licensed Accountants it was suggested that many businesses’ first question to their accountant would be, “how can we legally avoid this” and that much gaming of the system around definitions would inevitably occur.

Proposals to exempt business sales open up another minefield of potential avoidance. Not all genuine businesses have a company registration or VAT registration number. Even those that do have a legitimate company registration number may not be making legitimate purchases. For example, personal purchases through a business account are likely to be a problem with limited companies. Three-quarters of these – some 4 million small businesses – are one-person operations with no employees.

The consultation document also states that “the rationale for such a tax is limited to sales to UK customers”, but this is not necessary. As currently proposed, an overseas seller would pay no OST when selling to a UK consumer, and likewise, a non-UK customer would pay no OST when purchasing from a UK based seller.

So, as framed, overseas residents and sellers would receive preferential treatment that undermines the credibility and fairness of the OST and the tax treatment of UK residents. This should not be permitted.

Impact on small businesses

In order to protect small businesses, AAT believes that an exemption that mirrors the VAT threshold (currently £85,000) would protect most small businesses given those operating below the VAT threshold number approximately 3m, accounting for more than half (55%) of all small businesses.

At the same time, we recognise that such an exemption could undermine the Government’s objective of ensuring the OST generates sufficient revenue.

Setting the OST at the same rate as the VAT threshold would have another potential benefit in dealing with Government questions around quarterly or annual reporting. Given Making Tax Digital already requires VAT to be reported on a quarterly basis rather than annual, the OST could be incorporated into VAT returns and undertaken digitally. This would also reduce administrative burdens by removing the need for separate reporting and/or reporting at different times.

Environmental considerations

An OST that encouraged higher levels of in-store shopping would probably lead to increased travel movements, increased pollution and increased congestion depending on the number of items purchased and the last-mile travel method. As a result, suggestions that reduced online deliveries as a result of an OST is somehow good for the environment is highly questionable.

Conclusions

The Government consultation demonstrates that there is no identifiable policy proposal save for a very vague idea of introducing a new tax in limited circumstances, with limited applicability, that it will NOT replace business rates but may help reduce them for some retailers in unspecified circumstances.

The high degree of uncertainty makes it difficult even for the most passionate supporters of an OST to support these proposals. Indeed, both the CBI and the British Retail Consortium have failed to publicly support or reject the proposals because there is so much uncertainty, as well as very mixed views across their membership.

AAT’s Tax Panel and Digital Advisory Panels were both opposed to the idea of an OST and discussions with AAT licensed accountants also demonstrated little or no support.

AAT has therefore taken the decision to oppose these proposals but to make numerous suggestions for improvement should the Government decide to proceed.  

Read AAT’s detailed submission.

How this accountant uses her accountancy skills in cave rescue

Posted by & filed under Community, Inspiring stories.

Here we speak to Liz Maisey, Chair of Gloucestershire AAT branch about how she has used her accountancy skills in a number of voluntary roles.

Being an accountant means that you have a wealth of skills which are useful not just in your paid job, but in the community as well. This is particularly true for accountants who use their passion and knowledge for figures and their excellence in administration to help charities, voluntary organisations, schools and the community.

Using AAT as a basis for voluntary work

Liz Maisey is one volunteer who has used her AAT experience and her accountancy skills to work in a variety of voluntary roles – as treasurer of the Gloucestershire Cave Rescue Group (GCRG), chair of governors at a local primary school and chair of the AAT Gloucestershire branch. This is in addition to working as accountant at Wotton Auction Rooms and being mum to two small children, as well as running her own accountancy practice.

We caught up with Liz to ask her about her volunteering role and her AAT connections.

Why did you choose AAT and accountancy?

I qualified with AAT in 1992 and back in those days there was only the NVQ Level 4 qualification available. I left school after one year of A levels (it was not for me) and found a role at a local accountancy practice. I worked for them on a day release scheme, initially completing my BTEC Business and Finance, followed by a on- year AAT course. I was 17 and have worked in Accountancy my entire life!

I was at school in Cockermouth, Cumbria and I left school because I wanted to get out, earn money and train on the job. It was a close call between a Pharmacy position in the local hospital and the role I got in the Accountancy Practice (Gibbons & Co, Main Street, Cockermouth), but 33 years on I do not regret my choice.

Qualifying with AAT gave me a solid foundation to work in both practice and industry. It enabled me to work in industries ranging in size from multi-million turnover businesses, to micro businesses, both which face the same challenges albeit on different scales.

It also gave me professional credence and when moving jobs it gave me the confidence to apply for roles in the knowledge I had a supportive professional body behind me. Being involved with the Branch network has enabled me to meet lots of brilliant people, and given me opportunities I wouldn’t have had otherwise.

What is your current paid role?

I now work for Wotton Auction Rooms Ltd. We are an auction house based in Wotton under Edge and I have worked there since 2014. I took some time off when my children were small, but I couldn’t stay away for long. The owner and chief auctioneer is Philip Taubenheim, who regularly helps out on Antiques Roadshow. The Auction Rooms have also starred on Antiques Roadtrip and Salvage Hunters.

I deal with everything from staff management to property management, to IT support. This is what brings me the most joy, the varied nature of the job. I also have a small one client practice. I really enjoy the IT and new software coming out for MTD, or anything that involves analysing data and spreadsheets.

What are your volunteering roles?

I recently completed an eight-year term as a governor for the primary school that my children attend. For six of those years I was Chair and that involved many areas outside of my comfort zone, but it was a hugely rewarding role. I have also been on the AAT Gloucestershire Branch for 9 years, and Chair for the past five years.

Another volunteering role I hold is treasurer of the Gloucestershire Cave Rescue Group (GCRG). It was formed in 1962 by local cavers who recognised the need for cave rescue facilities in an area that was fast growing in popularity. The area has one of the most decorated caves in the country, Otter Hole Cave and the 10th longest cave in the UK, Wet Sink (Slaughter Stream cave) at 14km in length.

Cave Rescue in all parts of the country are organisations run by cavers, for cavers. We receive no funding from central Government and all our equipment has to be fundraised for. We are fortunate as an organisation to have a depot site located in Cinderford in The Forest of Dean, and we cover the Forest of Dean; the Wye Valley; the Cotswolds; and parts of the Thames Valley extending to the Reading area.

How did you get involved in cave rescue?

I married a caver and soon became involved when the previous treasurer retired from the post. That was 12 years ago and since I joined we have become Gift Aid registered, increased our fundraising and been involved in, thankfully few, rescues. Our rescues can range from something as small as a dog rescue or overdue caving party, right the way through to a rescue on a very large scale.

The nationally reported rescue in November 2021 involved 40 members of our team supporting the neighbouring group in South Wales with a major rescue that lasted 54 hours and involved cave rescue groups from across the country. Thankfully their skill and expertise managed to bring one badly injured caver back to the surface.

How have your AAT and accountancy skills helped as a volunteer?

With the GCRG we have to fundraise as we receive no money from the taxpayer. Fundraising has ranged from organising the auction of a large quantity of outdoor kit that belonged to a caver (who had sadly passed away) held at our depot site in Cinderford in the Forest of Dean, to producing themed calendars, involving many of our team, including children and family members (our 2023 one is out now).

We are fortunate to have a depot site and this gives us the ability to store our equipment, unlike some teams who keep it in members garages and sheds.

Why do you volunteer?

I like to feel I make a difference. I wanted to give back a bit and it is very satisfying to be able to help. For example, when I joined as treasurer for the GCRG I registered it for gift aid and helped the organisation claim back VAT for training and equipment because it is a charity. It helps them to have someone involved who has got an idea of how finances work.

We have managed to get a lot more money in as a result and that is very helpful because all the rescues are taken on at our expense. Cavers are a very close community and all the people who helped in the South Wales rescue were volunteers. Giving back something to the community – via the school governorship, AAT branch meeting or caving group – enables me to share my skills and make a difference.

Further reading:

Help your clients avoid poor payment practices by larger customers

Posted by & filed under Members, Prompt payment.

Best practice helps employer and supplier, says Small Business Commissioner, Liz Barclay

Poor payment continues to blight small businesses. If anything, it has become worse in the pandemic.

Small firms often feel they have to accept poor payment terms and other unfair contractual conditions because if they push back, the bigger, more powerful customer will just go elsewhere.

They also worry that if they chase too aggressively for late payment, they will lose future work:

  • 15% of firms owed money don’t chase up unpaid invoices; and
  • 28% of tradespeople lose £1,000 a year because they don’t chase up payments.

Last year, the Office of the Small Business Commissioner surveyed small firms to see how well they were treated by their customers. Their responses showed three things happening:

  1. payment terms are imposed on them
  2. small businesses have no choice but to accept if they want to get the work,
  3. employer firms may claim to be fair and ethical but often aren’t in practice.

The OSBC was set up to change the “culture of poor payment practice” in the UK. As accountants and finance professionals, AAT members are ideally placed to help us do this.

Having been Commissioner for nine months, I’m not sure that the problem is entirely the fault of larger customers.

Sometimes suppliers lack negotiating skills. They may just accept what’s offered without checking the details and don’t have good invoicing and cash flow management processes.

Accountants can have an impact

Accountants can be a huge force for good by helping small business clients adopt good practices.

As trusted advisers, you can deliver tough messages. Many practices, in particular AAT licensed members,  will be small businesses in their own right and have experienced payment abuse themselves.

Research in 2019 showed that 42% of invoices submitted by small suppliers had errors on them. Invoices with mistakes lie in the in-tray gathering dust until the supplier calls to find out why they have not been paid. That call is likely to lead to the invoice having to be submitted again and the clock starting to count down to payment all over again.

Instil best practice

Helping your small clients to get their processes for invoicing and cash flow management in place right from the beginning is one of the greatest services you can deliver.

On the other hand, small firms and freelancers often work for several customers and have to adapt to different payment processes. Encouraging your bigger clients to provide all of that information to each new business or freelancer they decide to work with makes life easier for everyone.

Often the person who gives your client the work has nothing to do with the payments. The person who pays knows nothing about your client, and will pay according to the firm’s standard payment terms. They may well have no experience of how a small business manages cash flow. I’ve been told by accounts payable people that it never occurred to them that a £300 invoice from a small supplier could be urgent given the amount is so small. They’re thinking about figures and processes, not people.

In my last column, I explained how inductions packs can make cut invoicing effors and save time and hassle for both sides. You can read it here.

ESG reporting

Payment practices could become part of ESG measurements. Large firms should already be reporting your payment performances to the Government. If you bid for public sector contracts, you will be expected to pay your suppliers within 30 days. Construction firms are expected to sign up to the Prompt Payment Code if they are bidding for public sector contracts.

It’s a short step from there to Boards and audit committees being expected to ensure their suppliers are paying fast and fairly. Accountants will be vital in relaying messages and helping make sure the business payment departments of their clients have the right processes in place and are auditing those processes.

Please encourage the companies you work with to consider the following.

  • Negotiate fair and fast payment terms before the work begins.
  • If suppliers have to pay out for labour or materials in advance, agree up-front or staged payments to cover those costs are likely to benefit everybody.
  • Put everything in writing and ensure all parties have copies to avoid lost time and disputes.
  • Ask for and give explanations: what does ‘standard terms’ mean? Small suppliers may erroneously assume it means 30 days. If it means 90 days they need to know. 
  • Ask for details or provide details of everything that needs to be included on invoices.
  • If your client needs a purchase order number on the invoice make sure your supplier knows how and when to get it.
  • Make sure everyone knows when the invoice should be submitted, to whom and when the money will hit the bank account.

Suppliers and customers should have named contacts so that the supplier can check they’ve given all the necessary information, and the customer can check with the supplier if there’s some detail missing rather than just leaving payments to fate.  

Form good relationships with the person who pays the supplier and make sure payments can be made fast. It’s a reputational issue and may become an audit one.  

If payments are late or unfair we can help the small supplier. However, if we find poor payment practices or late payments we may be able to publish reports about those poor practices. Those reports are eagerly awaited by the press. Do the right thing and #PayDontDelay. Everyone benefits when payments are fast and fair.  

Economic Crime Act: how to increase due diligence in your firm

Posted by & filed under Anti-money laundering.

The fast-tracked Economic Crime (Transparency and Enforcement) Act rushed through parliament earlier in the year, coming into effect on 15 March. Although the Act has been in the making for several years, the Russian invasion of Ukraine and the resulting economic sanctions created a new sense of urgency.

The Act is designed to crack down on economic crime and sanctions evasion by improving transparency and making it easier to trace sources of unexplained wealth (including money laundering) and the individuals involved.

In essence, the Act includes:

  • Introduction of Register of Overseas Entities. This is applied retrospectively to any UK land held by non-UK entities owned since 1 January 1999 (England and Wales) and 8 December 2014 (Scotland), the register requires any overseas or non-UK entity with ‘relevant’ interest in UK land to disclose beneficial owners and register with Companies House. 
  • Extension of the pre-existing 2017 Unexplained Wealth Order (UWO) regime to provide intelligence and enforcement agencies with means to trace property ownership.
  • Amendment of UK sanctions regime to better equip the Office of Financial Sanctions Implementation to enforce financial penalties for sanction breaches and evasion.

Due diligence has always played a critical part in the accounting profession, but accountants and firms must now think about how to increase vigilance, particularly in light of The Act.

We spoke to accountants for advice on how to do just that.

Perform regular CDD procedures for new and existing clients and when client circumstances change

Hitesh Patel, Partner, StoneTurn


With the enactment of the Economic Crime (Transparency and Enforcement) Act, CDD (Client Due Diligence) procedures have never been so necessary.

The purpose of CDD is to understand a client’s identity and business activities, enabling accountants to identify behaviours that appear to be unusual and may indicate suspicious activity.

Effective CDD is a key part of an accountancy firm’s money laundering defences. Firms that fail to perform adequate CDD are exposing themselves to financial and reputational risk.

Firms must apply CDD procedures at various points during the lifetime of the relationship, including:

  • The start of a new business relationship.
  • An occasional transaction.
  • Where there is knowledge or suspicion of money laundering and terrorist financing.
  • When there is doubt about the reliability of identification information.

Prior to performing CDD procedures, accountancy firms should assess the level of risk associated with a client, such as whether they are carrying out transactions involving countries or sectors deemed high-risk in money laundering/terrorist financing or if transactions are conducted on behalf of a Politically Exposed Person.

For clients assessed as higher risk, firms should increase the extent and frequency of CDD procedures.

Next steps:  Accountancy firms can increase vigilance by performing ongoing monitoring of new and existing clients. Firms should also refresh their CDD information when the client’s circumstances change, e.g., a change of beneficial ownership or registered office. For repeat clients, it is also good practice to refresh CDD information if there has been a long gap between engagements. 

In addition, firms should: 

  • Regularly evaluate the effectiveness of their due diligence procedures. 
  • Provide annual training to all staff on CDD procedures 
  • Monitor changes to laws and regulations, and ensure that any updates are reflected in CDD procedures. 

Verdict: Perform regular CDD procedures for new and existing clients and when clients’ circumstances change.

Provide regular money laundering training for staff to ensure they can spot signs and suspicious activities

James Howard, Partner, Haines Watts

 We ask all new clients to provide us with at least two forms of ID and we also use specialist software to help verify this. All new clients have to be signed off by the Money Laundering Officer and then an engagement letter is issued. No work is done until the engagement letter is signed and the ID all on file and verified.

Our software does regular reviews. Money Laundering training is given each year to all employees who are trained to spot any unexpected activities and then report it to the ML office. All staff have to also sign an annual statement of declaration and compliance to report that they are satisfied that there is no money laundering in their portfolio.

Next steps:  Firms should administrate a review of websites and social media before engaging with a new client. They must also ensure professional clearance before issuing an engagement letter or evening speaking to the previous provider directly.

Verdict:  Provide regular money laundering training for all staff to ensure they’re aware of signs and can spot and report any suspicious activities.

Identify Ultimate Beneficial Owners (UBOs) and ensure due diligence and risk assessments are ongoing

Dominic Wreford, Head of Forensic Services, Interpath Advisory

From a legal framework point of view, nothing has changed. The conflict in Ukraine has not changed due diligence requirements, but led to the extension of the existing sanctions regime to a larger number of individuals and entities.

As part of due diligence, firms should seek to establish who the Ultimate Beneficial Owners (UBOs) of the client are – consulting a business register is not sufficient and greater investigation is needed.

We frequently see a lax approach taken to establishing UBOs. Huge public interest in the most recent round of sanctions expansion should serve to heighten the pressure on accountants, lawyers and bankers to tighten up on poorly performed checking.

Firms should also seek to establish political exposure, adverse media, and other indicators that certain client relationships might carry higher risk. This does not necessarily mean that firms should reject these clients, rather, they should monitor them more closely as part of their ongoing monitoring.

Next steps: Firms should consider due diligence and risk assessments as ongoing, continuous exercises, rather than administrative tasks to be undertaken at a single point in time. Seeking specialised jurisdictional expertise can help shed light on opaque, impenetrable structures which may look legitimate on the surface but hide risks.

Verdict: Properly establish the client’s Ultimate Beneficial Owners (UBOs) and ensure due diligence and risk assessments are ongoing, continuous exercises.

Firms must ensure they undertake sanctions screening alongside AML obligations

Jackson Quaker, Professional Standards Policy Development Manager, AAT

There can be a common misconception the Anti-Money Laundering and Sanction regimes are the same. The UK Sanctions Regime has been developed over the same timeframe as the Anti-Money Laundering regime and share many similar objectives. But there are also significant differences.

All UK individuals and businesses must comply with financial sanctions requirements. Solely complying with the AML regime does not mean you have met your responsibilities under the Sanctions regime.

The Economic Crime Bill has made it far easier for the authorities to impose civil fines. There is no longer a need to establish that an individual or organisation had reasonable cause to suspect that they were in breach of a prohibition or had failed to comply with an obligation.

This new lower legal threshold for establishing liability should make those with AML responsibilities take them even more seriously. The potential reputational damage from being suspected of sanction busting is also a wake-up call.

In practical terms, firms should seek to thoroughly assess any exposure they have to any sanctioned persons and entities. Firms must consider all partners or customers and their ownership structures, to identify any direct or indirect sanctioned entities or individuals.

Next steps: Firms should acquaint themselves with the  OFSI ‘Consolidated List‘  list and then consider the risks of involvement from the profile of the work done within the firm and the range of clients. If alerted that a client might be someone on the OFSI consolidated list then you must report to OFSI as soon as practicable if you know or have reasonable cause to suspect that a person:

  • is subject to financial sanctions
  • has committed an offence under the regulations

Verdict:  Alongside existing AML client due diligence processes firms should also ensure that they have implemented adequate sanction screening processes ensuring sanction screening of its clients base is an ongoing, continuous exercise.

How your payroll software can be smarter

Posted by & filed under Digital download, Members.

Payroll software is versatile and relatively straightforward – until you start scaling up…

The benefits of introducing payroll software are well-established. At a basic level, processes such as payroll and deduction calculations can be made instantaneously, accurate payslips can be generated, and returns can be sent to HMRC.

Payroll and HR

All these processes can be automated, while the software can also act as a portal for employees and former employees, allowing them to access key documents, payslips, P60s and P45s, even after they leave the organisation.

“From a GDPR perspective, these portals are super-secure,” explains Accounts & Legal director Stuart Hurst.

“All the key documents are there for staff to review at their leisure and that self-service is much nicer for both employers and employees as it removes a lot of hassle.”

There are several other key benefits:

1. Automation

Automating the payroll process ensures employees and contractors are paid correctly and on time. It also means your data is encrypted and password-protected, so no one (besides you and your team) can easily access it.

2. Ease of reporting

Making strategic payroll decisions or predicting labour costs is easier with a bit of automated help. What’s not easy is digging through all your manual work to track down your payroll information and assemble it into a report by hand. Many automated payroll software platforms will give you downloadable reports, so you can focus on making sure that everything is running smoothly and you are making the correct decisions for your organisation.

3. Reduced errors

It might seem fairly obvious, but if you aren’t manually entering data, there’s no risk of mistyping a number or copying over data incorrectly. Instead, correct data is replicated throughout your entire payroll system.

Next level payroll

At scale, payroll becomes more complex and requires a wider variety of capabilities to function optimally.

This also provides accountants and finance teams with a greater range of options and flexibility in running their payroll functions.

Batching

This feature is very useful for both businesses’ finance teams and accounting firms managing multiple clients, especially for those with a lot of single-director companies or payrolls that don’t change from week to week. Doing this enables users to process or perform a task on multiple employer or employee files with a single click. Batch processing can be used to finalise payslips, to check for coding notices and to send outstanding real-time information (RTI) and construction industry scheme (CIS) submissions to HMRC

for multiple employers at the same time.

Tracking leave

Dedicated payroll software can track staff leave and absences using a variety of methods, such as set number of days, accrued by number of working days, accrued by number of hours worked and so on. This provides visibility to both management and staff over time taken off and ensures leave is correctly monitored.

“If someone takes holiday and later leaves, the software can do calculations to pro-rate their allocation,” explains Accounts & Legal’s Hurst. “It’s not rocket science, but it’s something that takes it to the next level and it’s where it moves into the realm of HR, especially with storing information such as contracts and employee handbooks.”

Data capture

While this is an area for some that is still improving, staff portals are an increasingly effective tool in capturing employee data accurately.

“Instead of someone typing data points in several times and copying information from one form to another, the employee or employer enters that information, such as a National Insurance number, in one shot and it’s captured where it needs to be,” Hurst notes. “No-one needs to re-key it.”

“It’s not rocket science, but it’s something that takes it to the next level.” 

Common Issues

Be prudent with payroll

While payroll is not an especially complex process, there are still several potential issues that users can encounter and should look to guard against.

Poor data  collection

The way data is collected, particularly by bureaus and accountancy firms from clients, can pose issues, especially if the client insists on providing it as a spreadsheet.

That means time must be spent on educating clients, otherwise you could find yourself sifting through the data and formatting it correctly for your software.

Conversion Software

Moving data from one software package to another can cause real issues, whether it’s poor integrations or moving to a new payroll system entirely.

Data can be imported in the wrong format, or go missing entirely if not managed correctly, so the virtues of a back-up should go without saying.

This is particularly important, Licensed Member William Buckland FMAAT warns, as failing to do so can lead to incorrect calculations and affect deductions for National Insurance Contributions (NICs) and pensions.

It is worth noting that there are conversion tools and services out there, such as Paiyroll and Intsys, which can help eliminate this, but it’s still vital to examine the imported data to make sure it has taken place correctly.

Case study – linking errors lead to overpayment

A client that Accounts & Legal’s Stuart Hurst inherited was shocked to discover that it had been overpaying its staff for several months as a result of poor payroll practice.

“They were running through the HMRC portal and pushing the data onto spreadsheets and then into the accounting software itself. We picked it up, and got to the end of the year and they had overpaid £8,000 in wages across the board.

“We’re talking £50 here and there over the year for every person. They hadn’t linked their payroll to their accounting software and effectively everyone got a small bonus. We reflected it in the RTI, so it was taxed correctly.”

Issues changing payroll system

William Buckland FMAAT learned how difficult switching to new payroll software can be. Last year, he switched from HMRC’s Basic Tools system to BrightPay, which has a greater set of capabilities.

Before he could take advantage of his new software, though, he had to transfer his clients’ information from the old software.

“I needed to scale up, and since the switch it has worked fantastically well, but the problems occurred purely when it came to exporting the files from Basic Tools and importing it into BrightPay,” Buckland explains.

“I switched part-way through the year and it ought to have worked smoothly, but the biggest issue was in the National Insurance payments. It was categorising them incorrectly.”

The issue was replicated across all of Buckland’s clients, and he confirmed the problem by undertaking a payroll dummy-run.

“Fortunately, I was able to look at it and work it as it should be. I did a test run by creating it as if it was at the start of the financial year and that was correct.”

Future-proofing

Global working can make life complex

While the benefits of flexible working have been well documented, it has helped accelerate another trend: globalisation.

Companies are now more willing to employ teams dotted around the globe, giving those residing in non-western countries the opportunity to enter skilled roles without the location barrier in place.

From a payroll and HR perspective this has multiple advantages and drawbacks. On the one hand, the very best talent in the world is available, regardless of location. On the other, having distributed teams across the globe can become a headache for the payroll department and accounting teams.

Transferring money across borders is far from smooth and, if your staff aren’t freelancers, you’ll need to be an expert in the tax legislation of several countries. This has led to a growing number of global payroll software and services providers, such as Global Expansion and Globalization Partners, which have emerged to help SMEs expand to employ team members around the globe.

They offer finance and payroll teams a platform that integrates with their existing accounting software products to provide visibility of team members, wherever they are, along with compliance with local tax and HR requirements. According to Global Expansion, using this method saves businesses around 70% in costs.

Take part in Future Finance 2022 wherever you are

Posted by & filed under Future Finance, Members.

AAT’s Future Finance Online returns in July, delivering a programme of non-technical educational content for members, while a live event will take place in October

Future Finance Online –  July

In July, AAT members will have the opportunity to refresh their knowledge at AAT’s Future Finance Online 2022, with free and exclusive sessions across three days, presented by some of the brightest minds in accounting and finance.

Book your place at AAT Future Finance

Get ahead of the pack and become the accountant of tomorrow. Get free access to nine inspiring sessions and enjoy presentations from leading industry experts.

Register

Future Finance Online, which will be held in early July, will cover a range of non-technical topics in-depth, such as:

  • Career support
    Sessions designed to help AAT members advance their careers and take the next step, including impact skills, mastering confidence and decisiveness.
  • Equality, diversity and inclusion
    Ways in which AAT members can improve the diversity in their firms and teams, along with sessions illustrating the benefits diversity can have in businesses.
  • Mental health and wellbeing
    Providing AAT members with tools and techniques to help manage their mental health and those of their teams.
  • Sustainability in finance and accounting
    Why AAT members have the skill set, experience and influence both in their organisations and with their clients to help advance sustainability.
  • Digital skills
    Sessions covering the whole range of digital skills members require, from accounting tools to coding, and much more.
  • AAT benefits
    A range of sessions to keep members informed about what AAT is doing for them and ways in which they can make the most of their membership.

Future Finance Live – October

Future Finance has been split into two parts, and, in October, AAT members will be able to attend live and in-person for the first time since 2019.

Members who attend will be treated to a premium programme of best-in-class technical CPD and education, along with great networking opportunities and a chance to meet and engage with fellow AAT members, AAT staff and experts across a range of areas. The live programme will be made up of:

  • Keynote speeches
    Must-see, inspirational headline sessions to set the tone for the day.
  • CPD workshops
    Need-to-know topics presented by industry experts.
  • AAT talks
    Short, motivational sessions providing insight into opportunities and practical examples of what can be achieved by members.
  • Special interest groups
    Rooms for members in similar sectors to discuss key areas of their role.
  • Coaching clinic
    Opportunities to speak one-on-one with subject matter experts.
  • Debates
    Discussing up-coming trends, sharing insight and delivering top tips to get ahead of the game.

It’s time for a windfall tax

Posted by & filed under AAT news, Time for change.

Pat McFadden MP, Labour Shadow Chief Secretary to the Treasury, argues the Government must act in the face of a cost of living crisis.

A cost of living triple whammy is hitting the UK.

Real wages are falling. Energy prices are rocketing. And the Conservative Government are imposing several tax rises from April 2022.

As the Bank of England has confirmed, these factors are set to hit household incomes harder than anything has for decades.

Rising energy billls

The announcement from the energy regulator, Ofgem, that the energy price cap is to go up by a stunning £693 a year will come as a body blow to many households in constituencies like mine.

Labour saw this problem coming and has been calling for more effective action for months. At the turn of the year, we produced a package that would give everyone £200 off their bills with a further £400 off for the poorest 8 million households. We would pay for this in part through the increased VAT receipts the Government is enjoying because inflation is higher than expected.

Oil and gas companies cashing in

The rest of the funds for this plan would come from a windfall tax on the oil and gas companies that are collecting enormous profits from this crisis. This one-off tax would ensure greater fairness and prove much more effective than the Government’s current approach. It would ensure that the companies making the most from the huge rises in global gas prices pay their fair share in supporting hardworking families, the squeezed middle, pensioners, and low earners to get through the tough months ahead.

If you want a sense of the size of the profits being made by energy companies look at Shell’s recent financial results. Their annual profit last year quadrupled to $20 billion in what the Chief Executive described as a “momentous year”. His rival at BP described the current market as a “cash machine” for his company.

Is this fair?

Labour thinks it is only fair that these companies pay something back to help relieve the huge bills consumers are facing and it appears that the British public is with us. A YouGov poll commissioned by Friends of the Earth earlier this year indicated that over three quarters of the country (76%) back the idea of windfall tax on gas and oil companies to help people struggling with their fuel bills.

Government’s inadequate plan

The Labour plan is fully costed, and our windfall tax plan would help us relieve the cost of energy bills for the poorest households in a fair way.

In contrast, the Chancellor’s package falls short of what is needed in three important respects.

  • Firstly, the money off the bills is in effect a Buy Now Pay Later scheme involving exchanging reduced bills this year for a £40 surcharge on bills for the next year – and it is contingent on prices falling next year – something that is by no means certain.
  • Secondly, the Government’s plan gets a lot less help to the poorest households than Labour’s plan. Whereas our plan would allow us to reduce the bills for the poorest by £600, the Tory figure is £350, leaving the poorest still facing much higher bills.
  • And thirdly, the Chancellor asks nothing of the companies making the most from this crisis. His funding comes entirely from billpayers over the next five years and taxpayers in general.

His is a less generous package and impacts harder upon working families.

Households continue to struggle

Even with his package, the combination of the triple whammy of price rises, tax rises and falling real wages still adds up to a very tough year ahead when it comes to the cost of living and household budgets.

While the cost of gas is a global issue, ten years of the Conservative Government’s failed energy policy has helped create a price crisis that’s now being felt by everyone.

The Conservatives cannot provide an answer to the cost of living crisis because they are the cost of living crisis.

In the context of declining standards of living, this one-off windfall tax will prove a vital life jacket for millions of hardworking families across the nation who are struggling to pay their bills.

About the author

Pat McFadden worked as a researcher for Donald Dewar MP, a speechwriter for John Smith MP and an adviser to Tony Blair, both in opposition and later in 10 Downing Street.

In 2005 Pat was elected as MP for Wolverhampton South East, serving in various Government roles under Tony Blair and then Gordon Brown in the Cabinet Office, and the Business Department. In opposition, Pat has been Shadow Secretary of State for Business, a member of the Treasury Select Committee, Shadow Minister for Europe, Shadow Economic Secretary and now Shadow Chief Secretary to the Treasury.