How do I prepare for an exam after not studying for a while?

Posted by & filed under Students.

If you’re about to take an exam but haven’t picked up a textbook in a long time, fear not. We look at the dos and don’ts of tackling revision a second time around.

The pandemic has been something of a game-changer for many people who thought they’d left education long behind. Being trapped indoors during the lockdowns saw many former students reflect on their lives and want to return to education. Meanwhile, financial concerns and furlough saw others want to upskill or retrain. Returning to studying after a long gap can be daunting, but there are steps you can take to make it easier. 

Do…  

Be willing to learn 

There are two things that can turbo-boost your revision, says Bradley Busch, chartered psychologist and director of mindset coaching company InnerDrive. The first is “developing a mindset of curiosity and wanting to learn”. And the second? “Knowing how to learn – some revision strategies are more effective than others,” says Bradley. 

Find a balance 

Returning students often have a zillion other responsibilities such as part-time jobs or family duties. Negotiate time and space with the people you live with, perhaps finding a designated study area or tackling revision when the kids have gone to bed. Study plans, calendars, to-do lists and a daily routine all help here too. 

Use technology 

Did your last exam experience involve textbooks streaked with lots of yellow highlighter? Revision has changed a lot in the last 10 years. It’s worth exploring some more modern revision tools out there. AAT has some amazing e-learning tools, such as its Learning Pod podcasts and online Green Light tests. Also, check out apps such as Evernote, StudyBlue and Focus Booster. 

Remind yourself how brilliant you are 

Been in a job where you’ve supervised others? Raised a family where time management skills are essential? If that’s the case, you’re likely to be a multi-tasking superhero who can easily nail a revision schedule. Remember, during your years of working or raising a family, you’ve acquired many skills that younger students would take years to pick up. 

Don’t…  

Attempt to go it alone 

Education has advanced massively in the last 20 years. Students don’t just have amazing technology and revision apps at their disposal – the world of learning has become a nicer place too. Today, training providers have a duty to safeguard the welfare of their students, such as looking after their mental health. If it all gets a bit too much, have a chat with them. 

Compare yourself to others 

Many returning students may find themselves succumbing to something called the “spotlight effect”. Bradley explains: “You might be looking at other classmates, thinking, ‘Oh, they look calm and confident.’ This can feel like a spotlight shining on you and that you’re the only one that feels nervous.” Don’t be fooled by this, says Bradley. Despite their apparent carefree attitude to revision, these students will be sweating just as much as everybody else once the exam date approaches. 

Be afraid of brain rot 

The idea that our brains get slower as we get older is a myth. A recent study by Harvard University’s Project Implicit used data from more than 1 million people to show that our mental processing speed actually remains the same until we’re 60 years old.   

Further reading:

How to get comfortable with change

Posted by & filed under Members.

Emma-Sue Prince, trainer at Unimenta and author of 7 Skills for the Future, reveals adaptability techniques.

Adaptability is an attractive quality. We all like to think of ourselves as being flexible and adaptable, being a team player and ‘going with the flow’. It means that we are not rigid or stuck and so are open to change and challenge. If you were to ask people if they consider themselves to be open and adaptable, most would tell you ‘yes’.

If you truly are adaptable then you are more likely to handle change with grace and ease, not be thrown by the unexpected and be a lot happier. Yet most of us are actually a lot more resistant to change than we might believe. And certainly the past two years will have both tested our ability to be adaptable, as well as increased it and made us better at it.

Adaptability is more than being flexible – it is about being open to things, even outside our comfort zone and not stating preconceived judgements, such as ‘I could never do that’, or ‘That will be too hard for me.’ We cannot afford to think we know everything, either. Something new will come along and blow that out of the water, whether it is a new technology, a new process or
a new plan.

Adaptability is about continually developing more of what we are truly capable of and living up to our potential. This is critical for our skills now and in the future. Unfortunately, it is also something we may well talk ourselves out of more than we think we do.

The best way to develop adaptability, or any behavioural change for that matter, is by practising it in everyday ‘low-stakes’ situations. When we talk to people about simple ways they might try to go out of their comfort zone, most invariably come up with big challenges – when, actually, the best way to get into stretch is through doing small, incremental things each day. So seemingly small things like changing your route to work, saying ‘yes’ to something you might normally say ‘no’ to automatically, or trying a different and unfamiliar food are relatively low-stakes situations, which then help you to move towards higher-stakes ones.

Comfort versus stretching

Change is difficult because we want to stay inside our comfort zone and will resist anything that requires us to step out of it. Therefore, a conscious effort is needed to do this for those of us less open to change, and even for those of us who are. Our comfort zones are, basically, as small or as big as we make them. We make them bigger by engaging in more activities, tasks, thoughts and experiences that lie outside of our comfort zone. The bigger our comfort zone, the more adaptable we will be! The comfort zone is where everything is easy and nothing risky ever happens. We can even be highly competent there. Equally, nothing great or exciting happens there either.

Just outside your comfort zone is the ‘stretch zone’, where learning and growth happen. This is the place which can feel a little uncomfortable because you might be stretching yourself in new and different ways, but you’re still able to manage. It’s not easy, but not impossibly hard either.

However, if you go too far in this direction you’ll reach the ‘panic zone’, which is not a good place to be, as the name might suggest. Learning and growth can’t happen here because we are so far out of the comfort zone that we find ourselves in fight or flight mode.

The stretch zone is the best place to be, and one of the most effective ways to increase your ability to be adaptable is to ensure you are spending plenty of time there.

Other adaptability techniques

1 Look for opportunities to try new things that will keep you learning

You can do this in very small ways to start with – learning a new skill, making new friends, trying a new type of food, taking the initiative for starting something in your community. As your comfort zone expands, make it bigger by doing more. Take on new challenges for work and seek them out. Embrace change, even if it feels uncomfortable at first.

2 Change your behaviour next time you are faced with a change

Even though it is natural to want to resist change, try and build up your ability to adapt and respond positively by literally changing your behaviour when you are faced with a change.
Again, start with small steps. Do you feel disappointed because of a change of plan? Respond enthusiastically even if you don’t feel like doing so. Couldn’t get tickets for a show you’ve been wanting to see? Smile and choose something completely different so you can embrace a new experience. Lost your job? Get upset, yes, but bounce back faster by taking positive action every day.

3 When you encounter a new challenge, list potential ways to  solve the problem

Research suggests that people who are able to come up with solutions to a problem are better able to cope with problems than those who can’t. Experiment with different strategies and focus on developing a logical way to work through common problems. By practising these skills on a regular basis, you will be better prepared to cope when a more serious challenge emerges. 

Why did all the energy companies go bust?

Posted by & filed under Energy crisis, Members.

In total, 28 energy suppliers in the UK went bust in 2021. Here’s what happened and what it means for the future.

The rapid and alarming rise in energy prices has affected almost every person and business not only in the UK but around the world. After more than 20 years of stable energy prices, the sudden rise has shocked consumers and destabilised many businesses already struggling as a result of staff shortages and supply chain issues.

For energy companies, it has been a similar story as the supply of gas became scarcer and the price per unit rose rapidly to unsustainable levels. Here, we examine the driving forces behind that change.

What is happening to wholesale gas prices?

There has been a huge squeeze on gas prices globally and this has been reflected in the energy bills customers are facing. Reasons, which come alongside the wider supply chain and staffing issues so many industries have faced, include:

  • A cold winter in Europe last year put pressure on supplies and, as a result, stored gas supplies were low;
  • A relatively windless summer meant it was difficult to compensate for those lost gas supplies; and
  • There has been increased demand from Asia – especially China – for liquefied natural gas.

Those first two points, though are crucial. The UK, despite its vast wind farms and increasing use of other green sources, is in not in a position to expand its use of alternative power sources when one or more fuel sources fails. As such, it is beholden to the global market for gas.

There are a number of technical and geopolitical issues at play as well. Chief among them is the £8.3bn Nord Stream II pipeline from Russia to Germany via the Baltic sea, which means many countries across Europe are grappling with the same problems. Nord Stream II, which could vastly increase the gas supply in Europe, has become a political hot potato as it could place the continent’s energy security in Russia’s hands.

Meanwhile, China’s increased demand for liquefied natural gas has been driven by its efforts to shift away from coal and transition to greener sources of energy. China, like many states around the world, regards gas as a key transition fuel in the move to more sustainable energy.

What has this meant for energy suppliers?

That inability to readily tap into alternatives to gas has meant that for many providers, it is grimly simple: the cost of producing energy is greater than the income they are able to generate.

Regulator Ofgem lifted the price cap on household gas and electricity bills by 12% to £1,277 in October last year. It is due to rise again by 54% in April. However, a large number of firms collapsed because they were unable to pass on the wholesale price rise to the consumer as a result of the cap. In fact, 28 energy companies have collapsed since January 2021 (see table on p15), affecting a total of nearly 3.5 million customers. Bulb, the largest to collapse, was the UK’s seventh-largest provider, with 1.7 million customers.

Scottish Power chief executive Keith Anderson told the BBC in November that the energy market was “broken” and the price cap was largely to blame.

“We’ve already seen the price cap go up by £150-180 and… in April, the price cap will go up by several hundred pounds,” he said.

His assessment has more recently been backed up by Chris O’Shea, chief executive of British Gas owner Centrica, who said the price pressures would remain in place for up to two years. This is, he says, because of the same reason China’s demand for gas has risen: gas as a transition fuel.

“As you turn off coal-fired power stations in other countries, there isn’t an abundance of gas that you can just turn on quickly,” O’Shea told the BBC in January.

How are businesses affected?

Unlike consumers, businesses in the UK are not beneficiaries of a price cap. As a result, businesses across the country are fully exposed to the rising prices.

In the Federation of Small Businesses’ (FSB) latest quarterly survey, 45% of the nearly 1,300 firms that participated said their costs had increased in the past three months because of rising utility bills.

“The picture we’re seeing is that unplanned-for bill increases are hitting firms when they’re already up against other major headwinds – supply chain disruption, inflation heading for 6%, increasing late payment from large business customers, and the biggest tax increase in small business history coming in April,” says Craig Beaumont,
the FSB’s head of external affairs.

Firms can, of course, shop around as they seek better deals, but all energy providers are experiencing the same pressures, meaning savings are hard to come by.

As is the case with consumers, if a business’ energy provider collapses, the advice is to do nothing while Ofgem places affected customers with a new supplier.

When the new supplier gets in touch, businesses then need to negotiate a new energy contract – notwithstanding the current market’s issues, this is usually a good time to shop around and switch, as exit fees are not charged at this point.

If your business had a switch in progress when your supplier went bust, the move to your new supplier should continue as arranged.

What is the impact on consumers?

Despite the price cap shielding them from the worst of the rising gas prices, consumers have still been hit hard, with the cap raised in October to a record £1,277. Introduced in 2019, the price cap is adjusted twice a year in October and April, meaning many of the steepest rises in wholesale gas and electricity prices in the past few months will not hit households until the spring, when bills tend to decline as heating demands reduce.

In December, trade body Energy UK warned consumers that bills could rise by as much as 50% in the spring, meaning the cap could soon exceed £2,000. Around 11 million households on default tariffs will see their bills increase straight away when the cap is raised.

Indeed, consumer charity Citizens Advice estimates supplier failures since August 2021 will cost consumers £2.6bn – around £94 per customer from 2022 – not including the £1.7bn of taxpayer money the government has set aside for Bulb’s failure.

Lessons for finance teams

  • Fix energy costs where possible to limit further exposure to price rises and make expenditure more predictable.
  • Make adjustments elsewhere in the business to help fund the increased outgoings. Can you find cheaper suppliers or raise prices, for example?
  • Set cash aside to help absorb future price rises.

HMRC update following the Spring Statement

Posted by & filed under HMRC updates.

The latest update from HMRC includes reminders of the NI increase, introduction of the Plastic Packaging Tax and the withdrawal of gov.uk Verify.

Spring Statement

In the Spring Statement, the Chancellor set out the Government’s Tax Plan. It brings together proposals to reduce and reform taxes over this Parliament to support the UK economy, businesses and families in both the short and the medium term.

Key measures the Chancellor announced as part of the plan include:

  • an increase to the National Insurance Primary Threshold for Class 1 NICs and the Lower Profits Limit for Class 4 NICs from 6 July 2022, aligning it with the equivalent income tax personal allowance which is set at £12,570 per annum
  • from April 2022, self-employed individuals with profits between the Small Profits Threshold and the Lower Profit Limit will not pay Class 2 NICs, while allowing individuals to be able to continue to build National Insurance credits
  • Employment Allowance will increase by £1,000 from 6 April 2022 to £5,000, which will benefit around 495,000 businesses
  • an immediate reduction in duty on diesel and petrol from 6pm on 23 March 2022, by 5 pence per litre, for 12 months
  • VAT zero rating on the installation of energy saving materials for a time-limited period
  • a reduction in the basic rate of income tax to 19% from April 2024.

Further detail on future changes being considered on Capital Allowances and R&D tax relief were also set out.

The full detail on all the measures can be found on GOV.UK.

Health and Social Care National Insurance contributions (NICs) uplift 

National Insurance contributions will increase by 1.25 percentage points from April 2022 to help fund public services. 

The government announced a new 1.25% Health and Social Care Levy to fund investment in the NHS, health and social care in September 2021. The levy is effectively introduced from April 2022 when National Insurance contributions for working age employees, self-employed people and employers will increase by 1.25 percentage points and be added to the existing NHS funding allocation.

From April 2023, the levy will be formally separated from National Insurance contributions and will also apply to the earnings of individuals working above State Pension age. National Insurance contribution rates will then return to 2021-22 levels and receipts from the levy will go directly for spending on health and social care.

Over the last few months, HMRC has asked employers and payroll software providers to include a message for employees on all payslips between 6 April 2022 and 5 April 2023, to explain their increased National Insurance contribution, reading: “1.25% uplift in NICs funds NHS, health & social care.”

More information is available at Prepare for the Health and Social Care Levy on GOV.UK.

Plastic Packaging Tax comes into force on 1 April 2022

On 1 April 2022 the Plastic Packaging Tax (PPT) comes into force. Manufacturers and importers of plastic packaging should visit GOV.UK, work through the eight steps listed and determine if they need to register for PPT. Businesses have 30 days to register for PPT from the date they become liable.

No business will need to file a PPT return until July 2022 at the earliest. However, they may need to register before this time. Importers of plastic packaging will need to check who is responsible for complying with and paying PPT; this is unlikely to be their suppliers.

HMRC has provided the following resources to assist businesses with the tax:

Mae’r holl arweiniad craidd ar y Dreth Deunydd Pacio Plastig bellach ar gael yn Gymraeg ar y dudalen gasgliad ar GOV.UK / All core guidance on PPT is available in Welsh at the collection page on GOV.UK.

Please signpost these resources to your network, and invite them to review these thoroughly to determine whether they are affected by PPT.

Withdrawal of Gov.uk Verify

From 1 April 2022, HMRC customers will no longer be able to use GOV.UK Verify to log into their Personal Tax Account or use any HMRC Digital services. Customers should instead use Government Gateway to sign in to HMRC Digital Services including for Self Assessment.

Trusted Helpers and customers who need extra support can access their online accounts through their Government Gateway. The Trusted Helper Service was previously only accessible via Verify, but changes have been made to allow customers to access the service using Government Gateway. Current Trusted Helper relationships will automatically transfer across to Government Gateway log-ins.

Users will need to, if they don’t already have one, create a Government Gateway User ID and navigate successfully through Identity Verification to access HMRC services.

Self Assessment users will need to enrol their Self Assessment onto a single credential – this is straight-forward and there are instructions on screen to support them.

We’ve issued targeted letters to customers to update and advise Self Assessment filers impacted by this change, and any customers with an active Trusted Helper relationship. GOV.UK will be updated to reflect this change.

Tax Avoidance Scheme Promoters

HMRC published a press release about a tax avoidance promoter being handed a £150,000 penalty for failing to provide legally required information. The company must now hand over the required records to enable HMRC to calculate the tax owed, which is currently estimated to be more than £3 million.

HMRC is not always able to share the details of its ongoing efforts to disrupt particular named promoters of tax avoidance, but as explained in its strategy for tackling promoters where it can it will to help further isolate and disrupt the business model of promoters of tax avoidance.

Statutory Sick Pay Rebate Scheme claims close on 24 March 2022

The Statutory Sick Pay Rebate Scheme (SSPRS) closed on 17 March 2022. Employers had until 24 March 2022 to submit any final claims, or to amend claims already submitted.

From 25 March, normal Statutory Sick Pay (SSP) rules will return, meaning employers will start paying SSP from the fourth qualifying day their employee is off work, regardless of the reason for their sickness absence.

For more information on eligibility and how to make a final claim, go to GOV.UK.

How to manage NI and Employment Allowance changes

Posted by & filed under Members, Tax.

Headline figures are misleading, so careful calculations are required.

A series of measures intended to benefit businesses, employees and the wider economy were announced during the 2022 Spring Statement last week.

These include:

  • National Insurance threshold will increase from £9,568 to £12,570 in July 2022. This means that employees will keep more of their salary before they have to start paying national insurance contributions (NICs).
  • Employment Allowance (EA), a tax relief scheme which entitles eligible businesses, organisations and charities to pay reduced annual national insurance liabilities will increase from £4,000 allowance to £5,000. From the 2023/2024 tax year, these employers will also be entitled to a reduced rate of their Health and Social Care Levy liabilities. 

But national insurance itself has also gone up by 1.25 per centage points to help fund the NHS and Social Care Levy. Industry commentators say this increase could mean that increased employment allowance and NIC threshold are therefore likely to be of limited financial benefit.

So what does all this mean for clients in practical terms and how effective are these measures? We asked several accountants to find out.

£1,000 increase in employment allowance is misleading – actual savings are much less

Clare Bowen, director, MHA Monahans


While it might appear to be a good thing that HMRC is providing businesses a further £1000 of employment allowance, it isn’t as straight forward as an extra £1000 in business owners’ pockets.

The increase in National Insurance by 1.25% will take back some of this increase into HMRC coffers to be spent on the NHS and Social Care. HMRC will also win in other ways: for businesses who are claiming the whole amount, it will result in an additional £1000 of taxable profit, as additional costs are offset by the added allowance.

For example

  • Imagine your Employers National Insurance is currently £5000. £4000 is covered by EA, leaving a £1000 payable expense in profit and loss and a reduction of corporation tax for this expense of £190.00. Net payment to HMRC will be £810.00.
  • The next tax year, due to the increase in NI rates, your employers NI will be approximately £5450. £5000 is covered by EA, leaving a £450 payable expense and a reduction in Corporation Tax due to the expense of only £85.50. Net payable to HMRC £364.50.
  • Savings overall will be £445.50, much less than the £1000 quoted in headlines.

We also need to consider smaller businesses who don’t currently utilise all the allowance. They are still hit by the increase in the NI levels but receive no direct financial help.

Next steps: EA needs to be re-claimed each year, so employers must select the option on payroll software, confirming they meet HMRC criteria. This can be tricky for business owners to understand so professional advice may be needed.

Verdict: Headline figures of HMRC providing a further £1,000 in employment allowance is misleading. Employers also need to be aware that employment allowance needs to be re-claimed each year via payroll software.

Evaluate client’s sources of de minimis state aid prior to making employment allowance claim

Tom Walker, partner, Wellers


The employment allowance increase is unlikely to cover the 1.25 percent increase in employer national insurance costs from the 6th April 2022. That being said, it’s still a welcome surprise.

To claim the allowance, employers need to submit an Employer Payment Summary (EPS). The Employer Allowance is classed as ‘de minimis state aid’ and so counts towards the state aid thresholds that are assessed over a rolling three-year period. Before making a claim, employers will need to check that they will not exceed de minimis state aid thresholds for their sector.

Next steps:

  • Check whether clients (and other companies within the same corporate group) have a combined Class 1 NIC liability of less than £100,000.
  • Evaluate the client’s sources of de minimis state aid to ensure that thresholds are not exceeded.
  • Finally, accountants need to make sure clients have made formal claims for the Employment Allowance via an EPS.

Verdict: Evaluate the client’s sources of de minimis state aid prior to an Employment Allowance claim to ensure their sector thresholds are not exceeded.

Any employment allowance benefit may be lost if client’s NICs exceeds £80,000

Nicola Goldsmith, head of private client, Haines Watts London


Anything that reduces the burden on employers is welcomed. The employment allowance is worth an extra £1,000 a year. Smaller employers in particular will enjoy a greater benefit.

On its own, an increase of £1,000 in the rate is unlikely to encourage employers to employ more staff, but the full allowance of £5,000 may help with some staffing decisions. 

In addition, national insurance employer’s contributions are increasing from 13.8 per cent to 15.05 per cent at the same time.

This means that for every £1,000 of salary subject to employer’s NIC paid, an additional £12.50 of NIC is payable.  Once the payroll subject to employer’s NIC exceeds £80,000, the allowance will not benefit them.  This can restrict growth, so this may impact hiring behaviour.

Next steps: Accountants need to advise clients where the benefit of additional allowance may be lost, particularly if the client’s NIC exceeds £80,000.

Verdict: Any benefit from employment allowance may be lost if the client’s NIC exceeds £80,000.

Ensure clients have the right processes in place to continue making correct payroll deductions

Lauren Harvey, assistant accounts manager, The Accountancy Partnership
The increased Employment Allowance is good news for employers who employ two or more people, helping them to reduce their costs, even with the additional Health and Social Care Levy. It does, however, mean a larger gap in the optimum salaries for sole directors who can’t take advantage of the increased EA, unlike two or more directors who can. 

Meanwhile, the Government’s decision to increase NIC threshold not only allows people to keep more of what they earn but also simplifies the system for taxpayers as opposed to having two different thresholds for employees.

Next steps: Communication is key. Accountants should be notifying clients as soon as possible, and ensure they have processes in place to continue making the correct payroll deductions without delays or errors which will need dealing with later on.

Verdict: Ensure there are processes in place to make accurate payroll deductions associated with Employment Allowance and NICs.

What should I do once I’ve completed all my AAT qualifications?

Posted by & filed under Students.

We take a look at some of the options open to you when you have completed your AAT Professional Diploma in Accounting (Level 4).

Getting a job 

There’s a wealth of opportunity open to those who’ve completed Level 4. You can now bring numbers to life – rather than just processing them – which makes you incredibly valuable to employers. There’s plenty of accounting work currently out there.

But with an AAT Professional Diploma in Accounting (Level 4), you should really be looking for jobs with the word “manager” in the title: finance manager, purchase ledger manager, sales ledger manager. Roles that include the words “clerk” or “assistant” are probably more suitable for AAT Advanced Diploma in Accounting (Level 3) students. 

Pursuing extra qualifications 

Around 50-60% of Professional Diploma students pursue another qualification afterwards. There are many qualifications you could pursue: 

  • CIMA (Chartered Institute of Management Accountants): CIMA is more business-orientated. So, if you harbour plans to help a company become more profitable and expand into new markets, then CIMA is the qualification for you. It’ll also allow you to sit exams in your own home, which is great for those who need flexibility, but bad for procrastinators. 
  • ICAEW (Institute of Chartered Accountants in England and Wales) and ICAS (Institute of Chartered Accountants in Scotland): ICAEW/ICAS is for anybody interested in compliance, accuracy, financial data, tax returns and carrying out audit work. To become a chartered accountant, you’ll need to study ICAEW/ICAS. Even though CIMA and ACA have chartered in their names, it doesn’t necessarily result in you becoming a chartered accountant once you qualify. 
  • ACCA (Association of Chartered Certified Accountants): ACCA has a mixture of both CIMA and ICAEW. In fact, it’s very similar to AAT. It’s not until the final level of ACCA that you can decide whether to specialise in areas such as tax, audit or management accounting. 

University 

It’s relatively rare for Professional Diploma students to go to university. This is largely because the qualification is equivalent to having studied the first year. We see more Advanced Diploma students go to university because their qualification is equivalent to A-Levels and is awarded UCAS points. If you’re a Professional Diploma student, finding an employer that will support your qualifications may be better than university and its high tuition fees. 

Become an AAT member 

If you get AAT membership, you can put MAAT after your name, which opens up so many doors. Whenever you see an advertised role in finance, they’ll be looking for a professional qualification and AAT will be the one they’ll be asking for. Those letters after your name go a long way. 

Going freelance 

Many people have chosen to set up a small bookkeeping practice or accountancy firm after being furloughed or finding themselves out of a job. If you do this after you have completed your Professional Diploma, remember there are certain certifications you need to obtain with AAT first, such as anti-money laundering regulations. 

Take some time out 

Although it’s great to take a break for a year or so, remember that if you return to qualifications, studying will be more difficult the longer you leave it.   

How can I continue CPD once I’ve finished my studies? 

You may have finished your final assessment, but that doesn’t mean your professional development should end. Constantly flexing your learning is a sure-fire way to progress in your career, stay ahead of your peers and land the job you want 

“If you’re fresh out of studying, you probably don’t want to think about learning or professional development ever again,” says Karen Waite, director of people development firm Leap Like a Salmon. 

But in today’s competitive job market, where technical knowledge trumps experience, the ability to pick up new skills is essential. Continuing professional development (CPD) can be a great way to stay ahead of your peers, keep up to date with the latest industry news and become more employable. 

Consider these sources of CPD 

Thought that CPD mainly involved attending boring training courses, then typing a few lines into a self-assessment form afterwards about your “learnings”? Think again. “Today, any learning that makes you think could constitute CPD,” says Karen. “Webinars have taken off during the pandemic and are a great CPD source. Podcasts are also effective, while you could also write blog posts about accounting, mentoring, volunteering or discussing industry issues on LinkedIn.” 

CPD with AAT 

Head to AAT’s Lifelong Learning Portal and you’ll find a plethora of helpful CPD tools, such as articles, videos, podcasts and webinars. Or visit AAT Comment to keep abreast of the latest accounting news and opinions. Meanwhile, AAT forums and social media are great for sharing and reflecting on your development journey with others. Plus, don’t forget that reading 20 and our member magazine AT counts towards your CPD too! 

Store your CPD somewhere useful 

“Some people jot their CPD on lots of different notes and never remember where they’ve filed it,” says Karen. Fortunately, there are many ways to organise your CPD. Leap Like a Salmon (leaplikeasalmon.com) has a “Leap Hub”, which enables you to upload and store your CPD documents, evidence and notes. Other methods to organise your CPD could include creating a CPD folder on your desktop, or using project management apps such as Trello. 

CPD can encourage positive thinking 

“If you’re feeling low or concerned you can’t do a task, looking back on your CPD can give you confidence you’ll achieve something again,” says Karen. “Sometimes, I look back on the CPD I wrote five years ago and think: ‘Wow, that’s amazing! I can’t believe I did that’. CPD reinforces the idea you are – and can be – great.” 

If you find yourself struggling to read a book from start to finish, or checking your phone 150 times a day, you’re not alone. Our brains have seemingly evolved to prefer short bursts of information. That’s why teaching yourself things in small and frequent snippets can be beneficial. Karen recommends doing this in half-hour chunks.   

Further reading:

Student funding changes boost the appeal of apprenticeships

Posted by & filed under Apprenticeships, News.

Radical changes to Higher Education funding will turn students and employers towards apprenticeships.

In February 2022, the Government published proposals to reform student finance in England that will see the threshold for Student Loan repayments reduced to just £25,000, and the repayment term lengthened to 40 years.

This means many will still be repaying their Student Loan as they approach retirement and will more than double repayments for many.  

The new repayment threshold will not just apply to new students but existing ones. The House of Commons library estimates that lifetime loan repayments for this cohort will be substantially larger than under the current system; for teachers and nurses it estimates an additional £10-£15,000 and £15,000 more will be owed.

Whilst the student population may argue the changes are unfair, the wider tax perspective is clearly being taken into account. With a staggering 75% of loans never being repaid in full, the current system was increasingly seen by many as unsustainable. The changes being proposed by Government will see this trend largely reversed with 70% repaying their loan.

Given the debt burden already discourages many from pursuing a University education, these changes could hasten the decline in University applications in the years ahead.

Against such a backdrop, in theory, apprenticeships should become more attractive. However, the system is skewed against them, with policymakers, schools and often colleges, fixated with Higher Education.

Research from AAT published earlier this year shows that there continues to be a considerable lack of awareness about apprenticeships, numerous misconceptions about their value and that Higher Education is a route regretted by many.

The AAT research shows:

A continuing lack of awareness

  • only 29% of 18-24-year-olds said that they heard about alternatives to degrees, such as apprenticeships, while at school
  • most people aged 18-24 (53%) think there should be more resources available to help people learn about apprenticeships.

Multiple misconceptions

  • 41% of 18-24-year-olds believe that apprenticeships don’t pay enough
  • 34% think that apprenticeships are only available for manual labour jobs
  • only 36% see apprenticeships as a good alternative to university
  • 40% are aware that apprenticeships enable people to earn whilst they learn.

Higher Education doesn’t always pay

  • 42% of people aged 21-45 believe their degree has not played an essential role in their careers to date
  • 16% of all people with degrees wish that they had chosen a different route (this figure rose to 20% of those aged 24 and below)  
  • Higher Education remains a great route to employment for some but it can be an expensive option and the proposed changes will make it even less affordable for many.

Given the high numbers of graduates who either regret their degree programme or admit it hasn’t played an important role in their career, it would make sense for schools, colleges and policymakers to do much more to promote alternative routes to employment such as apprenticeships – whether in accountancy or any other subject.

Apprenticeships not only mean no debt for students but earning a salary whilst learning and getting ahead of the competition too. In fact, if financial considerations are paramount, it’s worth noting that many apprentices will earn considerably more than University graduates over their lifetimes. Food for thought for individuals but also the institutions and organisations that continue to push a University education as the supposed “gold” standard.

Making Tax Digital Deadlines

Posted by & filed under Making Tax Digital.

This content is brought to you by Xero.

As the next phase of Making Tax Digital (MTD) approaches, businesses need to make sure they’re clear on the Making Tax Digital deadlines. Here’s a summary of key dates to bear in mind.

When did Making Tax Digital start?

From April 2019, businesses with a VAT taxable turnover above £85,000 were obliged to start following MTD for VAT rules.

There was a brief soft landing period where businesses could continue to copy and paste their data without digital linking. This ended in April 2021.

The MTD phase 2 deadline is fast approaching, which means that all VAT registered businesses must comply with MTD from April 2022, unless they are exempt.

When do I need to register for Making Tax Digital for VAT?

  • Making Tax Digital deadlines for VAT are the same as standard VAT returns, so you don’t have to change the dates that you usually file and pay your taxes.
  • This means businesses will need to file their first MTD return for the VAT quarter starting on or after 1 April 2022. But remember, businesses cannot sign up to MTD for VAT until after they have filed their last standard VAT return.
  • If you pay by direct debit, HMRC states that you should not sign up until 5 working days after the deadline of your last non-MTD return or at least 7 days before your return is due.
  • Your first MTD return cannot be filed earlier than 7 working days before its deadline.
  • Businesses paying via other methods must wait for 24 hours after their last non-MTD return has been submitted to sign up. They cannot file their first MTD return until 72 hours after the signup process. You should also ensure that you sign up at least 3 days before your return is due.
  • Whether or not your business is registered for VAT, if you are a sole trader or landlord with an annual turnover above £10,000, you will need to sign up to MTD for Income Tax (ITSA) when it launches in April 2024.

When is the Making Tax Digital for Income Tax (ITSA) deadline?

For sole traders and landlords with business or property income above £10,000, MTD for ITSA is due to be introduced in the tax year beginning April 2024.

General partnerships with income above £10,000 will follow in the tax year beginning April 2025.

Why was the MTD for ITSA deadline delayed?

MTD for Income Tax was delayed to give businesses and HMRC more time to prepare in light of the pandemic. You can read the full statement here.

Although the deadline has been delayed, you may still be able to sign up to the MTD for ITSA pilot via your accountancy software provider.

Signing up to the MTD for ITSA pilot will give you more time to get familiar with digital record keeping, quarterly reporting and accounting software.

Has the new MTD penalty points system been delayed?

From January 2023, HMRC is moving to a points-based system so that MTD for VAT penalties are only given to those who regularly make mistakes and miss deadlines. Points are calculated based on how regularly you submit.

You can find more information about penalties here.

The penalty points system will come into effect from April 2024 for MTD for ITSA.

Making Tax Digital Roadmap

DatePhaseWhat you need to doLive
April 2019MTD for VATVAT registered businesses with a taxable turnover above £85,000 need to use MTD-compatible software to: keep digital recordssubmit VAT returns to HMRCYes
April 2022MTD for VATAll VAT registered businesses must sign up to MTD for VAT, regardless of turnover, unless they are exempt. They must follow the rules outlined above. 
April 2024MTD for ITSASelf employed people and landlords with a total income above £10,000 must start using MTD-compatible software to: keep digital recordssubmit income tax returns 
April 2025MTD ITSA (general partnerships)General partnerships must now start following the MTD rules for ITSA, as outlined in the column above. 
From April 2026 at the earliestMTD for Corporation TaxBusinesses that pay corporation tax will need to start following MTD rules. For now, this date is unconfirmed. 

How Xero can help you prepare for Making Tax Digital

With Xero, you can submit VAT returns online to comply with MTD for VAT. Xero will automatically generate your VAT return from your bookkeeping so the process is quick, easy and streamlined. Our product features also include guidance checks and prompts in-product to increase efficiency.

If you’re not yet a Xero partner, visit our Xero Partner Programme page where you can find out more about becoming a partner. Help your clients to breeze through MTD for VAT and explore Xero’s resource hub covering everything you need to know about Making Tax Digital.

This content is brought to you by Xero.

How will the new Public Interest Business Protection Tax work?

Posted by & filed under Members, News.

Can the new tax stop businesses and stakeholders from profiteering from the assets of a failing energy or gas supplier?

At the end of January, the Government introduced a new emergency tax known as the Public Interest Business Protection Tax (PIBPT), intended to stop businesses and stakeholders from profiteering from the assets of a failing – or at risk of failing – energy or gas supplier.

The tax has been introduced in response to the rising numbers of failed energy and gas firms. It is expected to last for one year but could be in place until 2025.

PIBPT will apply when a company or individual – including stakeholders and investors – prevents the assets of their gas or energy supplier or other public interest business from being available, therefore financially benefitting them instead. And in addition, when the unavailability of these assets inevitably result in the supplier going into special measures or creates an increase in business costs for firms already in special measures.

Under the new regulations:

  • ‘Public interest’ business refers to businesses which require a gas or electricity supply licence, although other markets and sectors could be included in this regulation in the future.
  • The tax is 75% of the asset’s adjusted value (‘adjusted’ being the total asset value reduced by 10%).
  • All forms of assets are included in this tax including contractual rights and forward purchase agreements.
  • There is a £100m threshold, so only assets with combined value of £100m and over will be subject to PIBPT.

We spoke to accountants and tax specialists to find out more about the PIBPT and what it will entail.

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PIBPT will only affect large energy producers with current agreements and forward contracts – not smaller firms 

Rachel Nutt, National Head of Tax and Renewable and Sustainable Energy Sector, Partner MHA Macintyre HudsonThe Public Interest Business Protection Tax is a new tax which has been introduced on profits that could arise where a business undertakes arrangements that realise a valuable asset for its own benefit and that of shareholders and as a result contributes towards the collapse of an energy supply business.

The tax:

  • Is set at 75% of adjusted value of realised assets noted above and will only apply to assets which exceed £100m.
  • Will affect large energy producers who have current agreements and forward contracts to hedge energy prices at a rate lower than the current inflated market rate.  Such companies may seek to monetise large profits on these contracts by terminating the agreements early.
  • May be extended by future regulations to other public interest businesses for which a Special Administration Regime (SAR) is in place.

Next steps: Accountancy firms representing large companies to which PIBPT applies should ensure their client is made aware of the rules. They should be fully advised when the tax may apply, should they be looking to terminate any forward contracts for the supply of gas and oil prematurely.

Verdict: PIBPT will only apply to very large energy companies and will not affect smaller firms. Any businesses PIBPT affects will need to be made aware of the rules.

Accountants should check if any energy sector clients have any plans which may trigger PIBPT

Christy Wilson, Associate at Katten Muchin Rosenman UK LLP

The PIBPT means that investors in public interest companies could face a tax of 75% of the ‘adjusted value’ of the assets of the company.

PIBPT arises where a business undertakes arrangements that realise valuable assets for its own/shareholder benefit, and as a result accelerate the collapse of the public interest business. It applies to persons holding assets for the benefit of a public interest business where the value of the assets exceeds £100 million.

This individual is principally liable for paying the tax, although companies associated with the principal taxpayer will be jointly liable for the tax. The timeframe for making a PIBPT return which is done by self-assessment, is 30 days with tax being payable within 15 days after that.

Next steps: Accountants may need to identify whether any of their clients who are in the energy sector have any business plans that are likely to trigger a charge under PIBPT.

Verdict: Check whether any existing energy sector clients have any business plans which may trigger PIBPT. 

Pension funds plus investors with 5% interest in such companies may also be affected by PIBPT

Indu Melvin, tax manager, Prime Accountants Group

Larger energy firms have benefitted from record profits as a result of an increase in energy prices while consumers are struggling to cope with spiralling energy costs. In response to this situation, the Government has introduced a Public Interest Protection Tax at a rate of 75% (on adjusted asset value) targeting energy companies.

Firms holding assets for the benefit of an energy supply business where those assets exceed £100 million will be affected. This will also include investors with at least a 5% interest in those companies. Pension funds may invest in these sectors and receive dividends from these companies so it may impact pensioners, too.

Next steps: Advise affected clients to review investor shareholdings, together with their connections to check to see how they will be affected if PIBPT is triggered on realisation of assets.

Verdict: Pension funds plus investors with 5% interest in such companies may also be affected by PIBPT

Navigate complex issues with ease

Get hours of expert insight and advice, interactive training and in-depth analysis of all the latest on taxation by attending our ever-popular AAT Tax Update series.

Book now

The AAT Bursary has got me one step closer to running my own practice

Posted by & filed under Bursary scheme.

AAT Level 4 student and Bursary recipient Charlie Miller, 42, took to accountancy “like a duck to water” when he began studying for an AAT qualification in 2020.

Since then, he has been awarded distinctions in both Level 2 and Level 3.

It’s an exciting new beginning for Miller, who left school early with no qualifications after moving home at the age of 15 and was later bedridden for years after developing a complicated connective tissue disorder.

And now, thanks to the AAT Bursary scheme, he’s well on his way to accomplishing his dream of running his own accountancy firm.

A tough start

“I left school at the age of 15 because I found it hard to fit in after moving from Glasgow to Darlington. That didn’t stop me working my way up to make a good living in telesales, but then one day I started to get joint pain in my wrists and hands.

Over time, the pain spread to my chest and just kept getting worse and worse, until I was bedridden and unable to work. Doctors struggled to diagnose my condition, and I also suffered lots of side effects from the medications they put me on – I was really very ill for about 10 years.

My wife Jane also gave up her job to become my full-time carer, so our financial position changed dramatically during that time. It forced me to re-evaluate my life completely, but as I learned to live with my condition and accept the lifestyle changes it forced me to make, I realised it was an opportunity to do what I really wanted to do.

So I went back to college to do my English and Maths GCSEs, and once I recognised that numbers were more my thing I applied to join the AAT Level 2 course at the same time.

Getting accepted onto the bursary scheme

I’m really grateful to my AAT Level 2 tutor for allowing me to study the course while I was doing my GCSEs, rather than having to wait for my results before starting Level 2. I was walking with a stick at that point, but going back to college really helped me to build my confidence back up.

I also started volunteering as a treasurer for a charity – DACYM – as soon as I started studying with AAT, both to gain experience in the field and to give something back to my local community.

I used student loans to finance my studies until Level 3, but when I found out about the AAT Bursary I applied on the day applications opened for the 2021-22 edition of the scheme.

I was quite surprised to be accepted, but it’s been a great help throughout my Level 4 course, even though I now have a part-time job with a local retail group called LD Mountain Centre.

Building blocks for the future

In the future, I think I’d like to go on to study for my ACCA qualifications. I’m always worried about my illness flaring up again, so it’s reassuring to think I could work for myself as an accountant.

In fact, the ability to go self-employed and have your own firm is one of the reasons I chose accountancy.

But I’m also keen to get more on-the-job experience, perhaps by working on a more full-time basis for a while after I’ve finished Level 4. Either way, I’m now excited about the opportunities available to me.

About the AAT Bursary

AAT is committed to improving social mobility within accountancy, which is why it offers annual bursaries to financially disadvantaged students like Miller.

The scheme is open to UK residents aged 16 or over, and includes the entire range of AAT qualifications for the entry level Access qualification all the way to the highest AAT qualification, the Professional Diploma in Accounting at Level 4.

For those accepted, it covers all the costs involved in taking the relevant qualification, from the training provider’s fees to the textbooks required – up to a maximum of £5,000 per student.

“Being awarded the Bursary has helped me to reduce my debts, especially as I have relied on student loans to fund my studies so far,” said Miller, who now lives near Newcastle.

“I’m very grateful and my advice to other students considering applying would be to go for it – you have nothing to lose!”

AAT Bursary scheme

You can read more about apply for the AAT Bursary and the eligibility requirements via the AAT website.

Further reading: