Realigned AAT professional qualification offers great opportunities for colleges and employers

Posted by & filed under Employers.

As of this year colleges and training providers in Scotland will be able to offer an exciting range of accountancy courses thanks to a relevelling of AAT qualifications.

From September, they will be able to offer a new AAT pathway designed to dovetail with school and pre-university qualifications. The changes are designed to make it more straightforward for students, school leavers and those pupils who are still at school to gain a well-respected professional qualification that is in high demand with employers.

The relevelling of the qualifications, undertaken to match the HNC and HND qualification pathway, offers a fast track into a career as a chartered accountant or entry to university. It also helps those students who are still at school to choose the right entry-level course for their career ambitions. For colleges and training providers, it offers an exciting opportunity to enable students to study for a professional qualification that can facilitate a career as a chartered accountant or entry into university.

While an AAT qualification can be a great entry level course for students, it can also count towards university entry. It offers student fantastic job prospects. Scottish employers take on 29,000 apprentices every year, which includes many starting out in their accountancy careers. What’s more, three-quarters (75%) of Scottish businesses who have hired apprentices believe their new learners have boosted productivity.

What are the new AAT pathways?

From 1st September 2022, AAT Level 2 Certificate in Accounting will be a SCQF Level 6 in Scotland (Highers equivalent), AAT Level 3 Diploma in Accounting will be a SCQF Level 7 in Scotland (HNC equivalent), and AAT Level 4 Diploma in Professional Accounting remains a SCQF Level 8 (HND equivalent).

This new AAT qualification pathway provides a flexible progression route into higher education. It also presents a fast-track opportunity to becoming a Chartered Accountant.  

The re-levelling also opens new funding opportunities to support a student’s  AAT studies. For example, AAT Level 3 Diploma in Accounting (SCQF L7) will now attract Student Awards Agency Scotland (SAAS) funding, giving an opportunity to gain a well-respected professional qualification that is in high demand.

By completing AAT Level 4 Diploma in Professional Accounting, which is on a level with the Higher National Diploma SCQD L8, students have the opportunity to apply to university or to pursue a professional accounting qualification.

What is the current situation?

Previously AAT qualifications at Level 5 and Level 6 were seen not offering a challenging enough breadth in the curriculum to school leavers. They were also felt to be too long for some mature learners. Now with the releveling the AAT qualifications are on the same level of Scottish qualifications (SQA) and align with AAT’s academic place in England.

What the financial benefits of studying the new relevelled qualifications?

The changes mean that under the Student Award Agency Scotland, there are new funding opportunities.

These include:

  • AAT Level 3 now attracts £600 funding towards costs – increase of £600.
  • AAT Level 4 now attracts between £1049 -1124 funding towards costs – increase of additional £449 – £524

While L3 will need to be delivered over a year to attract full funding, L4 can be delivered over 2 years attracting the same funding but will be pro-rota over this period.

The minimum number of credits to be eligible for SAAS funding is 30 SCQF credits or £321 per year.  L4 can be split Y1 min 30 SCQF Credits Y2 Min of 30 SCQF Credits. Funding will be given once per academic year meaning courses can have flexible start dates – August 1st to July 31st..

What are the benefits of the realignment of qualfications?

The AAT qualification offers a fast track to employment with huge career development potential. It provides a recognised in-demand professional qualification which has now been relevelled and realigned in order to mirror the HNC/HND traditional route. This makes it easier for students at school or school leavers to pick the right course and qualification for their needs.

With clearly defined pathways to chartered or Higher education, AAT could even get students into University, should they decide to study the AAT Level 4 Diploma in Professional accounting, which is on a level with the Higher National Diploma SCQF L8.

The qualifications are now aligned at the correct education level and provide the same progression opportunities as the SQA. For your prospective students, this will offer freedom of choice. It will enable a training provider or college to offer a professional qualification which they can be complementary to the current SQA provision.  

What does AAT qualification re-levelling in Scotland mean to a Training Provider?

The new relevelled AAT Qualification is now more attractive to students as it offers comparable levels of qualification to Scottish Highers/NC, HNC and HND courses. It also offers clear progress and routes into Chartered Accountancy qualifications or Universities.

Training providers and colleges have the option to add value to HNCs & HND courses with the inclusion of AAT Bookkeeping at Level 6 & Level 7. Both of these courses provide students with skills that employers are looking for.

Funding is available for these courses through the Flexible Work Force Development Fund (FWDF), Individual Training Accounts (ITA), Scottish Funding Council (SFC) and the Student Award Agency Scotland (SAAS).

SAAS Funding is now available for AAT Level 7, and there has been increased funding made available for Level 8. All AAT Units have SCQF credits attached and the AAT qualifications are included in the Modern Apprenticeship and Foundation Apprenticeship framework funded though Skills Development Scotland.

Modern apprenticeship opportunities

AAT Accounting Qualifications are universally respected and internationally recognised. Organisations such as Sainsbury’s, P&G, Morgan Stanley, the Ministry of Defence and many more continue to hire AAT qualified members for their knowledge, skills, diligence and enthusiasm, because AAT represents the highest standards of professionalism

In Scotland there are more than 70 different Modern Apprenticeship Frameworks and they are all designed to deliver a training package around a minimum standard of competence defined by employers.

There are four different levels of Apprenticeship in Scotland: SCQF 5 (SVQ 2), SCQF 6/7 (SVQ 3), SCQF 8/9 (SVQ 4) and SCQF 10 (SVQ 5). They all contain the same 3 basic criteria:

• A relevant SVQ (or alternative competency based qualifications)

• Core Skills (Career Skills at AAT L4/SCQF L8)

• Industry specific training

Employers who have taken on MAs are positive about the experience: 96% say those who’ve undertook a Modern Apprenticeship are more able to do their job. They also commented that MAs helped to improve productivity, staff morale, and service and product quality.

Accountancy MA Frameworks have been developed by the Financial Skills Partnership (FSP), the Sector Skills Council for finance, accountancy and financial services. 

There are currently 13 AAT accredited training providers in Scotland, 9 colleges and 4 private providers. A further 5 are in the pipeline and are close to full approval status.

What are the Modern Apprenticeship Framework details?

SCQF Level 5: Aimed at people who are hoping to or are currently working in roles including accounts assistant, cashier, credit control clerk, finance assistant, purchase ledger clerk or sales ledger clerk.

SCQF Level 6: Aimed at people who are hoping to or are currently working in roles including trainee accounting technician or assistant accountant.

SCQF Level 8: This apprenticeship will enable people to become a qualified accounting technician or accounts manager.

For more information on how your college or training centre can provide this training, contact your Regional Account Manager Team or find out more information here.

More information and further reading:

New AAT qualification structure gives Scottish students new career and further study opportunities

Posted by & filed under Students.

Students and pupils in Scotland have an exciting new range of accountancy qualifications available to them thanks to a relevelling of AAT academic study.

As of this year, a new AAT qualification pathway will make it more straightforward for students and those at school to gain a well-respected professional qualification that is in high demand with employers.

The relevelling of the qualifications offers a fast track into a career as a chartered accountant or entry to university. It also helps those students who are still at school to choose the right entry-level course for their career ambitions.

What are the new AAT pathways?

From 1st September 2022, AAT Level 2 Certificate in Accounting will be a SCQF Level 6 in Scotland (Highers equivalent), AAT Level 3 Diploma in Accounting will be a SCQF Level 7 in Scotland (HNC equivalent), and AAT Level 4 Diploma in Professional Accounting remains a SCQF Level 8 (HND equivalent).

This new AAT qualification pathway provides a flexible progression route into higher education. It also presents a great fast track opportunity to becoming a Chartered Accountant.  

The re-levelling also opens new funding opportunities to support your AAT studies. For example, AAT Level 3 Diploma in Accounting (SCQF L7) will now attract Student Awards Agency Scotland (SAAS) funding, giving you a fantastic opportunity to gain a well-respected professional qualification that is in high demand.

By completing AAT Level 4 Diploma in Professional Accounting, which is on a level with he Higher National Diploma SCQF L8, students have the opportunity to apply to university or to pursue a professional accounting qualification.

What is the current situation?

Previously AAT qualifications at Level 5 and Level 6 were seen not offering a challenging enough breadth in the curriculum to school leavers. They were also felt to be too long for some mature learners. Now with the releveling the AAT qualifications are on the same level of Scottish qualifications (SQA) and align with AAT’s academic place in England.

What the financial benefits of studying the new relevelled qualifications?

The changes mean that under the Student Award Agency Scotland, there are new funding opportunities.

These include:

  • AAT Level 3 now attracts £600 funding towards costs – increase of £600.
  • AAT Level 4 now attracts between £1049 -1124 funding towards costs – increase of additional £449 – £524

What are the benefits of the realignment of qualifications?

The AAT qualification offers a fast track to employment with huge career development potential. It provides a recognised in-demand professional qualification which has now been relevelled and realigned to mirror the traditional route. This makes it easier for students at school or school leavers to pick the right course and qualification for their needs.

With clearly defined pathways to chartered or Higher education, AAT could even get you into university, should you decide to study the AAT Level 4 Diploma in Professional accounting, which is on a level with the Higher National Diploma SCQF L8.

Why study with AAT?

Employers love AAT because it provides industry designed qualifications, transferrable skills, CPD/life-long learning and career opportunities.

AAT qualifications are highly respected internationally and are regulated by all four UK qualification regulators, including Ofqual (England), CCEA (Northern Ireland), SQA (Scotland) and Qualifications Wales.

Key takeaways

  • The relevelling aligns AAT qualifications with equivalent Scottish HNC and HND certifications
  • New funding is now available for your study
  •   This new AAT qualification pathway provides a flexible progression route into higher education including University.
  • It also presents a great fast track opportunity to becoming a Chartered Accountant.  

See who is offering training in your area

More information and further reading:

Should the Government change tax registration for the self-employed and landlords?

Posted by & filed under Members, Tax reform.

The Government wants feedback on the case for reforming registration for Income Tax Self-Assessment (ITSA) for individuals with income from self-employment or property.

At present, individuals must give HMRC notice of liability no more than six months after the end of the tax year in which the taxpayer became liable. As this obligation is tied to the tax year, the timing of the obligation in relation to the start of self-employment can be very different for different people. For example, an individual who starts self-employment on 5 April 2022 needs to tell HMRC by 5 October 2022 (6 months) whereas an individual who starts self-employment one day later, on 6 April 2022, does not have to tell HMRC until 5 October 2023 (18 months).

Proposals for reform

The Government is suggesting that the current deadline of 6 months from the end of the tax year in which the taxpayer becomes liable could be reduced to 1, 2, 3 or 4 months but this does nothing to solve the disparity depending on the point in the tax year that the business starts – as some would still have over a year in which to notify.

AAT members views

The above proposal for reform proved deeply unpopular with AAT Licensed Accountants, with just 5% backing the idea in a 2022 survey on the subject.

In fact, 40% of AAT Licensed Accountants want the existing time periods to remain untouched and 10% suggested they should be lengthened.

However, there was also strong support for the idea of completely breaking the link with the tax year. 40% of AAT members agreed that “…there should be a new obligation to tell HMRC about the new self-employment or property income at a specified period after it starts rather than there being any connection to the tax year.” A further 5% would like a reduction but are unsure by how much.

A reduction and delinking from the tax year was also the overwhelming view of members of the AAT Tax Panel who met in January 2022 to discuss the issue.

International examples

Delinking registration with the tax year reflects the situation in a number of other countries. For example, in Rwanda anyone opening a business is obliged to register for tax within 7 days of starting their business activity.

With particular regard to landlords, in Poland anyone earning rental income is required to make monthly calculations and payments to the Polish Tax Office by the 20th of the month, following the month in which rent was received. This appears to work reasonably well but the example of Singapore is perhaps best given there is no need to calculate liability based on a particular day of the month.

In Singapore landlords must notify the authorities within 15 days of the start of their tenancy agreement. This is all done entirely online via a dedicated portal. This is also required for any rent increases i.e. they must be registered online within 15 days of coming into effect. Failure to comply results in a hefty fine of 5,000 Singapore Dollars (just under £3,000) plus interest.

Next steps

In choosing between a reformed obligation or a completely new obligation, AAT would probably favour a new obligation given this would address more of the existing problems with the process and deliver greater benefits to all.

As the Call for Evidence states, if taxpayers interact with the tax system early, they get the best opportunity to understand their tax obligations and prepare for paying tax. Likewise, AAT recognises that for many self-employed taxpayers, registering for ITSA also opens the door to important additional benefits, such as paying Class 2 National Insurance Contributions to build entitlement to a state pension, accessing tax free childcare or the construction industry scheme.

A change to a completely new obligation would also address a sizable issue with regard to simplicity and fairness whereby some are required to notify within six months and others have up to 18 months to do so, with the discrepancy based on nothing more than the day on which they started their business.

Reducing the tax gap and increased revenue for the Exchequer are naturally benefits that need to be considered too.

Given most AAT Licensed Accountants (85%) believe the current ITSA registration process is not well understood by the self employed or landlords or only understood with the help of an accountant or other professional, the case for reform appears to be significant.  

Accountants want to help

Finally, when surveyed earlier this month, an overwhelming 95% of AAT Licensed Accountants expressed a desire to register their clients for ITSA. None stated they did not know or required more information. And only 5% said they preferred not to get involved in the registration process on the client’s behalf.

As a result of this very clear support from its membership, AAT also supports the idea of utilising intermediaries, such as accountants, to improve tax registration and has urged HMRC to further explore such possibilities as soon as possible.

Further information

The Government Call for Evidence closes on 22 February 2022 and can be accessed in full here:

https://www.gov.uk/government/consultations/call-for-evidence-income-tax-self-assessment-registration-for-the-self-employed-and-landlords or you can email your views direct to: [email protected]

Licensed members could be suspended for ignoring HMRC letters

Posted by & filed under Anti-money laundering, Members.

Licensed members could face suspension as agents if they fail to provide AML information

Some licensed members are being caught out by letters from HMRC asking for confirmation of their anti-money laundering supervision (AML).

HMRC has begun the process of writing to agents to confirm who supervises them for anti-money laundering (AML) regulation purposes. The letter includes a questionnaire to be completed and returned to HMRC and must be accompanied by documentary evidence of your AML supervision.

If AAT is your firm’s registered supervisory authority then you should provide HMRC with your AAT number together with a copy of your practising certificate and licence approval or renewal letter (for the current renewal period) that confirms AAT is supervising you.

While this information should satisfy their request, please do contact us if you are having any difficulty with this process or you are unable to locate your paperwork.  

The impact of ignoring or failure to provide a satisfactory response to the HMRC letter is stark and may result in the suspension of access to your HMRC online agent services.

Loss of access to your agent portal means your day-to-day activities and interactions with HMRC on behalf of clients are massively compromised. Members will be unable to file any returns on behalf of their clients until the codes have been re-instated which can take five working days or more.

AAT therefore encourages members to reply promptly to this information request.

What you should know about navigating the energy crisis

Posted by & filed under Energy crisis, Members.

How should accountants prepare businesses to deal with the fallout from a chaotic energy market?

The UK is facing an energy crisis. Gas market prices have reached new highs, surpassing records only set in October. Prices have risen from 54p to £4.50 per therm of gas.

Cold weather and increased demand for supplies will further increase prices. And the effects will be felt by businesses, not just householders.

The Federation of Small Businesses (FSB) say rising energy costs are now a ‘top concern’ among small businesses. 45% of nearly 1,300 firms surveyed had experienced increased business costs over the past three months due to rising energy prices.

The worst affected businesses include:

  • those in the hospitality sector, who have already been hit hard by the pandemic;
  • microbusinesses employing fewer than 10 staff who may not have the in-house expertise to shop around for better energy deals; and
  • those unable to negotiate better long-term deals due to cash flow issues.

We spoke to a few accountants to find out what steps businesses should be taking to help mitigate the worst effects of the rising energy crisis.

Use rising energy prices as an opportunity to review all business costs

Ben Brookes, partner, Wellers

Rising energy costs will impact energy-dependent businesses. It’s important that such businesses have revised the budgets they have in place and reviewed their pricing structures to accurately reflect the changing situation.

The first thing to do is make sure that all energy suppliers are reviewed. If fixed-price contracts are in place, ensure that budgets are updated to reflect the impact of the contracts ending.

For some businesses, it may be an opportunity to invest in more sustainable energy sources, but as most businesses’ finances are stretched by the ongoing pandemic, and will be for a time, there is a need to assess the business case and any cash flow impact of such an investment. If businesses are going to invest, then they may wish to access funding from the likes of the recovery loan scheme, or another government backed funding opportunity.

Next steps: use rising energy costs as an opportunity to review all business costs. Making savings in other areas of the business could then offset any energy price increases, reducing the strain on the business.

Verdict: Use as an opportunity to revisit all business costs and ensure pricing structures are reviewing to active reflect changing situation.

Green energy transition could mean long-term volatility

Fraser Campbell, UK head of accounts and business advisory, Azets
For manufacturers and other major energy users, rising energy costs will impose further cost-drag on post pandemic recovery. Of most immediate concern would be the impact on embattled hospitality sector where energy costs are a relatively significant overhead.

Short term solutions are extremely limited, except for shopping around for the best deal. Longer term planning and investment is inevitably needed to reduce energy consumption. Everything from insulation and lighting to more efficient or novel power sources for machinery, processes and vehicles are long term investments that take planning, time and money. Energy price volatility is probably here to stay as we transition to a greener future. There are some great examples where wholesale rethink of business processes and energy sources & recycling have both reduced cost and environmental impact. Again, there are no quick fixes – this requires vision, strategy, planning and investment and must form a key part of all SMEs’ business planning.

Next steps: It is prudent for all businesses to start thinking about how overall energy consumption can be reduced over time through business process changes and investment.

Verdict: There are no quick fixes to mitigating rising costs but businesses should start thinking about their overall energy consumption sooner rather than later.

Plan ahead to ensure rising costs don’t eat into greener heating tech investment

Nick Paterno, managing partner, McBrides

Rising energy costs will be significant for businesses from all sectors, particularly those that are energy intensive. It could be even worse when you combine it with what businesses will need to do to comply with the government’s thinking around COP26 and legislative changes being brought in to achieve climate change goals.

For example, if you’re looking into investing in new greener heating technology for your business premises and you want to start putting money aside for it, will this contribution towards your new technology fund be depleted by your rising energy bills? 

It will be interesting to see if rising energy bills encourage firms to keep their employees working from home and possibly downsize their premises.

Verdict: Businesses must plan ahead and to ensure rising costs don’t end up eating into new greener technology investment.

Conduct detailed research into energy market when contracts due for renewal

Sherad Dewedi, managing partner at Shenward

Rising energy costs are certainly up there at the top of the ‘concerns’ list. And more so, because of the financial struggles, some businesses are set to experience as the knock-on effect of the pandemic continues.

For those who’ve moved completely to remote working and given up their offices, the direct impact of rising energy costs isn’t as simple as increased outgoings on household energy bills. Many have to look at whether the salaries they are paying to employees incorporate the rising cost of energy and the cost of living. Inflation is affecting the cost of most things and coupled with the increasing energy prices, the national minimum wage just won’t cover it.

For those businesses whose contracts are due for renewal, they should expect a significant increase in energy costs – which are likely to exceed inflationary increments. This could have a direct impact on the business’s ability to maintain profit margins and will have the tough choice of whether to pass on all or some of these costs to their customers without risking losing their market share. This is something that will need to be included in the pricing matrix and the forecast for the year.

Next steps: Costs can be mitigated by undergoing detailed research into the market when contracts are due for renewal. Businesses should consider alternative suppliers but also consider the counterparty risk of choosing a supplier who already will be facing financial difficulty. It could be an option to consider shorter contracts in the hope the market corrects itself in the future.

Verdict: Conduct detailed research into the energy market when contracts are due for renewal.

Government considers tax registration changes for the self-employed and landlords

Posted by & filed under Tax.

The Government is currently seeking views on the case for reforming registration for Income Tax Self-Assessment (ITSA) for individuals with income from self-employment or property.

At present, individuals must give HMRC notice of liability no more than six months after the end of the tax year in which the taxpayer became liable. As this obligation is tied to the tax year, the timing of the obligation in relation to the start of self-employment can be very different for different people. For example, an individual who starts self-employment on 5 April 2022 needs to tell HMRC by 5 October 2022 (6 months) whereas an individual who starts self-employment one day later, on 6 April 2022, does not have to tell HMRC until 5 October 2023 (18 months).

Proposals for reform

The Government is suggesting that the current deadline of 6 months from the end of the tax year in which the taxpayer becomes liable could be reduced to 1, 2, 3 or 4 months but this does nothing to solve the disparity depending on the point in the tax year that the business starts – as some would still have over a year in which to notify.

AAT members views

The above proposal for reform proved deeply unpopular with AAT Licensed Accountants, with just 5% backing the idea in a 2022 survey on the subject.

In fact, 40% of AAT Licensed Accountants want the existing time periods to remain untouched and 10% suggested they should be lengthened.

However, there was also strong support for the idea of completely breaking the link with the tax year. 40% of AAT members agreed that “…there should be a new obligation to tell HMRC about the new self-employment or property income at a specified period after it starts rather than there being any connection to the tax year.” A further 5% would like a reduction but are unsure by how much.

A reduction and delinking from the tax year was also the overwhelming view of members of the AAT Tax Panel who met in January 2022 to discuss the issue.

International examples

Delinking registration with the tax year reflects the situation in a number of other countries. For example, in Rwanda anyone opening a business is obliged to register for tax within 7 days of starting their business activity.

With particular regard to landlords, in Poland anyone earning rental income is required to make monthly calculations and payments to the Polish Tax Office by the 20th of the month, following the month in which rent was received. This appears to work reasonably well but the example of Singapore is perhaps best given there is no need to calculate liability based on a particular day of the month.

In Singapore landlords must notify the authorities within 15 days of the start of their tenancy agreement. This is all done entirely online via a dedicated portal. This is also required for any rent increases i.e. they must be registered online within 15 days of coming into effect. Failure to comply results in a hefty fine of 5,000 Singapore Dollars (just under £3,000) plus interest.

Next steps

In choosing between a reformed obligation or a completely new obligation, AAT would probably favour a new obligation given this would address more of the existing problems with the process and deliver greater benefits to all.

As the Call for Evidence states, if taxpayers interact with the tax system early, they get the best opportunity to understand their tax obligations and prepare for paying tax. Likewise, AAT recognises that for many self-employed taxpayers, registering for ITSA also opens the door to important additional benefits, such as paying Class 2 National Insurance Contributions to build entitlement to a state pension, accessing tax free childcare or the construction industry scheme.

A change to a completely new obligation would also address a sizable issue with regard to simplicity and fairness whereby some are required to notify within six months and others have up to 18 months to do so, with the discrepancy based on nothing more than the day on which they started their business.

Reducing the tax gap and increased revenue for the Exchequer are naturally benefits that need to be considered too.

Given most AAT Licensed Accountants (85%) believe the current ITSA registration process is not well understood by the elf employed or landlords or only understood with the help of an accountant or other professional, the case for reform appears to be significant.  

Accountants want to help

Finally, when surveyed earlier this month, an overwhelming 95% of AAT Licensed Accountants expressed a desire to register their clients for ITSA, with none stating they did not know or required more information and only 5% stating, “I would NOT like to get involved in the registration process on my client’s behalf.”

As a result of this very clear support from its membership, AAT also supports the idea of utilising intermediaries, such as accountants, to improve tax registration and has urged HMRC to further explore such possibilities as soon as possible.

Further information

The Government Call for Evidence closes on 22 February 2022 and can be accessed in full here or you can email your views direct to: [email protected]

Revise smarter with the AAT revision plans

Posted by & filed under Ready, Set, Go.

Power up your study and revision skills with advice from our experienced tutors.

Study methods and skills series

In the final article of our study methods and skills series, we’re looking at studying outside of the classroom. Whether you’re a distance learner or simply doing homework, the main study skills are the same.

Study timetable

You should already have a study timetable in place from the previous article, which shows you:

  • when you’re attending taught sessions (online or offline)
  • when you’re self-studying
  • and when you’re relaxing.

Download the study timetable here if you haven’t done this yet, and check out this article for guidance on filling it out: Study in chunks with AAT’s study timetable.

A well-planned schedule is one of the keys to successful study. It’ll enable you to space out the required number of study hours per unit, factoring in ‘down time’ for your brain to relax and unwind.

Your unit revision plan

Your study timetable from the previous article will help you maintain a schedule with your studies and social time, establishing a pattern to keep you on track.

Alongside this, you then need to fill out a unit revision plan and overall revision plan, breaking down each unit into bite-size revision chunks, and planning out how you’ll revise the unit effectively over time. Download your AAT unit and overall revision plans here

Hopefully your provider has given you guidance on this, but it may be something you have to create on your own. Ultimately it’s your responsibility to stick to it and keep yourself on track.

The unit revision plan has a slot for you to fill in the date your exam is booked for; don’t ignore this. It’s advantageous to book your exam at the planning stage – to motivate you to work towards a specific goal.

And if you’re reading this during the Covid-19 lockdown, then set a date for when lockdown might be over and when you’d hope to take your exam. It’s helpful to have a specific goal in mind, like an exam-date, to keep you motivated. And if lockdown restrictions are still in place when the date comes, you will simply shift it to later. But you’ll know you were ready for that date.

One of the main problems distance learners face is actually sitting their exams. Avoid this by booking your exam as part of establishing your revision timetable and plan, and commit to finishing your studies for that date.

With the revision plan in place, it’s time to get started with studying at home, using those home-based study skills we referred to in the first article on choosing your study method. 

Strategies for getting started

The most important skill is the ability to actually get started. 

This applies to your very first study session, and every session thereafter. It does get easier once you’ve established a routine, but self-regulation or self-discipline is key.

1. Short-term targets and rewards

People tend to say, “think about how great it’ll feel to complete your course,” but for many students, that’s simply too far away to be a meaningful goal. Instead, we recommend you set short-term targets with frequent rewards. 

The greater the target, the larger the reward. So if there’s a particular topic you know will be a real struggle for you to study, then set aside a big reward for completing that topic, e.g. a shopping spree, or a full day off to enjoy yourself.

2. Chunking your work

Another way of dealing with the daunting task of starting to study is to think small. 

If you can’t face three hours of study (and we recommend smaller time frames anyway), how about simply thinking about getting your books out or switching on the computer. 

Then make yourself a cup of coffee. 

Wander back to your study place and open the right page. 

Maybe do one question or read one paragraph. 

Before you know it, you’re deep into your studies without that feeling of dread at the amount you have to do.

What you’ve done here is chunked the task into very, very small pieces.  A bit like looking at a large pile of ironing. You can’t face doing it all, but might just be able to do one t-shirt, then maybe another, and finally something more challenging, like a shirt. 

Of course, some people like ironing, but then some people find it easy to start studying too.

Study materials

Now let’s think about the materials available to you. 

1. Pre-recorded videos

If you’re watching pre-recorded videos (which vary from fully-scripted, animated videos with subtitles, to listening to someone talking over a document with a highlighter), think about how you’ll interact with the video. 

Depending on the length, you may want to watch it once and then a second time taking notes. Make sure you copy down any words or calculations you think are important in your learning points & theory notebook. 

The great benefit of video is you can pause and rewind, watching the same bit again and again, going through an example very slowly. 

Note the bits that you find difficult and see if you can research them further. You can revisit videos as part of your revision so make sure you know which topics are covered where.

2. Textbooks and written learning materials

Similarly, with textbooks and written learning materials which are explaining theory, write notes in your own words into your notebooks. 

Scientific experiment has shown that if you write something down, even if you never read it again, you’re more likely to remember it.

3. Talking through what you’ve learned

Walking and talking really works. 

If you can, take someone (or the dog) for a walk and discuss what you’ve been learning. Or go by yourself and talk in your head. 

Great scientists like Charles Darwin and more recently Professor Higgs (of Higgs boson fame) went for long walks, and discussed or thought-through their theories, gaining inspiration on foot. 

Scientific studies have shown this is really effective when trying to sort stuff through in your head. It’s particularly good if you’ve hit a wall, and just can’t understand what you’re looking at. 

Leaving the subject for a short while and doing something else that doesn’t take much brain power (like walking) allows your brain to get on with figuring it out in the background. How often do you forget something, only to remember it later?

A great debate with fellow students also really helps.

4. Flash cards

Use flashcards.

They may seem a bit old-school now, but the scientific evidence for the effectiveness of flash cards is in no doubt. If used correctly, they can help you access details from your long-term memory. 

Create flash cards as you progress through your studies, summarising key points in enough detail for the level of study. When exam time starts getting close, you’ll have a fantastic resource at your finger tips.

Get a critical friend to quiz you with your cards regularly. This will help embed early course materials alongside more recent material. 

Practice, practice and practice – including for the dreaded written questions. 

If you don’t practice, you won’t do well!  Remember that it is ok to get questions wrong if you learn from the experience, when you find a similar question in the future you can pat yourself on the back if you spot where you went wrong last time and avoid the same error.  Consider this point; falling over is just another way of regaining your balance.

In summary

Overall, when revising, look closest at your weaker areas. Focus your studies on these topics and you’ll set yourself up well for your assessments. Plus, difficult study earns big reward.

And whilst practice assessments are invaluable as a resource (and can be found on the AAT Learning Portal), don’t fall into the trap of just learning how to do the practice assessments. Make sure you go deeper with your studies and really understand each topic fully when you study it.

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Browse the full range of AAT study support resources here

Sort out your own money: 10 New Year resolutions for your personal finances

Posted by & filed under Students.

Accountants spend all their time looking after other people’s money, but sometimes their own personal finances could do with a money MOT.

Here are some quick and simple New Year Money Resolutions that you can incorporate to help make your money work harder for in 2022.

1. Clear your debt

Look at all your debts and find out how much interest you are paying on each one. Tackle the debts with the highest interest rate (known as Annual Percentage Rate) first.

Set up direct debits to pay off your credit card and household bills so you don’t miss a payment. Set aside a time once a week to review your finances and how much you are spending and saving. Make a note in your diaryfor a month before your insurance comes up for renewal, so you can shop around and find the best deals. From January 2022, insurers will have to offer the same deal to new and existing customers, so you may find that rates and premiums rise as a result.

2. Manage your spending

A very simple way to keep tabs on where your money goes and identify “leaking” cash is to keep a log of what you spend every day. You can do this on a spreadsheet, a notebook or a money management app like Emma, Money Dashboard or Plum.

You’ll be amazed how small amounts of habitual spending add up to significant amounts.

Get into the habit of saving on the essentials of life – finding cheaper petrol and combining your usual supermarket shop with a visit to one of the discount supermarkets for non-branded essentials. Cancel non-essential direct debits like gym membership and magazine subscriptions if you don’t use them.

3. Seek help if you can no longer cope with your debts

There are a number of debt charities which offer free advice and counselling. You should not have to pay for debt advice, so avoid companies which want to charge you.

Free debt charities include StepChange Debt Charity, National Debtline and the Citizens Advice Bureau. 

4. Start to make savings

Once you have started to clear your debt and freed up more money you can begin to save. It is a good idea to think about savings in three separate pots: short term (for emergencies), medium term (for a house deposit or college) and long term (your pension and retirement savings).

As interest rates are historically low at present, so you will probably have to consider an equity-based (shares) investment for your longer term savings goals.

5. Use your ISA allowance

Sean McCann, Chartered Financial Planner at NFU Mutual, says anybody aged between 18 and 40 who is saving for a house deposit may want to consider a Lifetime ISA.

“You can invest up to £4,000 a year and get a 25% increase from the government on top,” he says.

One of the most effective medium to long term savings vehicles is an Individual Savings Account (ISA).

“You can shelter up to £20,000 a year in an ISA, and all income and growth is completely tax free. Assets can also be passed between spouses without triggering a tax bill, so between you, you can shelter £40,000 a year in ISAs,” says Sarah Coles, senior personal finance analyst, Hargreaves Lansdown.

6. Make the most of the annual dividend allowance

Everybody can receive £2,000 of dividends from shares each year tax free.

“If you receive more than £2,000 in dividends, you can transfer shares to your spouse or civil partner tax free, so that they can make use of their £2,000 tax free allowance,” says Sean McCann.

“Dividend Tax is increasing by 1.25% in April, making it even more appealing for married couples and civil partners to gift shares or investments,” he says.

7. Prepare for mortgage rate rises

The pain for around 2 million mortgage borrowers on variable rates will be swift, following the Bank of England’s interest rate rise in December 2021, says Sarah Coles.

“It’s not going to mean particularly eye-watering rises, and UK Finance figures show the typical SVR customer would pay just under £10 more a month. However, this is unlikely to be the last of the rate rises,” she says. “If rates go up to 1%, that boosts the typical SVR customer’s monthly payment by £57, which is a difficult sum of cash to find, particularly when prices are rising on all sides.”

Borrowers affected by hikes should consider remortgaging as soon as possible. In many cases a fixed rate deal looks like a sensible option, and it’s worth considering a longer fix.

“Rates had already gone up ahead of the rate rise, but we’re still around historic lows, so now is the time to act. If you’re on a fixed rate with less than six months left to run, you can book in a new rate now, so don’t wait for your deal to expire,” she says.

8. Get savvy about Higher National Insurance

On April 6, 2022 National Insurance will rise 1.25 percentage points, to 13.25% on earnings between £9,564 and £50,268, and 3.25% on earnings above this. It will have a disproportionate impact on lower earners, because it kicks in at a lower wage level than income tax and basic rate taxpayers pay a higher rate than those on bigger salaries. It also hits younger people, because when you’re over state pension age, you don’t have to pay National Insurance. It’s the first step towards the introduction of the Health and Social Care Levy the following April, which will extend the charge to anyone with earned income above working age too.

“If you’re worried about National Insurance, you can cut your tax bill and boost your pension if your employer offers a salary sacrifice scheme,” says Sarah Coles.

“These effectively cut your pay, and boost pension contributions by an equivalent amount. Because you don’t pay tax or NI on pension contributions, the full value of the cut in salary goes into the scheme. This won’t leave you better off today, because you’ll get less in your pay packet, but it means you’ll be boosting your income in retirement instead of handing over more to the taxman.”

9. Boost your pension

Saving in a pension is a tax-efficient way to save for the long term. It is a good idea to review your pension performance annually to check whether you are on course to meet your retirement needs, or whether you are saving too little, or too much and coming close to the annual “Lifetime Allowance” in pension funds. If you have the opportunity to join a pension scheme at work, you can make the most of the employer contributions as well. If you are a sole trader, a Self Invested Personal Pension (SIPP) is a good option.

10. Ensure you are properly protected

Having the correct life insurance in place is this particularly important if you have dependents. Depending on whether you have any children, you might want to write a will and set up a Power of Attorney for health and financial issues. If you have a workplace pension it may come with Death in Service Benefits for your spouse or dependants. If you are self-employed, you can set up simple life insurance cover online.

Further reading

Do plans for corporate re-domiciliation in the UK go far enough?

Posted by & filed under News.

Late last year, the Government announced plans to introduce a corporate re-domiciliation regime in the UK, allowing foreign companies to re-domicile and therefore making it easier to relocate to the UK.

A joint HM Treasury, HMRC and BEIS public consultation on the issue finished last week.

AAT responded to the consultation stating that it supports the principle of the UK aligning its re-domiciliation approach with its international competitors in order to attract more companies to invest in the UK (and pay UK taxes) providing opportunities for abuse are kept to an absolute minimum and that it is implemented in a way that maximises opportunities for the UK.

International considerations

Given so many other countries already allow for re-domiciliation, aligning our approach with international peers is likely to enhance the UK’s attractiveness as a destination to locate business, bring increased investment and skilled jobs into the UK, and as the consultation noted, increase demand for professional services within the UK. 

AAT notes that the Government is not currently proposing to allow entities to redomicile from the UK into a jurisdiction outside the UK and can understand the rationale for this given the policy proposal is aimed at attracting businesses to the UK rather than making it easier for companies to leave.

However, given a successful re-domiciliation regime requires mutual recognition and compatibility with other jurisdictions i.e. the origin jurisdiction must accept a migration to the UK, it is highly likely that other countries would require reciprocal arrangements. Whilst the Government is correct to highlight the examples of Singapore, Ireland and soon Hong Kong, as not permitting outward re-domiciliation, these countries are the exception rather than the norm. As a result, AAT believes that the Government must give serious consideration to simultaneously permitting outward as well as inward re-domiciliation.

AAT notes that the Government is not minded to prescribe a minimum turnover/size of companies that can re-domicile. Unfortunately no rationale or indeed any information is provided as to why. It may be that imposing such criteria could reduce the potential for tax or other forms of financial abuse as well as reducing any administrative burden on Companies House, HMRC and the Treasury by avoiding the re-domiciliation of very small companies unlikely to bring any financial benefit to UK plc.

In Singapore for example, the re-domiciling company must have either a minimum of 50 employees or a turnover in excess of S$10m.

Tax

Clarity around tax is essential. Furthermore, AAT believes that any re-domiciliation must lead to the entity being considered as UK resident for tax purposes as this is the simplest, clearest and fairest approach. The alternative, of only treating re-domiciled entities as UK resident if the central management and control is in the UK, will in some cases lead to considerable complexity, uncertainty, costly legal arguments and increases the potential for avoidance. AAT agrees with the Government that it is important that the UK attracts additional investment in the UK. However, it must be on the basis that such businesses pay a fair share of tax.

Potential for abuse

The Government has proposed a track record requirement to prevent a business from simply establishing itself as a legal entity in an overseas jurisdiction before immediately redomiciling in the UK. In practice this is no more than requiring the company to pass its “first financial period end”. Whilst recognising the need to attract all types of company, including those in their initial stages of growth, this appears to be unduly generous. Three years would appear to strike a better balance between attracting companies at an early stage and avoiding those seeking to exploit the system. Three years is commonly accepted in other areas of UK financial affairs. For example, a track record of three years is usually required before the self-employed can obtain a mortgage and a track record of three years is required before a company can list on the stock market in the UK.

On the issue of loss importation, whereby non-UK resident companies become UK resident in order to set foreign losses against the UK profits of other group companies (under the UK’s group relief provisions), this is a material risk that AAT believes requires additional protections. It is also worth highlighting that whilst some companies may not initially re-domicile for this purpose, they may seek to take advantage of the UK’s group relief provisions in years to come should their financial position in the UK and other countries make doing so more attractive. It is therefore essential that Government addresses this issue before finalising its plans to allow corporate re-domiciliation.

How the audit sector is turning to apprenticeships to fix the talent pipeline

Posted by & filed under Apprenticeships.

The audit sector is increasingly turning to apprenticeships to solve talent problems, and AAT is playing a big part.

Whenever new recruits begin at RSM, they receive a visit from the CEO, Rob Donaldson, who gives an inspiring talk chronicling his own journey at the audit firm. As he tells them, 30 years ago he was also in their shoes, about to start studying AAT as a trainee. And now? He’s the boss.  

Rob’s career path – he later built an M&A offering at the firm and led RSM’s national corporate finance and restructuring advisory business – illustrates what could happen when a new starter enters an organisation and rises through the ranks thanks to the knowledge they amass through training and while on-the-job.

How to build a great career with an AAT apprenticeship

Have you considered an apprenticeship as a route to gaining your qualification and getting the skills needed to progress your career? Do you have unanswered questions about how they work, who they are for and what roles that can lead to? Look no further, hear from us, along with Network Rail and Whyfield Accounting Services, to find out the answer to these and many more questions.

Watch now

His story also shows there’s a special quality that comes from employees that have been nurtured in-house. It’s particularly important in audit, where it can take many years to acquire the accuracy and investigative skills needed to thrive in the profession.

In recent years many audit firms have established their own internal apprenticeship schemes (Mazars was the latest, launching its scheme last autumn) to harness this. Here, leading audit bosses tell us how apprentices can bring diversity and a youthful approach to their teams, as well as being a wellspring of bespoke talent for many years to come.

Apprentices are perfect for audit as they can be trained towards the skills and values of the firm

Many businesses believe apprentices add greater value than university graduates or experienced employees because their skills can be developed in line with those required by the company. As such, it gives organisations an opportunity to mould the workforce they want, at a much earlier stage. It’s no different in audit.

“Our school-leavers often tend to be successful later down the line, because they’ve learned from the ground-up, are very pliable and hungry to learn,” says Miranda Smith, head of professional development at accountancy firm Mazars, which introduced its first audit apprenticeship in September 2021.

“When we invest in their AAT training, they really do bring these skills and knowledge back into the workplace. Not only that, but they also support others by mentoring new school-leavers and apprentices.”

Accounting giant KPMG offers an apprenticeship scheme within its audit team. Helen Organ, early career development manager comments:

“Apprentices can be better than graduates in the sense they’ve acquired more work experience while at KPMG,” she says. “Because they are on a five-six-year programme, we can shape how they work, meaning they can get a deep understanding of our business and the clients.

“By doing these junior and foundation tasks, we can build the workforce from the bottom upwards. By the time they finish the scheme, they have the equivalent of a graduate, plus they’ve got five-six years of experience behind them.”

Apprentices can strengthen the diversity of audit teams

With many youngsters from less affluent backgrounds choosing not to pursue a career in audit because of the traditional recruitment process or the financial barriers of university study, apprenticeships are a brilliant way of giving them hands-on experience in the sector.

Bringing these apprentices into an organisation can not only address any issues surrounding lack of diversity in the workplace, but also make good business sense. “It’s really important our workforce reflects the people we work with,” says Helen Bloodworth, senior manager, professional qualifications at RSM. “If you’ve got a whole mix within an audit team, it helps build relationships with the client, ensuring the job gets done in an effective manner.”

“It’s really important that we don’t want to shape all young recruits the same; we don’t want robots,” adds KPMG’s Organ. “Having the apprenticeship scheme within audit has definitely made the workforce more diverse.”

Audit needs tech-savvy talent: many apprentices have these skills already

Young apprentices may not have stacks of work experience, but they do possess skills that more senior colleagues don’t, such as a grasp of tech. This obviously helps any audit teams helping their clients undergo digital transformations. Audit teams encourage apprentices in using this tech knowledge, with Mazars’ Smith noting that “younger people are coming into the office with great digital skills – we try to give them space to innovate and nurture any ideas they have.”

Audit apprentices pick up some first-rate accounting skills via their training

KPMG has run an audit apprenticeship alongside its well-received KPMG360° scheme for two years. Today, audit apprentices work towards AAT Level 3 and 4, before moving onto the Level 7 ACA or CA qualification. In the first two years they’ll also complete AAT’s Level 3 Advanced Bookkeeping certificate. “We feel that when students come in at 18-years-old with no real accounting background, doing Level 3 Advanced Bookkeeping provides them with a foundation-level understanding of what KPMG and accounting is all about,” says Organ. “It’s also a nice transition from school learning to the valuable technical skills they acquire at AAT Level 4.”

“The AAT qualification opens up so many doors; it’s a brilliant foundation and building block for their careers,” says Sian Phillips, learning and development manager, RSM.

Audit apprentices also pick up important business skills too. “The skills that audit apprentices acquire, such as understanding how accounts and financial statements come together and where those numbers come from – plus the exposure of going out with clients and looking at their accounts – is invaluable,” says RSM’s Bloodworth.

… but audit apprentice training isn’t just about the numbers

Stepping into the flashy offices of a large accounting firm like Mazars, RSM or KPMG can be intimidating for school-leavers. With little work experience, many youngsters unsurprisingly have no idea how to draft a professional email or say the right thing in an office meeting. Accounting and auditing firms realise this too, which is why they also offer personal development programmes that teach softer skills such as communication, confidence, presentation prowess and looking after mental wellbeing alongside professional AAT qualifications. As RSM’s Bloodworth explains, students learn “everything on how to write emails to using the phone for what it was invented for: speaking to people rather than Instagram!”

Apprentices help energise audit teams with their enthusiasm and a youthful approach

“I find the apprentices are willing to put their hands up to assist with any internal events or any external recruitment events,” says KPMG’s Organ. “We recently inducted a cohort of audit apprentices and asked our second-year internal audit apprentices to facilitate virtual induction sessions. Despite the apprentices being fairly junior, there was a huge volume of them who volunteered to do this. They then ran the sessions on KPMG systems and values with such confidence; I was really impressed…” 

This enthusiasm rubs off on the work that apprentices produce…

An essential part of being an auditor is spending a period of time on-site at the companies whose accounts they’ll be examining. It’s no different for audit apprentices. At RSM, apprentices work at clients from “day one” according to Bloodworth. RSM’s audit teams typically consist of four or five people, including a first-year AAT student, who will be tasked with jobs such as inspecting Excel spreadsheets. They can expect to spend anything from one week to several months working with such firms.  

Audit apprentices will get the opportunity to work with some interesting companies, such as tech start-ups, public services, famous retailers or multinationals. There could even be some travel too…  It largely depends on which company they’re auditing, but audit apprentices are required to travel to the firms they are auditing (Covid-permitting). Although most of this travel is within the UK, RSM audit apprentices have previously travelled to the US, Middle East, Africa and Europe. “Pre-Covid, university students would have a gap year,” says Farrah Beveridge, RSM’s national talent acquisition manager. “But if our apprentices can do some of that travelling while earning a good wage, without the university debt [that saddles university students], it can be a massive win-win for them.”

There’s another advantage too which adds to the workplace <joie de vivre>: they’re earning money while their university counterparts are spending £9,000 a year on tuition fees. “The apprentices really appreciate the fact they can earn while learning, without racking up student debt,” says Jayne Lambert, professional development assistant manager at Mazars. “They can still get professional qualifications, but also given responsibility quite early in their careers: something they really enjoy.”

How to build a great career with an AAT apprenticeship

Have you considered an apprenticeship as a route to gaining your qualification and getting the skills needed to progress your career? Do you have unanswered questions about how they work, who they are for and what roles that can lead to? Look no further, hear from us, along with Network Rail and Whyfield Accounting Services, to find out the answer to these and many more questions.

Watch now

What to look for when recruiting apprentices for audit

Those embarking on an audit apprenticeship may need a different mindset and personality type to that required on standard accounting apprentices

“Analytical skills are really important in audit as you really need to understand the client,” says Mazars’ Smith.  “Ensuring the audit apprentice has the confidence and ability to challenge clients [on their accounts] is also critical.”

“Being a self-starter is so important,” adds RSM’s Beveridge. “They’re not at school anymore with a timetable, so they need to be self-motivated and able to self-learn.”

Photo shows Gabriele Scavinskyte, a successful participant in the KPMG 360 Apprenticeship Programme in which apprentices work in different areas of the business such as Tax, Audit and Advisory whilst studying for professional qualification.

More on audit apprenticeship schemes

AAT apprenticeships

https://www.aat.org.uk/apprenticeships/employing

KPMG’s Audit apprenticeship

kpmgcareers.co.uk

RSM’s School-leaver audit apprenticeship

rsmuk.com

Mazars

jobs.mazars.co.uk