Businesses must deal with supply issues and grasp the nettle of price rises Posted 11/29/2021 by Annie Makoff & filed under Members. It’s a volatile time for businesses, so they need to insulate themselves against risk and communicate clearly with customers. Businesses are experiencing a squeeze on profit margins in the run-up to Christmas due to supply chain issues from pent up demand and manufacturing sector closures during 2020. Brexit, wage inflation, driver and staffing shortages and increased business costs across the board have all had their part to play. Trade association UK Hospitality has warned of the squeeze predominantly affecting businesses in the hospitality, retail and leisure sectors but other sectors are also affected, including construction and the automotive industry. With many businesses unable to raise prices this side of Christmas to mitigate the increased cost of raw materials and products across supply chains, it is likely it will lead to a rise in inflation in 2022. Businesses, therefore, have several challenges on their hands: Managing volatile price rises.Protecting profit margins as far as reasonably possible.Communicating inevitable consumer price rises for 2022. How then should businesses tackle these complex issues and prepare for price increases in the year ahead? We spoke to several accountants for their views. Reduce overheads with the biggest cost burdens Craig Billington, Accountant and Business Advisor, Kirkwood Wilson The closure of many manufacturing sectors during 2020 had a significant impact on raw material supplies. In the building sector, timber and steel have been in short supply. We’ve seen a 70 per cent increase in the price of timber since last year. Also, prices on new builds are ‘locked in’ so building companies are facing price increases that can’t be passed onto their customers. In the car industry, wait times on new orders have been as long as twelve months, impacting short term sales. Also, Brexit-related paperwork is causing delays to orders, adversely affecting profit margins. There are two key areas to keep an eye on: the selling price of goods and services and overheads. With increased costs for raw materials, businesses should be assessing their market and customer base to see if they can pass on a price increase. With overheads, clients have been looking at these more closely in the wake of the pandemic and many have realised they don’t need centralised offices. This removes a significant cost burden on an ongoing basis. Next steps: Fully explain to clients why price increases are justified including why they will improve service delivery and product quality. Advance notice of any price amendments helps get clients on board. Verdict: Consider reducing overheads with a large cost burden and demonstrate how any price increase enables a continued high level of service. Look at ways to incentivise sales following a price increase Graham Lamont, CEO, Lamont Pridmore Much of the world is experiencing a big squeeze predominantly associated with the increased cost of running a business. Wages are rising and logistics costs are going up due to an international driver shortage and certain materials are in short supply. These are driving up values throughout the supply chain. Ultimately there is only so much of these costs which can be passed on to clients or consumers, so businesses are having to accept smaller profits, which is limiting growth. We recommend the following steps to help ease the pressure: Ensure regular account management to gain a clear understanding around profits and costs. This can also help expose any weaknesses and may help find identify potential cost savings.Consider diversification to reach new audiences and to explore new profitable ideas. For example, a physical retailer may find greater profit by selling online by reducing staff numbers and overhead costs.Consider automating processes in lieu of staff.Increase prices. This is fundamental in ensuring your business remains profitable. Competitors will also be putting up prices and dealing with the same costs and challenges. Next steps: Businesses should look at what they can do to incentivise sales following a price increase. This could include: Limited time offers.Adding value to existing products and services.Creating an experience in the sales process.Ramping up marketing and advertising to reach a wider audience. Verdict: Look at ways to incentivise sales following a price increase. Communicate price increases with clients and customers ahead of time Oliver Atkinson, Atkinsons Chartered Accountants We are seeing margins being squeezed in most sectors, but this is more pronounced in those that have traditionally been reliant on non-UK national staff, and those businesses that are non-serviced based such as manufacturing. Such businesses are more at the mercy of volatile price rises. The protection of profit margins is difficult, as price rises in both raw materials and labour are often out of the control of the businesses which employ them. Only an increase in pricing will protect such margins, this only adds fuel to the inflationary fire. Next steps: Communication is key, making customers aware in good time will allow all to prepare for the possibility of inflationary price rises in the coming months. Verdict: Communicate price increases with the client base ahead of time. Set price expectations as early as possible Andy Smith FMAAT, Director, Abbeygate Accountancy The cost of raw materials and fuel costs are having a large impact on profit margins. Price inflation meanwhile, is highly likely next year. The minimum wage and living wage are also due to increase along with tax rates, so all this will have a direct impact on price. To address price increases, businesses need to set expectations as early as possible. For those selling to B2Bs, start a dialogue with your clients, asking them about their plans, how much they’re intending to increase costs and work together to ensure both businesses are on the same page when it comes to passing on increasing costs. Next steps: We’d recommend that businesses consider the following: Forecast and planCarry out a thorough cost reviewRefinance expensive debt where possible Map out any inefficiencies and gaps in the end-to-end process. Verdict: Set expectations as early as possible to avoid nasty surprises for customers later. Treat sales as high priority Alistair Dickson, Director, SKSi Most sectors are facing challenges that significantly impact the bottom line: UK importers must invest in time and resources to deal with Brexit paperwork and increased haulage costs.Construction, retail and manufacturing are affected by major supply chain issues due to ongoing impact of Suez Canal crisis.Leisure, hospitality and food production sectors are experiencing staff shortages and supply chain issues.Ongoing costs of Covid preparedness, environmental concerns and current energy crisis is also hitting every sector. Next steps: Consider increasing prices to as high a level as possible without destroying activity. At the same time, carry out a review of all business activity – whether it’s losing poor margin customers, cutting ineffective advertising or reducing supplier costs through switching and negotiation. These will all present opportunities to improve profit immediately. Price increases may also be more palatable if they are introduced incrementally. But most importantly, service is key – customers will be loyal if you provide a quality service that is markedly better than the competition. Verdict: The aim must always be to prioritise sales with a focus on capital management. Be proactive: budgeting ahead of time is essential Stuart Crook, Partner, Wellers We are still experiencing a lag created by the impact of Brexit which is more of a long-term challenge than short-term issues caused by Covid-19. Transportation costs and duties have risen sharply, with manufacturing industry particularly hard hit because of the shortage of raw materials. We have also seen reports of significant increases to operating costs which has reached 8 per cent within the hospitality sector. The important thing for managing profit margins is to understand that everyone is expecting costs to rise, so planning for next year and budgeting is essential. It’s much harder to recoup costs retrospectively than it is to be proactive. Next steps: Budget for wage inflation alongside operating costs.Prepare for pressure from employees during wage reviews – as tax goes up, there will be less in their wage packets.Look at price lists and tenders and start managing expectations. Businesses need to start passing on the costs now, rather than in hindsight.Analyse cost lines and test various factors like cost increases to see impact they have on cost margins.Find out where in the working capital cycle the business is and identify the pinch points to help with cash flow and managing margins.Don’t be afraid to turn away business where margins are too tight. Verdict: Planning and budgeting is essential but remember to focus on profit rather than turnover.
HMRC update – coronavirus grants and self-assessment returns Posted 11/23/2021 by AAT Comment & filed under HMRC updates, Members. After a difficult year, HMRC is encouraging the early filing of self-assessment returns. It also reminds companies that tax is due on coronavirus grants. Declaring coronavirus grants on company tax returns Coronavirus grants to support businesses during the pandemic are taxable. If a business needs to complete a company tax return (CT600) and has claimed grants from the Coronavirus Job Retention Scheme (CJRS), Eat Out to Help Out (EOHO), or any payments made by local authorities and devolved administrations, they’ll need to report this as income when they calculate their taxable profits. Additionally, if a business received a CJRS grant, they will also need: to declare the amount they received (box 471)the grant they were entitled to (box 472) and any CJRS overpayment already assessed or voluntarily disclosed (box 473) during the accounting period covered by their CT600 return. They will need to complete box 474 if they received any EOHO overpayments. They must also include the grants as income when they calculate their taxable profits. These boxes were added to the online CT600 on 6 April 2021, so if a business filed before 6 April 2021, they would have been unable to declare this online. If a business submitted a CT600 return without boxes 471-474 and 526, or left the boxes incomplete, and they have a CJRS or EOHO overpayment to report they should resubmit the return. If all coronavirus support overpayments are already repaid or have already been assessed before the tax return is filed – and there’s no coronavirus support schemes overpayment due – they do not have to correct the return. Self-Assessment – Covid-19 support grants HMRC has already seen thousands of people filing their returns early – more than 63,500 customers filed their tax return on 6 April, the first day of the tax year. After a difficult year, beating the rush and avoiding the panic will be especially helpful. This year Self Assessment customers must declare if they received grants or payments from COVID-19 support schemes up to 5 April 2021 as these are taxable. This includes grants or payments from: the Self-Employment Income Support Scheme (SEISS)the Coronavirus Job Retention Scheme (CJRS)other Covid-19 grants and support payments such as self-isolation payments, local authority grants and Eat Out to Help Out. For more information about which Covid-19 grants or support payments need to be included in tax returns, Self Assessment customers can visit: reporting coronavirus (COVID-19) grants and support payments on GOV.UK for more information. HMRC recommends customers start gathering the necessary information together now to make sure there’s enough time to check it is correct and to avoid delays. Plastic Packaging Tax: technical consultation, updated guidance and webinars Plastic Packaging Tax (PPT) will be introduced in the UK from April 2022 and we would be grateful for your help in sharing HMRC’s recently updated GOV.UK guidance with businesses that manufactures or imports plastic packaging. The latest update provides information on what businesses need to include on a tax return for PPT, and what other substances need to be considered for multi material packaging. We will provide a further update after more information has been added to the updated guidance. You may also be aware, that the first HMRC Get Ready for Plastic Packaging Tax webinars took place last month. Recordings of both the ‘Introduction to Plastic Packaging Tax’ and ‘Plastic Packaging Tax – Administration and technical aspects’ sessions are now available to view on GOV.UK. Building on the secondary legislation published in draft earlier this year, HMRC has also recently published further draft secondary legislation for Plastic Packaging Tax (PPT) for technical consultation. The Government welcomes feedback on whether the further draft secondary legislation works as intended. The technical consultation runs until 11:45pm on 1 December 2021. Please provide any comments to [email protected]. HMRC warns customers about Self-Assessment tricksters More than 4 million emails and SMS will be issued this week to Self-Assessment customers reminding them about the 31 January deadline. As these go out, HMRC is warning customers to not be taken in by malicious emails, phone calls or texts, mistaking them for genuine HMRC communications. Criminals often mimic government messages to trick their victims into handing over money or personal and financial information. To help HMRC fight these crimes, people can report suspicious phone calls on GOV.UK, and forward suspicious emails to [email protected] and texts to 60599. HMRC is also reminding Self-Assessment customers to check websites and online forms before using them to complete their 2020/21 tax return. People can be taken in by misleading sites designed to make them pay for help in submitting tax returns or charging to connect them to HMRC phone lines. Customers should visit GOV.UK for more information about Self-Assessment and use the free, signposted tax return forms. More information can be found on GOV.UK. Tax Administration and Maintenance Day The Government will publish a Tax Administration and Maintenance Command Paper on 30 November. The Paper will outline the further steps it is taking to progress tax simplification, tackle non-compliance and ensure our tax system is fit for the modern world. It follows a similar set of announcements published on 23 March in ‘Tax policies and consultations (Spring 2021)’. Working Tax Credit – reporting changes to working hours During the pandemic, Working Tax Credit (WTC) customers haven’t needed to tell us about any temporary reductions to their working hours as a result of COVID-19. This was one of several measures we introduced to help those facing uncertainty. We’re reminding WTC customers that this measure ended on 30 September 2021. If they don’t intend to go back to working enough hours to be entitled to WTC by 25 November, they must tell us as soon as possible. Customers can check their current claim details and how many hours they need to work on GOV.UK. After 25 November, if they are still not back to working enough hours to be entitled to WTC, they must tell us within one month. Customers should still continue to tell us about any permanent changes to their circumstances, for example if they’re made redundant, lose their job, or their hours change permanently. If a customer has a change in their working hours which makes them no longer eligible, they will continue to receive WTC for four weeks before their claim ends. Any changes can be easily reported online on GOV.UK. If customers receive tax credits they’re not entitled to as a result of a change, they may need to repay this money, and may also have to pay a penalty if they don’t let us know within one month of their change. Time is running out for customers with Post Office card accounts From 1 December 2021, HMRC will stop making tax credits, Child Benefit and Guardian’s Allowance payments to Post Office card accounts. HMRC is urging account holders to contact them to update their bank account details to continue receiving payments without disruption. Customers can choose to receive their benefits and credits payments to a bank, building society or credit union account. If they already have an alternative account, they can contact HMRC now to update their details. Child Benefit and Guardian’s Allowance customers can use their Personal Tax Account to provide revised account details, change their bank account details via GOV.UK or by contacting the Child Benefit helpline on 0300 200 3100. Tax credits customers can change their bank account details by contacting the tax credits helpline on 0345 300 3900. If customers cannot open a bank account, they should contact HMRC. More information can be found on GOV.UK.
Keeping on the right side of compliance Posted 11/23/2021 by Gill Wadsworth & filed under Ethics, Members. AAT has published new ethical guidance on how accountants can stay on top of compliance – here’s what it looks like in action. Compliance should be front and centre for accountants as they go about their day jobs – that requires diligence to stay on top of regulations and changing ethical requirements. Sadly, the accounting profession as a whole does not always achieve this goal. Have you read AAT’s new ethics guidance? All AAT members are bound by AAT’s Code of Professional Ethics, so have you seen the four new guidance notes? View guidance In 2020/21, the Financial Reporting Council (FRC) imposed £16.4 million in sanctions – an increase of £5.1 million on the previous year (read more below). The profession is also tarnished by the poor compliance record of unregulated accountants, who make up one-third of the profession, but two-thirds of complaints to HMRC. AAT makes clear the importance of compliance in a new guidance note – Ethics and Regulations. “Failure to adhere to compliance has a devastating effect on multiple stakeholders including investors (fines), employees (losing jobs), consumers and suppliers. The limited liability of so many businesses has been exploited and abused. Adherence to requirements is therefore absolutely an ethical issue for professionals as ambassadors for compliance,” the guidance states. The guidance is also clear that ‘in a world of increasing transparency, to build trust, protect reputation and attract talent, on an individual and organisational level’ accountants must report on how requirements are met through annual reports, and this is likely to increase in the future. More than box-ticking Natalie Moore (FMAAT), Director of PKF’s Business Outsourcing team, argues that compliance must never be a mere box-ticking exercise. “We have a duty of care to clients, and they expect us to make sure we are providing them with the correct advice. There is an expectation that we would be doing that proactively rather than reactively; they want us to ask them lots of questions and to check in regularly,” Moore says. PKF International’s approach is in line with the AAT code which says: “As a professional, you should strive to be doing more than the minimum and in fact adhering to legal and regulatory requirements should not even be up for debate.” Given the seriousness of staying on the right side of compliance, professionals should put processes in place that ensure they are up to date with changing regulations. Moore says membership of professional bodies is critical in keeping pace with fast-paced legislative change. “I am signed up to AAT and the Association of Chartered Certified Accountants and they have a requirement to keep up with CPD. I get alerts from HMRC and trade publications all of which are very helpful in staying on top of everything.” Moore says she sets aside time ‘at least once a month’ for compliance and will also attend webinars, which she says are a ‘great way to keep up to date’ and adds these were especially helpful during the Covid-19 pandemic. Moore also recommends accountants build networks of experts to help them when dealing with compliance issues that fall outside their own particular field. “I am lucky enough to work for a large organisation and I can talk to other departments with expertise that is not in my specialism,” Moore says. Top four firm Deloitte recommends looking outside your own business for compliance advice. The thinking is that a risk assessment relies on knowledge of emerging risks and regulatory behaviour, which are not always well known within the organisation. “Tapping outside expertise can inform the assessment and ensure that it incorporates a detailed understanding of emerging compliance issues,” says the firm. Jargon busting Regulatory compliance should not be a ‘set and forget’ strategy. Instead of seeing legal, regulatory and compliance requirements as a set of rules, AAT urges accountants to match them to scenarios in their working life to bring the requirements to life. AAT says accountants should ‘make time to discuss requirements with clients and educate them’, a recommendation Moore follows at PKF International, not only to meet compliance requirements but to build better relationships with customers. Moore says: “It is a good opportunity to connect with clients and show where you can add value, which in turn could potentially lead to you more work.” However, all this communication and process is of little value if those involved do not understand the terms involved. The AAT recommends developing a ‘jargon buster’ to ensure that everyone across the organisation applies a uniform meaning, while Deloitte says businesses should ‘use plain language’ and to ‘avoid absolutes and complex legal analysis’. Accountants often form the first line of defence against breaches of compliance and their personal reputations and that of their business and clients depends on them taking regulations seriously. However, it need not be seen as a burden and with support from senior management and membership of specialist bodies it should instead be a way to instil productivity and professionalism through an organisation. What is compliance risk? Compliance risk is the threat posed to a company’s financial, organisational, or reputational standing resulting from violations of laws, regulations, codes of conduct, or organisational standards of practice. Risks of falling foul of compliance The following is from Deloitte: Legal impact: Regulatory or legal action brought against the organization or its employees that could result in fines, penalties, imprisonment, product seizures, or debarment. Financial impact: Negative impacts with regard to the organisation’s bottom line, share price, potential future earnings, or loss of investor confidence. Business impact: Adverse events, such as embargos or plant shutdowns, that could significantly disrupt the organisation’s ability to operate. Reputational impact: Damage to the organisation’s reputation or brand—for example, bad press or social-media discussion, loss of customer trust, or decreased employee morale. Treat the assessment as a living, breathing document. Once you allocate resources to mitigate or remediate compliance risks, the potential severity of those risks will change. The same goes for events in the business environment. All of this should drive changes to the assessment itself. Ethical failings behind the FRSC sanctions The FRSC issues sanctions for serious lapses of professionalism by accountants. Last year there was a 45% increase in FRSC sanctions, often connected with massaging companies’ profitability. Here are some of the common infringements. Fabrication of revenue streams Some accountants were found to have fabricated revenue streams and provided false invoices to auditors, thereby allowing fictional amounts to appear in the financial statements or interim reporting, which bolstered the appearance of the company’s results. Wrongly recognising revenue A number of investigations found accountants recognised revenue in the financial statements when accounting standards – and even companies’ policies – did not allow it. Recognising revenue too early In some instances, revenue was recognised in one year when it should fall into a later year. Inappropriate capitalisation of costs Here accountants failed to follow the accounting standards, which set strict criteria for when costs can be capitalised or recognised as intangible assets. Failure to account appropriately for bad debts Several accountants tried to obscure the nature of certain losses from users of the financial statements by categorising them inappropriately. Hidden loans and borrowings By classifying liabilities as operational rather than financial, accountants were able to conceal company loans or borrowings. Help with financial reporting The AAT Knowledge Hub has a section dedicated to Financial Reporting to help members navigate pitfalls and avoid errors in this tricky area of accounting. Find out more here.
From self-doubt to self-starter with AAT Posted 11/22/2021 by AAT Comment & filed under Inspiring stories, Members. After redundancy, Katrina Borissova fought off self-doubt to start a small soap business. Being made redundant from her accounting job in late 2019 was a turning point for Katrina Borissova. She had been hoping she would get another position, but her thoughts soon turned to launching her own business, and soon her vegan soap venture, Little Danube, was born. “My friends were worried about me moving from the corporate world to making soaps,” she explains. “I was dreading the launch – I thought I was making a fool of myself. I was hoping I would get a job, so that I wouldn’t have to go through with launching the business. But it didn’t happen.” Little Danube slowly developed while Borissova was still searching for a finance transformation or project management role. “I would go from interview to interview, but I wouldn’t get the job I really wanted. Then there was Covid-19 and my phone stopped ringing. I had to start processing the fact that I might not find a job.” She says she has always enjoyed designing and crafting and had previously bought a lot of products and equipment for making soap, but had never really got started with it. “I realised that I wasn’t doing anything with my hands and for the simple pleasure of doing it. So I started making soaps and really enjoyed it.” Where can an AAT qualification take you? The choice is yours An AAT qualification can open so many doors for you in your career, giving you the change to explore roles in any industry you can think of – from fashion and sport to banking or forensic accounting. After all, every business needs someone to look after its finances. Find out more Attending a soap making course helped to remind her that it was something she loved to do – and she thought to herself, “it’s now or never”, and decided to start the company. It took Borissova several months to figure out the recipes and the branding. Of course, there were challenges that came with launching during the Covid-19 pandemic too. “Everything was online – the whole industry went online,” Borissova explains. “I adapted to social media and I adapted my business in an e-commerce sense – including thinking about packaging and ensuring it was sustainable. There were no markets, so I was limited when it came to wholesale. I had to be a salesperson for my own business – going to shops and selling my product myself.” Learning and growing Borissova notes that starting a business has been a constant learning experience. “As my business grew, I grew as an individual as well,” she says. “The first month was very busy, with friends and family buying, but the second month was quiet. That was really difficult and I thought, ‘What am I doing wrong?’” Borissova got in touch with some other small business owners on social media and sought advice. She says their answers helped her put everything into perspective. “This helped me think about my strategy. I spoke to someone who runs a number of successful businesses – he asked me about my margin, who I was selling to, and he looked at my packaging and gave me some positive feedback. I had to tell myself that the first six months of being in business was to listen to feedback and to understand my customer base. Doing a course in digital marketing really helped me as well.” With Covid-19 restrictions being lifted, Borissova has identified pop-up events and wholesale opportunities, which will help with scaling up. Trying and failing Despite learning English while living in France, Borissova says learning English at school and articulating yourself in a language that is not your mother tongue are two different things. “I found it hard to express myself – I had to develop a different sense of awareness. Living in another country has taught me so much about different cultures. I have become a more adaptable person. I’m no longer afraid to try and fail.” Borissova says learning accounting and studying with AAT also helped her broaden her horizons, as well as helping her progress in her career. “I initially studied philosophy in France and I wanted to be a journalist,” she explains. “I came to the UK when I was 21, with the objective of improving my English. I was initially based in Manchester and I was working for Michelin in accounts payable, but I soon realised I was limited when it came to career progression. I signed up for ACCA, but it was difficult for me to grasp – going from philosophy to accountancy. “I had a look at local colleges and courses, and I found AAT. I went to college for the first year and then I took online courses until I was fully qualified. It took me three years and I was working at the same time. I was very regimented at the time – I was going to work, coming back and then studying. It helped me to be so much more organised and focused. I gave myself deadlines – telling myself I had one or two months to pass each part of the course. This helped me to progress in my career and expand my mind – I later moved into a financial accounting role.” From a business perspective, Borissova says studying AAT helped her to learn to deal with a large amount of data and gave her practical skills that still help her today to run her company. “It wasn’t just reading a book and then taking an exam – it was practical.” Photography: Tim Kavanagh/UNP Where can an AAT qualification take you? The choice is yours An AAT qualification can open so many doors for you in your career, giving you the change to explore roles in any industry you can think of – from fashion and sport to banking or forensic accounting. After all, every business needs someone to look after its finances. Find out more
What is changing in the world of R&D tax credits? Posted 11/22/2021 by Annie Makoff & filed under Members, Tax. Research & Development (R&D) tax credits have been in the news a lot of late – two significant changes to the scheme are expected to take effect from April 2023 while more imminently, HMRC is investigating the huge volume of what they call ‘spurious’ claims which have increased over the past few years. R&D tax credits are intended to support companies who are investing in science and technology projects or schemes. To qualify, companies need to already pay corporation tax and the associated project should involve either advancement, innovation or research in the science and technology areas. Staff costs, research contributions and software all qualify under the scheme. For SMEs with less than 500 staff and a turnover of under 100 million euros or a balance sheet total of under 86 euros, they are entitled to a payable credit rate of 14.5 per cent and an enhanced rate of 130 per cent. Larger companies who claim R&D tax credits under the Research and Development Expenditure Credit (RDEC) scheme are entitled to a 13 per cent RDEC rate. Here’s what accountants – and businesses – need to know about activity around R&D tax credits: HMRC investigations (ongoing): HMRC are now clamping down on ‘spurious’ R&D claims. Their own figures show that £612million has been lost through incorrect R&D claims. As part of this, HMRC have recruited 100 additional caseworkers to add a heightened level of scrutiny over R&D claims. R&D tax credit changes (from April 2023): Chancellor Rishi Sunak announced during the budget that there would be two significant changes to the R&D scheme from April 2023 including: Extension of R&D scheme. Currently, cloud computing and data costs are not included in the scheme but under the changes, the scheme will be extended to include these key areas in recognition of increased use of cloud software and data hosting.Focus on UK-only innovation. From April 2023, R&D claims will be restricted to UK-only activity which may affect companies who subcontract R&D overseas. We spoke to a few accountants across the industries to find out their views on the R&D reforms and recent HMRC investigations. Carry out due diligence if outsourcing R&D tax relief xpertise on claims Keiron Kelly, Tax Partner, Sherlock & Co Two key sectors that seem to be attracting a lot of attention currently within R&D investigations are the software and construction industries. This isn’t a problem for businesses who have legitimate claims but, as it’s a highly technical area, we’d always recommend using an accountant who either has internal expertise or who opts to bring in outside help. There are a number of companies that specialise in R&D tax relief but they’re not all born equal so it’s important you do your due diligence. Investigations can be demanding, stressful and costly if a claim cannot be defended, and HMRC is increasingly involving their Chief Digital Information Officer (CDIO) and IT specialists to guide inquiries. The department also has a panel of construction specialists to steer challenges in that industry. Across all sectors, HMRC is demonstrating a determination to see evidence of payments after a high-profile R&D tax credit fraud. Next steps: Carry out due diligence on companies specialising in R&D tax relief to ensure you receive the best advice. Verdict: Carry out due diligence if outsourcing specialist R&D tax relief expertise Ensure clients understand impact of latest R&D tax reforms Nigel Holmes, head of R&D technical operations, Catax There’s so much going on in the R&D tax credit arena. The Government announced cloud computing and data costs are to become eligible from April 2023 and this promises to be fertile ground for tech-focused UK companies. Many firms will be hoping these additional areas make up for shortfalls elsewhere because the Chancellor has also just declared that overseas R&D spending will no longer qualify. A ‘PAYE Cap’ that links the maximum benefit for loss-making companies to their NIC and PAYE liabilities also came into effect in April this year, heavily impacting some smaller businesses. The pandemic has also complicated matters. Due to state aid rules, some R&D projects staffed by employees who received Coronavirus Statutory Sick Pay Rebate (CSSPR), must be claimed for under the less generous RDEC scheme, shrinking the overall benefit. Next steps: Accountants will need to explain to clients what the impact will be and advise on whether it’s worth bringing some or all of their R&D activity back to the UK. Verdict: Ensure clients understand the impact of the latest R&D tax credit reforms and how they apply to RDEC where relevant. Tackling abuse of R&D tax reliefs Jenny Tragner, director, ForrestBrown Ltd Research and development (“R&D”) tax relief is a vital part of the ecosystem that supports innovation investment in the UK. With the Government doubling down on its commitment to turn the UK into a science superpower, it is more critical than ever that we have an effective and well-targeted tax incentive to encourage business investment in R&D. There is much work to do if we are to secure the future success of R&D tax relief in the UK. We have already seen increased compliance activity from HMRC and legislative changes designed to improve targeting of the relief and tackle abuse. Part of HMRC’s renewed compliance focus has been a spate of tax tribunal cases, many of which have revealed worrying shortcomings in the quality of taxpayer R&D claims. However, HMRC’s recent and notable loss on subsidised expenditure exposes a need for clearer guidance on some of the technicalities of the legislation to ensure that their compliance efforts remain within the intent of Parliament. The accounting industry has also moved forward in its approach to R&D tax relief, with guidance published by the main accounting and tax professional bodies on professional standards and R&D tax advice. However, there remains much disinformation about R&D tax relief, and too many businesses are falling foul of poor or negligent advice from unregulated agents. Greater awareness of the benefits of engaging with a properly qualified professional adviser would enable businesses to make informed decisions and protect themselves from the threat of bad advice. ForrestBrown and AAT have published an eBook guiding taxpayers on what they need to know before engaging with an accountant or tax advisers. Next steps: Innovative businesses should ensure they understand the current environment and how this may affect the risk profile of their R&D tax relief claim. ForrestBrown and AAT’s guide can help them to make the right decision. Verdict: The ongoing consultation is an opportunity for all relevant stakeholders to help shape the future of R&D tax incentives in the UK. Guide: why tax advisers should be accountable Anyone can call themselves an R&D tax advisor. Don’t fall foul of bad advice, get AAT and ForrestBrown’s joint guide explaining what you need to know before appointing an accountant or tax adviser. Downlad the guide R&D claims must be properly considered and justified Anthony Lalsing, Director and R&D specialist, Menzies LLP R&D tax reliefs have had little change since their introduction in 2000. The Autumn Budget 2021 saw the Government announce welcome reforms to support modern research methods by expanding qualifying expenditure to include data and cloud costs. The potential removal of overseas costs from R&D claims is significant and although the devil will be in the detail, there will be planning around commercial considerations vs tax relief. Meanwhile, the ever-increasing number of spurious R&D claims has prompted the Government to act, whilst not discouraging companies making genuine claims. For a number of years, HMRC adopted a light-touch approach with few disputes reaching First Tier Tribunal. Recent cases ruled in favour of HMRC show HMRC’s hardening stance and a willingness to challenge R&D claims. Next steps: with increased scrutiny from HMRC, it is important that businesses engage with specialists to ensure claims are properly considered and justified. Verdict: R&D claims must now be properly considered and justified in order to avoid HMRC investigations. Businesses should use their official tax agent for R&D claims to protect against rogue R&D advisers Simon Littlejohn, Director and Founder, SLJ Accountants Unfortunately, too many ‘rogue’ advisers are saying ‘yes’ to activities that do not qualify for R&D tax relief. For example, they may claim a company’s activity is a qualifying R&D project when it isn’t or that it’s a significant advance in science and technology. In addition, some rogue R&D advisers may make claims without involving the company’s official tax agent, therefore side-lining this agent’s professional and correct advice. A tax agent’s solid professional relationship with a client can be threatened by an outsider saying ‘yes’ to what the agent may have already dismissed. Next steps: To protect themselves, businesses should only submit R&D claims through their own recognised tax agent. These claims must both identify and quantify R&D costs. Verdict: A tougher approach is needed for advisers pushing spurious claims. We know that HMRC lacks the resources, but the plethora of incorrect claims is giving the profession a bad name. Consider wider relief claims such as Patent Box or Capital Allowance Super Deduction alongside R&D for maximum benefit Jonathan Scott, Tax Partner at Haines Watts, Newcastle The extension of the R&D scheme to include cloud computing and data costs is a huge step in the right direction. Yet whilst it’s great to see the scheme is being modernised to include such costs, cases of fraud and improper relief are still on the rise. With HMRC making an active bid to clamp down on this, we can expect much more scrutiny going forward. Some of these spurious claims are happening because the tax profession is unregulated which has created a rise in the number of tax boutiques, not all of them legitimate. Some aren’t members of professional bodies and don’t follow industry guidelines or a professional code of conduct. Without expertise, it’s easy to wrongly assess eligibility, give out misinformation, inaccurately assess expenditure or provide insufficient supporting evidence, which can result in lengthy, resource-draining HMRC enquiries and hefty penalties. We’ve also seen an increase in R&D fraud. One of the worst cases to hit headlines involved a £30m claim where three individuals claimed they spent over £137m on a spurious IT healthcare system for two Middle Eastern countries. They provided falsified bank statements to HMRC which prompted an inquiry and was found to be fraudulent. Next steps: In terms of advice for future R&D claims, keep wider reliefs in mind for clients who are claiming for R&D tax relief, such as Patent Box and the Capital Allowance Super Deduction. These reliefs very much sit hand in hand, and when claimed in addition to R&D they could act as a real lifeline for your clients. Verdict: Always seek advice from a credible and established adviser, ideally one that is governed by an industry code of conduct and consider keeping wider relief in mind such as Patent Box and Capital Allowance Super Deduction alongside R&D claims.
Are businesses accelerating transformation in the finance team? Posted 11/22/2021 by Mark Rowland & filed under Members in business. Digital transformation has been a buzz-phrase in the accounting sector for some time, but there seemed to be a big gap between talk and action. While some finance functions were adopting new technologies, accountants in business were largely going about business as usual. The pandemic may have changed that. A transformative event in and of itself, not only has it accelerated migration to the cloud as businesses found ways to manage remotely, it has also forced a perspective change in the finance function. Members report that the focus is shifted further onto strategic planning, analysis and real-time decision making. In many cases, new technology is necessary to meet the growing demand for this kind of service. https://www.aatcomment.org.uk/audience/members/members-in-business/are-businesses-accelerating-transformation-in-the-finance-team/(opens in a new tab) Has this translated into a major transformation in the average finance function? We asked our panel of members whether they are embracing digital transformation, and how things might change in the coming years. We’ve seen a shift in our clients’ behaviours Clare Elliott (FMAAT) CFO, ILUX Being a tech company, I wouldn’t say that our attitude to tech and change has altered very much, as we are (and should be!) ahead of the game when it comes to implementing tech within our organisation. But by the same token, that means that we continually change quite a lot. We are definitely not afraid of change when it comes to implementing some new technology! But we have seen a big change with a few of our clients who historically were quite resistant to change with their tech and didn’t always see the importance of keeping up with the latest innovations. That is one positive result of 2020, as there has been a shift in how organisations operate and how employees work. It would be difficult to work at ILUX if you were resistant to change, not only because we try to be highly technical, but because we ourselves have continued to grow throughout the pandemic. We were already on a growth trajectory prior to 2020, and that hasn’t faltered as we are continuing to grow. There is often fear around change, but I guess we just envelop it within the culture of our organisation, and so change becomes normal and expected, and therefore is not a surprise. We do endeavour to have strong communication, as that enables change to happen more effectively and efficiently, but for us change is simply the norm. We don’t envisage a time when we will not continue on this change and growth trajectory! We see both technology and change management as exciting, as it brings new opportunities, creating a pathway for a better future. Transformation has become a top priority Farha Jamadar (FMAAT) finance manager, Todd Doors We rely on technology more heavily than ever. It seems the pandemic has been a catalyst and where this was not a norm previously, it has now become a part of life. Relying on instant information has become normal, this is changing the way teams work and how businesses operate. Digital transformation was a priority but not at the top of our agenda. As soon as the pandemic hit, it became a priority. The information that we needed during lockdown was not the same as what we would need normally. We needed up-to-date information to ensure instant strategic decisions were made. As with all change, transitions were challenging. The biggest aid with this was communication. Ultimately, the process was new, but we know the business requirements and the talent that was navigating it, which allowed us to ensure all forms of communication was open and we could troubleshoot any problems. Business Automation has become a priority in the finance department to free up the processing element of the purchase and sales ledger. This will enable us to bring more value-add activities like business partnering, and allow us to increase collaboration with senior management to help the business grow.
Accounting in the film industry: what you need to know Posted 11/19/2021 by The content team & filed under Career. Behind the scenes of all major motion pictures and TV shows are hard-working accountants crunching the numbers. Here, we meet two accountants working in the exciting world of film and TV production and discover more about how their work has helped bring together some of our favourite flicks… Cheryl Anderson, Manager – Film and TV, Saffery Champness As a manager in the film and TV team at Saffery Champness, Cheryl Anderson helps production companies with their accounts and audit, as well as advising on the tax reliefs that the projects will qualify for and then helping them get those. Saffery Champness has worked on several hugely popular TV shows including Game of Thrones, Mr Selfridge and Downton Abbey, and blockbuster films including Skyfall, Prometheus and The Dark Knight Rises. Part of a team of 50+ in London (and another 14 in Dublin), Cheryl has been with the company for more than three years. “I work mostly on film and TV productions, but I have also done some work for video games as well,” she says. “Anything that’s been produced in the UK, chances are they’ve probably come to us for help with claiming the tax credits. Where can an AAT qualification take you? The choice is yours An AAT qualification can open so many doors for you in your career, giving you the change to explore roles in any industry you can think of – from fashion and sport to banking or forensic accounting. After all, every business needs someone to look after its finances. Find out more A passion for the film industry Prior to moving to London to take the role with Saffery Champness – a role she was matched with by a recruitment agency – she was working at a small practice in Scotland. “I’d always wanted to stick with the accounts preparation side of things,” she notes. “And when the recruitment agency said, ‘film and TV’, I thought: ‘Oh, this will be relevant as I’ll know what I’m working on.’ I think a lot of the time (in bigger companies) people are working on things where they don’t really know what the company does, or they can’t get to grips with it. Whereas film and TV, it’s easier to understand – you’re producing a film or you’re producing a TV show. When I first heard about the job it was the film and TV side that I was drawn to. I think if you are interested in what you are working on it makes life a lot easier!” Working from home during the pandemic Although Covid-19 put a halt to film and TV production, Cheryl and her team carried on working. “Clients were in the middle of shooting when the pandemic hit and they had to down tools,” she notes. “For us, we kept working – we moved to working from home. A lot of our contact with clients is done over the phone as opposed to being out on-site somewhere, so that side of it didn’t change. We still saw just as much work coming through, but with people needing more advice more than anything else – to see the best way to keep going.” Simone Abecassis, Owner, Daffodil Accounting Business owner Simone Abecassis has been involved in the film and TV production industry for over 20 years. Simone studied her AAT qualifications while still working full-time. “I would work during the day and study in the evening,” she says. “I then moved on to ACCA. It was a long process, but I got there.” “When I started, it was as a purchase ledger clerk in a TV production company,” she says. “I worked my way up from there whilst I was doing my accountancy exams. It wasn’t a planned thing – a friend that I was studying with said: ‘There’s a job going for three months, come and help us out’. It just went from there. Most production accountants are freelancers. They’ll go and work on a film or a project and then move on to another one. It’s very much a gig contract industry.” A strong AAT background As a freelance financial controller who engages directly with the production company, she oversees the accounts team – making sure that everything is in order and making sure that everyone is keeping compliant with the rules and regulations. “I liaise with the financiers to make sure that everything is as it should be regarding costs and budgets, and expenditure to date,” she explains. “There are very tight deadlines when you’re working on a production. At the moment, I work in kids’ TV and the type of productions we work on are very challenging. We work with children and sometimes animals, which together can be very expensive – the animals may not behave, the children may not behave and therefore the shoot takes longer. You don’t complete everything you need to in a day. You go over-schedule, which means you go over-budget. So the issue is trying to stick to the budget and not go over, which is a huge challenge.” Ensuring to keep compliant Another challenge of the job, Simone notes, is compliance, especially with HMRC. This is mainly regarding crew, and who can and who can’t be self-employed. “You end up (sometimes) having disagreements with crew members who want to be self-employed, but they can’t because their job grade doesn’t allow for them to be,” she says. “Especially if they’re someone that’s not really taking any financial risk, they would be considered to have a PAYE grade. The challenge there is to make sure that we’re not making any mistakes, as you get a penalty from HMRC for not keeping records properly and not employing people properly. A demand for production accountants Covid-19 has obviously affected Simone’s job as well, as a lot of productions had to halt. Simone points out that now most Covid-19 restrictions have been lifted, the industry is getting busier and more projects are coming through. “There is a huge shortage of production accountants,” she says. “If people are thinking of switching industries, there’s a very big demand at the moment”. Top skills you’ll need to get into film and TV accounting A relevant accounting qualification (such as AAT)Good working knowledge of the film and TV production processAbility to work as part of a teamOrganisational skillsA keen eye for detailStrong communication skills Where can an AAT qualification take you? The choice is yours An AAT qualification can open so many doors for you in your career, giving you the change to explore roles in any industry you can think of – from fashion and sport to banking or forensic accounting. After all, every business needs someone to look after its finances. Find out more Further reading: How to get experience when you can’t get work experience My experience as an AAT intern Top tips for work experience success
Will freeports create investment or a free-for-all? Posted 11/16/2021 by AAT Comment & filed under Members, Tax reform. The Government is rolling out freeports to drive trade following the UK’s departure from the EU. But will they deliver? Words by Christian Doherty As the dust settles on Brexit, the post-Covid landscape is beginning to take shape. The Government is rolling out eight new freeports, with two more to follow, in a bid to drive investment into forgotten parts of the UK. The ports are spread across the country and comprise the areas where the Government believes that investment and enterprise stimulation are most urgently required. East Midlands Airport, Felixstowe and Harwich, the Humber region, Liverpool City region, Plymouth, the Solent, the Thames, and Teesside have been designated as sites. There are also plans to establish more in the coming years, with Scotland, Wales and Northern Ireland all earmarked for freeports. Described by the Government as “the hubs of enterprise [that] will allow places to carry out business inside a country’s land border but where different customs rules apply”, in essence, each proposed freeport must be confined to a geographic radius of 45km and include: At least one port;One primary customs zone;Up to three tax sites of a maximum of 600 hectares; andAs many secondary customs zones as required. Back to the future? To some, freeports represent a welcome return to low-tax, low-regulation, free enterprise policy that some felt was strangled by EU membership. To others, they’re a mirage – unregulated zones of tax avoidance that attract those looking for a tax break rather than new investment that creates jobs. This time, however, the Government says freeports will form one part of the global UK strategy that will shape the country’s post-Brexit direction. Having announced the policy, chancellor Rishi Sunak claimed that the ports “will have simpler planning to allow businesses to build, infrastructure funding to improve transport links, cheaper customs with favourable tariffs, VAT or duties and lower taxes – with tax breaks to encourage construction, private investment and job creation”. Tim Morris is the chief executive at UK Major Ports Group (UKMPG), the trade body representing many of the UK’s largest port operators. So far UKMPG has been cautiously welcoming of the plans, but Morris explains this new iteration of freeports must be different from and more ambitious than those that came before. In his view, freeports have typically failed to deliver the promised benefits when they have focused narrowly on trade tariffs. “In the UK experience, they narrowed into just being about good storage and cash flow management. Whereas what we have now is a toolbox that includes tax incentives, aspects around planning, as well as the more traditional customs easements – combined, they provide a more stable basis for success, similar to the successes we’ve seen elsewhere around the world.” Morris accepts that many see the re-introduction of freeports as a retrograde step, but insists this iteration of freeports promises to be different. “The Government has come forward with a wider and more ambitious strategy, alongside a set of measures to stimulate a broader range of investment than what existed before.” What’s in it for me? Doubts remain. “The issues have always centred on the tangible benefits,” says Brad Ashton, a customs and international trade partner at RSM UK. “In other words, what does a business get from locating in a freeport?” Ashton points to the US’s Foreign Trade Zones (FTZs) as the model the UK appears to be following: “They are entirely inward-facing because they offer a duty-free manufacturing environment that allows something we call tariff inversion.” That would allow goods imported into the freeport under normal rules to carry a tariff of X, but after production, the finished article would carry a lower tariff of Y. “While that is already available in some places, in a freeport, the benefits are wider in terms of tax reliefs like NICs and corporation tax,” Ashton explains. So while that might prove attractive to some manufacturers looking to grab tax breaks on plant and machinery, “the biggest danger under that system is that we simply see jobs and investment being relocated from one area to another without creating any new activity,” Ashton warns. And it’s that fear – that freeports just displace existing activity – that has drawn concern from many observers. Certainly Tom White at the Connected Places Catapult believes the focus must be on looking outward to attract investment. “When we began talking about freeports and looking at European experiences, it was important to focus fundamentally on how we can use these special economic zones and the financial and economic incentives they have attached to them, to drive people to come to our country as innovators by establishing strong regional USPs,” he says. “The investors’ thinking should be: ‘Why should I go to Liverpool rather than Singapore?’ It is not about getting more cargo over the borders, it is about attracting people and innovation to these regions.” In White’s view, freeports must have a holistic investment focus to attract new business, rather than simply moving between regions to avoid creating a negatively competitive environment and a race to the bottom. Taxing times There are, however, dissenting voices that claim the ports as currently envisaged won’t deliver on Sunak’s promises. “One of the main drivers was to offer a VAT-free zone for companies looking to relocate,” says Huw Witty, head of tax at accounting firm Ince. “However, the rate of corporation tax is going up to 25% in March 2022, while Ireland is moving from 12.5% to 15%. So if you’re transporting something into the EU, are you likely to choose the UK where you’ll pay a higher rate of CT on the profits that you make? To my mind, that rate is a crucial issue. Second, I don’t think it’ll attract any new work from the EU, which is what the Government is hoping to do.” The unavoidable shipping and processing costs involved in bringing goods to UK freeports, Witty believes, would almost certainly persuade most businesses to avoid the UK and its freeports altogether. All of these criticisms must also be set alongside the growing belief among many around the world that the drive towards a more equitable global tax regime must continue. With even US President Joe Biden endorsing the idea of a 15% minimum corporate tax rate, does a policy of using tax arbitrage levers like freeports to drive investment simply create a race to the bottom? “I would say they’re not at odds with that agenda at all,” says UKMPG’s Tim Morris, who points out that – so far at least – no part of the freeports agenda involves corporate tax. “The tax incentives are very much around stimulating investment by using things like capital allowances. But in terms of taxing the profits from those activities, that’s not part of it. What we’ve asked for – and what has emerged so far – is a set of tax measures that focus on stimulating investment, and that for us feels like the appropriate thing to do, and is within the grain of people and businesses paying a fair and appropriate level of tax.” Key tax considerations HMRC has released some of the direct tax incentives it anticipates will form the basis of the freeports offering. Stamp Duty Land Tax (SDLT) relief Businesses will be offered SDLT relief on land purchases within the freeport tax site where the property is to be used for qualifying commercial activity. Capital allowances These will take two main forms: Enhanced Structures and Buildings Allowance (SBA) for firms building or renovating structures in a freeport and Enhanced Capital Allowances (ECA) focusing on companies investing in eligible plant and machinery. Employer National Insurance Contributions (NICs) rate relief Employers operating within the site will pay 0% employer NICs on any new employee working within the site.
Tips for becoming a confident speaker and communicator Posted 11/16/2021 by Sophie Cross & filed under Communication. Two of the most important things to remember when it comes to getting better at speaking and communicating are that you can get better at anything you want to with some work and practice. The second is that everyone finds things challenging at first and has to go through an uncomfortable period of growth. Here’s how you can become a more confident speaker and communicator. Recognition An essential part of self-development is recognising weaknesses and having the desire to improve on them. This is a skill in itself and demonstrates ambition and self-awareness. Think about what skills you specifically need to improve on and what you are already good at in relation to speaking and communicating. These are some of the skills related to communicating: ListeningAsking questionsIntroducing yourself and othersRemembering informationInterviews Written communicationPreparationReading out loudTalking on the phoneVideo callsTeaching othersChatting one-on-oneSpeaking in front of small groupsSpeaking in front of large groups Reframing It’s possible to reframe some of the tasks related to speaking and communicating to make them more enjoyable. For example, if you dislike networking events and don’t like talking about yourself, you can reframe them as events where you listen and learn about others and ask them questions. By focusing on listening instead of speaking, you can quash your nerves, and the conversation will flow better. How to listen: Really think about what the person is saying, not what you are going to say next.What do they want to tell you? Not: what do you want to hear?Be curious.Ask questions. Get inspired Answer the following questions: What will being a more confident communicator allow you to do?What benefits would it bring to your life?Who are some role models for you?What do you think makes someone a good communicator? Challenge yourself To make progress, we need to step outside our comfort zone, but it’s up to you how far you go. What’s the smallest step you can take to improve? Here are some ideas: Have a video callAsk a question in every class you haveDo a mock interview with a friendTeach someone somethingDo a talk to a small group or onlineGo to a networking eventDo a talk about something you know a lot about and are passionate about Getting out of your comfort zone will give you a competitive advantage when it comes to things like job interviews or starting a business. The more you practice and push yourself, the more benefits that you’ll gain. Many people don’t like public speaking, networking or job interviews, so the better you get at communicating, the more you’ll set yourself apart. 12 tips for public speaking Don’t think about how you can come across as clever or the authority; think about how you can help the person or people you’re speaking to. If you are comfortable having a conversation with a friend and answering questions when you’re chatting, then there’s no reason that you can’t do this in a more formal or public situation, like on a panel or in a job interview. Nerves are to be expected, and nerves can be helpful. Being nervous and being excited feels very similar. Do as much research and preparation as you can to feel more confident. Make some notes beforehand.Record videos and audio notes on your phone.Ask a friend if you can practice with them. Start small. There are opportunities everywhere for you to get better at communicating, so think about the right next step for you. No one will mind if you make a mistake, stumble a bit or pause. Do you mind when other people do? It makes you human, and it actually makes people warm to you.Tell people that you feel a bit nervous or make a bit of a joke of it – it will break the tension.Don’t be afraid to say that you don’t know or you’ll find out the answer and get back to them. Don’t try and blag it.Don’t forget to breathe. Reflect When you have been in a situation where you’ve been communicating, reflect on your experience. What went well, and what could have gone better? What would you do differently next time? And look back at how far you’ve come. It’s easy not to notice the progress you’ve made, and it’s important and motivating to give yourself the credit you deserve. Further reading How to critically reflect on your studiesWhat’s the best way to get work experience?15 questions you could ask at a job interview
AAT praised in fight against Anti-Money Laundering Posted 11/15/2021 by AAT Comment & filed under AAT news, Members. The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) has said that AAT has made significant progress in its contribution to Anti-Money Laundering (AML). In a new report, OPBAS says it is encouraged by progress in AAT’s approach to AML and counter-terrorism financing since it last visited in 2018. It noted improvements in governance and guidance to members and highlighted significant improvements in the following areas: • AAT’s risk-based approach that effectively prioritises our anti-money laundering (AML) supervisory and enforcement work; • providing information and guidance for members to help them understand their high-level obligations; • the quality and accuracy of information and guidance; • information sharing between supervisors and public authorities. Volunteers needed to improve SARs reporting The NCA is improving the way Suspicious Activity Reporting works – and you could help. If you would like to help test the new online portal, email the team on the link below. Email the team AAT welcomes the recognition by OPBAS of the measures put in place to demonstrate our continued commitment to delivering on our responsibilities as an AML professional supervisory body. AAT aims to have the greatest possible impact on the prevention of money laundering through its supervision of AAT members, helping to make the UK an inhospitable place for criminals. AAT Professional Standards Policy Development Manager, Jackson Quaker, comments: “The last 18 months have been a difficult period for AAT members with the ongoing impact of coronavirus (Covid-19) and with regulatory changes having a significant impact on general practice, particularly with regards to the Money Laundering Regulations. “We are pleased by recognition of our response to Covid-19 and our supervisory activities by OPBAS. As cited in the report, AAT has shown effectiveness in amending our approach to factor in pandemic-specific challenges, such as providing updated guidance on alternative methods of customer due diligence verification and with our supervisory review processes.” As highlighted in its annual AML report, AAT is pleased to find many examples through its supervisory work that show how AAT members embrace the risk-based approach to AML and make full use of AAT’s resources to assist in their compliance. AAT is committed to evolving its approach to supervision, using a wide range of methods to enrich understanding of risks, drive more effective supervision and ensure that standards are being met and maintained. Help improve the SARs online portal As part of the SARs online programme, the NCA is replacing the current SAR online portal. The changes are not due to go live until next year and AAT will keep you informed of the progress. Please see SAR Online demo – YouTube to get a feel for how it will look, the reasons for the changes and how they can help improve financial crime intelligence. As part of this planned rollout, the NCA is looking to recruit volunteers for the SAR Online Portal testing. If you would like to find out more about planned user testing and get involved, please contact [email protected].