Technical and Insight
Taxation of pension benefits
The key points to consider when looking at how inherited pension pots are taxed.

The key points to consider when looking at how inherited pension pots are taxed.

When a member of a pension scheme dies the pension pots relating to that person may be passed on to living individuals.


Often a member of a pension scheme will start to draw their pension benefits when they retire, ie they will cease full time employment and in order to maintain their living standard they will start to withdraw benefits from their pension scheme(s). However, since 6 April 2015 legislation changes give pension scheme members options regarding when they could take benefits from their pension schemes.


Taking benefits from defined benefit pension schemes

In most cases the rules of the defined benefit pension scheme will stipulate the options available to the scheme member. Typically the options available will include: 

  • withdrawing a pension (usually monthly payments). Often this will be reduced if started before the normal retirement date and is often enhanced if started after the normal retirement date (which will be specified in the scheme rules)
  • withdrawing a tax free cash lump sum (limits apply) followed by a reduced pension (usually monthly payments)
  • transferring the ‘pension pot’ to another pension scheme (either another defined benefit scheme or a defined contribution scheme).

When the member dies the defined benefit pension scheme rules will usually only allow a pension to be paid to a dependant (this would include a husband, wife, civil partner or child under the age of 23). This dependant’s pension may be less than the pension which the member was entitled to. 

Taking benefits from defined contribution pension schemes
Most defined contribution pension scheme providers will allow greater flexibility about how benefits can be withdrawn from such a scheme. Typically the options available to the member will include: 

  • purchase annuities (these usually pay a monthly amount for the remaining life of the member) (although other individuals may be paid after the member dies)
  • withdrawing a tax free lump sum (limits apply)
  • withdrawing amounts, 25% of which is tax free and the remainder is taxed at the member's marginal rate of tax
  • transferring the ‘pension pot’ to another pension scheme (either another defined benefit scheme or a defined contribution scheme)
  • on the death of the member any remaining funds in the ‘pension pot’ will usually be paid to an individual or individuals nominated as beneficiaries of the scheme
  • the pension scheme provider will usually allow a member to use any combination of the above options.


When can a member make withdrawals from a defined contribution pension scheme?
If the member is under 55 years of age then access to the pension pot will normally only be available if: 

  • the member is in poor health
  • the member is in a profession where retirement is lower than normal (such as a professional sports person)
  • the member has a protected pension age lower than 55.

If the member is 55 years old or over, then that member can usually access the pension pot at any time, whether they are still working or not (although sometimes the scheme rules may stipulate otherwise). 

How is the beneficiary taxed relating to a defined contribution pension scheme which they inherit?
The tax treatment will depend on the age of the member when they died and the nature of the scheme at the date of that death. There is a different tax treatment if the member dies before the age of 75 as opposed to after the age of 75.


Death below age 75

1.    Uncrystallised funds

The fund can be paid to any beneficiary tax free as a lump sum, annuity or as a drawdown pension.

The benefits will be tested against the lifetime allowance.

2.    Crystallised (in drawdown)

The fund can be paid to any beneficiary tax free as a lump sum or as a drawdown pension. A drawdown fund can be used to buy an annuity at any time.

3.    ‘Joint life annuity’, ‘Guaranteed term annuity’ or ‘Annuity with protected lump sum death benefit’

Any beneficiary can receive payments tax free.


The rule remains that tax free lump sum payments (where the member dies under 75) must be made within two years of the scheme administrator being notified of the death of the individual. However, any lump sum payments made after the two year period will no longer be an unauthorised payment (i.e. taxable at 55%). Instead they are taxed at the recipient’s marginal rate.


Payments from a joint-life annuity, or an annuity purchased from crystallised rights or unused funds remaining in a drawdown pension, must be made within two years of the scheme administrator being notified of the death of the individual, or they become taxable at the recipient’s marginal rate.


Death after age 75

1.    Uncrystallised funds and Crystallised funds

The fund can be paid to any beneficiary, taxed at their marginal rate. Payment can occur as a lump sum, annuity or as a drawdown pension.
The fund can be paid to a trust as a lump sum in which case a 45% tax charge will be deducted before being paid to the trust.

2.    ‘Joint life annuity’, ‘Guaranteed term annuity’

Any beneficiary can receive payments taxed at their marginal rate.

  • 3.    Annuity with protected lump sum death benefit


Any beneficiary can receive the lump sum payment taxed at their marginal rate. The fund can be paid to a trust as a lump sum in which case a 45% tax charge will be deducted before being paid to the trust.


Lifetime allowance charge at age of 75 or if death occurs before age 75

If a member’s pension has not already been tested against the lifetime allowance, then when that individual dies it will be tested before being passed on to the beneficiary. Any pension funds that a person inherits will not count towards their own lifetime allowance.


However, if the member was aged under 75 when they died, and the uncrystallised funds lump sum death benefit is paid more than two years from the date the scheme administrator first knew of the member’s death (or if earlier, the date they could first reasonably have been expected to know of it), the uncrystallised funds lump sum death benefit is not tested against the lifetime allowance.


The lifetime allowance charge (LTA) only applies when the benefits in a person’s pension schemes exceed the available Lifetime Allowance following a Benefit Crystallisation Event (BCE). There are currently 13 BCEs, three of which occur when an individual reaches the age of 75 and two occur when an individual dies before their 75th birthday.


The LTA charge is applied to the amount which crystallises at a BCE over and above the member’s available LTA. The charge is applied at two different rates as follows: 

  • 55% if the excess is taken as a lump sum before age 75 (known as a LTA excess lump sum); or
  • 25% if the excess is retained within the scheme.



Mr A has a BCE and the value of his pension schemes at that time exceeds his available LTA by £200,000. Mr A has the choice of taking the excess as: 

  • a lifetime allowance excess lump sum of £90,000 (£200,000 x (1 – 55%)) or
  • £150,000 could be retained in the scheme(s) to provide Mr A with benefits in the future (but would be subject to tax under PAYE).


If an individual has a Benefit Crystallisation Event before age 75 there may be a second BCE at the age of 75.


The lifetime allowance has been as follows:

2006/07          £1.50m

2007/08          £1.60m

2008/09          £1.65m

2009/10          £1.75m

2010/11          £1.80m

2011/12          £1.80m

2012/13          £1.50m

2013/14          £1.50m

2014/15          £1.25m

2015/16          £1.25m

2016/17          £1.00m

2017/18          £1.00m



Mr B, in the tax year to 5 April 2013, withdrew a tax free lump sum of £200,000 and the remaining £600,000 was transferred to a drawdown pension scheme. Mr B had no other pension schemes. This used 53.3% of the LTA (£800,000/£1,500,000).

For that year the lifetime allowance was £1,500,000. Mr B was 70 years old in the tax year ended 5 April 2013.


Mr B has taken no income from the drawdown fund and in the year ended 5 April 2018 Mr B is 75 years old and the drawdown fund has increased in value to £1,300,000. At age 75 there is a second BCE. The crystallisation amount is the fund value less the original drawdown value at the previous BCE (£1,300,000 less £600,000 = £700,000). The lifetime allowance remaining at the second BCE is 46.6% x £1,000,000 = £466,667.


There is a Lifetime Allowance Charge on £700,000 less £466,667 = £233,333.

As the funds are retained in the drawdown scheme the charge is £233,333 x 25% = £58,333 which is deducted from the fund and paid to HMRC by the pension scheme administrators.


Other scenarios which could have occurred regarding Mr B:

  1. If he had died before reaching the age of 75, then the funds would be paid to his nominees tax free and there would be no second crystallisation event and no LTA tax charge on death.
  2. Mr B could have withdrawn some of the drawdown funds which would have reduced the LTA charge on his 75th birthday. For example he could have withdrawn say £200,000 over the 3 or 4 years before his 75th birthday. This would be treated as taxable income, but it may have reduced the drawdown fund to below £466,667 in which case no LTA charge would occur on his 75th birthday. However, the funds withdrawn less tax may add to his estate value at death if not spent before then.
  3. It may suit Mr B to pay the LTA charge on his 75th birthday, especially if he does not intend to touch the drawdown funds and just wants to keep them out of his estate for inheritance tax purposes.
Overpayments from customers
Don’t overlook the VAT, tax and legal implications of overpayments.

Don’t overlook the VAT, tax and legal implications of overpayments. 

A common scenario – a customer overpays your client and you pick this up when preparing the year end accounts. The client is not sure what action to take as the customer has not contacted them and seems oblivious to the error. What advice do you give?


The obvious initial reaction is that the money does not belong to the client and should be returned. However, it may not be so straightforward. For instance, the client may have made some attempt to contact the customer without success or they may be claiming that they want to hold on to the money as security against potential future sales to the same customer. The last thing that the client wants is the advice to return the money. The accountant is now in an awkward position as to what advice to give and how to treat the amounts in the accounts.


Areas to consider when advising:



There have been a number of cases considered by various tribunals on the subject of overpayments and a famous one concerning NCP car parks decided that in some cases retained overpayments would constitute further consideration for their services supplied to the parking site owner and are subject to VAT.


This leads to the guidance HMRC has included in its internal manual (supply and consideration):


Consideration – payments that are not consideration: overpayments

The value of a supply is not affected if a supplier receives payment twice for a single supply due to a mistake by the customer. The value remains the original advertised price and cannot be increased simply because of an overpayment and so the additional payment is outside the scope of VAT. This applies whether or not the supplier makes provision to return the overpayment.


However, if the overpayment is not returned and is used to pay or part-pay a future supply then it becomes consideration for a supply. So in some cases this may mean that VAT is due on the overpayment. The inference would be that if it is carried forward then this would not attract VAT.



There are several tax related cases which indicate that tax may be charged on overpayments especially when written off to the profit and loss account. Two of the main ones are:


Smart v Lincolnshire Sugar Co Ltd  illustrates the fact that even though a customer may have a claim against the taxpayer (for repayment of the original overpayment) this does not prevent the payment representing trading profits.


A major case which suggests the above is the ‘Pertemps’ case. This was a first tier tribunal case where the facts (briefly) were:


  • money was mistakenly paid over by the customer
  • the unclaimed amounts were transferred to a separate balance sheet account and subsequently released to the profit & loss account.


The main issue that the tribunal was asked to conclude on was whether these payments constituted trading receipts accruing or arising from trade for tax purposes.  The tribunal decided that they were for the following main reasons:


  1. The tribunal agreed with HMRC's submission that a mistaken payment for services has the same characteristic in the hands of the recipient trader as a payment made not in error – if the payment is made because the customer makes a mistake about owing something for services or for a trading transaction, the mistaken payment accrues from the trade of the recipient.

  2. The payments were made by customers in the mistaken belief that they owed money to Pertemps for services Pertemps had supplied to them in the course of Pertemps' trade. Even though Pertemps did not carry on any specific activity which might be said to earn or encourage the receipt of these mistaken payments, their receipt is an inevitable and unavoidable incident of Pertemps' trade.  Pertemps did not segregate the mistaken payments from its other receipts, and treated the mistaken payments as its own money, as indeed they were.  The fact that the payments were unilateral or that customers may have an entitlement to claim the money back does not prevent the payments from being trading profits.

So despite the fact that the customers mistakenly made the payments and may be due the money back, the receipt may be a taxable receipt.


Is keeping the money theft?

It may be the above considerations for VAT and tax are simply not relevant because the client’s actions in relation to the overpayment are illegal in the first place. Have a look at the Theft Act 1968 definitions:


Basic definition of theft

(1) A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and “thief” and “steal” shall be construed accordingly.

(2) It is immaterial whether the appropriation is made with a view to gain, or is made for the thief’s own benefit.


‘Appropriates’ is basically defined as:


Any assumption by a person of the rights of an owner amounts to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it, any later assumption of a right to it by keeping or dealing with it as owner.


So could the fact that the client makes no attempt to repay the money and /or ignores it in communications with the customer mean that it is deemed to be theft?


Consideration should also be taken on the timing of any transfer. The Limitations Act 1980 would need to be considered as the relevant limitation periods for a claim in relation to debt arising under statute as set out in the Limitation Act 1980 is six years.



Most clients’ sales ledgers will contain some overpayments and the reasons behind them will be many and varied. But the treatment of these might incur VAT, tax and in fact accusations of theft!


To make matters worse the spectre of a suspicious activity report to NCA under the money laundering regulations may loom depending on the client’s subsequent actions.


So the clear advice to the client must be to contact the customer, make them very aware of the issue and agree how the overpayment will be used in the future.

Changes to PAYE tax coding
Why it pays to get it right first time!

Why it pays to get it right first time! 

Real-time tax for those employed has seen HMRC pushing a number of changes through. These include payrolling of benefits in 2016 and now coding changes.  

Employers can now register themselves before the start of tax year to tax benefits as they are provided to employees. Employees used to pay a tax element through their self assessment returns or wait for the correct tax code to be issued to suffer tax at a much later date of receiving benefits. HMRC guidance on payrolling can be found here.


HMRC states that currently 8m people underpay or overpay their tax each year. Two thirds of these people (5.5 million) overpay tax, of which just over 50% are the lowest paid, earning under £15,000 a year. Additionally the current system can take up to two years for an individual’s tax account to be balanced after an underpayment has occurred. HMRC estimated that ‘these improvements will stop most people paying too much tax during the year or getting unexpected tax bills at the end of the year. They will now pay the right tax at the right time.’


From July 2017 HMRC is now generating new PAYE codes as soon as possible after receiving notifications from employers, pension companies or the taxpayers’ personal tax accounts. HMRC’s intentions are to calculate and notify the employer or pension company to repay, hopefully within the same tax year, so there is no delay in the tax refund or an unexpected bill at the year end.


However, there will be limits to the amount of tax which can be collected through the PAYE code: 

  • it can’t be more than 50% of income; and
  • it can’t double the tax liability.

While HMRC will try to use cumulative PAYE codes, they will use W1/M1 codes if any backlog is £15 or more per month. Obviously, for lower paid employees and those with tight budgets, these fluctuations could be significant and employers may be asked why the pay the person receives has fluctuated.


HMRC is encouraging people to use their online personal tax account where they can view any changes to their tax code, learn more about how their tax code is calculated and access help and support if needed. Many employers may wish to advise employees to use their account.


The Agent’s Talking Points webinar was titled: “Paying the right amount of tax through PAYE: PAYE has changed”. A recording of an earlier webinar on the same topic is available here.


In this webinar, the presenter emphasised the benefit of these changes with respect to making refunds sooner with two worked examples (reproduced below). These examples dealt with additional benefits where a change in tax code would collect the tax sooner.


Example 1

In the tax year 2017/18, Susan has a salary of £24,000pa and a personal allowance of £11,500 so her tax code is 1150L. Her usual tax deduction is around £208pm.


From 6 April 2017 Susan begins to receive a new health benefit of £200pa so 20% extra tax will be due, i.e. £40pa. Susan notifies HMRC of this benefit via her personal tax account in June 2017.


Now HMRC will collect this tax by reducing her tax code to 1130L. A cumulative notice is OK, as there is less than £15 difference in the first month which is July 2017.


In July Susan’s employer will collect the additional tax due for April-July of 4 x £3.33 = £13 (less than £15 so a cumulative correction is OK), and then the monthly additional tax from August 2017 onwards. By March 2018 Susan will have paid all the extra tax due on her new benefit.


Example 2

John has a salary of £30,000pa and a personal allowance of £11,500 so his tax code is 1150L. His usual tax deduction is around £380pm.


From 31 October 2017 John receives a company car with private use and fuel benefit. The benefit for the remainder of the tax year is worth £5,000 so tax of £1,000 will be payable for the period. Once John notifies HMRC say via his personal tax account, HMRC will send a tax code notice to him.


John doesn’t need to do anything unless he wants to change the tax payment, eg as a lump sum, or if he would have financial difficulties in paying. HMRC will also send the code to the employer for the next payday.


The new tax code will collect £200pm over the remaining pay days from November to March. This would be done on W1/M1 as the backlog would be more than £15 per month. John will have paid all £1,000 due in tax by the year end, rather than just part of it, with a balance due the following tax year in addition to the 2018/19 charge.

HMRC also suggested that collecting the tax earlier is harder on John now, but it is easier for him to plan. It is all up to an Individual taxpayer who will have his/her own opinions as to which method is preferable.



These changes of managing benefits and over/under tax payments through the current tax year should work in an ideal world, subject to:


  • HMRC being able to amend the codes correctly in time
  • the risk of issuing/amending PAYE codes twice if the individual AND the employer notify HMRC electronically being eliminated
  • the link between PTA and P11D information being maintained. 
60 second update: IR35 – how to calculate the deemed employment payment
Since April 2000 anti-avoidance legislation – known as ‘IR35’ – applies to individuals who would be employees of their clients if they didn’t use a service company.

Since April 2000 anti-avoidance legislation – known as ‘IR35’ – applies to individuals who would be employees of their clients if they didn’t use a service company. 

HMRC has designed a tool which provides its view on whether: 

  • the intermediaries legislation (known as IR35) applies to an engagement
  • the off-payroll working in the public sector rules apply to a public sector engagement
  • a worker should pay tax through PAYE for an engagement.

HMRC has stated that it will stand by the result given unless a compliance check finds the information provided isn’t accurate. If IR35 applies, all payments to an intermediary are treated as if they were employment income of the worker and the intermediary must pay any tax and NICs due. It ensures that a similar amount of tax and NICs is paid as if the worker had been directly employed by an organisation instead of via an intermediary. 

IR35 calculation
The IR35 calculation has eight steps. Each step, other than Step 7, is on cash basis for both tax and NICs. Records must therefore be kept on both a cash basis for IR35, and an accruals basis for accounting and other tax requirements such as corporation tax. 

HMRC provides a deemed employment payment calculator.

To calculate the deemed employment payment manually, you will need to follow the steps below: 

Step 1 - deduct 5% from your off-payroll income

Add up the total amount of all payments (using the VAT exclusive amounts) and other benefits received by the service company in that year in respect of all IR35 engagements.


You then apply a flat rate 5% deduction from this income for general expenses, which represents a round sum expense allowance designed to cover the extra costs of working through a service company. There is no requirement that the company actually spent 5% on this sort of expense – it may spend more, less, or nothing at all.


Step 2 - add payments made directly to the worker

Add any payments or benefits paid directly to the worker by the client, rather than to the intermediary, that would have been employment income if the worker was employed directly.


Step 3 - deduct expenses

Deduct expenses paid by the intermediary in the tax year that relate to the relevant engagements. In general, the expenses must have been incurred ‘wholly, exclusively and necessarily in the performance of the duties of the employment’.

Where off-payroll working rules apply, each engagement will be regarded as a separate permanent employment for the purposes of travel and subsistence expenses. This means that you can’t claim expenses for travel and subsistence if you regularly commute from home to a workplace for an off-payroll engagement.


Expenses include:

  • incidental overnight expenses
  • work-related training provided by clients or agents (but not by the service company)
  • professional fees and subscriptions
  • professional indemnity insurance (PII).


Step 4 - deduct capital allowances

This applies to plant or machinery bought for the purpose of the performance of the tasks required by the engagement. You will only get relief if the duties of the engagement meant that the intermediary had to provide the equipment in question. If the intermediary purchases the equipment out of choice then you can’t claim the deduction.


You cannot claim the full value of items which you also use for outside engagements where the off-payroll working rules don’t apply. You must reduce the capital allowances you enter by the proportion you use the asset outside the off-payroll engagements.


Step 5 - deduct pension contributions

Deduct any employer contributions to a registered pension scheme.


Step 6 - deduct employer NICs

Deduct any Class 1 and Class 1a NICs paid to HMRC by the intermediary in the tax year on the salary and benefits paid to their worker.


Step 7 - deduct salary and benefits already paid to the worker

Deduct the amount of salary and benefits paid by the service company to the worker that has been taxed as employment income. If the figure is nil or a negative number, there is no deemed employment payment and no further employment taxes to pay.


Step 8 - deduct employer NICs on the deemed payment

Deduct the employer’s NICs on the result above.


Pay tax and NICs on the deemed payment

When all these steps have been completed, the result gives the individual’s deemed employment income from contracts within IR35. The service company is required to pay over the PAYE and NICs due, using the RTI system by including the deemed employment payment on an FPS on or before 5 April.


Normal reporting deadlines apply. However, because of the difficulties in carrying out the calculation within this timetable, estimated figures can be used. If the tax and NICs are paid late interest is charged, but there are no penalties. The company should report these on an Earlier Year Update (EYU) submitted on or before 31 January following the end of the tax year. By concession, there are no penalties as long as the tax and NICs are paid by 31 January following the end of the tax year.



Total income received by the service company £50,000, wages paid to the worker £8,000, pension contribution made by the employer to a registered pension scheme £3,500.


Step 1

Total sum received



Less 5%


Step 2

Add Payment made directly to worker


Step 3

Less Expenses


Step 4

Less Capital allowances


Step 5

Top of Form

Employer’s pension contributions

Bottom of Form


Step 6

Employer's NIC


Step 7

Salary paid





Step 8

Employer's NICs on attributable earning





Deemed earning



Employee NIC on deemed earning





Total NIC due (4,365.55+3,796.13)


The usefulness of FRS 105 and the micro-entity regime
The micro-entity regime (including FRS 105) was a fundamental change in the accounting regime. Please share your feedback on how it has impacted on you by taking our survey.

Micro-entity regime

The UK introduced an optional company law reporting regime for micro companies in 2013. While still requiring a balance sheet to be prepared and filed, it allowed for minimal accompanying disclosure requirements in those accounts, subject also to them not being allowed to revalue items to fair value. 


It is available to companies falling below two out of three of the size criteria:

  • turnover of £632,000
  • balance sheet total of £316,000
  • employees number of 10.

A number of companies are not eligible – for example charities, some financial entities, members of groups.    



In 2015 the FRC provided an accounting standard FRS 105 that is available to be used by those eligible under company law. FRS 105 was based on the minimum note disclosures in the legislation and on the accounting (recognition and measurement) principles of FRS 102, the main accounting standard for the UK and Republic of Ireland (ROI), subject to some simplifications. The accounting simplifications included: 

  • not accounting for deferred tax
  • not accounting for equity-settled share based payments
  • not using effective interest rates or imputed market rates for discounting financial instruments
  • using contracted rates for foreign currency financial assets and liabilities
  • not allowing development costs of new products or processes to be capitalised
  • not allowing fair values (for investment and other property, financial instruments).


Some welcomed these proposals as proportionate reduction in administrative burdens for the smallest entities that are not justified by the public interest in them.


Others regretted the potential loss of information about the majority of UK and ROI available on the public record, considered the micro-entity financial statements as not fit for any purpose and considered the reduction in burden as insignificant given that accounting would still be required for tax purposes. 


FRS 105 has been available for accounts for periods beginning on or after 1 January 2016.



ACCA recognises the micro-entity regime (including FRS 105) was a fundamental change in the accounting regime. We are interested therefore in the extent to which our practitioners and your clients are taking it up and why or why not.

Please take this survey to help us with an assessment of this significant change. The survey will be open until noon on Tuesday 12 September.

If you have any other feedback please emails us at - we welcome all of your thoughts and insight.

Is the end of the £30,000 tax free termination payment in sight?
Changes in the pipeline as HMRC seeks to ensure rules are ‘fairer’.

Changes in the pipeline as HMRC seeks to ensure rules are ‘fairer’. 

Many employees have traditionally benefited from the ‘legendary’ £30,000 termination payment as it has always been assumed that it would always be tax free.


The legislation governing this has always been complicated and HMRC has been concerned that the rules ‘should be fair and not open to abuse or manipulation’.


This normally results in some sort of clampdown on taxpayers and sure enough in the summer of 2015 it launched a consultation on simplification of the tax and national insurance treatment of termination payments. This was followed by draft legislation (being part of the summer 2016 Budget) which included the following main objectives: 

  • clarifying the scope of the exemption for termination payments to prevent manipulation, by making the tax and National Insurance contributions (NICs) consequences of all post-employment payments consistent
  • aligning the rules for income tax and employer NICs so that employer NICs will be payable on payments above £30,000 (which are currently only subject to income tax)
  • removing foreign service relief
  • clarifying that the exemption for injury does not apply in cases of injured feelings.

The most important part of these changes is contained in the first point. Clearly HMRC wants to limit the use of the traditional tax free amount. Unfortunately, to confuse matters the changes were included in the Finance Act 2017 which was delayed due to the general election. Finance Bill 2017 (2) explanatory notes highlights the areas that will be legislated and states:


Termination payments etc:

Authorises the Finance Bill to make provision in a future year about the tax treatment of payments or benefits received in connection with the termination of an employment or a change in the duties in, or earnings from, an employment.


The current situation

Many employees and accountants advising clients have long assumed that most lump sum termination payments would benefit from the tax free status. Although this has always been technically subjective, the rules have long been a minefield and this leaves all interested parties confused as to what does/does not count and exactly what exemptions may be due. Where the payment did not count it would be taxable under ITEPA 2003 s.62


The situation is very confusing and HMRC has made it clear that it considers the existing rules can encourage manipulation by employers to take advantage of the exemptions and can encourage employers, in some circumstances, to change the nature of some payments so that they become termination payments, including remuneration such as bonuses which would normally be subject to tax and NICs.

What is impact of the changes?

The original consultation stated that HMRC wanted to ensure: 

  • the tax system should continue to provide support to those who lose their job
  • the rules should provide certainty for employees and employers and be simple
  • the rules should be fair and not open to abuse or manipulation.

Clause 14 of the original Finance Act (2) 2017 introduced a number of amendments to ‘tighten and clarify the income tax treatment of termination payments’. These effectively alter the existing legislation and also add new sections 402A to 402E into Chapter 3 of Part 6 (Payments and Benefits on Termination of Employment etc) of ITEPA.


However, instead of clarifying the rules it might be argued that the amendments simply add another layer of uncertainty.  The detailed changes are beyond the scope of this article but the main issues are: 

  • the new sections 402 a and b seek to clarify what is a termination benefit and exactly how it is treated/what exemptions it may attract.
  • the new section 402c sets out whether a termination benefit is to be treated as a redundancy payment
  • the new sections 402 d and e contain details of relevant calculations and the importance of dates of payment.


The effects of the above can be briefly summarised as: 

  • if the payment is deemed to be a redundancy payment (redundancy as defined by Employment Rights Act 1996) then the £30,000 exemption still applies
  • if the payment is an approved contractual payment (a payment to a person on the termination of the person’s employment under an agreement in respect of which an order is in force under section 157 of ERA 1996 or Article 192 of ER(NI)O 1996) then there are still limited exemptions available
  • if the payment is deemed to be general earnings then it will probably be taxable in full as no exemption will apply
  • a new category of post-employment notice pay (PENP) is introduced. This is defined as the amount of a termination award which should be treated as general earnings (ie taxable). Effectively this seeks to reduce the use of the £30,000 exemption.


Employers and accountants advising clients need to be very clear about the new rules and whether or not payments are taxable. HMRC clearly wants to limit the use of the exemption and so employees’ expectations may not be met. There are obvious dangers in setting or altering the terms of the payments to try and benefit from the exemptions. Grey areas still exist including whether or not a payment is contractual and the status of emergency employment issues such as an employee being sent on ‘gardening leave’.

Automatic enrolment regulator spot-checks
Why it could pay to know your client's on-going duties.

Why it could pay to know your client's on-going duties. 

The Pensions Regulator has advised that it is undertaking spot-checks on businesses that have already automatically enrolled their staff. These are to check compliance but it is also highlighting the importance of making sure businesses are compliant with on-going obligations, including monitoring the ages and earnings of employees.


In its guidance the Regulator highlights under the section Keep track of age and earnings changes that must be monitored: 

  • 128. Changes in age and earnings may see a worker move between the different categories of worker. The employer duties in relation to that worker will therefore change. For this reason, it is important to monitor age and earnings – this is especially important for workers who earn below the qualifying earnings threshold, or who are under 22 years old.
  • 129. An employer will need to put procedures in place to monitor when their workers move from one category of worker to another, and alert them as to what this means in practice.

Employers' on-going duties are to identify whether a person is a worker and the category they fit within. Their obligation will be to issue the appropriate communication to each category of worker (eligible jobholders, non-eligible jobholders or entitled workers) and pay the appropriate contribution for any eligible jobholders or non-eligible jobholders. 

Eligible jobholders
These are workers who: 

  • are aged at least 22 but under state pension age
  • are working or ordinarily work in the UK under their contract
  • have qualifying earnings payable by the employer in the relevant pay reference period that are above the earnings trigger for automatic enrolment.

Non-eligible jobholders
These include workers who either: 

  • are aged between 16 and 74
  • are working or ordinarily work in the UK under their contract
  • have qualifying earnings payable by the employer in the relevant pay reference period but below the earnings trigger for automatic enrolment.


  • are aged between 16 and 21, or state pension age and 74
  • are working or ordinarily work in the UK under their contract
  • have qualifying earnings payable by the employer in the relevant pay reference period that are above the earnings trigger for automatic enrolment.

Entitled workers
They are called this because they are ‘entitled’ to join a pension scheme. These are workers who: 

  • are aged between 16 and 74
  • are working or ordinarily work in the UK under their contract
  • do not have qualifying earnings payable by the employer in the relevant pay reference period.




Annual threshold

Lower level of qualifying earnings


Earnings trigger for automatic enrolment


Upper level of qualifying earnings



From October new employers – including all new limited companies – will have instant pension duties and obligations. These businesses will need to put pension plans in place. Advisers should update new company checklists for the requirements and consider using the new online suite of information and tools made available by the Pensions Regulator.


It is important to remember that even those businesses with no employees in a pension scheme will still have a legal requirement to complete a declaration of compliance online within five months of their duties start date.


Auto enrolment enforcement

The Pension Regulator won’t let businesses avoid their pension requirements.

The Pension Regulator won’t let businesses avoid their pension requirements. 

The Pension Regulator has published its latest compliance and enforcement bulletin, once again providing details of action it has taken. 

Within this bulletin the following case study is noteworthy: 

Case study
A London-based car hire company had a staging date in January 2016. It sent a letter to its staff, telling them they’d soon be automatically enrolled, and that if they wanted to opt out ahead of this time they should sign and return the form. 

In early April of this year we carried out an inspection as part of our compliance validation drive. They had claimed to have zero workers, but our intelligence suggested otherwise. 

The employer claimed that ill health, financial difficulties and bad advice from their accountant had contributed to their failure to comply. Their accountant had drawn up the letter that was sent to employees, with a tear-off slip asking them to fill it in if they wanted to opt out. 

As the employer had failed to put any of their staff into a pension scheme, we sent them a compliance notice, warning them that we would fine them unless they quickly put things right.


Six weeks later they sent us proof of their compliance, the letters they’d sent to their staff and confirmation that they’d automatically enrolled the 13 people who were eligible. They also provided evidence that they’d backdated over a year’s worth of contributions to their original staging date, and were finally compliant on 8 June 2017. 

Message to employers
Whether your intentions are to make things easier for your staff or avoid paying into their pension scheme, the law is the same. They can’t opt out before you put them into a pension scheme, even if they’ve told you it’s what they want.

60 second update - CGT loss relief when a taxpayer dies
What to consider when it comes to CGT losses, including worked example.

What to consider when it comes to CGT losses, including worked example. 

Losses are always an area that requires consideration. The basic rules regarding capital gains tax are:


  • no liability to capital gains tax arises on death. The personal representatives are treated as acquiring the deceased’s assets at the market value at the time of death
  • no liability to capital gains tax arises on the transfer of assets from the personal representatives to the legatees. Each legatee is treated as having acquired the asset at market value at the time of death
  • if the personal representatives sell an asset while administering the estate then they will be liable to capital gains tax although they are entitled to the same annual exempt amount as individuals for the year of death and the following two years. Any gain or loss arising on the disposal of the asset by the personal representative after the death is calculated by reference to the market value of the asset at the date of death.

Where an allowable loss is incurred by the deceased in the tax year of death, on disposals made before death, these losses are set off against chargeable gains in that tax year and any excess losses can be carried back and set against chargeable gains in the three preceding tax years. Chargeable gains accruing in a later year must be relieved before those of an earlier year. Any remaining unused losses cannot be carried forward and set off against gains made by the personal representatives or legatees. 

Rose sells an asset on 1 May 2017 realising an allowable loss of £95,000. She then dies on 1 September 2017. Rose had no chargeable gains for 2017/18 but had chargeable gains (before the annual exemption) in 2016/17 and 2015/2016 of £55,000 and £75,000 respectively. 

The 2017/18 allowable loss is carried back as follows:


Firstly to 2016/17                                        £          £

Chargeable gains                                                    55,000

Loss carried back from 2017/18                              43,900


Annual exempt amount                                           11,100

Taxable gain                                                                   Nil


Loss summary

Loss from 2017/18                           95,000

Loss utilised in 2016/17                   43,900

Losses carried back                         41,100

2015/16                                             £                      £

Chargeable gains                                                     75,000

Loss carried back                                                     41,100


Annual exempt amount                                            11,100

Taxable gain                                                             22,800


Loss summary

Loss brought back from 2017/18   41,100

Loss utilised in 2015/16                 41,100

Losses carried back                             Nil


General points to consider

The following points are worth remembering:


  • if an asset in an estate is to be sold it may be appropriate to consider transferring the asset to the legatee(s) before the sale occurs. The points to consider are that the legatee’s annual exemptions and the rates of capital gains tax payable by the legatee(s) compared to the personal representatives' rate
  • if there are a large number of legatees, each will be entitled to their own annual exempt amount
  • some legatees (such as non-resident individuals and charities) may not be liable to capital gains tax
  • even if legatees are subject to capital gains tax they may be subject to a lower rate of capital gains tax than the personal representatives
  • inheritance tax relief may be available on certain types of assets, therefore the person who owns the asset(s) may consider not selling such assets if he/she considers his/her death may be imminent.


Tax treatment of Banco Santander rights issue
Advice on how to treat tax on last month’s share issue.

Advice on how to treat tax on last month’s share issue. 

Santander shareholders were able to subscribe one new share for every 10 shares they held at a price of 4.85 euros per share. Shareholders who wished to exercise their right to subscribe shares were allowed to do so for a period of 15 days from 6 July to 20 July 2017. 

Banco Santander shares can either be held directly or via CREST Deposit Interests (CDIs). While UK CDI holders are set to benefit from the capital raising known as a ‘rights issue’, those invested via Santander’s Nominee Service are not being given the same options.

Santander has arranged an automatic sale of the rights of UK investors holding CDIs through its nominee service. Those who have invested in Santander CDIs separately through a broker may be able to take up their rights; however, those who hold CDIs via Santander’s Nominee Service were not given the right to take up the rights issue.

Tax Information
The sale or gift of Santander shares and rights has Spanish tax reporting implications. The following information has been provided by Banco Santander, SA:


  • shareholders disposing of Banco Santander shares or subscription rights to Banco Santander shares by way of sale or gift and who realise a gain on that disposal are required by Spanish law to file a tax return (Form 210) with the Spanish tax authorities declaring the gain made on the disposal
  • a Form 210 must be filed annually for all such transfers carried out in each calendar year. A Form 210 must be filed by the shareholder between 1 January and 20 January in the year following the year in which the sale or gift of the shares was completed. Even if no tax is payable, failure to file a Form 210 on time can give rise to a 100 euros fine which may increase to 200 euros if a Form 210 is not filed before a request has been issued by the Spanish tax authorities
  • if a shareholder wishes to apply for an exemption from Spanish tax in relation to the sale or gift of shares or subscription rights as a resident of a Member State of the European Union, a Form 210 must be accompanied by an appropriate certificate of residence issued by the relevant tax authority (in the UK this would be HM Revenue and Customs)
  • Spanish tax Form 210 is in Spanish; however, there is a guide written in English which explains how to complete this form. This guide can be found online here
  • Section 7 of the above guide explains how to obtain a Certificate of Tax Residence from HMRC. 
Employee benefit trusts and tax avoidance
GAAR Advisory Panel issues significant conclusion in recent case.

GAAR Advisory Panel issues significant conclusion in recent case. 

In a recent company and taxpayer case concerning employee rewards the GAAR Advisory Panel concluded that: 

  • ‘entering into the tax arrangements isn’t a reasonable course of action in relation to the relevant tax provisions
  • carrying out of the tax arrangements isn’t a reasonable course of action in relation to the relevant tax provisions’.

The above opinion concerned an employee benefit trust, the company and two directors who held 100% of the shares in the company. The arrangement as outlined in the GAAR decision highlighted that:  

  • ‘4.1 The Company wished to reward and incentivise its key employees Mr X and Mrs Y. Advice was sought on how to structure this reward so it would not constitute remuneration for tax purposes.
  • 4.2 The reward was structured in the following way: a purchase of gold for the Employees was funded by the Company; that gold was immediately sold by the Employees; the Company’s liability to pay the third party gold supplier was settled by the Employees in return for a director’s loan account credit in favour of the Employees; in connection with the purchase of the gold a long term obligation was created under which the Employees were required in the future to pay to the trustees of the EBT an amount at least equal to the purchase price of the gold (plus indexation).’

In arriving at its conclusion the GAAR panel summarised in the section ‘The arrangements – contentious facts’ that: 

  • ‘5.1 HMRC maintains that the Employees’ obligation to fund the EBT in return for receiving his reward is not a bargain on arm’s length terms. The Company and the Employees disagree.
  • 5.2 We reach our conclusion without having to take a view on, and without being influenced by, whether or not the obligation to fund the EBT is a bargain on arm’s length terms.
  • 5.3 HMRC maintains that there is no evidence to suggest the Employees’ obligation to fund the EBT will be met. The Company and the Employees maintain that the obligation is genuine.
  • 5.4 We reach our conclusion without having to take a view on, and without being influenced by, whether the Employees intended to meet their contractual funding obligations.’

Section 10 is interesting reading as the panel conclude that:  

  • ‘10.7 In our view the steps in this case involving gold are abnormal and contrived.
  • 10.8 It is not abnormal for an employer to establish an employee benefit trust. The scheme of legislation for employee benefits recognises employers have a choice as to whether to reward employees direct or via an employee benefit trust.
  • 10.9 It is, however, abnormal for the obligation to fund an employer established employee benefit trust to be fulfilled by its key employees.
  • 10.10 In this case we can see no reason, other than for tax purposes, for the steps involving the EBT to include the assumption by the Employees of the Company’s trust funding obligation.

Had the EBT been funded in the normal way by the company and the trustees lent funds to the employees, none of the company, the employees or the EBT would have been in a substantially different economic or commercial position.’

Anti-money laundering – high value dealers
HMRC highlights changes to the supervision process for ‘high value dealers’.

HMRC highlights changes to the supervision process for ‘high value dealers’. 

New guidance states that HMRC supervises high value dealers and a business ‘must not make or accept high value payments unless it is registered with HMRC’. It also stresses that a business ‘must inform HMRC of the names of the compliance and nominated officers within 14 days of the appointment and if there is a change in the post holder’ and that a business ‘must not accept or make a high value cash payment until it ‘has registered as a high value dealer’. 

High value dealers are defined as a ‘firm or sole practitioner, who or whose employees make or accept cash payments of €10,000 or more, or its equivalent in another currency in exchange for goods, including when this payment is made into your bank account or to a third party for your benefit. It does not include payment made for services. Where a payment is made for goods and services, such as fitting a bathroom, the transaction is only in scope if the goods are valued at more than €10,000 or the equivalent in another currency.’ 

If a business is ‘only ever paid large amounts by credit card, debit card or cheque’ it does not need to register.

In the guidance a number of high value dealer sub-sectors are highlighted, including: 

  • alcohol
  • antiques, art and music
  • auction
  • boats & yachts
  • caravans
  • cars
  • cash & carry/wholesale
  • electronics
  • food
  • gold
  • household goods and furniture
  • jewellery
  • mobile phones
  • plant, machinery and equipment
  • recycling
  • textiles and clothing
  • vehicles other than cars.

The guidance includes core minimum obligations for the high value dealers as well as suggested actions that should be taken. Under the record keeping section these are: 

Core obligations
‘You must retain: 

  • copies of the evidence obtained of a customer’s identity for five years after the end of the business relationship
  • details of customer transactions for five years from the date of the transaction
  • details of actions taken in respect of internal and external suspicion reports
  • details of information considered by the nominated officer in respect of an internal report, where the nominated officer does not make a suspicious activity report
  • copies of the evidence obtained if you are relied on by another person to carry out customer due diligence, for five years from the date of the agreement, the agreement should be in writing.

You must also maintain:

  • a written record of your risk assessment
  • a written record of your policies, controls and procedure.

Actions required
The points below are to be kept under regular review: 

  • maintain appropriate systems for retaining records
  • making records available when required, within the specified timescales’.

Further insight
More information is available online in this money laundering guidance and these pages looking at high value dealer registration 


Anti-money laundering - guidance for the accountancy sector
CCAB issues updated guidance in line with the 2017 anti-money laundering regulations.
Anti-money laundering guidance for the accountancy sector 

CCAB has issued new draft guidance for all entities providing audit, accountancy, tax advisory, insolvency or related services, such as trust and company services, by way of business. 

This draft guidance has been updated for the 2017 Regulations and sent to HM Treasury for approval later this year, after which it will be published as final. 

See the guidance here while ACCA will be updating our AML pages shortly.
Anti-money laundering - Responsibilities when verifying the status of new clients
Can you rely on third parties for money laundering compliance?

Can you rely on third parties for money laundering compliance? 

ACCA's Technical Advisory Service regularly receives calls from members who either subscribe to – or have received sales calls from – third party organisations that claim to provide a ‘one stop shop’ service for all their compliance needs. 

Cold calling has increased as a result of the recent changes to the money laundering regulations (MLRs) effective from 26 June 2017. The question is can a third party provide an online service which absolves ACCA members from having to carry out any additional work on their clients? This is what some of the companies claim but unfortunately it is not true.


When a firm pays for these services effectively what they get for their money is an extra ‘layer of comfort’ about a new or existing client. Although companies vary, typically these services could include some/all of the following: 

  • credit checks
  • certain ID checks
  • certain due diligence checks
  • address checks
  • financial information.


The issue is that the above – although useful to members – may not mean that their work has ended.  So firms that rely totally on third party services run the risk of non-compliance with some of the MLRs and also ACCA's Rulebook. 


To illustrate this let’s look at the existing ACCA Rulebook advice on customer due diligence:


Before any work is undertaken, the professional accountant shall verify the identity of the potential client by reliable and independent means. The professional accountant shall retain on their own files copies of such evidence. This will involve the following:


 (a) where the client is an individual: by obtaining independent evidence of the client’s identity, such as a passport and proof of address;


 (b) where the client is a company or other legal entity: by obtaining proof of incorporation; by establishing the primary business address and, where applicable, registered address; by establishing the structure, management and ownership of the company; and by establishing the identities of those persons instructing the professional accountant on behalf of the company and verifying that those persons are authorised to do so;


 (c) in either case: by establishing the identity and address of any other individuals exercising ultimate control over the client and/or who will be the ultimate beneficiaries of the work or transactions to be carried out; and

 (d) by establishing precisely what work or transaction is desired to be carried out and to what purpose.


If the professional accountant is unable to satisfy himself/herself as to the potential client’s identity, no work shall be undertaken.


Note that subject to any local legal requirement for a longer period of record retention, a professional accountant shall retain all client identification records for at least five years after the end of the client relationship. Records of all transactions and other work carried out, in a full audit trail form, shall be retained for at least five years after the conclusion of the transaction.


A third party could help with some of the above requirements but in many cases the above could all be carried out by the accounting firm. As part of the ‘know your client’ work the accountant would naturally want to visit the client (where possible) and gain a satisfactory knowledge of the business and how it works. Only by doing this would they be in a position to identify potentially suspicious transactions. So in this instance it would be difficult to see how a third party could provide the service.


Changes to the MLRs

You must still identify and verify the owner and the beneficial owner but the regulations state that you can’t rely solely on Companies House.


There are three key changes to the CDD requirements:


  • You must now also complete CDD where you only perform company formation services, even if that service is a one-off service for that client (s.4(2)).
  • You must also identify and verify the identity of a person purporting to act on behalf of your client.
  • You must obtain and verify the name of the body corporate, its registration number, its registered address and principal place of business. You must also take reasonable measures to determine and verify the law to which it is subject, its constitution (set out in governing documents) and the names of the board of directors and its senior management (s.28(3)).


Reliance on third parties (s.39)

If you place reliance on the CDD of a third party, or if a third party places reliance on your CDD, you need to be aware of the changes under the regulations.

If you are relying on a third party, you must obtain copies of all relevant documentation. You must also enter into a written arrangement that confirms that the firm being relied on will provide the relevant documentation immediately on request. In summary, for reliance on third parties for CDD: 

  • written agreement is needed
  • the third party must retain documents and make them available within two working days of request by those relying.


If you choose to use online agencies to help with MLR compliance you must ensure that the agencies meet the above criteria. You should also be clear exactly what services are provided and what additional work you need to do. It appears unlikely that the use of an outside agency would mean that you would have to undertake no additional work, particularly client identification work.


Discover the value of intellectual property
The main issues to consider around intellectual property.

Join us for a free webinar on 12 September when David Hopkins of the IPO will cover the four main areas of intellectual property and build your understanding of the free online tools available from the IPO. Register here.


Beforehand, we explore some of the main issues to consider.

A business’s knowledge, skills and the creative expression of its ideas are the focus on which today’s national and local economies are increasingly reliant. Many modern businesses are built mainly around these types of assets but they are often overlooked by accountants and their clients. 

These valuable intangible assets can be covered by intellectual property (IP) so it's important to recognise and understand them. 

It is almost certain that every business, large or small, will own or use some form of IP, and in many cases, without realising. When identified, protected and exploited, IP can generate valuable income streams and can mitigate future risks. 

The first and most important step for any business or business adviser is to identify the IP, as not every business will be the same. This can range from the business's brand, ownership of the IP on website or app, photos, reports, marketing material and much more. Once the IP has been established, a business can protect the IP and develop its competitive advantage. 

Benefits of IP

Understanding IP can bring many benefits. A business that has identified and protected its IP can build brand value and customer loyalty, taking reassurance that the brand is protected through a UK trade mark. Protected IP can open windows of opportunities such as lucrative income streams through licensing. It can also play an important role in M&A’s and exit strategies or when attempting to raise finance. So where do you start?

Start with an IP audit

Completing an IP audit of a business is a clear way of determining its IP. An IP audit is a review of the intellectual properties owned, used or acquired by a business. The audit will create a starting point and documentation that will best place a business to successfully develop its model. An IP audit should ideally be conducted at the point of business start-up, when launching a new product or service or if an IP audit has never taken place.


An IP audit can be done within the business by someone with the necessary competencies or there are external IP practitioners available to conduct the audit.

A local IP practitioner can be found through CITMA (Chartered Institute of Trade Mark Attorneys) and CIPA (Chartered Institute of Patent Attorneys). They will be confident with the audit process and on hand to help.  

Building your own knowledge of IP as an accountant may also strongly position you to complete an IP audit and therefore offer extra value to your clients.

The process should identify any IP assets and their status, their importance to the business and a plan to protect them. Any third party IP right that the business is reliant on should also be listed.

Intellectual Property Office health check tool


The IPO offers a free online health check tool which is a basic IP audit and a great starting point. It’s broken down into the four main IP elements, as well as advice on licensing IP and managing confidential information such as the business's know-how and show-how. After answering a series of simple questions, a tailored confidential report will be created including recommendation action points, explanations and further guidance.

Develop an IP strategy

Once the IP assets are clear, a decision and a plan on the best way of protecting them can follow. The bottom line will often determine the strategy but key factors to consider are how best to commercially exploit any assets through licensing and how best to enforce any IP rights. Restricting others' access to the market place using your monopoly rights may also be a consideration.  

Make IP part of business planning

Modern business plans are integrating IP within their framework. This demonstrates that IP is being seriously considered. For example, the relevance of IP assets, whether owned by the business directly or to which they have legitimate access (through licensing) and how they impact on the business in both terms of cost and returning benefits.

Build your knowledge of IP and this will add value to your client engagement

IP plays an important role in today’s business and in the role of the trusted business adviser. In what is a tough market for businesses and their advisers, thousands are increasing their knowledge of IP to keep up with their competitors. For the accountancy profession, understanding IP can add real value to your relationship with both existing and future clients.


To start your journey, take the IPO's e-learning tool - IP Equip. The tool contains four short modules and is CPD accredited, as well as being mobile device friendly to allow completion within your hectic schedules. Many of the IPO's customers have already completed IP Equip to learn about IP - join them today. 


Every business will own or use IP; identifying, protecting and exploiting these will help your clients grow.


Join us for a free webinar on 12 September when David will cover the four main areas of intellectual property and build your understanding of the free online tools available from the IPO. Register here.

David Hopkins – business engagement manager, Intellectual Property Office

ACCA UK signs up to government’s Exporting is GREAT campaign
ACCA UK is now a partner of the Department for International Trade’s (DITs) Exporting Is GREAT campaign.

ACCA UK is now a partner of the Department for International Trade’s (DITs) Exporting Is GREAT campaign. 

Exporting Is GREAT aims to significantly increase the number of UK businesses selling internationally by providing support throughout all stages of the exporting process, from identifying opportunities through to winning international contracts.


To mark the first stage of the ongoing partnership between the two organisations, we're drawing attention to the support and guidance available to firms looking to trade internationally via the campaign website,

You can also help your clients to access trade finance and insurance available from UK Export Finance. These products help companies selling overseas to ensure their offer is competitive, at the same time as supporting working capital and protecting themselves from payment risk.


John Williams, Head of ACCA UK, says: 'We are delighted to be working with the Department for International Trade on this campaign. ACCA’s recent consultation on the government’s Industrial Strategy saw a clear demand from members for more support and guidance for SMEs on international trade.


‘As the UK begins to form new trading relationships with the EU and the rest of the world, it is important that large and small firms are aware of the opportunities available. We are committed to working with government and business, including our ACCA global network, to ensure our members receive the support they need to thrive.'

Exporting services for ACCA members and their UK-based clients

Visit to:

  • access the best online advice on exporting
  • find export opportunities for your products and services
  • find an online marketplace best suited to your products
  • search and register for events in your area and webinars
  • sign up and create your profile on the find a buyer service, to promote your products and services to international buyers.

Access finance and insurance for international trade

Less than 20% of businesses are aware of loans, insurance policies and bank guarantees designed to enable international trade to take place as easily and securely as possible between buyer and seller.  The government, through UK Export Finance, provides support in this area. Find out more at or email the UK Export Finance customer service team directly. 


Get help to access international markets

Making the move into any new market can feel like a leap into the unknown. But if you and your client would like help, there’s a support network near you.

Contact an international trade adviser in your area at

Alternatively, call the Business Support Helpline on 0300 456 3565 (Monday to Friday, 9am to 6pm).


Get help with exporting intellectual property

Visit the Intellectual Property Office website to find guidance on applying for IP protection overseas and on extending UK intellectual property rights abroad.

It also publishes country-specific IP protection guides.



Are UK companies sleepwalking into a cyber crisis?
Many companies think they excel at cybersecurity – but our research suggests something very different.

Many companies think they excel at cybersecurity – but our research suggests something very different. 

UK companies are greatly underestimating their cybersecurity risk. Consequently they may be far more exposed than they imagine.


As part of Lockton’s UK Cyber Security Survey 20171, we asked 200 senior decision makers how they think their cyber risk mitigation compares with other companies in their industry. Interestingly, 60% of companies say they are ‘leading’ or ‘almost leading’ their industry.


Among manufacturers, almost three quarters (72%) think they excel in this area. Even among gaming and entertainment companies, where confidence levels are lowest, almost half (49%) say they are ‘leading’ or ‘almost leading’ their industry.


Similarly, 59% of companies say their industry is ‘extremely’ or ‘very well’ prepared against cyber-attacks. Meanwhile, only 36% of companies think that their industry is ‘very’ or ‘extremely’ exposed to cyber-attacks.


Fact or fiction?

Companies’ optimism is at odds with the ever-increasing number of publicly documented cyber incidents, never mind the incidents that companies choose to keep quiet about or simply never detect.


Nearly half (46%) of British businesses discovered at least one cyber-security breach or attack in the past year, according to the UK government2.  Among medium to large companies, more than two-thirds fell victim to a cyber-breach or attack. For larger organisations in particular, the cost of a cyber-breach can run into millions of pounds, with additional hits to a company’s reputation and customer base.


Our research found that senior business leaders’ confidence in their companies’ cyber mitigation is also incongruent with the steps they actually take to protect themselves: 

  • the great majority of companies are not minimising the risk of being hacked. Only 8% of companies take measures to detect whether they’ve been hacked every day – something all companies should do
  • many companies do not do enough to minimise the risk of human-error related cyber incidents – with only 58% making new staff aware of their cyber security processes and procedures
  • many companies do not have sufficient board-level buy-in to implement effective cyber breach3 scenario planning – with only 50% involving their boards
  • many companies are ill-prepared for the communication challenges that would follow a cyber-breach – with only 26% involving their Head of PR and Comms when planning for a breach
  • the Head of HR is only involved in planning for a cyber-breach in 7% of companies – worrying, considering how a breach could affect employees (for example, through the loss of personal data).

When it comes to their cybersecurity, are companies being too complacent, or are they simply unaware of the true nature of their cyber risks? It may well be a bit of both.


Falling short

Companies often struggle to find good-quality data on other companies’ cyber mitigation, inside or outside their own industry. If you’re in charge of a company’s cybersecurity, it’s a constant challenge to know how your company’s cybersecurity compares with others, and to understand what ‘good’ looks like.


We also often see a gap between what the board think their company is doing regarding cybersecurity and the reality. This could be the result of boards not fully understanding their company’s cyber risks, or security professionals and others ineffectively communicating these issues to the board, or both.


The exact reasons for this over-confidence will doubtless differ between companies and industries. It is clear, however, that many UK companies’ cyber risk mitigation is inadequate. Despite the almost daily reportage of cyber incidents, many companies still do not appreciate the severity of cyber risks, or simply lack the resource and expertise to manage them.


Over the next few months, Lockton will be sharing results from our UK Cyber Security Survey 2017. Alongside the results, we will provide advice and analysis on various aspects of cybersecurity, including: 

  • cyber-breach scenario planning
  • hacking detection measures
  • working with third parties after a breach
  • managing staff-related cyber risks
  • cyber risks companies expect to increase most.


UK companies have made great improvements to their cybersecurity in recent years. It seems, however, that the really hard work is still to come.


Peter Erceg – senior vice-president, Global Cyber and Technology



1 Respondents were CFOs, CROs, CIOs, Director of Risk and General Legal Counsel. Fieldwork completed in January/February 2017.

2 Cyber security breaches 2017.

3 Defined as either a) the loss of data (either first- or third-party) or b) the compromise of an internal system.


Lockton Companies LLP is ACCA’s recommended broker for Professional Indemnity insurance. For information, please contact Lockton on 0117 906 5057.


Lockton Companies LLP.

Authorised and regulated by the Financial Conduct Authority. A Lloyd’s broker.


Self assessment – individual exclusions
HMRC has issued an update on personal savings and dividend taxation calculation errors.

HMRC has issued an update on personal savings and dividend taxation calculation errors and advised on self assessment online filing reasonable excuse.


What happened?

The changes arising from Personal Savings and Dividend Taxation Reform, effective April 2016, mean that it is more beneficial for some customers to allocate (some of) their reliefs and allowances (eg personal allowance) against dividend income before savings income. If savings income is covered by the personal savings allowance, reliefs and allowances are more beneficial if they reduce dividend income in excess of the dividend allowance. It may also be more beneficial to set reliefs and allowances against dividends at 38.1% than against non-savings income at 20%.


HMRC implemented changes that have enabled the majority of customers with savings and dividend income to receive the most beneficial calculation. However, for a small percentage of customers, the calculation is not correct. We are sorry for the problems this has caused.

HMRC is committed to helping customers file online for 2016-17 and has been in discussions on how best to achieve this with agent representatives and software developers.


What’s been done?

We have decided to make changes to the 2016-17 calculator in-year across our systems and interfaces. These changes address the errors in the current calculator and will enable affected customers to be able to file online and receive the correct calculation.


What will happen next?

We are planning to implement this change in October 2017 and the exact date will be confirmed as soon as it is known. We are asking commercial software developers to deliver in-year updates to align with HMRC’s systems, to avoid filing error submissions. We understand that agents are very busy from October, but to ensure there is sufficient time to make the changes, this is the earliest date we could achieve. However, we will maintain the Exclusions document for filing paper returns and claiming reasonable excuse if needed.


The fix will correct Exclusions 48 to 56 and 58 to 59 which cover the majority of cases.

We will also automate the recovery of all cases where a return has already been filed, but shows the incorrect tax position for the customer. This will include all customers whether they have filed online or on paper. This recovery will include an SA302 and bespoke output to the customer to advise them of the correction.


We do not anticipate having to make any further changes. However, in the unlikely event that further changes are needed we will let you know without delay.


What to do now

  • Await the implementation of the fix in October 2017 and then file online
  • Continue to file online if your current software allows you to do so
  • File on paper (with a covering letter identifying the Exclusion).

Please note:

If a paper return which cannot be filed online due to an exclusion is delivered on or before 31 January of the tax year to which the return relates, HMRC will accept a reasonable excuse for not filing by the normal 31 October deadline. We will cancel an automatically generated penalty if a reasonable excuse claim accompanies the paper return or the reasonable excuse form found at self assessment: reasonable excuse for not filing return online - GOV.UK.


The technicalities

The Personal Savings Allowance PSA and Dividend Allowance DA allow a nil rate of tax. Dividends covered by DA still count towards the basic, higher or additional rate bands where non-savings and savings income take up some or all of basic rate and higher rate bands. This may therefore affect the rate of tax paid on dividends received in excess of the £5,000 allowance. The PSA also counts towards the basic, higher or additional rate bands but if the customer has income chargeable at the additional rate, their PSA will be nil.


The legislation at section 25 (2) ITA 2007 states: 'At Steps 2 and 3, deduct the reliefs and allowances in the way which will result in the greatest reduction in the taxpayer's liability to income tax’. The fact that an allowance has been split to cover different types of income (savings/dividends etc.) does not alter the order in which the income is subject to tax per s16 ITA.


The income in the SA tax calculation is allocated as follows and has not changed as a result of the introduction of the personal savings allowance:


1. Non-savings income and non-savings income with notional tax.

2. Savings income (section 16 ITA 2007)

3. UK dividends, stock dividends and foreign dividends (section 16 ITA 2007)

4. Lump sum payments and Settlor Interested Trust income (section 1012 ITA 2007)

5. Gains on life policies with tax treated as paid (section 1012 ITA 2007).



Your feedback, the questions and observations from software developers, together with our testing, have given assurance that the proposed changes to the calculator will produce the most beneficial calculation for customers.


We appreciate that there are customers who are uncertain whether their calculation is correct and whether they are affected by an exclusion. The solution we are implementing ensures that customers can file online and be confident.

The exclusions document can be seen online

Updated guidance on financial sanctions enforcement

The government has extended powers to act against those who don’t report information that could undermine UK financial sanctions.

The government has extended powers to act against those who don’t report information that could undermine UK financial sanctions.

All businesses, organisations and individuals have an obligation under financial sanctions regulations to report information which facilitates compliance. However, enforcement action could only be taken against firms or people in the regulated financial services sector who failed to report.  


The extended powers, set out in new regulations, broaden enforcement to the following business areas from 8 August 2017:


  • auditors
  • casinos
  • dealers in precious metals or stones
  • estate agents
  • external accountants
  • independent legal professionals
  • tax advisers and
  • trust or company service providers


Prompt reporting of information is essential for financial sanctions to be an effective foreign policy and national security tool - for instance, it helps OFSI to detect breaches and identify those who evade sanctions by using different aliases.


The new regulations extend existing powers without creating new ones or changing the purpose of the law. The only change is that from 8 August these groups may commit a criminal offence if they do not report the information they should already be reporting to OFSI.


OFSI have updated the Guide to Financial Sanctions to help individuals and businesses understand what they should report and when. All affected businesses are encouraged to review their responsibilities as non-compliance could lead to a monetary penalty or criminal prosecution.


As well as new information on reporting obligations, the updated Guide clarifies OFSI’s existing positions on organisations owned or controlled by those subject to sanctions, as well as the process for obtaining a licence.


OFSI will continue to work with industry bodies to develop its guidance so that it is responsive to what businesses, and the public and charitable sectors, need. 


OFSI’s Guide to Financial Sanctions is published on OFSI’s GOV.UK pages.


To stay up-to-date on financial sanctions, subscribe to OFSI’s e-alert


HMRC introduces 2 Step Verification
Users promised greater security and a safer online experience.

Users promised greater security and a safer online experience. 

From September 2017, HMRC will make it a requirement for all businesses using their online tax accounts to register for 2 Step Verification (2SV) – if not already using it.

Users logging into their tax accounts from September will be asked to register for 2SV. The result of this minor change means greater security for customers and a safer experience when using their online services, says HMRC.


What is 2SV?

2SV is a way of adding a layer of security to customer’s Government Gateway credentials. Instead of relying on something you ‘know’, like a User ID or Password, it adds an extra factor of something you ‘have’, a mobile or landline.


Is 2SV new?

No it isn’t. The use of 2SV is backed by the National Cyber Security Centre and promoted by Cyber Aware and Action Fraud. 2SV is used widely across well-known brands in the tech industry, it’s also commonly used for online banking.


HMRC began introducing 2SV in December 2015 and, since then, more than 11 million individuals and businesses have successfully set up 2SV to protect their online tax accounts.


Why is HMRC requiring 2SV for businesses?

HMRC takes the protection of customer data extremely seriously. Similar to other large financial organisations, that makes HMRC a target for fraudsters and cyber criminals.


If you encounter issues using 2SV with HMRC, please contact their Online Services Helpdesk

ACCA Rulebook – interim changes
Interim changes to ACCA’s Rulebook, effective 1 July 2017.

This article provides an explanation of the interim changes to the ACCA Rulebook, which took effect from 1 July 2017.


The Rulebook is divided into three sections: 

  • Section 1 carries the Royal Charter and Bye-laws, to which there are no interim changes
  • Section 2 carries the Regulations, covering membership of ACCA, practising and licensing arrangements, and regulatory and disciplinary matters. Commentary on the changes is set out below.
  • Section 3 carries the Code of Ethics and Conduct. ACCA has adopted the Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants (IESBA). However, the IESBA Code is augmented with additional requirements and guidance that are appropriate to ACCA and its members. There are no interim changes to Section 3.



Changes to the Regulations arise largely from policy decisions, legislative and lead regulator requirements.


Membership Recognition Agreements

The changes to the Membership Regulations permit members of the Union of Chambers of Certified Public Accountants of Turkey (TÜRMOB) and graduates of the Leading Accounting Talent Programme provided by the Beijing National Accounting Institute (BNAI) to gain membership of ACCA in accordance with the recognition agreements with those organisations.


Amendments have also been made to remove the detail of all such recognition agreements from the Rulebook, so that regulation 3(d) simply provides cross-references to the agreements. This avoids the risk of inconsistency between the requirements of an agreement and the Rulebook. The necessary details of each agreement will be available on the ACCA website, or by contacting the relevant local office.


Annex 2 to the Global Practising Regulations

By June 2016 EU Member States were required to implement the requirements of the EU Audit Directive (2014/56/EU) and Regulation (537/2014). This gave rise to the audit regulations relating to the UK being moved to a separate part of Annex 1 to the Global Practising Regulations, and amendments were made to incorporate into ACCA’s Regulations the requirements of the Statutory Auditors and Third Country Auditors Regulations 2016 (SATCAR) and the Delegation Order of the FRC.


Following the publication of the European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regulations 2016 (SI 312), a review of the statutory references within Annex 2 to the Global Practising Regulations was required. In addition, consistent with Annex 1, the regulations relating to audit in Ireland have been moved into an appendix to Annex 2. The relevant provisions of SI 312 have been incorporated into this appendix, together with some additional provisions that provide greater consistency with the UK audit regulations in Annex 1.


An amendment has also been made to Regulation 3(3) to make clear that anti-money laundering supervision applies to those members providing public practice services, as well as those providing only bookkeeping services. This amendment is among those requested by the lead regulator in Ireland, which also required clarification of the relevant experience requirements for those gaining membership of ACCA through a recognition agreement, and who might subsequently wish to practise in Ireland.

ACCA values my feedback
Focus group proves more than a talking shop, explains Ryan Witter.

Focus group proves more than a talking -hop. 

Earlier this year, I attended a focus group meeting for ACCA members working in public practice in Manchester. We were a mixture of charity auditors, tax specialists, and general practitioners, but we all had common issues relating to Brexit, HMRC, and Making Tax Digital, recruitment difficulties, regulation and ethics.


The focus group was far more than simply a talking-shop. It enabled practitioners to share perspectives on real and current issues challenging practices of all sizes. Due to the small size of the focus group, we had the chance to put our views across in a close setting. While there was a basic format and structure to the discussion, we could influence the course and direction of conversation to get answers to questions we had.


The benefit of the focus group for me personally was that I could receive insight on issues facing not only my firm but also others, change my views on certain issues, and reaffirm my view on other issues. I could compare strategies and approaches to issues and take this back to my practice to mull over with colleagues and put actions in place where required.


Such focus groups provide a benefit to ACCA and therefore its membership as practitioners on the ground are providing feedback on the real and current issues that practices face. ACCA can then use this information to influence the areas of support and professional content it provides to its members.


We discussed contemporary issues concerning:


  1. Economy and trade – issues pertaining to the local economy and trade concerning practice areas of actual and potential growth or decline.
  2. Technology and the future of the profession – the technological capabilities of our practices and the burning issue of Making Tax Digital (MTD). It was evident that we practitioners rely heavily on outsourced software providers, and have few internal IT resources, this certainly being the case for the small to medium practitioner.
  3. Human capital - the supply of human resources. We found that there was a market gap between trainees and qualifieds in respect of supply. This meant that newly qualified accountants were generally seeking greater starting pay exceeding indexation than what would have been the case, say, five years ago. We felt this had generally occurred due to past reliance of supply on the Big4 taking on mass numbers but they had cut back on training during the latest recession. As a result, small and medium practices are having to find fees to cover these additional human capital costs.
  4. ACCA – how ACCA can support practitioners. I think sometimes ACCA is not our initial 'go to' for professional advice - rather we tend to go to private sector services. However, it was highlighted that valuable ACCA resources are available.

ACCA ran 24 such focus groups across the country for different sectors attended by nearly 200 members. It has collated the feedback and already run one webinar providing a high-level overview of the issues raised by members. 

A second webinar on 13 October will look at what ACCA can and will do in response to the feedback received. You can register for the October webinar and listen to the first webinar on demand by using this link -


Continue the discussion

What do you think about the issues highlighted by Ryan? Continue the discussion by sharing your thoughts in the ‘comments’ section under Ryan’s post on LinkedIn.


Ryan Witter ACCA – tax senior, Royce Peeling Green Ltd

Shortlist released for British Accountancy Awards 2017
ACCA members in the running for honours.

ACCA members in the running for honours.


The shortlist has been released for the Annual British Accountancy Awards, in association with Accountancy Age and ACCA. Congratulations to all finalists!


The British Accountancy Awards are regarded as the industry’s most prestigious accolades. They celebrate professional development and highlight those that have demonstrated excellence in their profession over the last year. 


Amongst firms with ACCA are Farnell Clarke (multi-award winners in 2016), Salhan Accountants, Inspire Accountants and Soaring Falcon and we offer our best wishes to these and all firms with ACCA connections who are short-listed.


On Friday 13 October the British Accountancy Awards will welcome over 750 guests, representing a multitude of small local firms to the larger regional, national and global players. In addition, this year, the British Accountancy Awards will also welcome finance teams and accountants working in industry.


There are seven brand new categories to look out for this year including ‘Excellence in Accounting/ Finance Technology’, ‘Accounting Innovation Project of the year’ and ‘Outstanding Community Engagement and Contribution’.


If you are interested in attending, contact Alfie Hill-Kitcherside at  or 020 808 0942 to discuss your requirements.


Practice Excellence Week
ACCA members can benefit from a 50% discount on tickets.

Practice Excellence Week is AccountingWEB's landmark festival of excellence, inspiration and celebration for the accounting profession.


Across five days (16-20 October) a world-class programme includes a prestigious annual awards night, interactive online seminars and a live London conference. ACCA is delighted to support this festival. 

Look out for details of who has made the short-lists for the awards when they are released on Friday 18 August.


The Practice Excellence Conference - Thursday 19 October

An unmissable conference for the modern accountant


A full day conference in London, supported by Quickbooks, jam packed with expert presentations, interactive workshops and marketing automation showcases. We will be putting ambitious accountants through their paces in our marketing boot camp - including exercises and demonstrations to help you put your clients and their challenges at the heart of your growth strategy.


You will leave with a full plan on how to think about your brand, where to focus your marketing effort, and how to deploy the right tech and tools. Create your brand story, build your own strategy and embrace new and innovative ways to promote your services and attract new clients. We will provide you with an end-to-end experience to plan, implement and execute growth.


ACCA members can claim a 50% discount (use the code "ACCA17M3MR" at checkout) and purchase tickets for just £124.50!


Book tickets now for you and your colleagues

Shaping your ACCA - you speak, we listen
We reveal focus group findings in a webinar double-header.

ACCA recently completed a series of sector-specific focus groups across the UK for members working in public practice, the corporate sector, financial services and internal audit. Nearly 200 members attended 24 meetings in 12 different locations, providing insight into their working lives and what their ACCA membership means to them.

In a webinar on 11 July, John Williams, Head of ACCA UK, and Kevin Reed, former editor of Accountancy Age, provided an overview of the findings of those meetings. Join us for a follow up webinar on 13 October when John and Kevin will examine what ACCA can do in response to this valuable member feedback to better support all members.

Register for both of these webinars now

A series of reports on these focus groups is available at

Charity Finance Conference
Essential CPD for anyone who has charity clients.

ACCA’s annual charity finance conference provides you with an excellent opportunity to keep up-to-date with the latest developments and best practice within the sector.


Date: Tuesday 10 October (09.30-17.00)

Venue: Jury's Inn, Birmingham

CPD units: 8

Standard price: £263


Early bird booking discount: Save £20 and pay just £243
when you book on or before 10 September 2017




Who should attend?

Finance professionals working in or advising charities, trustees and treasurers. The conference is also a useful refresher for those who only deal with charities occasionally.


What will you get out of it?

  • an update on important developments in the charity sector
  • guidance on best practice
  • the opportunity to exchange your views and experiences with other professionals working with charities.


Sessions will include:

  • good governance matters – how to avoid reputation damage
  • financial reporting update
  • charity tax and VAT in the last 12 months
  • new charity reporting guidance update / Q&A Panel discussion, chaired by Nigel Davies
  • GDPR - what are the charity's obligations?
  • charity people: latest changes in rules for employers and volunteers.


Further session and speaker details to be confirmed.


Take advantage of the early bird discount and book your place now. 

Webinar: the value within
An introduction to exploiting intellectual property.

Webinar: The value within – an introduction to exploiting intellectual property

Date: 12 September

Time: 12:30-13.30


Register for your free place now


Understanding a business’s intellectual property can increase sales and profit margins, help secure finance and assist with grant applications. Intellectual property will account for a large part of the value of most businesses.


In this webinar, Dave Hopkins will cover the four main areas of intellectual property (trade marks, patents, designs and copyright) and how to protect Intellectual Property rights. He will also build your understanding of the free online tools available from the Intellectual Property Office to help both you and your client to become better informed about intellectual property.


The session will draw on real examples to put you in a better position to talk with confidence on the subject. 


About the speaker

Dave Hopkins is a Business Engagement Manager for the Intellectual Property Office, holding a number of key roles over the last 15 years. He works within the Business Support Policy Team and is primarily responsible for working with a range of local, regional and national organisations to help promote intellectual property rights to UK businesses, He has been working closely with the accountancy profession to highlight the importance and benefits of IP to a business community. 

Prior to joining the Office Dave has worked in a broad range of private sector organisations including manufacturing, distribution, retail and insurance. Dave gives presentations on IP at a range of conferences, workshops and events and has had articles published in a range of magazines.


Apprenticeships – a modern alternative
There are many reasons why your practice could benefit from hiring an apprentice.

There are many reasons why your practice could benefit from hiring an apprentice.


Apprenticeships are set to play an increasingly important role in addressing the UK’s skills shortage, upskilling staff and lessening the pressure to attract new talent to enter employment directly rather than following university education.


Why consider apprenticeships?

Our apprenticeships can help feed your talent pipeline, and bring millennials into the workplaces that tend to be more digitally savvy, thereby supporting the existing workforce.


Our Generation Next research has shown us that to retain talent, businesses and organisations should think about providing flexible opportunities to learn new skills and, if possible, clear paths for progression. Apprenticeships offer that flexibility.


Since launching ACCA’s Level 4 Accounting Technician apprenticeship, we’re advising employers large and small to invest in apprenticeship programmes.


Apprenticeships make hiring simpler and cheaper. They’re not just for new hires, as there’s no upper age limit they can also be used to train and develop current staff. This can help with staff retention and, with ACCA Pathways, drive the acquisition of highly skilled accountants, up to chartered certified status.


They’ll be taught the optimal combination of professional competencies: a collection of technical knowledge, skills and abilities, combined with interpersonal behaviours and qualities so they can add value for their employers by becoming forward-thinking accountants


Many smaller practices and businesses are likely to be outside of the apprenticeship levy payments – but you will be able to benefit from government co-investment of up to 90% as a way to grow the team and business without the high costs of training – providing you with new opportunities to develop new and existing talent with skills tailored to your business needs.


Following the successful launch of the ACCA Level 4 Accounting Technician Apprenticeship, the government has recently approved the Level 7 Professional Accountant standard and assessment plan. We are pleased to confirm the ACCA qualification meets the standards set.


Once the funding band has been agreed by the government, we will be able to announce a date to take registrations for the ACCA Level 7 Professional Accountant Apprenticeship.


Our Level 7 will be the only accountancy pathway with the option of a BSc (Hons) in Applied Accounting and an embedded MSc in Professional Accountancy, and will prove to be a popular choice with parents, careers advisors and prospective apprentices. 


Further information

Visit our website to find out more, download our handy guide How can I recruit an apprentice, or email to request a call-back from one of our team who can discuss your requirements around apprenticeships in more detail.


What’s in a name?
Things to consider when choosing a new practice's name.

If you’re planning to establish your own firm, read our list of key considerations when it comes to how to describe your  practice. 

If you have decided to establish your own practice it is worthwhile taking a look at ACCA’s rules on how to describe your firm – before you spend money on marketing, a website and letterheads etc.


Here are some key considerations:


Personal descriptions

The Rulebook 2017 states:

  1. If you are a member of another accountancy body words showing the membership may be used on professional stationery
  2. If you belong to two or more accountancy bodies then you have the choice of either using all of the designatory letters on your professional stationery or none at all
  3. Civil or service honours (such as CBE, DSO, DFC) can be used on professional stationery.


Rules affecting the practice name

As long as you follow both the bye-laws and the rules below you have great freedom in choosing your practice name, which should: 

  • be consistent with high ethical and technical standards
  • not be misleading
  • not be capable of being confused with the name of another firm, even if the member(s) of the practice could lay justifiable claim to the name.

The Rulebook also discusses issues regarding claims made by the firm, for instance: 

  • it would be misleading for a firm with a limited number of offices to describe itself as ‘international’ even if one of them was overseas
  • a firm can trade under different names from different offices providing that this does not mislead.

Describing the new practice

Some of the strictest rules relate to the descriptions allowed for the firm, including: 

  1. The descriptions ‘Chartered Certified Accountant(s)’, ‘Certified Accountant(s)’, ‘Statutory Auditor(s)’ or ‘Registered Auditor(s)’ cannot form part of the name of a firm, company or limited liability partnership. (For example, a company shall not include the description in the name which is registered with Companies House in the United Kingdom or its equivalent elsewhere.) Similarly, the designatory letters ‘ACCA’ or ‘FCCA’ shall not form part of the name of a firm, company or  limited liability partnership.
  2. Where the firm is a partnership or has more than one director, it may describe itself as a firm of ‘Chartered Certified Accountants’, ‘Certified Accountants’ or ‘an ACCA practice’ only where:

(a) at least half of the partners (or directors in the case of a company, or members in the case of a limited liability partnership) are ACCA members; and

(b) the principals noted in 15(a) above control at least 51 per cent of the voting rights.


This may be an issue where the firm has a mix of say ACCA and AAT partners/directors. 

  1. A firm in which all the partners are Chartered Certified Accountants may use the description ‘Members of the Association of Chartered Certified Accountants’. So where the firm has a mix of partners or directors it cannot use this statement. However, a mixed firm may wish to make it clear that some partners (or directors) are Chartered Certified Accountants and others are (for example) ICAEW members. In this case they may use the following statement on its stationery (providing the ICAEW members within the firm have permission from their own Institute to use the statement):  

‘The partners (or directors) of this firm are members of either the Association of Chartered Certified Accountants or the Institute of Chartered Accountants in England and Wales (of Scotland /in Ireland)’.


Can I include ‘ACCA’ in the firm’s name?

A professional accountant is not permitted to do the following:


(a) form or incorporate a firm, partnership, company or limited liability partnership incorporating or consisting of any of the terms:


‘Chartered Certified Accountant’

‘Certified Accountant’


‘FCCA’ or any

confusingly similar term; and/or


(b) register a domain name or trade mark incorporating or consisting of any of the terms above or any confusingly similar term.


So for instance ‘John Bloggs ACCA Members Limited’ would breach the rules.


Use of the ACCA logo

The ACCA logo is iconic and can form an important part of the firm’s stationery and websites/social media content.


A firm that has at least one ACCA member as a partner or director may use the ACCA logo subject to the restriction that it may not be used unless a firm is controlled overall by holders of recognised accountancy qualifications.


The design/use of the logo is important. The overriding consideration is that the positioning, size and colour of the ACCA logo shall not compromise its recognition. The ACCA logo is square and shall not be cropped or altered in any way. The logo must appear in black or red (Pantone 485).


To get the logo a member in an eligible firm can request the logo artwork and guidelines from ACCA by telephoning +44 (0)141 534 4237 or emailing and providing the member’s practising certificate number and membership number.


Different sizes/specialisms of firms and their descriptions

When setting up in practice, the size of the new firm leads to some interesting rules:


Sole practitioners

  • A sole practitioner may use the plural form of Chartered Certified Accountants or Certified Accountants and/or Registered Auditors and/or Licensed Insolvency Practitioners to describe their firm providing they hold the appropriate certificate, and either:


 (a) they apply the suffix ‘& Co.’ after their name; or

 (b) otherwise trade under a business name which is not the same as their personal name.


  • A professional accountant who is a sole practitioner may describe himself/herself as a ‘Member of the Association of Chartered Certified Accountants’
  • It would be misleading for a sole practitioner to add the suffix ‘and partners’ to their firm’s name. Similarly, it would be misleading for a firm to add the suffix ‘and Associates’ to its business name unless it has two or more formal associations/consultancies in existence which can be demonstrated to exist.
  • The Rulebook has no objection to a firm practising under its own name and including a statement on its professional stationery to the effect that it is a member of (a named) accountancy group.



Where the firm wants to demonstrate some specialist services that they provide it may include a list of these on its professional stationery. For example,

‘Tax advisers’ could be used by a firm provided that:


 (a) it is competent to provide the specialisms shown, and

 (b) the content and presentation of the descriptions do not bring ACCA into disrepute or bring discredit to the firm or the accountancy profession.


What names can go on the stationery/websites?

The basic rule is straightforward – it should be clear from reading a firm’s professional stationery whether any person named on it is a principal in that firm (ie a partner, sole practitioner or director).


However, where a firm would like to put other people on, this is allowed providing that the name is clearly described, for instance ‘Manager’, ‘Tax Consultant’, etc. The firm should only include such people if they are competent and have the necessary eligibility and qualifications to provide any specialism shown. Obviously, those named as principals should be clearly separated from those of non-principals.


Other headings on professional stationery

There are other headings which can be included when the firm is for instance a registered auditor or part of ACCA's Designated Professional Body Regime. Please refer to the Rulebook for more details.


Further advice

Members are encouraged to seek advice from ACCA’s Technical Advisory team if they have any specific queries or would like any further information.


Anti-money laundering supervision
Government consultation open until midnight tomorrow (Wednesday).

Government consultation open until midnight tomorrow (Wednesday). 

ACCA has fundamental concerns regarding the government’s latest ‘Office for Professional Body AML Supervision’ proposals.


In March 2017, the government published a call for further information, in which it disclosed its plans to create a new oversight body called ‘the Office for Professional Body AML Supervision’ (OPBAS). ACCA has fully engaged with HM Treasury, and others, during the implementation of the Fourth Money Laundering Directive and, previously, during the process of the National Risk Assessment (NRA) carried out in 2015 and aspects of the action plan that followed the NRA. ACCA continues to engage with HM Treasury and other Anti-money laundering (AML) supervisors during the course of the second NRA (commenced in 2017) and the proposed creation and scoping out of OPBAS.


The UK is preparing itself for a Mutual Evaluation Review (MER) by the Financial Action Task Force, which will commence towards the end of 2017. ACCA is mindful of the importance of the MER to investment in the UK, and is striving to influence the government to bring about effective and proportionate measures that uphold the public interest while minimising the financial and regulatory burdens on practising members.


The 2015 NRA identified a lack of consistency in AML supervision as a key vulnerability in the AML infrastructure of the UK. ACCA supports the proposal of an oversight body, not only to address inconsistencies in standards of supervision, but to act as a conduit for the sharing of information and best practices. However, ACCA does not support the creation of OPBAS, with its limited range of oversight. ACCA responded accordingly to the March call for further information.  


On 20 July 2017, HM Treasury issued a formal consultation on its Anti-money laundering supervisory review, accompanied by a set of draft regulations to establish powers of the Financial Conduct Authority (FCA), which will host OPBAS. The consultation is open for only four weeks and closes at 11:59 on Wednesday 16 August. ACCA will be responding in a manner consistent with previous engagement.


Although the consultation document makes reference to some of the responses to the call for further information, it does not convey the strength of the concerns expressed by many of the professional body supervisors. These bodies share information through the Anti-money laundering Supervisors Forum, which has clearly expressed to HM Treasury its concern that the proposed scope of OPBAS oversight (which is only over the professional bodies, and so excludes HM Revenue and Customs – the default supervisor) will prevent OPBAS from addressing the issues highlighted by the NRA. In addition to this threat to the public interest, the proposed inconsistency in oversight of regulated and unregulated accountants would create an unfair regulatory burden on professional accountants who are members of professional bodies.


The specific questions raised in the consultation document are very limited. Nevertheless, ACCA intends to voice again its fundamental concerns regarding the proposed scope of OPBAS oversight and the anticipated costs, which will be borne ultimately by members of the professional bodies. ACCA would welcome comments from its members, which will be considered for inclusion in its response to HM Treasury.


There is still time to comment – just. Members may respond directly to the consultation before 11:59 on Wednesday 16 August. Please also share any comments with ACCA’s Christopher Bandoo at