Technical and Insight
Brexit: implications for engagement letters and AML

Issues to consider with regards to GDPR and anti-money laundering regulations.


Issues to consider with regards to GDPR and anti-money laundering regulations.

 

From 1 January 2021, the UK is not a part of the EEA, which means the UK is in control of its own laws and regulations. Many EU laws are already embedded in the UK laws which may be tailored to suit the local requirements as and when required.

 

The following laws are among many which may affect practitioners in the coming weeks or months:

  • General Data Protection Regulations (GDPR); and
  • Anti-money laundering (AML) laws.

 

Data sharing impact due to General Data Protection Regulations

The existing EU GDPR will continue to apply, unchanged, in the countries of the EEA. All the main principles, obligations and rights remain in place.

 

As of 1 January 2021, the UK GDPR together with the amended Data Protection Act (DPA) and Privacy and Electronic Communications Regulations (PECR) will constitute the personal data protection legislation in the UK.

 

One of the burning questions troubling many practitioners is whether they need to amend or issue new engagement letters.

 

The answer is it all depends.

 

There is no specific requirement for issuing new engagement letters unless the practice is getting their data processed in a EEA area or the personal data is transferred outside the UK. However, the firms should review their engagement letters if the data is processed or shared with another EEA country; you should ensure that there are the adequate safeguards suggested by the Information Commissioner’s Office (ICO) and GDPR laws. But the good news is that there is a little time to consider this area.

 

The ICO clearly states that in answer to ‘What effect does the trade deal have on data protection?’ as ‘part of the new trade deal, the EU has agreed to delay transfer restrictions for at least another four months, which can be extended to six months (known as the bridge). This enables personal data to flow freely from the European Economic Area (EEA) to the UK until either adequacy decisions are adopted, or the bridge ends. If you receive personal data from the EEA, we recommend you put alternative safeguards in place before the end of April, if you haven’t done so already.’

 

The ICO has published resources for the Brexit transition here, which all firms must adhere to in order to comply with the regulations.Furthermore, firms may need to check their outsourcing arrangements in detail if any information is being processed within the EEA (such as payroll processing).

 

Firms need to ensure that they have explicit consent – which is already built into ACCA standard engagement letters – for the processing of data. A practitioner must send their privacy notice to clients as part of the engagement letter. This will cover most of the information that clients require under the legislation. A practitioner must also update clients if the purpose or lawful basis of processing their data has changed.

 

A sample privacy notice has been provided which, if this version is used, must be adapted to cover the circumstances applicable to a practitioner’s own firm. Alternatively, a firm should send clients their own version.

 

More detailed ICO documentation templates for controllers and processors are available on the ICO website

 

Transfer of data to and from the EEA

Data can be transferred from the UK to the EEA. Transfers to Gibraltar will also continue. As the UK is considered a third country outside the EEA, the EU GDPR will continue to apply to EEA senders of personal data and EU GDPR transfer rules will apply to any data coming from the EEA into the UK.

 

Under the GDPR, an EEA controller or processor will be able to make a restricted transfer of personal data to the UK if any of the transfer mechanisms are in place which are subject to reaching an adequacy decision and appropriate safeguards.

 

Being outside Europe will affect the following data protection matters in the UK:

 

  • International transfer of personal data, including the question of ‘adequacy’ and other safeguards. (This is to be kept under review by the UK government.) The ICO website states that ‘In the absence of an EU adequacy decision, the EU GDPR as it was on 31 December 2020 (‘frozen GDPR’) applies to the processing of personal data collected before 01 January 2021 about an individual living outside the UK as of 31 December 2020 (‘legacy data’). Our [Interactive Tool] will help you decide if you are processing ‘legacy data’ and provides more guidance. As the UK data protection regime is currently aligned with Frozen GDPR, you can continue to read our guidance on the basis that UK GDPR applies. Please continue to monitor the ICO website for updates.’

If there are no UK ‘adequacy regulations’ about the country, territory or sector for your restricted transfer, you should then find out whether you can make the transfer subject to ‘appropriate safeguards’:

  • The possible need to appoint a representative in the EEA.
  • Lead supervisory authorities - who is yours and might it change?
  • Miscellaneous points to check and note.

 

Standard Contractual Clauses can be used when the controller is sending data. However, the European Commission has recently published draft SCCs which also cover transfers from processors.

 

If the firms have offices in UK and EU countries, then the Binding Corporate Rules (BCRs) apply. These are internal codes of conduct, which apply to multi-national groups sending data between its entities.

 

Holders of EU BCRs, where ICO wasn’t the lead supervisory authority, will be eligible automatically for a UK BCR if:

  • the UK established entity notifies the ICO that they have an EU BCR and wish to have a UK BCR
  • they provide the name and contact details of their DPO or other relevant contact; and
  • additional information the ICO reasonably requires.

 

Changes to procedures under anti-money laundering laws

The Fifth Money Laundering Directive (5AMLD) introduced a number of key changes to the European money-laundering regime, including extending the scope of the directive to cryptocurrency wallets and electronic identification process.

 

The UK has already adopted the fifth money laundering regulation in its laws since 10 January 2020 through SI 2019/1511 to warrant the Financial Action Task Force (FATF) standards. Additionally UK passed the The Money Laundering and Transfer of Funds (Information) (Amendment) (EU Exit) Regulations 2019, and SI 2020/991 to bridge the gap between EU legislation and UK anti-money laundering rules.

 

Among many changes, firms are expected to report discrepancies they find between their own KYC and the information on the PSC register. In addition, updates have been made regarding access to the UK’s register of express trusts, requiring information to be made available to those with a ‘legitimate interest’. Some of the regulations are set to be applicable on different future dates.

 

The Sixth Money Laundering Directive (6AMLD) will be transposed into EU law this December and must be implemented into member states’ national laws by 3 June 2021. However, the UK has decided to opt out of complying with 6AMLD as the UK AML regime already complies with many of the 6AMLD rules. Whilst 6AMLD has not been formally incorporated into the UK AML legislation it’s crucial that all regulated entities that operate in Europe ensure they are compliant.

 

Useful resources

ACCA AML guidance and factsheets Look out for further updates on engagement letters, including revised VAT schedules for GB and NI that will be available in the next few weeks.

 

Government guidance for processing personal data

 

Brexit: Summary for VAT impacts

Summary of the key changes from 1 January 2021 which affect VAT.


The UK exited the EU VAT regime, Customs Union and Single Market from 1 January 2021. This means the loss of a range of compliance simplifications and the imposition of customs declarations, goods regulations, services and import VAT.

 

Brexit Trade and Cooperation Agreement deal with no goods tariffs or quotas was agreed in time for the end of the Brexit transition period.

 

Here is a list of few of the key changes from 1 January 2021

 

Area of concern

UK position

EU VAT Directive rules

The UK will no longer have to assume the EU VAT Directive rules into its own VAT Act

VAT rates

The UK will no longer have to maintain a minimum VAT rate of 15% and UK will have complete control over its reduced VAT rates.

B2B goods supply

All movements are now imports or exports, subject to UK or EU import VAT. Businesses moving goods now need two EORI numbers to move goods between the UK and EU

B2B services

There are no changes on the Brexit VAT on services for B2B transactions after the UK leaves the EU VAT regime. The reverse charge will still apply.

Postponed VAT Accounting Import VAT

The UK has introduced a Postponed VAT Accounting Import VAT deferral scheme so no cash VAT payment has to be made by business importers to UK customs.

Distance selling

Distance selling thresholds are scrapped for UK e-commerce sellers, which means UK sellers will have to consider EU VAT registration immediately.

VAT representative

Any UK business with a foreign VAT registration in the EU may now face the obligation to appoint a special VAT representative (similar rules are required in the UK for NETP VAT registration). These agents hold direct liability for any unpaid VAT, and therefore require cash deposits or bank guarantees in exchange.

Low value items

The low value consignment stock relief for £15 is scrapped now. VAT is payable at the point of sales if the consignment value is less than £135.

Online claim for EU refunds

UK businesses incurring EU VAT on travel, hotel or other expenses are no longer able to use the online VAT reclaim system operated via HMRC. Instead, they must use the 13th Directive paper-based reclaim process. This requires individual claims to each country where there is a VAT claim. Last online UK claims will be for the final quarter of 2020.

Northern Ireland

Northern Ireland will take up a special dual position now. Whilst NI remains within the UK VAT area, it tracks EU rules, including zero-rating for VAT on intra-community supplies across the Irish border. EU VAT on imports into Ireland via Northern Ireland are collected by the UK authorities.

EC sales lists

For the export of goods from Great Britain or the supply of services from Great Britain and Northern Ireland made to EU businesses on or after 1 January 2021, you will not need to submit EC sales lists.

Intrastat reporting for arrivals/imports

 

Businesses importing (arrivals) goods into Great Britain (UK minus Northern Ireland) from the EU are still be expected to prepare monthly Intrastat reports if over the £1.5m reporting threshold. 

Intrastat reporting for dispatches/exports

No requirement to maintain Intrastat for dispatches/exports to the EU.

 

 

Useful resources

 

ACCA Brexit Cross-border VAT factsheet

 

HMRC guidance for Import VAT

 

 

Five tips for thriving in January

Practical advice and tips to keep your focus this month.


Practical advice and tips to keep your focus this month.


January can be a busy time for us as we balance the new demands from clients due to the impact of Covid-19 and Brexit with the usual regulatory deadlines.

 

It is important to recognise stress as it occurs and take action. According to the Chartered Institute of Personnel Development, when under pressure eight out of 10 of us will have trouble concentrating, six out of 10 will take longer to do our work and three out of 10 will fall out with people. At this time of year it is more important than ever to have a plan to deal with your stress. 

Here are five ways to keep your focus 

1. You are more important than the job
Your best decisions will be made when you have a creative and relaxed mind. Whilst making time for yourself may seem impossible, bear in mind that not every hour of the day is equally productive. You may work until midnight, but was it your best work? Give yourself regular breaks to get away from your screen and do something physical. This increases blood flow and helps your mind to reset. If you really don’t have an hour for a run, try regular stretching and a ten minute walk. This will also help to relieve neck tension, and gives your eyes a break from the screen, both of which can lead to headaches.

 

Prioritise one good thing you can do today which your future self will thank you for. 

2. Sleep 
A bad night’s sleep can impact your functionality the next day. It is estimated that 90 minutes less sleep will reduce your thinking capability by 30%. Use the REST method for getting better sleep: 

  • Routine – go to bed at the same time each night and set your alarm for the same time every morning
  • Environment – make sure your room is dark, cool and free from noise. Ear plugs and eye masks can help. If your brain is still racing, try some white noise such as the Rain Rain app to give you naturally soothing sounds 
  • Stimulation – avoid alcohol and limit caffeine in the afternoon. It takes six hours for caffeine to leave your system. Limit screen time in the evening and if you do want to watch a bit of TV make it funny or light-hearted where you can 
  • Thinking – get your mind in to the best place by writing down 10 good things that have happened that day or things you are grateful for, just before bed. Maybe it was a chat with mum or a smile from your son: all of these thoughts help towards a good night’s sleep.  

3. Rocks, gravel and sand 
Keep focused by planning your day in advance. At the end of each day create a list of tasks for the following day. This will help you to let go of the day and leave work behind. Create a list of the three most important things to do the next day, these are your ‘rocks’. Then think about what is important but can wait till the day after – do them if you can, don’t worry about it if you can’t, this is your ‘gravel’. The ‘sand’ is the small items you can fit in if you have time. This could be your social media posting or the newsletter. This exercise is about focusing on the important things first. Make sure your team do the same and agree what the team ‘rocks’ are. 

4. Delegate and communicate 
When we are under pressure other people often want to help us but don’t know how. Think of positive ways those around you can help. Teenagers can cook dinner, even if it is basic! Be clear with communication around timescales and expectations with clients, family and yourself. Rome wasn’t built in a day, be aware that things often take longer than you had hoped. If you are being constantly distracted by emails where you feel clients expect an immediate response, set up an autoresponder setting an expectation of a reply within 48 hours.

 

You can also add calendar links if people want a quick 15 minute talk about something so that you can set aside fixed times of the day for these conversations. Importantly, let people know that this is the new regime. Part of your new regime may involve splitting the day in a different way so you can be with the children when they need you, but also have the quiet time you need for your work. Uncertainty breeds confusion. If you find that you need to be with your children at certain times of the day, let people know.

 

Communication includes self-talk. Some of you may now be home schooling alongside work. Be honest with yourself about the time and energy this takes.

 

Remove the word ‘should’ from your vocabulary – that word is so 2019 and belongs in an era of certainty and predictability. Remind yourself that you are doing the best you can and celebrate the small wins. I left school struggling to read and learned to read properly in my late teens - I still qualified as ACCA at 23.

 

Remember that all of life is coaching, and you, your children and your team learn from everyone and everything around you every day whether you realise it or not. Learning what makes you happy is key to your success and theirs. If your home schooling is more about life skills such as compromise or kindness it is still valuable.

 

Take a lesson from emotional intelligence with your communication. When someone or something has pushed your buttons, do not feel you have to provide an immediate reply. Pause and consider your outcome. Will your reply provide that outcome? 

 

Under pressure we often feel that we have to react, but choosing how we respond is one of the true gifts which is always under our control. Put both feet on the ground, shake your shoulders and turn our head from side to side to release any tension. Now breathe slowly. Breathe in for the count of five, hold for the count of five, breathe out for the count of five and hold empty for the count of five. Within 20 seconds you have paused, calmed your body and provided your brain with more oxygen. Now reply.

 

Another tip from emotional intelligence is to be more descriptive with how you communicate. I don’t mean flowery, just more accurate. Stressed means different things to each of us. If you want support, be clear on the issue. Being overwhelmed with the volume of work is different to getting frustrated with interruptions but both can lead to that blanket word of ‘stressed’. Consider the details of what is really underlying the ‘stressed’ aspects of your life. What can you let go of? What can you delegate? You may believe that no-one can help you, but even just communicating the situation to someone else may give rise to a solution you hadn’t considered. Remember, under pressure we don’t always recognise all of the opportunities around us.  


5. Boundaries 
If you are one of the many people who are now working from home you may find your work and worrying about your work spills over into your home life. Set some boundaries and enlist others to enforce them. For example, you could agree to go on a dog walk with a friend at a set time each day to ensure you get out and finish work at 6pm. It’s harder to let someone else down than it is to let go of our commitment to ourselves. 

 

One of the most important things to remember is that you are doing the best you can and dismiss your mind monkeys which would have you believe you need to be more or to do more. You are going to totally rock this January. Go for it! 

 

 

Sharon Critchlow – member of Global Council at ACCA and a Director at Discover Your Bounce Group specialising in corporate wellbeing strategies and personal development through emotional intelligence.

 

She is also the co-author of the Amazon best-selling book Love Your Life! 100 tips for more peace and happiness

 

 

 

Covid-19 grants for closed businesses

Eligibility and other guidance for businesses forced to close due to Covid-19.


The Local Restrictions Support Grant (LRSG (Closed)) supports businesses that have been required to close due to temporary local restrictions.

 

Businesses that were open as usual and were then required to close due to local Tier 2 or Tier 3 restrictions may be eligible for LRSG (Closed).

 

All Tier 4 businesses required to close will be eligible for grants of up to £1,500 for each 14-day period of closure. Grants will be administered by local authorities.

 

For more information, click here.

 

Capital gains tax and divorce

When the breakdown of a marriage occurs, tax considerations are likely to be the last thing on the parties’ minds.


When the breakdown of a marriage occurs, tax considerations are likely to be the last thing on the parties’ minds.

 

However, the potential benefits which can arise from tax planning cannot be ignored, especially where it can be demonstrated that both of the parties concerned may benefit.

 

Transfers between spouses

Section 58 of Taxation of Chargeable Gains Act 1992 (TCGA92) provides that transfers of assets in a tax year, between spouses or civil partners who are ‘living together’ in any part of the tax year, are regarded as being made on a 'no gain/no loss' basis.

 

What this means is that the person receiving the asset is treated as if he/she has paid an amount equal to the total of its original costs.

 

Transfers between spouses in the year of separation

The ‘no gain/no loss’ treatment continues to apply to transfers between spouses or civil partners throughout the whole of the tax year in which separation takes place, even though the spouses or civil partners may not be 'living together' at the time of transfer.

 

If a divorce or dissolution of a civil partnership takes place in the same tax year as separation, the ‘no gain/no loss’ treatment applies to transfers of assets made after that divorce or dissolution, but before the end of the tax year. 

 

The definition of ‘living together’ is given in ICTA 1988/s 282. A woman is treated as 'living together' with her husband unless she is:

  1. separated under a court order,
  2. separated by a formal deed of separation, or
  3. separated in such circumstances that the separation is likely to be permanent.

 

A couple may be separated even when they are still living in the same house (Holmes v Mitchell STC 25), for example, because financial considerations make alternative accommodation unavailable for one spouse or civil partner, or where the parties want to minimise the initial impact of the separation on their children.

 

Transfers between spouses after the end of the tax year of separation

Where a transfer occurs between spouses or civil partners after the end of the tax year in which they stop ‘living together’, the rules to decide the date of disposal and the amount of consideration on disposal are as follows:

 

(a) Date of disposal

For transfers made as part of a divorce agreement, the date of disposal for capital gains tax purposes is the date of the agreement.

 

If transfers take place following a court order, the date of disposal for capital gains tax purposes is the date of the court order, unless the court order precedes the date of the decree absolute, in which case the date of the decree absolute is the effective date.

 

(b) Amount of consideration

Transactions between a husband and wife (or civil partners) after the tax year of separation cannot take place at ‘no gain/no loss’, as section 58 of TCGA 1992 is no longer applicable.

 

Furthermore, a husband and wife (or civil partners) are connected persons by virtue of TCGA92/s286(2). This is so even if they are permanently separated, and it remains the case until the date of the decree absolute which ends their marriage.

 

Section 18(2) of TCGA 92 provides that transactions between connected parties are always treated as transactions otherwise than by way of a bargain made at arm’s length.

 

TCGA92/s17(1)(a) provides that where a transaction takes place which is otherwise than by way of a bargain made at arm’s length, the consideration for the disposal of an asset is deemed to be equal to the market value of that asset at the date of disposal.

 

Accordingly, in general, the transfer of an asset between a husband and wife or between civil partners of each other, who are permanently separated, is treated as taking place for consideration equal to the market value of the asset transferred on the date of the disposal. More information

 

The market value rule can extend beyond the date of the decree absolute where a disposal is not made by way of a bargain at arm’s length. For example, a disposal under a court order would not be a bargain at arm’s length and therefore requires the substitution of market value.

 

After the decree absolute or dissolution, the former spouses or civil partners cease to be connected persons (unless they are connected for other reasons, for example, because they are business partners) and, accordingly, transactions between them take place at the value placed by both parties.

 

Matrimonial or civil partnership home

 

Where a property has qualified for private residence relief and one party to the marriage moves out, it is possible to make a claim to enable the property to continue to be treated as that individual's only or main residence until disposal to the remaining spouse where all of the following three conditions are met:

  1. The disposal is pursuant to:
    * an agreement with the spouse or civil partner made in contemplation of the dissolution or annulment of the marriage or civil partnership; or
    * a separation order; or
    * that the separation is likely to be permanent; or
    * by order of a court, a decree of divorce, nullity or dissolution is granted.
  1. The dwelling house (or part of) continued to be the main residence of the individual’s spouse or partner.
  1. The individual seeking the relief has not provided notice that another residence is to be treated as their main residence.

 

This is a very useful relief provided by s225B TCGA 1992 and can often come in handy in situations for example where the spouse moving out is renting a property and is therefore not concerned about loss of relief on that residence.

 

However, if the departing spouse or civil partner acquires another property, he/she will not obtain private residence relief (PPR) on his/her other property for the period that the matrimonial or civil partnership home is deemed to be his/her principal residence. Therefore, a cost/benefit analysis should be undertaken before deciding whether or not it is in the departing spouse's or civil partner’s interest to apply the concession.

 

Please note that certain periods of non-occupancy are deemed periods of occupancy, for example:

  • the last nine months of ownership (where the disposal takes place on or after 6 April 2020; previously it was 18 months)
  • an absence not exceeding three years for overseas employment
  • an absence not exceeding four years where the individual was prevented from residing by virtue of the place of work
  • an absence no exceeding four years where a spouse was prevented from residing by virtue of the other spouse’s place of work.

 

Mesher orders

An order by the court that a spouse or civil partner holding an interest in the matrimonial or civil partnership home should hold it on trust for a limited period, for example, until the 18th birthday of their youngest child, and entitling the other spouse or civil partner to occupy the home for the trust period, is often referred to as a Mesher Order.

 

A Mesher order allows the sale of the family home to be deferred for a certain length of time or until a specific event takes place.

 

The effect of an order or agreement is that one spouse/partner’s interest in the property is transferred to a trust at the date of that order or agreement. The trustee will normally be the spouse who holds the interest subject to that settlement. The transfer is treated as a disposal (at market value) of the whole asset that becomes the property of the trust. Provided the property meets the conditions for a private residence, the gain on the creation of the settlement should be exempt by private residence relief. The other spouse or civil partner may then occupy the property under the terms of the trust.

 

When the deferred period ends, the spouse holding the interest in the property subject to the trust will generally become the outright owner. There will be a deemed disposal at that time. So long as the property has been occupied as the only or main residence of the spouse entitled to occupy it, the trustee will benefit from private residence relief for the trust period.

 

The non-occupying spouse reacquires the share in the property at its current market value and this value is taken into account when calculating a gain on a subsequent disposal.

 

Other issues

Another issue to be aware of when dealing with clients going through a divorce relates to court orders governing post-divorce asset realisations. See HMRC’s guidance on the issue.

 

The guidance provides that if the court instructs one party to hand over a certain percentage of the proceeds on a sale of an asset to the other party, the person receiving the proceeds is not chargeable to capital gains tax on the amount received.

 

This is because it represents financial provision by order of the court, and is not a sum received in consideration for the disposal of an asset.

 

The guidance also states that the party making the payment is not entitled to a deduction for the amount paid to the other party, because the sum is an allocation of the proceeds and not a deduction in arriving at the gain.

 

Conclusion

In conclusion, no capital gains tax is payable on transfers between spouses or civil partners in a tax year in which they are living together. This includes the year in which they separate.

 

Where a transfer takes place after the year of separation, capital gains tax may be payable. The transfer is normally treated as being made at market value, because the spouses are still connected persons until the decree absolute.

 

Ideally, transfers of chargeable assets between the parties should therefore take place before the end of the tax year in which separation occurs.

 

Where a transfer of assets could give rise to a capital gains tax liability, making the transfer in different tax years may reduce the total bill by taking advantage of two annual exemptions. If the transferor spouse's or civil partner’s capital gains tax rate is likely to be lower in one tax year than another, accelerating, or delaying, a transfer of assets could improve their capital gains tax position.

 

Finally, do not forget the useful relief contained in s225B TCGA 1992.

HMRC’s use of deeds to settle tax enquiries

Why it is important to understand the difference between contract settlement and deed.


Why it is important to understand the difference between contract settlement and deed.

 

In response to the Covid-19 crisis the government has announced measures that give businesses a helping hand when it comes to managing their tax affairs.

 

One of those measures is 'The Time to Pay arrangement' which gives businesses additional breathing space during which to settle their existing HMRC liabilities, something that could be invaluable in the current climate.

 

It is important to understand the difference between contract settlement and deed. Members should be aware that the drafting, preparation, amending, inserting of any additional terms, execution and signing of a deed which relates to the settling of an individual’s liabilities to tax and interest fall within the statutory definition of a ‘reserved legal activity’ and should not be carried on by any member unless they are specifically authorised to do so or are exempt under the terms of the Legal Services Act 2007 (‘the Act’). 

 

However, most direct tax enquiries are concluded formally, or by contract settlement where amounts of tax, interest and penalties are agreed and it is administratively more convenient for both the taxpayer and HMRC to settle those cases by the use of a contract settlement, not a deed.

 

However, in some cases HMRC has proposed executing deeds rather than contracts when reaching settlements in respect of certain tax arrangements. The cases seem to be mainly tax ‘avoidance’ cases or cases involving complex multi-lateral elements, such as groups (of companies) and employee benefit trusts.

 

Members should be aware of the difference between a contract settlement and a deed.

 

Please note that simply providing advice to a client as to the taxation consequences or implications of entering into a settlement by way of a deed, which has been prepared by HMRC, would be outside of the definition of a reserved legal activity.

 

In some cases it may not always be clear whether the documentation provided by HMRC is in the form of a legal deed, or whether it is simply a contractual agreement. If there is any doubt about whether a member is entitled to carry out certain work, it is recommended that the member contact technical advisory services for further support.

 

A deed, according to Law of Property (Miscellaneous Provisions) Act 1989 is any instrument entered into after 31 July 1990 and:

  1. it makes it clear on its face that it is intended to be a deed by the person making it or, as the case may be, by the parties to it (whether by describing itself as a deed or expressing itself to be executed or signed as a deed or otherwise); and
  2. it is validly executed as a deed by that person or, as the case may be, one or more of those parties.

 

HMRC will often indicate if a deed is being used, but it might not alert the agent that the preparation of a deed is a reserved activity. Things that an adviser should look for are:

  1. Description: It is reasonable to expect a deed to be entitled a ‘Deed’ although this is not conclusive.
  2. Statement: A deed must state that it is ‘executed as a deed’ or ‘signed as a deed’, or other words to that effect, and should contain (usually at the end) spaces for the signature of the representative of each party in addition to the name, address, occupation and signature of the person witnessing each signature.

 

Further guidance including example of 'deeds' for individuals and companies are included in HMRC Practice guide 8 - Execution of deeds

 

Examples of standard letters of offer used in contract settlements for individuals, partnerships and companies are included in HMRC’s Enquiry Manual at Appendix 1 (EMAPP1).

 

ACCA members are not authorised to carry on a reserved legal activity unless they are also members of the Law Society or the Bar. An exemption is provided if a member carries on the reserved activity at the direction and under the supervision of an authorised person who is an employer, manager or fellow employee. An example would be a member working in-house at a law firm. In this example, the tax adviser could lawfully prepare a deed if they are instructed and supervised by one of the authorised lawyers in the firm. 

 

It is a criminal offence to carry on a reserved activity when not authorised to do so. Conviction for such an offence could lead to a fine or a prison sentence or both.

 

Accountants – key business partners for ANY business

Bethan Evans FCCA explains why technology cannot replace the experience and empathy that the practitioner brings to the role.


Bethan Evans FCCA explains why technology cannot replace the experience and empathy that the practitioner brings to the role.

 

As a young adult, I loved to read novels. I would read the likes of Jane Green, Maeve Binchy and Patricia Scanlan’s City Girl series of novels. I loved the idea of dressing up in a suit and becoming a businesswoman.

 

I was fortunate enough to have a family friend as CFO of a Plc who offered me work experience. I learnt that he had started his career as an auditor in one of the big firms and it was inspiring to see how he had once been like me and was now on the board of directors. That, combined with fiction, was my inspiration although it felt a bit like an unconquerable mountain.  One day, I went to a small practice offering ACCA training and a job. That was the day I met my now business partner and it’s the day that I fell into the world of restructuring and insolvency.

 

Partner – Menzies LLP

I am now a partner in a mid-tier firm, Menzies LLP. We are a general accountancy practice based in the South East of England and Wales. I am based in Cardiff and our office is all about business recovery.

 

At the beginning of the pandemic it was quiet which allowed us to adapt to the new ways of working, putting in place new policies and procedures for day to day working, rolling out new technology and checking in with our teams. As time went on, we found ourselves advising a lot of clients on their solvency and cash flow projections. We worked closely with our general practice colleagues and their clients, particularly corporate finance who were working hard to get CBILs over the line.

 

Biggest challenge(s)

Working from home has been the biggest challenge we’ve faced during the pandemic. Whilst it has created the opportunity for people to gain more flexibility in their daily lives and provided a better work life balance, it comes with mental health challenges, training issues and collaboration barriers. That said, the advances in technology have created some real opportunities. This is helping to break down geographical barriers, improve productivity and, given the mass scale on which it is happening around the world, helping towards climate change pledges.

 

Improving paper usage and embracing the use of electronic delivery of documentation has been an important part of our drive to be sustainable. It is all about making it easy for people to make changes to their lives and daily routines so that they can embrace the changes. Docusign and client portals are big ones and for our department the changes made to the Insolvency Rules in 2016 mean we no longer have to hold physical meetings as a matter of course; instead we can hold virtual meetings and make decisions by correspondence. This of course means less travel and reduced emissions.

 

Variety and curve balls

One of the things I love about my job is the variety and the curve balls that are thrown at me every day but that does involve stepping outside of my comfort zone sometimes. A good example is a number of years ago when I was relatively junior, and I was sent to trade the administration of a printing company. I was terrified and at one point was locked in the kitchen of the premises on the phone to one of the partners explaining how the production manager was fighting my decisions.

 

It was all about having confidence and knowing why my decision making was right. I was well and truly out of my comfort zone but, having been given a pep talk and knowing my logic backed up my decisions, I went on to complete the project and make a profit. The business was later sold and I paid dividends to all the creditors.

 

Immediate future

The immediate future is going to be busy. Unfortunately, as we all know, the pandemic has had a significant impact on the economy and there will be a substantial need for turnaround, restructuring and insolvency professionals to help rebuild the economy over the course of the next few years.

 

Improvements in technology are making it easy for us to do our job more efficiently and add more value to our clients which is fantastic, but we also have changes in legislation and regulation to navigate. As technology evolves there are more tasks that it can do for us to improve efficiencies, but technology cannot replace the experience and empathy that the practitioner brings to the role.

 

Key business partners

Accountants should be key business partners for any business. We have the expertise to advise on strategy, to assist with funding applications, to help with succession planning, to guide for growth, turnaround and restructure businesses. We have expert knowledge, experience and an ability to empathise with the people operating the business.

 

Those entering the profession are starting on a journey. Anyone who comes into the profession thinking they know all they need to is certainly not ready; those that are not ready to take ownership of tasks and look for ways to problem solve will struggle. The world is changing at pace and those that come into work ready to embrace change will have a more fulfilling career.

 

Bethan Evans – Partner, Menzies LLP

Covid-19 – latest updates to CJRS guidance

CJRS extended until the end of April 2021.


CJRS extended until the end of April 2021.

 

Coronavirus Job Retention Scheme (CJRS)

In response to the most recent lockdown measures, the CJRS has been extended until the end of April 2021. As before, this will be accessible by employers putting staff on furlough in any part of the UK and continues to be available for employers and employees who have not previously used the furlough scheme in its previous versions.

 

Under the extended CJRS, for claim periods starting from 1 November 2020, the UK government will pay 80% of employees’ usual wages for hours not worked, up to a cap of £2,500 per month. Claims for the month of November are now closed and the deadline for claims for December was 14 January. For all subsequent months’ claims, the deadline for submission will be the 14th of the month following the month of claim.

 

In the most recent updates to the guidance from HMRC, further clarity has been provided on how staff can be furloughed due to caring responsibilities, such as children learning from home or care facilities being shut due to the lockdown.

 

View our updated guidance now

 

 

 

Brexit – what’s next for reporting?

You and your clients have a lot to consider when it comes to year-end reporting post-Brexit.


You and your clients have a lot to consider when it comes to year-end reporting post-Brexit.

 

Risk and viability are the key words the FRC used when issuing its going concern guidance on coronavirus. Many reporting entities will now also look back at the Brexit risks they reported on and will be carefully considering reporting aspects which are likely to require more attention post Brexit.

 

More reliance on judgement

Depending on business sector and complexities of the trading environment it is possible that matters previously straightforward may become less so and reporting on them will need to be approached with caution. Practitioners should highlight those areas in discussions with management and be prepared to challenge directors’ judgements and assumptions, in a way that will result in prudent reporting.

 

This may require practitioners to devote more time to preparing accounts and to achieving balance between optimistic but unsubstantiated assumptions and overcompensating by taking an overly pessimistic view.

 

Going concern

Where clients have predominantly EU-based customers, profitability of sales contracts is likely to be impacted by customs duties for goods not originating in the EU or UK, the cost of logistical delays, forex movements, price competition issues, changes to supply chains and reliance on EU workforce. If contracts already in place become onerous, time may be needed to renegotiate them, resulting in pressure on cash flow in the short to medium term, until stability returns.

 

Going concern uncertainties should be highlighted in the accounts as usual (please see more below), and the availability of shareholders’ ongoing support or third-party funding confirmed in the context of a higher than usual commercial risk. Practitioners relying on directors’ representations in relation to availability of financial support should ensure such commitments are relied on only when verified and confirmed.

 

If despite the free trade agreement some of the adverse impacts of the trading environment remain and the margins are insufficient to absorb losses, accounts should be prepared on other than going concern basis.  

 

Impairment of assets

The trade agreement is likely to protect against significant decrease of recoverable amounts of assets. However, if recoverable values fall below their carrying amount, impairment should be recognised immediately. Inventories and other assets held at cost such as property or certain equity investments may be among those affected.

 

Impairment is discussed in section 11.21 (debtors and other financial instruments) and section 27 Impairment of assets (stock, fixed assets, goodwill, other intangibles) of FRS 102.

 

Inventories

  • Inventories must be reviewed for impairment annually, irrespective of whether or not there is an indication of impairment
  • impairment factors to consider: adverse legal post Brexit landscape, increase in costs to sell, higher employment costs, availability of labour supplied by EU workers
  • compare the carrying amount of inventories with the selling price and direct and incremental costs to complete and sell, based on all reliable evidence, on an item by item basis, or, if impracticable, per groups of related items
  • consider knock-on effect on related balances, such as WIP, which may need to be impaired if finished goods need to be impaired.

 

Assets other than inventories

  • assets other than inventories, for example PPE or some equity investments, must be reviewed for impairment if there are any internal or external indications that recoverable values are below carrying amounts
  • recoverable amounts may be the assets’ values in use (the value that a business achieves by holding and using the asset) if higher than the selling price the asset could achieve if disposed of, less costs to sell. For example, commercial property may not be affected when it is fully utilised by the business, rather than surplus to requirements 
  • consider impact of impairment on useful lives and depreciation estimates as these may decrease.

 

Reliance on valuations

In a climate of any remaining uncertainty, clients should consider utilising professional valuers, rather than relying on directors’ valuations, even though FRS 102 does not mandatorily require professional valuations. Specialist assets or assets for which active market comparables are not freely available may have to be professionally valued irrespective of the impact of Brexit.

 

Provisions

Overproviding whether based on uncertainties and lack of detailed analysis should be avoided. Any costs expected and associated directly with Brexit should only be provided for if there is a legal or constructive obligation to incur those costs at the balance sheet date.

 

If a client is pushed into restructuring as a result of Brexit, section 21.11C of FRS 102 explains that a constructive obligation to make a provision exists only when detailed plans to restructure have been formulated by the year end and formal announcements have been made to those affected. An intention to restructure at some point in future is insufficient to recognise a provision.

 

Emphasis on disclosures of uncertainties, judgements and estimates

Material judgements and estimates made by directors as a result of uncertainties faced should be disclosed separately. These may include:

 

  • disclosures of uncertainties related to events or conditions that cast significant doubt upon the entity’s ability to continue as a going concern (FRS 102, section 3.9)
  • disclosure of significant uncertainties affecting the value of recognised assets and liabilities (FRS 102 section 8.7).

 

Where uncertainties result in directors making judgements or estimating values, those should be disclosed in accounting policies. Focus should be on areas of significant risk of a material change to within the next year. Specific amounts at risk of material adjustment should be identified. In some circumstances, it may be necessary to quantify and disclose a range of material outcomes based on underlying estimates.

 

Changes to assumptions and estimates made in the past should be explained. 

 

Significance of disclosure of post-balance sheet events

To capture all material impacts of Brexit, clients should plan to undertake a comprehensive post balance sheet event review.

 

During the review, information may be found after the year end, which provides evidence in relation to:

  • circumstances that existed at the balance sheet date - adjusting post-balance sheet event
  • circumstances that arose after the balance sheet date (for example if full Brexit terms become known after the balance sheet date) – non-adjusting post balance sheet event, which should be disclosed.

 

Requirement of more detailed disclosures

Overall, the complexities of Brexit are likely to require more detailed disclosures, even for small companies applying FRS 102 1A, due to the overall true and fair view requirement included in paragraph 1A.16.

 

A good reference point for the standard of disclosure by small private companies may be FRC’s Reporting by smaller listed and AIM quoted entities . Or view a complete list of similar resources, including for companies applying IFRS.

 

Increased value of directors’ reports

Whilst not mandatory for small companies, including the directors’ report in the accounts may provide valuable context and insight into company’s post-Brexit future, including information on its ability to deal with challenges and uncertainties.

 

For businesses and advisers it’s important to consider and document the areas that will impact. It is something that many funders also ask about.

Deadline looms for third SEISS grant

All you need to know to help clients make a claim.


All you need to know to help clients make a claim.

 

Applications for the third grant for the self-employed opened from 30 November and claims must be made by 29 January 2021.

 

The third taxable grant is worth 80% of the applicant’s average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total.

 

To qualify, applicants must have traded in both tax years 2018/19, and submitted a self-assessment tax return on or before 23 April 2020 for that year, and 2019/20. To make a claim for the third grant the business must have had a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021.

 

Additional qualifying criteria have been imposed by HMRC in respect of the third grant and presumably this will also apply for the fourth grant expected to be available from February. Applicants must now declare themselves to be either:

  • currently trading, but impacted by reduced demand due to coronavirus, or
  • to have been trading but temporarily unable to do so due to coronavirus.

 

Therefore, when claiming the third grant, the individual will need to confirm to HMRC that:

  • they intend to continue to trade; and
  • they reasonably believe there will be a significant reduction in their trading profits for the period from 1 November 2020 to 29 January 2021.

 

HMRC’s latest guidance states it expects an ‘honest assessment’ about whether or not the business will suffer a significant reduction in trading profits due to reduced business activity, capacity or demand or inability to trade due to coronavirus during the period 1 November to 29 January 2021, and applicants will be expected to keep evidence to support this. As the significant reduction in trading profits test applies to the tax year as a whole, this means that claimants will have to forecast their results for the rest of the tax year to establish eligibility.

 

Self-employed individuals who were not eligible for the first and second grant, based on the information in their self-assessment tax returns, are not be eligible for the third.

 

Where a person claims a grant to which they are not entitled, and they do not repay it, there is a 100% income tax charge plus, in certain circumstances, a 100% penalty.

 

View further ACCA guidance

Wales increases tax on second home sales

The Welsh government has increased the higher residential and non-residential rates of LTT on property sales


The Welsh government has increased the higher residential and non-residential rates of land transaction tax (LTT) on property sales with effect from 22 December 2020.

 

From 22 December, the higher residential rates of LTT increase by 1% across all bands. This applies to sales of second homes and buy-to-let properties as opposed to the main residential home.

 

From 22 December 2020, the zero-rate band of the tax charged for lease premiums and assignments, and freehold property transfers increase from £150,000 to £225,000.

 

The zero-rate band of the tax charged on the rent element of non-residential leases increases from £150,000 to £225,000.

 

The Welsh government has also announced that it plans to increase the 'relevant rent' amount for the annual rent element of non-residential rents from £9,000 to £13,500 in February 2021.

 

As a reminder the temporary increase to the nil rate band of LTT for main residential property transactions will end on 31 March 2021. This means on 1 April 2021, these rates will revert to the original rates and starting threshold of £180,000. Purchases must be completed before this date to use the temporary reduction rates.

 

Details of the changes can be found at Land Transaction Tax Rates and bands.

 

The Welsh government official tax calculator has also been updated to reflect the new rates.

 

 

Landlords and tax returns

Do all landlords have to complete a tax return?


Do all landlords have to complete a tax return?

 

In short, not necessarily.

 

How much tax is payable depends on the level of profits and the personal circumstances of each individual. We discuss the circumstances where an individual does not require to complete a tax return for their rental income but can get their tax paid by notifying to HMRC only.

 

HMRC notification

HMRC guidance clearly states that you must contact them if you have taxable profits from your rental property. The deadline for this notification is by 5 October following the tax year one had taxable rental profits.

 

HMRC does state that those with small amounts of profit have a choice between filing a tax return and paying taxes or getting their PAYE code adjusted with the level of profits. HMRC states that ‘it will ask for a return where rental income is £10,000 or more before allowable expenses’ and under this limit is likely to ask for a return where the rental income falls between ‘£2,500 to £9,999 after allowable expenses’.

 

If the rental income is below the above levels, then the individual may ask HMRC to deal with the profits by adjusting the PAYE code.

 

However, if HMRC has issued a tax return, it has to be completed even if there is no tax to pay.

 

Property allowance

From 6 April 2017 you can get up to £1,000 a year in tax-free allowances for property income. If your annual gross property income is £1,000 or less, from one or more property businesses, you won’t have to tell HMRC or declare this income on a tax return. Gross income means the total amount you would put on your tax return before any allowances or expenses are taken off.

 

You must keep records of this income. This is known as ‘full relief’.

 

If your annual gross property income, from one or more properties, is more than £1,000 you can use the tax-free allowances, instead of deducting any expenses or other allowances. If your expenses are more than your income it may be beneficial to claim expenses instead of the allowances

 

If you use the allowances you can deduct up to £1,000, but not more than the amount of your income. This is known as ‘partial relief’.

 

If you own a property jointly with others, you’re each eligible for the £1,000 allowance against your share of the gross rental income.

 

Further guidance can be found here.

 

Updated guidance for charitable organisations

A summary of notable updates from the Charity Commission.


A summary of notable updates from the Charity Commission.

 

The guidance issued by the Charity Commission for Charitable organisations and CIOs has been updated and trustees and those working with or for charities should consider the changes.

 

Notable updates include:

 

Charitable companies and Charitable Incorporated Organisations (CIOs) can continue to hold AGMs and other members’ meetings online - this has been made possible by the Corporate Insolvency and Governance Act 2020 and applies until 30 March 2021. Note that:

  • they may be held by phone / video or other electronic means, even if the governing document requires them to be held physically face-to-face
  • members still have the right to vote, but the charity can require this to be done electronically, or by other means (such as by post)
  • members will not have the right to attend a meeting in person or participate in meetings other than to vote

 

If you rely on these provisions, you must ensure that this decision is recorded in the minutes and that all other meeting requirements are met. You should ensure that you have a robust system to ensure only those eligible to vote can do so and that you record who has voted and the percentages of votes cast.

 

Wrongful trading provisions, allowing company directors and trustees of CIOs to continue operating a charity through the emergency without the threat of personal liability:

  • these provisions which applied between 1 March and 30 September 2020 have been reinstated, so that it won’t be possible to bring wrongful trading claims in relation to losses caused by trading between 26 November 2020 and 30 April 2021.

 

 

Why you procrastinate and how to stop doing it

Seven key causes of this procrastination and how to overcome them.


Seven key causes of this procrastination and how to overcome them.

 

We human beings are a lot less rational than we like to think we are. And we’re very good at justifying our irrational actions – or inactions – to ourselves. How many times have you told yourself you’re saving money because you’ve bought something on sale? Even when you would never have bought it at full price?

 

We do this in our professional lives just as much as we do in our personal lives, particularly when it comes to making changes to the way we work. We know what we need to do, but somehow there are very good reasons for not doing it just yet.

 

Do you recognise this behaviour in yourself? Procrastinating even when you know taking action will benefit you?

 

I see this all the time with accountants. They keep on doing the things that make them stressed and unhappy even when they know what to change to stop the stress and unhappiness! It’s not that they’re too lazy to change, it’s just that they’re paralysed by procrastination.

 

I’ve identified seven key causes of this procrastination and also the key mechanisms to overcome them.

 

Which of the following applies to you?

 

  1. Overwhelm

Every day you deal with a constant barrage of emails, phone calls, meetings, client queries and questions from your team – not to mention the actual work you’re supposed to be doing. There’s just so much of it you can never reach the end. It’s hard to sift out what really matters and what could help you to move forward because you’re so busy dealing with everything else.

 

  1. Confusion

You know you need to make changes and you might even have an idea of what to do. But where to start? Which is the most important area to focus on? What will bring the fastest results? When you want to make fundamental changes to your entire practice, it’s difficult to know where to begin, so you never actually start.

 

  1. Perfectionism

You just want to be sure that everything is right but you’re not quite ready yet. And somehow, you never reach the point where you are ready. Perfectionism is an admirable quality in many ways but it can stop you from ever taking action. I’ve seen many projects that never get off the ground because they’re never quite good enough for the accountant.

 

  1. Fear

What if it all goes wrong? What if you upset your clients? What if you mess up? Fear can drive you to take action, but it can also have the opposite effect. We all have fundamental fears – of failure, rejection, conflict or insecurity – and these can paralyse you before you’ve even taken the first step.

 

  1. The bright and shiny

You know what your goal is, you know what you need to do, but what if this new software could make it easier? Or what about this consultant who’s promising so much? The ‘bright and shiny’ comes in many forms so it’s not always easy to recognise. But it distracts us from reaching our main goals.

 

  1. Comfort zones

The changes you need to make mean you’ll have to do something new and that makes you very uncomfortable; much easier to stick to what you know. This can be a big hurdle to taking the action that will make things easier in the long run. We all know that change isn’t always easy.

 

  1. Not enough pain, not enough gain

You’re working too many hours, for not enough income, for clients who don’t value what you do – but that’s just running an accountancy practice, isn’t it? You’ve got used to it and you can’t see there’s any real alternative. Well, I can tell you that this isn’t the norm and you don’t have to work this way.

 

Do any of these feel familiar to you? You might find that there’s more than one reason for procrastinating and sometimes you have to dig quite deep to identify the real cause. But you can’t tackle it unless you know. That’s the first step.

 

Next step is to learn how to overcome it. You’ll be glad to know that no matter the cause, you can do something about it. I’ve researched this extensively, but it’s actually too big a topic to go into here.

 

However, you will find the answers in chapter 5 of my book, Putting Excellence Into Practice. There I explain the mechanisms that research has shown to work and that I’ve found to work myself.

 

If you haven’t downloaded the book yet, you can get your free copy here.

 

Shane Lucas – Keynote speaker, author and trainer at AVN

 

 

 

 

Top tech trends for accountants in 2021

From app advisory services to client funding solutions, which trend will benefit your practice most?


From app advisory services to client funding solutions, which trend will benefit your practice most?

 

The use of technology in accountancy has increased over recent years, first through the introduction of Making Tax Digital and then at a faster pace due to Covid-19. The lockdowns resulted in both accountants and clients having to work remotely for long periods of time which led many businesses to change the way they operate and to implement more technology to allow them to continue to work.

 

With the country back in lockdown, we would be unable to work from home effectively without technology. But which technology-based products and services will be the top tech trends for accountants in 2021?

 

Cloud accounting adoption

It is envisaged that businesses will continue to adopt online accountancy packages such as Xero, QuickBooks and FreeAgent. The ability to access data online and from remote locations has fuelled the recent adoption of cloud-based accounting solutions. This is an advantage not only while we are in a national lockdown but also into the future when travelling returns and clients go away on holiday again as they still can access their data if needed.

 

Also, ongoing advances in these packages has seen the increased use of artificial intelligence and machine learning which, in turn, has led to many benefits including task automation and efficiencies as well as access to more insightful information regarding business performance.

 

These benefits, coupled with the further roll-out of MTD in the future, mean that it is likely that the client adoption of cloud accounting packages will continue to increase and we will see more firms offering this to their clients.

 

Remote communication tools

The ability to work remotely was essential in 2020 and will remain crucial. Staff have seen the benefits of home working whereby they can save time and money not commuting to the office and some accountancy firms have decided to close their offices completely and move to a totally remote environment. Others are now looking at offering more flexible options for their staff whereby they split their working week between home and the office.

 

The ability to communicate effectively with staff and clients in a remote environment is essential and we have seen the use of online meeting tools such as Zoom and Google Meet increase significantly in 2020. There has also been the development of new online meeting applications designed to ensure the meetings are more organised with preset agendas, stored meeting notes, templates etc. The adoption of these tools is set to continue as staff and clients see the benefits of not having to travel for meetings and the time and costs saved as a result.

 

There has also been a huge increase in the use of other online communication tools such as Slack, WhatsApp and Microsoft Teams for staff communication within the office. These allow for easy, immediate communication with staff and can be left open all day so that questions can be quickly answered between team members. We have also seen accountancy firms start to use other communication tools such as WhatsApp to communicate with clients as this is faster than email. These trends are predicted to continue.

 

 

Practice management and document storage

Linked with the increase in remote working, there is a growing need for collaborative online practice management software within the accountancy profession. These tools allow for the management of work remotely and also, with integrations to other applications, can reduce the volume of data entry needed. For example, the integration of the practice management software with the proposal software means, when a proposal is signed, the new client is automatically set up within the practice management application along with the services agreed. This significantly reduces the time taken for client onboarding and so improves internal efficiencies.

 

The use of practice management software helps to ensure that the client information, services, emails and workflows are all sorted in one location. This allows for the creation and allocation of job and task workflows to team members for completion and ensures that the manager is aware of staff workloads and, in turn, can identify bottlenecks early.

 

As well as practice management software, online document storage solutions are also an area expected to grow in 2021. Again, the need to be able to access data from remote locations in a safe and secure manner has accelerated the growth of this area. No longer is it acceptable to store information in paper files in the office!

 

Client funding solutions

Previously, when looking into financing options for clients, accountants contacted a financial adviser who then engaged with the client to assist with their enquiry.

 

We have seen an increase in online software available for accountants so they can now offer this service to their clients themselves. Fuelled by the introduction of new UK government backed loans as a result of the pandemic, the use of this software has grown and accountants have become more accustomed to providing their clients with this service.

 

Many of these funding apps integrate with the clients' accounting software so the data needed for the finance providers is easily available to allow for quick product comparison. These services also provide fast turnaround times and offer a wide range of finance options such as asset finance, loans and invoice finance products.

 

App advisory services

There has been a significant increase in the number of apps available that integrate with the accounting packages over recent years. You only need to look at the vast array of apps in the Xero App Marketplace today to see how this area has grown dramatically.

 

App advisory is an area that is predicted to increase in 2021 as accountancy firms offer clients solutions to help them run their business more efficiently. There are the more general apps which are suitable for many business types (eg for cashflow management and credit control) as well as more sector specific applications (eg Buildertrend for the construction sector).

 

This increase in app availability will, in turn, allow accountancy firms to provide new services to their current clients as well as attract new clients and so provide the firm with new sources of revenue.

 

Integrated HR and payroll solutions

It is predicted that there will be an increase in availability of integrated payroll and HR software. These products allow both employee information and payroll data to be used within the same system and assist with the management and control of staff related data and administration.

 

These software tools have a number of benefits including improved accuracy of payroll processing, time savings through reduced data entry as well as providing staff with easy access to their personal information within the same online application as their payroll and attendance records.

 

Demand for new skills

There has been an increase in the use of data analytics over recent years. The power of data is enormous and really can help clients understand so much about their business and how it operates. This, in turn, assists with important decision making and allows companies to adapt to meet the needs of their customers.

 

This is a relatively new area for accountants and we are starting to see firms recruit staff into new roles who specialise in data analytics. This is a trend that is expected to continue into the future as the demand and uses for this sort of ‘big data’ increases.

 

Use of social media

Social media marketing for accountants is predicted to develop further in 2021 and beyond. This is an area which has grown dramatically and, with social media playing a big part in many people’s lives, it is a trend that is set to continue.

 

Social media is used as a means of online marketing for many businesses and more and more accountancy firms are using applications such as LinkedIn, Instagram and Facebook to connect with their target audiences and to improve brand awareness.

 

Social media allows for different types of engagement compared to the more traditional email and website marketing techniques previously used, and includes videos, images and polls as well as text posts. You can also post shorter content and use applications to schedule postings so saving you time whilst ensuring you maintain an online presence.

 

It is also possible to obtain detailed data analytics on how posts have performed which, in turn, can be used to further develop and improve the marketing efforts. Insights such as these were never available through the more traditional marketing channels.

 

With the growing use of social media along with the recruitment of more millennials who have grown up with social media, it is no surprise that this is a trend predicted to develop further into the future.

 

Technology is now a huge part of many accountancy firms and one that is developing and growing at a rapid pace. It will be interesting to see this develop more in 2021 and beyond!

 

Caroline Harridence – Counting Clouds Cambridgeshire

First line of defence

Engagement letters – a benefit, not a burden.


In the same way that a life-belt can mean the difference between swimming and sinking, an effective engagement letter can help ease the sinking feeling that occurs when faced with a claim notification. The lack of a properly scoped letter of engagement has been identified as a key element in successful claims against accountancy professionals. A robust engagement letter may protect your practice from a claim, assist greatly in the defence of any claim or, at very least, mitigate any loss.

 

Engagement letters are often seen as time-consuming administration. Some practitioners doubtless see them as merely a compliance box to tick. If that is how they are viewed in your practice, could you be missing out on the advantages and risk management benefits of properly crafted engagement letters?

 

A benefit, not a burden

At your initial meeting, you will have discussed the client’s requirements, the services your firm can provide and what the client can expect to receive. Then comes the process of writing up that client’s transaction into an engagement letter. Many individuals regard that step as an administrative burden or a compliance necessity. Rather than viewing an engagement letter as a non-value-added activity, think of the positive business benefits that it can deliver. A properly drafted engagement letter can be a powerful tool to:

  • help summarise client discussions
  • manage expectations
  • set out services
  • increase transparency to the client
  • help clients understand fees and the value being delivered by the practice
  • avoid awkward conversations on fee increases
  • avoid misunderstandings.

 

This leaves more time for actually delivering the service and obtaining payment rather than resolving complaints or miscommunication.

 

First line of defence

If you do find yourself facing a claim, one of the first questions your professional indemnity insurers are likely to ask is - what services were you providing and what does your letter of engagement say? All too often, the answer is – I don’t have a letter of engagement – in which case you will likely find yourself immediately on the back foot when trying to build a defence.   

 

Scope of services

That said, it is too simple to suggest a letter of engagement does, of itself, offer full protection, but a well drafted letter almost certainly will.  There are a number of areas where it has been found that letters don’t achieve their desired result.  One such area is what would best be described as ‘scope creep’.  How often do you undertake a client engagement for a specific piece of work and half way through suddenly you’re being asked questions about a completely different area of work?    

 

In that situation, do you try to answer the question and then just leave it, or do you specifically state you are not advising on such matters and to do so we must firstly amend our terms of business? If the former, it may be the client is entitled to accept that 'ad hoc' advice as being something on which they can rely.

 

In a similar vein, do you ever think about setting out in your engagement an area of work which is specifically excluded for the agreement?  As with ‘scope creep’, the client may (wrongly) assume you have agreed to give certain advice if it is not specifically noted as being excluded.

 

Our tip – readability

Research has shown that there are a number of principles to consider to get the best out of your letters of engagement to avoid the client losing interest at page one.  These are:

  1. A clear purpose. Demonstrate the reason for the letter and the importance of reading it.
  2. Short. If it is not feasible to keep the engagement letter very short, break information down into digestible paragraphs.
  3. Plain English. The use of complex language, complex sentence structure or heavily caveated sentences should be minimised.
  4. Prioritise. The letter should anticipate the information which will be most relevant to the client.
  5. Personalised. Focus on that individual’s transaction and try to exclude generic information.
  6. Easy to read. Avoid small fonts and densely spaced paragraphs. Headings, bullet points and tables can assist in making the document easier to read.
  7. Highlight key information. Make it easier for clients to focus on key points using bold text or headers.
  8. Consider additional opportunities to engage. This refers to following up the initial engagement letter with other detailed communications.

 

There is nothing to be lost in asking the question whether a more effective initial communication could be developed by putting some (if not all) of the above principles into practice.

 

Mark Gray – service leader Mid Market PI, Lockton Companies

 

If you have any questions please contact your Lockton Account Manager for further advice or email ACCAaccountants@uk.lockton.com 

Lockton is ACCA’s recommended broker for professional indemnity insurance

 

 

Digitalising your practice’s client onboarding process

ACCA is collaborating with Practice Ignition to provide a solution that helps you to streamline and automate your client onboarding experience, from engagement letter creation to debt recovery.


Practice Ignition has launched a version of its product with ACCA templates. These templates have recently been updated by ACCA.

 

For next steps, and to start a free 14 day trial of Practice Ignition, you’ll find all the information here.

 

Their return on investment calculator allows you to determine how much your ROI would be if you use Practice Ignition in your firm.

 

They have bespoke pricing for smaller firms (a client base of fewer than 15), so if you are interested, please get in touch with alice@practiceignition.com (put 'ACCA templates' into the subject line) and a member of the Practice Ignition team will be in contact.  

 

Rest assured that ACCA will always have free engagement letters for members to use. You can download our free factsheets from our website:

 

Engagement Letters for tax practitioners

Engagement Letters for practitioners: accounts production

 

Each factsheet contains a main client covering letter with a privacy notice, a terms and conditions document and the most commonly used schedules of services.

Averaging profits for farmers

Farmers and market gardeners in the UK may obtain relief by averaging the profits of consecutive years.


Farmers and market gardeners in the UK may obtain relief by averaging the profits of consecutive years.

 

Full averaging relief can be claimed where the profits of one tax year are 75% or less of the profits of an adjacent year.

 

Averaging options

Finance Act 2016 extended the ability for profit averaging to five years and removed the marginal relief and there are now three options as below:

 

  1. two-year averaging
  2. five-year averaging (not available for creative artists)
  3. no averaging at all.

 

To carry out an initial review of an averaging claim, check that:

  • The trade, profession or vocation is a qualifying one (see BIM84050)
  • Where the trade is farming, market gardening or intensive rearing of livestock or fish, it is carried on in the UK.
  • The claimant is not a company.
  • The claim was made not later than the normal time limit, or, exceptionally, under the extended time limit for further claims.
  • The claim covers two or five consecutive tax years.
  • The profits dealt with by the claim are the trade profits after capital allowances and balancing charges.
  • Of the profit figures, the lower figure is less than 75% of the higher figure.

 

The following conditions have to be met for averaging provisions to apply:

 

  • for two-year averaging, the current year and prior year’s profits must not be within 75% of one another, ie the difference between the profits for the two years must be more than 25% of the profits of the year with the better result
  • for five-year averaging, the average of the previous four years’ profits and the fifth year’s profits must not be within 75% of one another, ie the difference between the profits for 2019 to 2020 and the average of the profits for the four previous tax years must be more than 25% of the profits of the higher figure. This condition is also satisfied if any one of these years has nil profits or a loss. Those losses will then receive tax relief under the normal loss relief rules. The last year subject to the five-year averaging claim cannot already be subject to an averaging claim from a future tax year. As with a two-year claim, averaging claims must effectively be made in a consecutive order.

 

Averaging is NOT permitted:

  • in the year of commencement or cessation of trade
  • for other streams of income for the farmers such as letting of property, income from leisure activities or income generated from renewable energy etc
  • for farming on a contract basis
  • when using cash accounting
  • for partners who joined or left during the averaging period
  • no marginal relief is available after 1 April 2016
  • for companies, including corporate partners
  • for other bodies which are subject to corporation tax.

 

Losses – sideways relief

Most losses can be claimed against other income, but there are special rules which restrict your ability to claim if your farm is not commercial or if you had a run of losses (worked out before capital allowances) of more than five tax years.

 

Time limit and how to claim

The time limit for making the claim is the first anniversary of 31 January following the latest tax year covered by the claim (eg where the claim relates to 2018/19 and 2019/20, the time limit is 31 January 2022).

 

They are claimed in the tax return for: 

 

HMRC examples for computing averaging claim can be found within HMRC manual BIM84210 onwards.

 

You can see more on the return rules including worked examples and a look at the rules relating to the averaging profits of farmers on our technical advisory webpages .

 

 

Useful links

HMRC Helpsheet 224 for Farmers and market gardeners

HMRC Helpsheet 234 for Creative artists

ACCA examples for prior to 2016 changes

Income tax and deductibility of expenses

Revisiting a case where not everything charged in the profit and loss account of a trade, profession or vocation is an allowable deduction for tax purposes.


Revisiting a case where not everything charged in the profit and loss account of a trade, profession or vocation is an allowable deduction for tax purposes.

 

At this time of year, you tend to remember cases which influence what you can claim. Here we revisit a case where not everything charged in the profit and loss account of a trade, profession or vocation is an allowable deduction for tax purposes. 

 

The legislation disallows any expenditure not incurred wholly and exclusively for the purposes of the trade, profession or vocation. This means that the rule is only satisfied if the taxpayer’s sole purpose for incurring the expense is for the purposes of their trade, profession or vocation. If there is a non-trade purpose, then the expenditure is not allowable.

 

Dual-purpose expenditure is expenditure that is incurred for more than one reason. If one of the reasons is not for business purposes, the expenditure fails the statutory test and there is no provision that allows a ‘business’ proportion. But see the comments here concerning expenditure that the courts have allowed as deduction against the income of the trade, profession or vocation.

 

Essentially, the issues in dispute concern the deductibility of travelling expenses incurred by Ms Daniels (a self-employed exotic dancer) between her home and Stringfellows (a nightclub in central London) and of certain other items including clothing, lingerie, dry-cleaning, make-up, beauty treatments. These costs were claimed as allowable in Ms Daniels’ tax returns for the years in dispute.

 

Deductibility of travelling expenses incurred by Ms Daniels between her home and Stringfellows

Normally the cost of travel between the business base and other places where work is carried out is an allowable expense, while the cost of travel between the taxpayer’s home and the business base is not allowable. Let’s look at these two contrasting cases:

 

Horton v Young [1971] 47 TC 60

In this case Mr Horton, a subcontracting bricklayer, claimed travel from work to site as an expense. Mr Horton’s tools were kept at home and his books were written up at home. In addition, he held meetings at his house with contractors to establish fees. The travel included daily travel to building sites, picking up other bricklayers and inter-site travel. The daily travel varied between five and 55 miles. Each project would take no more than three weeks. There was no office at the sites.

 

The Court of Appeal held that Mr Horton’s home was his ‘business base’ and as a result the whole expense was allowable as it satisfied the wholly and exclusively rule. In conclusion, travel expenses in relation to itinerant work or for journeys between places of business for purely business purpose are deductible.

 

Samad Samadian v Revenue & Customs [2013] UKFTT 115

In this case Dr Samadian was a self-employed consultant geriatrician who was also a full-time consultant working for two NHS hospitals. Dr Samadian claimed the costs of travelling between private clinics and NHS hospitals and between private clinics and his home.

 

Although the judge accepted that Dr Samadian did have a place of business at home, there was a ‘mixed object’ in the travelling between home and the private hospitals. Because the office was also Dr Samadian’s home, part of the object of the journey was to allow him to maintain a home in a location separate from his place of employment. So the judge decided that the cost of these journeys was non-deductible.

 

The journeys between the NHS hospitals and the private hospitals were also regarded as non-deductible on the grounds that the travel was not an integral part of the business itself.

 

In conclusion, travel expenses for journeys between home (even if the home is used as place of business) and places of business are treated as non-deductible (other than in very exceptional circumstances).

 

In the case of Ms Daniels, the first-tier tribunal followed the upper tribunal’s decision in Samadian and ruled that her travelling expenses were not allowable because they had a dual purpose. They were incurred to travel from home to work and back again, as well as from her home office location to her place of work at the club in London.

 

Items including clothing, lingerie, dry-cleaning, make-up, beauty treatments and hairdressing (including hair extensions)
Normal everyday clothing is not allowable because of the duality of purpose as established in Mallalieu v Drummond HMRC. In this case the judge concluded that even though Ms Mallalieu's sole conscious motive was to comply with professional rules, this was not the relevant test. The clothes were also used for ‘warmth and decency’ and therefore no apportionment was possible.

 

By contrast, uniforms, theatrical costumes etc that can only be used on stage are allowable and not deemed to be normal everyday clothing [BIM 37910]. Ms Daniels’ evidence was that her appearance was a very important part of her role at Stringfellows. The costumes and dresses that she wore were not the type of clothing that would be suitable to be worn outside the club. Her dresses were long, see-through and skimpy. They were frequently decorated with sequins so that they dazzled under the lights. In addition, her costumes would include nurses' and schoolgirls' uniforms for ‘fancy dress’ evenings. Her shoes had six to ten inch stiletto heels and were made so that it was possible to hang upside down from a pole when her performance included pole dancing. Her high-heeled shoes tended to wear out quickly.

 

The tribunal accepted Ms Daniels’ evidence that the clothes she bought to perform at the club could not be worn outside, and concluded that these items were solely for the purposes of her business and therefore deductible.

 

As regards the cost of cosmetics, these had to be heavily applied in a theatrical (over the top) manner in order to last the whole evening of Ms Daniels’ performances. She did not wear that make-up outside her work.

 

In respect of perfume, Ms Daniels said that she did not wear perfume other than for her performances. Her performances involved ‘getting naked in front of drunken men’ and she did not want perfume to feature in her everyday life to remind her of her dancing job.

 

It was held that while most women (irrespective of what work they do or whether they work at all) wear make-up of some sort, a stage performer has to wear a different level of make-up and so stage make-up is therefore allowable as part of a performer’s costume. In the judgement the court stated that ‘the fact that Ms Daniels could have worn make-up and the perfume outside her work is not the correct test. Her evidence was that she did not do so and that she bought those items solely for her performances. We consider that she incurred the expenditure wholly and exclusively for the purposes of her performances and that it was therefore deductible.’

 

As regards the cost of hairdressing, hair extensions and various beauty treatments (eg manicures, fake tanning and waxing), HMRC’s own practice as outlined in its own Manuals (BIM50160) states ‘where a performer claims a deduction for the cost of cosmetic surgery to correct some perceived inadequacy in their appearance then you need to examine whether one of the purposes in incurring those costs was to gratify their private wish to improve/change their appearance. If it was, no deduction will be due. Some performers may, however, be able to show that expenditure on cosmetic surgery has been incurred solely for professional purposes. Such expenditure may be allowed.'

 

The court considered that the purpose of Ms Daniel’s expenditure was to enhance her appearance for the purposes of her performances. The effect may have been that her appearance in her everyday life was also enhanced, but that was not the purpose in incurring the expenditure. As a result, the expenditure for hairdressing and other beauty treatments was deductible.

 

Receipts or other primary records

Although a cashbook was provided showing expenses totalling £8,629.48 and which were claimed as an allowable deduction, receipts and invoices were provided which substantiated less than 10% of the amount claimed.

 

Ms Daniels stated that it was not possible to collect and retain receipts for all expenses as in many cases her purchases were made from market stalls, whose stallholders did not provide receipts.

 

The judge decided that while Ms Daniels should have kept better records, he had no reason to believe that she had not incurred the expenditure and, as a result, the claims should be accepted regardless of the lack of invoices. 

 

The validity of a penalty assessment under Schedule 24 for ‘carelessness’

On penalties, the court agreed that HMRC was justified in charging penalties for the incorrectly claimed travelling expenses. The argument that Ms Daniels relied on her accountant to prepare and submit the tax returns was not accepted. However, the penalties were reduced on the basis of one HMRC officer’s ‘unreasonable approach’, which had ‘soured the relationship’ with the taxpayer and her adviser.

Launching a new service in 2021? What you need to know

As we enter the new year, many are hoping for a fresh start after the events of 2020.


As we enter the new year, many are hoping for a fresh start after the events of 2020.

 

While no one can say for certain what 2021 has in store for us, it’s a good time for accountants to look back, review how their business has been affected, and think about what they’re going to change in the future.

 

One of those changes might be a new service offering. Perhaps the Covid-19 pandemic has prompted you to change the way you work with clients or the kind of advice you offer – or maybe you’re looking to make up for some lost revenue over the next year.

 

Whatever your reason, planning is key.

Here are a few questions you should ask yourself before you launch a new service.

 

Who are you offering the service to?

Even if you have a fairly clear idea of the kind of client your new service is for, dedicating some time to market research will give you a major advantage compared to launching based on assumptions.

 

Finding out the size of the market and the experiences and opinions of people in it means you can ensure you’re offering the right service in the right way.

 

This could be done through a combination of desk research, interviews with your current clients, and larger-scale surveys.

 

To inform your research and keep you on track, you could also put together some profiles of your ideal clients. These are also known as buyer personas, which we explain in more detail here.

 

How does it fit with your business goals?

A new service launch can seem exciting, but if it doesn’t contribute towards a specific business goal, it might not be worth the time and cost.

 

For example, are you looking to acquire new clients from a certain sector or meet a need that’s emerged in a sector you already work with? Do you want to widen your customer base as a whole or attract higher-value clients?

 

Drawing up some forecasts for customer acquisition in the first year you offer the service will help you to work out whether it will achieve the results you’re hoping for.

 

How will it scale?

Starting small is usually the best approach to any new service offering, but it’s also a good idea to plan for how the service might develop and expand over time.

 

Look ahead at the next three to five years, and think about how the number of customers and revenue might grow.

 

What resources do you need?

In order to start offering a new service, you’ll usually need to make some form of investment. That could mean purchasing new software, hiring staff who specialise in that service, or training up your existing employees so they have the skills to offer it.

 

Aside from the practical requirements of the service itself, you might also find that you need to invest in new systems and processes in order to handle an increased workload and run smoothly as your firm expands.

 

An effective customer relationship management (CRM) tool, for example, could be a good way to keep track of your growing client base while maintaining a high standard of customer service.

 

How will you package it?

Once you’ve done your research, it’s time to look at the specifics of what’s included in the service, and how much you’ll charge for it.

 

Packaging your service effectively is really important. You want to make it as easy as possible for someone to understand what you’re offering and simple for them to buy it.

 

You might decide to offer it as a standalone service, an extension to an existing service, or part of a bundle.

 

You should also think about how you’ll present the service package on your website, and how you’ll go about promoting it to your clients.

 

Find out how to package, price and promote your accounting firm’s services in our new eBook.

 

Melissa Tredinnick – Assistant Editor, PracticeWeb

Tax guides to help your clients

Give your clients a helping hand before the self-assessment deadline hits.


Give your clients a helping hand before the self-assessment deadline hits.

 

With the self-assessment deadline fast approaching, here are three guides you can share with clients which help them understand their filing obligations this season and in future.

 

The guides are purposefully brief and basic and can be re-purposed to your business headings and should serve as quick tips on some of the common areas of concern around self-assessment. 

 

They can also be used as marketing tools as quick guides with your business branding. Hopefully with these tools, you can educate your clients on the most frequently asked questions around tax returns.

 

Download each Guide from our website, or directly via the links below.

 

 

Tax inspections and how to avoid them

Only some 7% of tax inspections are triggered at random – ‘so HMRC can check that they are targeting their inspections properly and also so that nobody feels safe’. The vast majority, though, happen when HMRC believes there's something wrong.

 

What to do when you lose your tax records
‘HMRC will expect you to make a “reasonable effort” to complete an accurate return - and there's a difference between losing records through circumstances beyond your control and losing records through shoddy filing,’ says Russell Cockburn, former tax inspector and now a tax consultant.

 

Home expenses to claim when you're self-employed FAQs
An expense is allowable as a deduction only if it is incurred 'wholly and exclusively' for business purposes, but it doesn't have to be billed separately nor does the part of your home have to be set aside permanently for business.

ACCA key policy updates

The latest on self assessment and our proposal for a directors’ income support scheme.


The latest on self assessment and our proposal for a directors’ income support scheme.

 

Campaign to delay self-assessment deadline

In December ACCA wrote to HMRC’s Permanent Secretary, Jim Harra, to express concerns over clients’ ability to meet the approaching self-assessment deadline and to request a delay to the end of the financial year.

 

On 18 December we received a response from HMRC relaying that the Department wished to encourage as many customers as possible to file on time and Covid-19 impact would constitute reasonable excuse.

 

Following the announcement of renewed national lockdown measures in January, ACCA reissued our call to HMRC, highlighting the welfare of ACCA members and clients, many of whom have fed back that they are unable to cope.

 

ACCA continues to raise the issue with HMRC. We are also seeking additional member quotes and case studies to support our call for a delay; members can share their views at UKPolicy@accaglobal.com           

 

 

 

ACCA proposal for a directors’ income support scheme

In November ACCA partnered with Forgotten Ltd, FSB and tax expert Rebecca Seeley Harris to continue our campaign for a Directors' Income Support Scheme (DISS).  The Income Support Scheme proposal was developed following feedback from ACCA's practitioner network and aims to reduce erroneous claims and target support towards those who cannot access existing schemes.

 

Following a briefing from the campaign group to MPs and Ministers, several MPs asked questions at Treasury Questions in the House of Commons to the Financial Secretary to the Treasury on support for company directors. The parliamentary session can be viewed here.

 

Financial Secretary to the Treasury, Jesse Norman, met with Rebecca Seeley Harris, Forgotten LTD, ACCA UK and the Federation of Small Businesses on 9 December 2020 to discuss the proposal for a Directors' Income Support Scheme.  The meeting was also attended by policy officials across HM Treasury and HMRC.

 

The meeting was positive and covered a lot of ground. The government agreed to continue to consider how to better target support to those impacted by Covid-19. As this meeting was confidential, no further details will be released.


ACCA is continuing its campaign for income support for company directors. ACCA is continuing its campaign for income support for company directors. On 20 January, ACCA will give evidence to the Treasury Select Committee, and to the All Party Parliamentary Group for Gaps in Support on 19 January to discuss the proposed scheme for Director Support.  

 

         

 

NEWS
Webinars - Brexit and VAT issues

Webinars to support you in the transition to the new rules.


Editor's Note: This issue of In Practice was first published on 16 January. The e Croner-i webinar has now taken place. However, read on for other webinars on demand and future webinars and courses. 

 

 

Following on from our previous webinars, ACCA has partnered with Croner-i to bring you a webinar covering new rules and VAT aspects relating to imports and exports between the UK and EU following Brexit.

 

The course will cover practical information on movement of goods, VAT aspects and much more.

 

To register for this webinar, please use the link below:

 

Post-Brexit VAT changes to imports and exports

Date: Tuesday 19 January

Time: 2pm

 

Our earlier webinar covered VAT issues with online trading and can be accessed below:

 

VAT issues with online trading

Speaker: Dean Wootten, Wootten Consultants Limited

Accompanying technical factsheet

 

 

 

There are further upcoming webinars and courses to support you in the transition to the new rules and you can register using the links below:

 

Brexit – the full picture and its business and economic outcomes

 

Overview: Finally, the Brexit process has come to an end with the trade deal agreed just before Christmas – or has it? There are numerous difficulties in implementation, many areas where agreement is somewhat flexible in interpretation, no substantive agreement on services and many hidden barriers and obstacles to trade.

 

In practical terms there are real challenges in overcoming political differences and uncertainties and the very real practical difficulties in achieving a frictionless relationship with the EU.

 

This course considers the continuing rocky road ahead and the impact on business planning and the domestic economy.

 

Key features:

  • Brexit review – what brought us to where we are now, a history and timeline
  • What issues have been settled with clarity and what have not – examination of the Political Declaration and the 'deal' agreed.
  • Downsides and upsides to the economy and businesses
  • Macroeconomic impacts and what we should be keeping an eye on in our planning
  • Likely resultant trade and sectoral impacts

 

What will I get out of it?

An understanding of the current Brexit position and the outstanding issues still to be resolved, along with a review of the risks to both the economy as a whole and possible sectoral trade impacts.

 

Who should attend?

Senior finance management and any finance and non-finance management and members of staff involved in business planning and forecasting processes.

 

 

Title: Cross border VAT post-Brexit

This free webinar will look at the movement of goods in 2021, identify overseas registration obligations for clients, and changes to international services post-Brexit. Accompanying technical factsheet

 

Date: Wednesday, March 10, 2021

Time: 12:30 PM GMT

Further resources: Keep abreast of all Brexit-related issues as developments progress. Follow ACCA’s views, opinions and guidance on Brexit on our Brexit Hub

Webinars tackling the topics which matter

Our 2021 programme of free webinars for practitioners is open for booking!


Our 2021 series of free technical webinars for practitioners is now open for booking. The series features these webinars:

 

 

Accounting for Covid-19 reliefs and grants 9 February (12:30)

Speaker: Steve Collings, LWA Ltd

 

Protecting your data 18 February (12:30)

Speaker: Dr Stephen Hill, Hill Bingham Ltd

 

IR35 – the extension of IR35 to the private sector 2 March (12:30)

Speaker: Louise Dunford, LD Consultancy Limited

 

Cross border VAT post-Brexit 10 March (12:30)

Speaker: Dean Wootten, Wootten Consultants Limited

 

 

Register for any or all of these sessions using this link.

 

If you are unable to join us for the live webinars then you will be able to watch them on demand at your convenience.

 

Each webinar will count for one unit of verifiable CPD where it is relevant to the work that you do.

 

Don’t lose your licence! Renew now

All practising members must renew their practising certificate for 2021.


All practising members must renew their practising certificate for 2021.

 

If you haven’t already, please complete and submit your renewal now. It’s your responsibility to ensure the renewal is submitted on time and that you’ve been issued with the correct certificate(s).  

 

We recognise that ACCA members and firms are facing extraordinary challenges as a result of Covid-19 and if you are experiencing difficulty in these exceptional circumstances with submitting a renewal or anticipate any delays please contact us at authorisation@accaglobal.com

 

Thank you to all members and firms who have already submitted renewals. We’re working through these as quickly as possible and will be in touch shortly, but don’t worry - you can continue to practise in the meantime.

 

Holding a Practising Certificate allows you to provide a range of services to clients beyond basic bookkeeping. This can include producing accounts, preparing tax returns and reports or certificates concerning a person's financial affairs that will be seen by a third party (for example, confirmation to a potential lender of a person's income). You can also be supervised in compliance with the anti-money laundering provisions under the AML Regulations.

 

 

Talking practice

Join our virtual chats for small and medium-sized practitioners.


ACCA UK has been running a series of virtual chats to offer members space to connect and talk with peers in specific industries.

 

We are running a series of virtual chats to offer members in practice space to connect and talk with peers. Through these virtual chats, members are encouraged to share their journeys of success, discuss challenges their business is facing and their outlook for the future - identifying support needed from others and ACCA.

 

Why not join one of the following taking place in February:

 

18 February 2021 10.30-11.30

Talking practice – diversity and inclusion

 

24 February 2021 10.30-11.30

Talking practice – starting your digital journey

 

26 February 2021 10.30-11.30

Talking practice – starting your digital journey

 

Spaces will be limited so book your place now

Budget 2021 – we’ve got it covered

Will this year’s Budget on 3 March contain a number of significant announcements?


Will this year’s Budget on 3 March contain a number of significant announcements?

 

Our team of experts will be on hand to dissect the key announcements and we will publish our annual Budget Special on the evening of the Budget itself. Ready for you to share with your team and clients the next morning.

 

KYC – the right tools for the job?

ACCA wants to hear from accountants involved in KYC checks. Take our survey now!


We would not normally highlight or undertake surveys in January but this one is short and relevant to your business, and we don’t want your voice not to be heard.

 

In recent years, more and more accountants are turning to automated software tools to help with KYC checks. But are they getting the right tools for the job, and are the benefits often claimed for these new tools really being delivered?

 

As part of a report looking into the evolving world of client due diligence checks and the role that they can play in crime fighting and even the broader client relationship, ACCA is conducting a global survey of small and medium sized practices' experiences of the KYC process, and whether they use commercial software tools, or the reasons why not.

 

Whatever the process followed in your firm, ACCA would like to hear from accountants involved in KYC checks by completing this short (five minute) survey

 

 

 

Update on UK exams in March 2021

Update for UK students ahead of our March 2021 exams session.


We recognise that the escalating pandemic and increasing restrictions create uncertainty for you and students taking ACCA exams, especially during this busy period of the year for self-assessments and filing deadlines.  

 

After consulting with partners and listening to government advice, we can confirm that it will not be possible for students in the UK to sit their centre-based exams at the March 2021 session.  

 

Instead, students will be offered the opportunity to sit their exams online through remote invigilation. Entry for remote exams will open on 25 January and close on 8 February 2021.  

 

To find out more about how the current pandemic is affecting our exams globally please visit our Exams Availability webpage. If you have students taking ACCA exams in March we would recommend that you familiarise yourselves with our Remote Session Exams webpages.  

 

We thank you for your ongoing understanding regarding exam arrangements.  

 

New year - new career!

Support for members navigating their way through to a new job or new career.


We know this is a challenging time for many and we want to continue to support members in navigating their way through to a new job or new career.

 

As well as the main ACCA Careers page, we have developed a dedicated page for Career Development and Support. This insight has been gained from members faced with unemployment, redundancy and self-confidence so whatever stage you are in your career as an early, mid or experienced professional we have resources to suit all.

 

High quality CPD for ACCA members

Browse and book upcoming Professional Courses events.


Professional Courses webinars below:

 

Conference one for practitioners

Date: 17-19 March 2021

Fee: £115 + VAT (£138) per person

CPD units: 8

Sessions include:

  • IR35: The new regime
  • Capital taxation update
  • Anti-money laundering, Bribery Act and practice regulation
  • Property tax update.

 

ALL SECTOR COURSES

 

One-day webinar

 

General tax update

Date: 17 February

Time: 09:30-16:00

CPD units: 6

Fee: £115 + VAT (£138) per delegate

 

Half-day webinars

 

Time: 09:30-12:30

CPD units: 3

Fee: £60 + VAT (£72) per delegate

 

CIS domestic reverse charge for VAT

04 February

 

Protecting your data and digital privacy

11 February

 

Company law update

09 March

 

Employment law update

11 March