Technical and Insight
Change can be good!

Will Farnell FCCA on why coronavirus could mean there has never been a better time to be an accountant.

If you embrace change, coronavirus means there has never been a better time to be an accountant in practice, believes Will Farnell.


Coronavirus has upped opportunities for firms ready to support clients in what could be a brave new world.


In the first of a new series, leading practitioner Will Farnell FCCA outlines how he can help practices willing to embrace change and build a new strategy by focusing on:

  • pricing
  • advisory
  • people
  • culture
  • strategy
  • technology
  • process and marketing.



For some years now we have witnessed technology and process re-design change industries beyond recognition. It is nearly 13 years since I set up my firm Farnell Clarke. Back in 2007 I wanted to change the way professional services (and accounting services particularly) were viewed and perceived by users of these services. I wanted to make accountancy simple and easy. 


I was committed to making what we did different from others in our profession, and to achieve my aim of making accountancy simple and easy I considered every part of what I did - from fee structure to the service we provided, from the way I positioned myself and my brand through to the technology we might use.


You may already know my story, while others won’t. Farnell Clarke has since grown substantially, averaging 35% year on year growth and our team is now 50 people across three offices. Our mission remains the same – to make accountancy simple and easy. For me personally it's now also to help other firms make it simple and easy for their clients too.


While I am proud of many things our firm has done, it was our early adoption of technology that contributed most to our growth. Back in 2008, we partnered with KashFlow and by the end of 2009 every client was using KashFlow, making us one of the first 100% cloud practices globally. Today we are a Xero-based firm.


Around this time two years ago I published my book ‘The Digital Firm’. I set out to produce a blueprint for firms looking to digitally transform their practice and I’m delighted to have heard from many firms who say the book has helped their thinking. This is the first of eight articles over the coming months which will share a) some of my thinking from the book and b) some of my more recent experiences.


Change hurts

Few thrive on change; many spend their lives doing everything they can, not to change. If there was a scale of 1-10, one being' I’m never changing anything' and ten being 'I want something new every day', where would you be? For me it’s a nine: some change is pointless and not worth the effort, but I am one of those that thrive on change. I often find myself actively looking for something to change!


Change in a business requires change of so many components: values, beliefs, traditions, personalities and attitudes to name just a few. Changing just one of these is tough but to shift them all highlights why it is so hard and for so many the short-term pain is simply too much and it is too easy to carry on as we were.


Most change therefore requires a catalyst to make it happen.


Catalyst for change

In late 2018 I was busy speaking at accounting conferences and events around the UK and I talked about what I saw as a ‘once in a generation opportunity to fundamentally change what we did and how we did it’. HMRC simply called it MTD.  Some used the prospect of MTD to make changes to their firms. However, HMRC took its foot off the gas and MTD failed to be the catalyst I, and many others, thought it might be.


Fast forward to March 2020, a global pandemic may have provided the catalyst. Firms across the UK immediately switching to remote working, relying on technology to deliver this somewhat alien way of working. Clients were desperate for up-to-date financial information to support cash flow forecasting, CBILs applications and decisions on who to furlough. These are terms that meant nothing to most of us until the pandemic hit.


In a short period of time, many firms may have seen first-hand the value of delivering regular bookkeeping for their clients. They may have seen that letting staff work from home was not as frightening as they had imagined, maybe even more productive than the team being in the office. The big question of course is, once we don’t have to work this way will we continue or revert to form?


What else has worked for you and your firm during the coronavirus lockdown? Whilst our firm was well placed for remote working (we offered it anyway), for me, after a number of years talking to my team about advisory and what it means, in the bat of an eyelid staff from junior trainees right through the ranks have seen what advisory really means. 


Clients have called and asked them questions about different areas of their business that go beyond questions about their VAT return or their year-end accounts. Advisory is, after all, simply having great relationships with your clients so we as accountants become the first port of call for any question a client has. My team had never quite seen the reality of this before as anything beyond the day-to-day work usually gets delivered by someone usually more senior in most firms!


For those firms that are committed to using what they have learnt during the lockdown to adapt their business model, I hope the seven articles which follow will provide some ideas and inspiration, for what I believe being a digital firm really means.


Coming up


In my book I talk about the digital firm wheel, which will form the basis of future articles. We will discuss what client experience really means and why it is so important for firms that want to genuinely see a competitive advantage when it comes to service level. Providing good client service is no longer enough. 


I will talk about pricing, my favourite topic because I was so very bad at it! How do we price what we are worth and ensure that clients buy based on what we can deliver rather than on the prospective invoice value? We will discuss the importance of data and why I believe accountants should be delivering daily bookkeeping to ensure we have the data we need to deliver real business advice to our clients. How we can use our knowledge of the client to deliver new services like HR, App Advisory and much more?


Those that have heard me speak over the last 18 months or so will know that I often say there has never been a better time to be an accountant in practice; coronavirus has not changed this - it has simply upped the opportunities for those firms ready to support clients in what could be a brave new world.


There will be a strong focus on practice development; many practitioners strive to deliver exceptional client service, but often at the cost of their own profitability. Whether we are looking at better profitability through increased prices or greater levels of efficiency and effectiveness, what we will be talking about is new strategies. The first step in any strategic project is to know where you are now and where you want to be.


Consider the following actions before my next article:

  • Establish clarity on your client base. Identify each client, what they pay you for, what you deliver for them (and perhaps what you had originally planned on delivering for them), the fee you charge and finally add a ranking to each client as A, B, C or D.  A being your perfect client and D being you wish they were not a client!

  • If you have not done so, set some 12 month and three-year objectives for where you want your firm to be. This could be increased revenue; it may just be making your firm more profitable with your current client base or it could be improved efficiency to let you reduce the hours you have to work. Spending time thinking about where we want to be is so important, as without this clarity we have no idea of where to go.


Many firm owners recommend such steps to clients – but don’t always practise what they preach…


In the next article we will focus on pricing. I will share some of the steps we went through at Farnell Clarke in re-pricing our entire client base and you may be pleasantly surprised at some of the results.


In the meantime, good luck with the actions in assessing your client base!


Will Farnell FCCA

Founder – Farnell Clarke

Guide to the government’s recovery strategy

Summary and key dates for an exit from lockdown.

Summary and key dates for an exit from lockdown.


On 10 May the Prime Minister announced the following phased return to normal working practices for those unable to work from home:

  • from 13 May, the UK entered a phased plan for recovery with different timetables possible for each of the devolved nations. Individuals and employers in Wales, Scotland and Northern Ireland should check local advice as circumstances change
  • The UK government’s plan is set around five key measures that will determine the ability to move to the next stage:
    • sufficient NHS capacity to provide critical care and specialist treatment to those that need it
    • sustained fall in daily death rates
    • data from the Scientific Advisory Group for Emergencies (SAGE) shows sustained fall in the rate of infection (transmission among the public)
    • PPE and testing capacities must meet current and future demand
    • confidence that adjustments will not cause a second peak.

13 May: Phase 1 begins

This allows the following:

  • those unable to work from home can return to workplace settings as long as new Covid-19 Secure Guidelines are followed. Those who can work from home must continue to do so
  • public can leave the house for unlimited exercise and are able to drive to another location or meet in open green spaces with one other member of a different household. Outdoor gyms and theatres remain out of service
  • paid childcare services can resume
  • government advice now recommends face coverings are worn on public transport and in some shops
  • those in clinically vulnerable or shielded groups must continue to stay at home and minimise trips out.


1 June: earliest date the UK may enter Phase 2

If data indicates further steps are allowable there may be:

  • a phased return for early-years centres and primary schools to reopen for more students
  • reopening of non-essential retail (excluding hospitality and personal care, eg hairdressers) as long as retailers are able to follow the new Covid-19 Secure Guidelines
  • sports and cultural events able to restart behind closed doors for broadcast only
  • reopening of local transport in urban areas


4 July: earliest date the UK may enter Phase 3

If data indicates further steps are allowable there may be:

  • possible reopening of some leisure and hospitality premises, personal care retail and public spaces (eg places of worship).
Accounting aspects of government assistance

Steve Collings FCCA explains the accounting treatment of the government guidance.

Steve Collings FCCA explains the accounting treatment of the government guidance.


As businesses continue to deal with the significant level of disruption caused by the Covid-19 pandemic, HM Revenue and Customs are sending payments out to employers in respect of the Coronavirus Job Retention Scheme (CJRS) for employees that have been furloughed. For self-employed individuals, the self-employed income support scheme is up and running.


This short article examines the accounting treatment in respect of grants received in respect of the CJRS and the Coronavirus Statutory Sick Pay Rebate Scheme together with the disclosure requirements under UK GAAP.  Its supported by a Technical Factsheet that further explains the treatment. This is available by emailing with the subject line ‘Technical Factsheet Accounting for CV19’.



Grants received from HMRC for furloughed employees

Employers who have furloughed employees will have been claiming the 80% grant available from HMRC. Many businesses have now received these grants and in terms of the accounting treatment there are a couple of points that need to be considered where the financial statements are concerned.


FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland deals with government grants in section 24 Government Grants.  FRS 102, paragraph 24.3A states that government grants cannot be recognised in the financial statements until there is reasonable assurance that:


  1. the entity will comply with the conditions attaching to them; and
  2. the grants will be received.


Once the recognition criteria has been met, FRS 102, paragraph 24.5E states:


A grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs shall be recognised in income in the period in which it becomes receivable.


The relevant accounting policy in respect of the grant will then be applied. Under FRS 102, section 24 this will either be the ‘performance model’ (FRS 102, paragraph 24.5B) or the ‘accrual model’ (FRS 102, paragraphs 24.5C to 24.5G). Where the CJRS is concerned, recognition of the grant in the financial statements is likely to be the same under both models (i.e. it will be recognised immediately in profit and loss).


The grant in respect of furloughed employees must be presented as income within profit or loss. This can be done either separately as ‘Grant income’ or ‘Government grant’ or within the heading ‘Sundry income’.  The grant cannot be offset against the payroll expense (or any other expense) in profit or loss because this is prohibited in company law. Schedule 1 to The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410), para 8 states:


Amounts in respect of items representing assets or income may not be offset against amounts in respect of items representing liabilities or expenditure (as the case may be), or vice versa.


The above restriction is also the same for small companies in The Small Companies and Groups (Accounts and Directors’ Reports) Regulations 2008 (SI 2008/409) at paragraph 8.



Disclosure requirements


Non-small entities

FRS 102, paragraph 24.6 requires an entity to disclose the following:


  1. the accounting policy adopted for grants in accordance with paragraph 24.4 (ie the performance model or the accrual model);
  2. the nature and amounts of grants recognised in the financial statements;
  3. unfulfilled conditions and other contingencies attaching to grants that have been recognised in income; and
  4. an indication of other forms of government assistance from which the entity has directly benefited.


Small entities choosing to report under FRS 102, section 1A Small Entities

A small entity choosing to report under FRS 102, section 1A is not required to apply the above disclosure requirements and there are no specific disclosure requirements in section 1A for small companies where government grants are concerned.


However, there is still a requirement for the directors to ensure the financial statements give a true and fair view, so potentially there may be some disclosures made in respect of the grants received if in the directors' view this is necessary to enable a true and fair view to be presented.



For micro-entities choosing to report under FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime, there are no specific disclosure requirements.


Coronavirus Statutory Sick Pay Rebate Scheme

For payments received by an entity from HMRC in respect of the Coronavirus Statutory Sick Pay Rebate Scheme, the same accounting treatment as above will apply.



Steve Collings FMAAT FCCA is a director at Leavitt Walmsley Associates Ltd and a member of the UK GAAP Technical Advisory Group at the Financial Reporting Council.

The return on investment of getting paid for the work you do

Trent McLaren pinpoints the cause of 99% of all debtor problems in accounting firms.

Trent McLaren pinpoints the cause of 99% of all debtor problems in accounting firms.


When I speak to an accountant about the biggest challenges they face in practice, I typically get a few candid responses. We need to improve our marketing to get more leads, we think we might be too cheap and need to evaluate our pricing, and the list goes on. 


The one that always surprises me is the number of firms that would just love to get paid for the work they’ve already completed for their clients. 

Sadly I’m not just talking about a couple of grand either. I’ve seen debtors sitting in the £100,000 and beyond territory in some really notable firms. 


This can only happen when there is a breakdown in your process of getting paid. And it’s actually a really easy one to fix if you know where the hole in your process is. 

When you meet a new prospect, things seem great. They’re nice, you’re nice, you all get along and everything feels like it’s off to a great start. You didn’t bother putting them on a payment plan because they were so nice, and you were so nice so why would they intentionally not want to make sure that you get paid, so that you can keep running your business? 


Except because you’ve done this for every client, you’ve lost all control of your cashflow of your own business. You know that most of your clients should pay you around the invoice due date, but you can’t pinpoint exactly when they’ll pay because that’s up to them – not you.


This is the cause of 99% of all debtor problems in an accounting firm. If you’re owed money by a client, it’s because your process to get paid is broken and you’ve got no systems or framework in place.

New partnership

ACCA has announced a partnership with Practice Ignition to specifically help accountants put in place processes that won’t break, ensuring that your engagement letters are created quickly, and you put in a strong payment plan and process in place – for every single client.

If you want to find out the ROI to take back control of your cash flow and implement a client onboarding experience that impresses all of your clients then you can take this quiz that will tell you how much your ROI would be to use Practice Ignition in your firm.


Good luck, happy hunting and let’s help you take back control of your cashflow! Let’s put better processes in place to help make sure you get paid on time – every time!


Trent McLaren - Head of Accounting & Partnerships, Practice Ignition



ACCA and Practice ignition

ACCA believes that the future of engagement letters lies in the integration of payment and engagement letters into a single onboarding process.


Our partner, Practice Ignition, has developed a version of its onboarding product that uses ACCA templates. There is more information about this partnership and Practice Ignition’s product here.

Flexibility for insolvent businesses

What the Corporate Insolvency and Governance Bill means for businesses.

What the Corporate Insolvency and Governance Bill means for businesses.


What is the purpose?

The UK government recognises that businesses are going through an unprecedented time and it is trying to provide some additional benefits to businesses and directors to help them through it.


Is it all because of Covid-19?

No.  There are new company rescue provisions that stem initially from a European Directive (Restructuring and Second Chance Directive) that came into force in 2019.  Consultation on these changes happened in 2018.  However, any new opportunities to save companies in this difficult time are welcome.


What do they mean for my business?

If you believe your business is insolvent but can be rescued, you can take advantage of a moratorium that means you have a payment holiday from most of your business’s historic debts while the rescue or restructuring happens. There are exceptions, such as staff costs which must be met. Legal action against your company cannot be continued without court approval.


How do I trade?

Your suppliers, unless they show cause, must continue to supply your business. Your business must be able to meet any debts incurred during the moratorium period. Your suppliers would not be bound by this provision for a short time during the period of the Covid-19 crisis, however, if they are a ‘small’ entity.


What is a ‘small entity’

Simply put, an entity is small if two of three of the following are true:

  1. Turnover not more than £10.2m
  2. Balance sheet 'total' not more than £5.1m
  3. Number of employees is not more than 50.


Are there any historic debts that can be paid?

Yes, if the monitor consents, or the court so rules or the law suggests you should. There are exemptions on payment holidays to parties where the amount is less than £5,000 or, if greater, 1% of all debts and liabilities at the start of the moratorium.


How do I apply for a moratorium?

The moratorium is a court process and requires a monitor who will be an officer of the court and an insolvency practitioner. There will need to be an application to court. Whether there needs to be a hearing will depend on the circumstances at the time of the application and there are also some temporary rules changes to make it a little easier during the ‘relevant period’ which is currently defined as up to one month after the coming into force.


Can a monitor refuse to act?

Yes, and there may be lots of reasons. You might expect a company that applies for a moratorium to be able to afford to pay current creditors as and when they fall due and have excellent and timely management information to give the monitor some comfort that it is an appropriate mechanism.


What is the advantage of a moratorium?

When businesses are in distress, often the most critical factor is time.  A moratorium would provide that time. 


I supply a business that is in a moratorium. What if it fails?

The cost of your supply after the moratorium date would be paid in priority to pre-moratorium debts in any process that happens following a moratorium, subject to pre-existing mortgages/fixed charges.


If I continue to trade in this difficult time, can I be found guilty of wrongful trading?

If a director knew or ought to have known the company was insolvent and continues to trade, a director can be personally liable for the further debts incurred. The government is suspending this provision from 1 March 2020 until one month after the introduction of the legislation (probably some time in June 2020 it will go before parliament). That does not mean that directors do not need to focus on creditors in times of financial hardship. 


Can a company issue a winding up petition against my business or can I issue a winding up petition against another company?

When this legislation comes into force, there will be a temporary restriction on the issue of winding up petitions or statutory demands where the inability to pay is the result of Covid-19.


I have to hold an AGM but social distancing means that may not be possible. What do I do?

The legislation allows companies to hold general meetings by any other means even if company protocol does not allow.


I cannot file my accounts on time due to Covid-19. Will I be fined?

There is a temporary extension on time limits for filing so this is unlikely.


You can follow the progress of the Bill


John Cullen FCCA Partner at Menzies and ACCA Council member








Alert for all auditors, independent examiners and trustees

The Charity Commission warns on scrutiny of all audit and independent examination reports where a matter of material significance has begun.

The Charity Commission warns on scrutiny of all audit and independent examination reports where a matter of material significance has begun.


Auditors, independent examiners and trustees of charities in England and Wales, Scotland and Northern Ireland have a common statutory duty to report matters of material significance to charity regulators.


The Charity Commission has announced that it will be conducting a review of all independent examination reports or audit opinions, signed on or after 1 May 2020, which contain a qualification, modified opinion or other reporting paragraph, to confirm that a matter of material significance was also filed with the Commission. They will then be reporting their findings to professional bodies highlighting any non-compliance with the legislation by firms.


If you are an auditor, independent examiner or trustee check and re-check the accounts and reports.


Reporting of matters of material significance

The Charity Commission guidance sets out the directions to independent examiners, which must be followed in any examination. ACCA has produced a Technical factsheet which a member/firm must follow while carrying out any charity audit or independent examination.


Additional guidance is provided where an examination is undertaken during a time of a national emergency. In times of national emergency (including Covid-19 pandemic) independent examiners must also read the latest guidance when following the Commission’s directions for independent examination.


Unless the legal duty to report is relaxed by the government, the auditor or examiner must still report matters of material significance; however, where a modified opinion, an emphasis of matter, or a matter identified by the independent examiner is solely due to the exceptional circumstances of the national emergency affecting the conduct of the audit or the independent examination then this is not considered to be reportable as a matter of material significance to the charity regulator.


This is because remedying this situation is not in the power of the auditor or examiner, the preparer of the charity’s accounts, or the charity regulator. Examples of such exceptional circumstances are:

  • travel restrictions preventing the auditor or examiner from verifying the existence of physical assets such as stock
  • access restrictions preventing the auditor or examiner from reviewing accounting records and/or from obtaining the assurances required
  • limitations of scope being identified due to the control measures imposed to deal with a national emergency.


Disclosure requirements

The accounts of a charity must include key disclosures contained in the Accounting and Reporting by Charity: Statement of Recommended Practice. As identified within the Charity Commission review, one of the areas which was not disclosed properly was related party transactions.


Related party transactions often arise in a charity and, again, care must be taken to ensure that such transactions are managed appropriately. While charities are encouraged to obtain value for money, this should not compromise quality, and at the same time a fair and transparent tendering process should be in place at the charity for ongoing supplies of goods and/or services.


Where transactions with related parties have not been disclosed, or related parties themselves have been discovered by the auditor or independent examiner and transactions have taken place with those previously undiscovered related parties, this is an indicator that the related party relationship has been mismanaged and hence will be reportable.


Charities preparing accruals (SORP) accounts must disclose:

  • trustees’ remuneration and benefits
  • trustees’ expenses
  • transactions with those persons and entities that are closely connected to the charity or its trustees, referred to as related parties.


If there have been no transactions of each type, this fact must be stated.


Full Charity Commission monitoring findings can be accessed here

Influencing - on your behalf

A summary of our Policy team's recent efforts on behalf of members like you. 

ACCA UK's Policy team has been working hard on behalf of members to influence discussion on Covid-19 and many other areas.


Take a look at our current update now

How will you help your clients move out of lockdown?

How you can help business owners as they emerge from lockdown over the coming months.

Our latest insight report shows that the coming months present a whole new set of challenges for business owners. By providing relevant communications and strategic advice, accountants can help.


It’s hard to believe it’s been more than two months since lockdown was enforced in the UK. Many businesses are now looking to the post-lockdown future, as staff return to workplaces and non-essential shops get ready to reopen from 15 June.


To get a quick snapshot of small and micro-business sentiments at this time, we’ve put together a report based on user discussions on our sister site, UK Business Forums (UKBF).


The report shows that coming out of lockdown is far from an easy process, as businesses now need to meet social distancing requirements, react to changes in consumer demand, and manage the administrative process of gradually taking staff off furlough.


All the while, there’s the threat of more severe economic impacts on the horizon, and continued uncertainty around how long those impacts will last.


Accountants have already played a vital role in reassuring and informing the UK’s small business community over this time, but as our report highlights, their support is still very much needed.


New announcements need quick communications

The period our report looked at, over the week from 10 May, marked a shift in the way lockdown has been enforced in England, with reduced restrictions on businesses and a conditional roadmap set out for the next few months.


Each announcement provoked immediate questions and reactions from users on UKBF, who wanted to know how the changes would apply in practice, and what it meant for their business.


We can expect more changes in the coming months as other regions of the UK make their plans public, as well as more detail on the schemes that have already been announced.

As accountants, you can offer reassurance and clarity over this period of change, by producing relevant, topical content.


The most important thing is to get your communications out quickly – within 24 hours of the announcement, if not sooner – and they don’t have to be perfect.


You might not be able to answer every client’s questions in one blog post, but you can cover the key facts and invite clients to speak to you if they’re unsure.


It offers reassurance that your firm is on top of what’s going on, and that you’re still there if your clients need to talk.


Increased complexity is an opportunity to advise

While many questions on the forums had to do with technical detail and specific problems, others were more open-ended: ‘How should I go about moving my staff back to the workplace’, for example, and ‘What happens when the government support dries up?’


We know that many accountants have had more than enough furlough applications and repetitive paperwork to deal with over this time, and would rather be using their expertise to help their clients’ businesses succeed.


While that side of the work doesn’t look likely to go away anytime soon, it could be used as a starting point for offering strategic guidance.


If your clients have had staff on furlough and are looking to reopen in the next couple of months, how should they manage the transition away from the scheme? Will they take advantage of the added flexibility from August?


And are they prepared for the eventual cut-off point, when financial support is no longer available?


Recession is already happening – how will you prepare your clients?

One of the biggest discussions on the forum surrounded the prospect of a significant recession in 2020, after Chancellor Rishi Sunak said this was ‘very likely’ and that ‘we're already in the middle of that as we speak’.


While several users said they had made preparations and were fairly confident their business could survive it, there was a general sense that other business owners were not fully aware of the danger.


Small businesses may be better placed to adapt quickly and manage the impacts of a recession, but those that have not prepared at all, or have existing financial issues, could be at risk.


Your clients might have started planning for this, or they might be too absorbed in immediate concerns to think about it – either way, it’s best to find out from them directly.


Start talking with clients now, rather than later, about how they can prepare themselves for the challenges ahead.


Read more in our insight report, Beyond lockdown: the road ahead for the UK’s small businesses.


Melissa Tredinnick – Assistant Editor, PracticeWeb

Lockdown options for businesses in difficulty

Changes to UK insolvency law will provide options for businesses in difficulty as Britain exits lockdown.

Changes to UK insolvency law will provide options for businesses in difficulty as Britain exits lockdown.


Introduced on 20 May 2020, the Corporate Insolvency and Governance Bill is a welcome development that will deliver a number of changes to UK company law, enabling companies undergoing a restructuring and rescue process to continue trading.


The Bill itself contains a number of temporary and permanent provisions to assist companies through the COVID-19 crisis. However, some of these proposals have been in consultation for some time, originally outlined in a March 2018 consultation, albeit with some significant changes. These reforms also reflect a number of provisions contained in a European Commission Directive from November 2016.


Under this Directive, the Commission proposed that the insolvency legislation of each European Union member state should include three of the key elements set out in the government’s proposals—a moratorium, a prohibition on ‘ipso facto’ clauses and the ability to confirm a restructuring plan ‘if it complies with the cross-class cram-down requirements.


The Bill contains a number of temporary changes to prevent winding up petitions and statutory demands, together with the temporary suspension of wrongful trading provisions until 30 June 2020 at the earliest—allowing directors to continue trading without the threat of personal liability. In addition, the Bill will ease regulatory requirements enabling companies to delay annual general meetings until late September 2020 or hold “closed AGMs” online.


Of the three permanent changes to the insolvency regime, the most impactful is the introduction of a ‘company moratorium’. This provision will give distressed companies which are viable 20 business days, extendable to 40 or longer by agreement, to pursue a rescue plan.


To qualify for the moratorium, a company must be unable to pay its debts and it is likely that a moratorium would result in a rescue of the business as a going concern.


The exit from the moratorium may be achieved in a number of ways including a rescue, sale, refinance, Company Voluntary Arrangement (CVA), scheme of arrangement or restructuring plan.


Whilst the company remains under the control of its directors throughout the moratorium, it is envisaged the appointed ‘monitor,’ who must be a licensed insolvency practitioner, will be comfortable that a rescue is achievable and then monitor the process throughout. 


This means that protection is provided to the company and the creditors are unable to commence legal action via winding up petitions or by other enforcement avenues available to them.


The second new provision in the Bill is a change to existing supplier contracts so that termination clauses do not trigger, and supply issues or price increases cannot be implemented. This will mean that contracted suppliers will have to continue to supply companies despite the pre-insolvency arrears, unless they can demonstrate ‘hardship’ as a result.


The third key element of the Bill will enable companies in financial difficulty, or their creditors, to form a ‘restructuring plan’. Although similar to a scheme of arrangement, the major difference is that it can impose the restructure on any dissenting creditors, be it secured or unsecured, who voted to reject it. But these dissenting creditors cannot be put into a worse position than what the court considers would have been the most likely outcome if the plan was rejected.


‘In enabling businesses to continue trading even if they are undergoing a rescue or restructure process, the changes introduced are designed to avoid insolvency, preserve employment along with potential enterprise value and should therefore be welcomed. But the key test will be in the detail and practical implications of the new measures.


The challenge now is how fast these changes can be made. With Parliament now sitting, this significant support for the UK economy is being fast tracked through with the aim to enact the Bill by June at the earliest,’ added Wiles.


‘It is our contention that this might not be the end of the reforms to the existing legal framework. We could potentially see a flattening out of global insolvency framework, moving to a more level, fairer playing field. In doing so the international business community, and the small to mid-sized enterprises they support, will be better placed to re-start and return to trading.’


David Fleming – Managing Director, Restructuring Advisory, Duff & Phelps


Sage – supporting you and your clients at this time

Sage is offering free access to solutions to help you and your clients. No commitment. Cancel anytime.

To help during these uncertain times, we are offering free access to solutions to help you and your clients. No commitment. Cancel anytime. Request a call back from one of our experts to find out more or book a demo.


Free Sage Business Cloud Accounting

During this uncertain time, having a clear, real-time view of business finances is critical to help inform key decisions. Sage Business Cloud Accounting enables your client to take control of their cashflow, manage their accounts from anywhere and control costs. To help, we are offering Accounting free for 6 months for all new clients you add to the software. No commitment and you can cancel anytime.


Find out more about how you can add clients to Accounting for free, for six months.


Sage Online Bureau

If you already use Sage 50cloud Payroll Bureau, you can bring it online with Online Bureau. Suitable for bureaus of any size, Online Bureau can support you in driving efficiencies, saving time and money whilst providing a great client experience. To help you support clients during this time, you can now add clients to Online Bureau for free for 6 months. There is no commitment and you can cancel anytime.


Find out more about how you can drive improvements in your payroll processes and add clients to Online Bureau for free for six months.


Sage Business Cloud Payroll – free for six months

A simple four-step cloud payroll process that’s perfect for businesses with 1-25 employees, free for six months*


Free Satago

The coronavirus pandemic has been challenging for businesses, with many reducing their capacity or closing temporarily. To help you and your clients get a clearer view of cashflow and make informed decisions, we are offering six months free access to Satago*.


Satago is an all-in-one risk insights and credit control tool that gives you everything you need to get paid on time. There’s automatic payment reminders and detailed credit risk data to support you in managing debtors more effectively and improve your clients cashflow.


With Satago you can:

  • Understand your clients and their customers – gaining credit insight about who you are looking to work with and make informed decisions
  • Quickly identify risk – powerful reports show you risk profiles and help you identify those that are most likely to cause bad debt
  • Automate credit control tasks – automate your clients email chasing means faster payments. You can also customise invoices and statements


Coronavirus support and guidance

For further support for your practice and help for your clients, visit our Coronavirus Hub where you will find the latest information on financial and product support as well as how to access our free webinars.



For full terms and conditions please click here. All offers are subject to availability.

Sage Business Cloud Accounting and Sage Business Cloud Payroll, free for 6 months followed by 25% off RRP for 12 months before reverting to RRP. Cancel anytime.

Satago, free for 6 months before reverting to RRP. Cancel anytime.


R&D tax credit services

New guidance on the provision of R&D tax credit services was issued on 1 June.

New PCRT Topical Guidance covering the application of professional standards to the provision of R&D tax credit services was issued on 1 June.


The guidance is relevant to a member who is in a firm providing any service, or is an employee of a claimant company who undertakes work, that contributes directly or indirectly to the preparation, submission, agreement of, and advice on any or all aspects of a company’s research & development claim.


The new guidance supports the existing PCRT and the following help-sheets which cover:


Helpsheet A: submission of tax information and 'tax filings' 

Helpsheet B: tax advice 

Helpsheet C: dealing with errors 

Helpsheet D: request for data by HMRC 

Helpsheet E: members’ personal tax affairs 


Forms P11D – returns and key dates

A quick reference guide for P11D forms.

A quick reference guide for P11D forms.




Manner in which provided:

 Tax/NIC due:

Report on:

Employer arranges and pays directly for benefit

Class 1A


Employee arranges benefit; employer pays for it

Class 1 (employee and employers)

Account for NIC through payroll; report benefit on P11D

Employee arranges and pays for benefit; employer reimburses cost

PAYE Tax and Class 1 NIC (employees and employers)

Through payroll





Key dates for submission of forms and payment of taxes due

The due dates for submission of the forms and the relevant payment dates are summarised below:




Submission of forms P11D to HMRC

6 July following the end of the tax year

Provide employees with copies of their information from their P11D

6 July following the end of the tax year

Submit form P11D(b) to HMRC

6 July following the end of the tax year

Payment of any Class 1A NICs on benefits provided

Must reach HMRC’s bank account by 22 July (19 July if you pay by cheque)

Payment of tax and Class 1B NICs owed under a PAYE Settlement Agreement (PSA)

Must reach HMRC by 22 October (19 October if you pay by cheque)

Pay any PAYE tax or Class 1 National Insurance owed on expenses or benefits

Pay monthly through payroll



ACCA’s full guide to benefits and forms P11D will be available mid-June from our website


IHT exemption – volunteers and employees

Inheritance tax exemptions for emergency responders.

Inheritance Tax Act 1984 S153A provides an exemption from Inheritance Tax for an emergency responder whose death occurs as a result of responding to emergency circumstances.


The exemption applies where the death results from:

  • an injury sustained, accident occurring, or disease contracted when that person was responding to emergency circumstances, IHTA84/S153A(1)(a), or
  • a disease contracted at some previous time, the death being due to, or hastened by, the aggravation of that disease when the person was responding to emergency circumstances, IHTA84/S153A(1)(b).


There is no time limit on when the injury, accident or disease was incurred. It is important to note that for the exemption to apply, the person must qualify as an emergency responder and they must have been responding to emergency circumstances. It will be vital that records are kept and that with any estate planning that the exemption and likelihood of it applying is considered.


Emergency responder
IHTA84/S153A(6) sets out the services a person needs to be engaged in before they can qualify for exemption as an emergency responder. They are:

  1. person employed, or engaged, in providing fire services or fire and rescue services
  2. a person employed, or engaged, in search or rescue services (or both)
  3. a person employed, or engaged, in providing medical, ambulance or paramedic services
  4. a constable or person employed for police purposes or engaged to provide services for police purposes
  5. a person employed, or engaged, in providing services for the transportation of organs, blood, medical equipment or medical personnel, or
  6. a person employed, or engaged, by a government, international organisation or charity in connection with the provision of humanitarian assistance.


The employment or engagement does not have to be paid, so the exemption applies to both employees and volunteers.


The range of emergency services covered by the provisions is wide and will include not only the traditional emergency services – police, fire and ambulance – but also, for example, RNLI, HM Coastguard, Mountain Rescue, Cave Rescue, Air Ambulance, Community First Responders and lifeguards (both at a swimming pool and at the beach). It will include equivalent in-house services provided by other organisations, such as fire services at airports, oil rigs and refineries.


Emergency circumstances

It is important to note that a person must be responding to emergency circumstances in their capacity as a person ‘employed or engaged’ in connection with providing appropriate services – in other words when, as an employee, they are on duty; or in the case of a volunteer, when they have been called out to assist in dealing with emergency circumstances.

  1. A person will not be responding in that capacity if they are killed or injured whilst offering assistance at an incident whilst off duty, for example a doctor travelling at the weekend who attends a road traffic accident
  2. Equally, a member of the public who happens to be a qualified 1st Aider and dies administering 1st Aid will not qualify as an emergency responder as they are not ‘employed or engaged’ to provide those services within the meaning of IHTA84/S153A(6)(c)
  3. In the case of the police however, police officers are required to exercise the office of constable at all times, whether on or off duty. A police officer who attends an emergency will always be responding in their capacity as a constable and therefore within the meaning of IHTA84/S153A/(6)(d).


IHTA84/153A(3) sets out the situations that are ‘emergency circumstances’ for the purposes of the exemption. These are circumstances which are present or imminent and are causing, or are likely to cause:

  1. the death of a person
  2. serious injury to, or the serious illness of, a person
  3. the death of an animal
  4. serious injury to, or the serious illness of, an animal
  5. serious harm to the environment (including the life and health of plants and animals)
  6. serious harm to any building or other property, or g) a worsening of such injury, illness or harm.


IHTA84/153A(4)(b) sets out that a person is responding to emergency circumstances if they are:

  • dealing with emergency circumstances,
  • preparing to do so imminently, or
  • dealing with the immediate aftermath of the situation.


Travelling to the emergency circumstances is specifically included by virtue of IHTA84/S153A(4)(a)


Emergency service personnel responding to emergency circumstances: evidence to show exemption is due

Personal representatives should provide such evidence as is available to show that the deceased’s death was as a result of, or was hastened by, their being an emergency responder who was responding to emergency circumstance.

Such evidence is likely to include:

  • evidence that the deceased attended the incident in their capacity as an emergency responder. This could be in the form of evidence from the emergency service concerned, a police report or perhaps press reports
  • a copy of the death certificate
  • a medical report which should (if necessary) explain the link between the cause of death and the emergency circumstances concerned.

The extent of the evidence needed will vary depending on length of time between the incident and the death. Where the death occurs at the incident or very shortly thereafter, it is likely that quite basic information will be sufficient to prove entitlement to the exemption


Exemption applies to:

  • any potentially exempt transfers (IHTM04057) made within 7 years of death.  By virtue of relevant sub-section (a), potentially exempt transfers (PETs) do not become chargeable transfers under IHTA84/S3A(4) as a result of the death.
  • the estate (IHTM04029) on death.  The relevant sub-section (b) disapplies IHTA84/S4 and so no charge to tax can arise on the estate passing on death.
  • any additional tax that arises on an immediately chargeable transfer (IHTM04067) made within 7 years of death.  By virtue of relevant sub-section (c) no additional tax under IHTA84/S7(4) is due.


So the only chargeable occasion to which an exemption does not apply is where a person makes a lifetime transfer which gives rise to an immediately chargeable transfer.  Tax at 20% is still payable where the nil-rate band is exceeded, and any such tax paid in the lifetime is not repayable should an exemption apply on death.

New service launches to resolve bank disputes

The Business Banking Resolution Service promises to help resolve current – and past – disputes with banks.

The Business Banking Resolution Service promises to help resolve current – and past – disputes with banks.


A new free service to resolve disputes between small and medium sized businesses and their banks has been launched called the Business Banking Resolution Service.


In this Q&A with the chair, Lewis Shand Smith, find out how the service could benefit you and the businesses you advise.


What is the BBRS?

The Business Banking Resolution Service (BBRS) is a new, independent organisation set up to resolve disputes between eligible small and medium sized businesses and participating banks.


Who are the participating banks?

The participating banks are Barclays, Danske Bank, HSBC, Lloyds Banking Group (including Lloyds Bank and Bank of Scotland), RBS Group (including Royal Bank of Scotland, Natwest and Ulster Bank Northern Ireland), Santander UK plc and Virgin Money (including Clydesdale Bank and Yorkshire Bank).


What should accountancy practitioners be most aware of?

Our service is free and is available to both historic and contemporary cases. We can look at complaints dating back to 1 December 2001. The service will launch in the early autumn.


How can SMEs use the BBRS services?

The service is free and easy to use; businesses can register their interest in using the BBRS on our website


Why should SMEs consider using the BBRS?

Using an ‘alternative dispute resolution’ approach to settling claims has the potential to be cheaper and less stressful than existing complaints-handling techniques or going to court. The BBRS is fully independent and will treat all customers as individuals, taking a bespoke approach to each case in order to achieve a fair and reasonable outcome. In these difficult times it's more important than ever that businesses have access to a fair, transparent service.


Who is the service available to and will the BBRS be available to those whose complaints arise from Covid-19?

We can accept complaints from businesses registered in England, Wales, Scotland and Northern Ireland and, yes, we will be able to consider disputes in the wake of the pandemic crisis.


We will consider complaints being raised by or on behalf of a number of corporate structures, including sole traders, limited companies, partnerships, trusts, charities, and community interest companies. However, businesses must first have complained to their bank within required timescales and given the bank concerned the opportunity first to resolve the dispute.


There is more information about our eligibility criteria on our website at:


What does Covid-19 mean for the BBRS?

We published a report in May on the impact of Covid-19 loans. Government-backed loan schemes have provided a lifeline. But it is critical for customers to understand that, just like any other loan, they will be required to repay 100% of the money they borrow under these new schemes. There needs to be clarity about that now to avoid the risk of storing up problems for the future. The banks have been working hard to support many of their SME customers in this context.  The BBRS will not have access to a ‘magic wand’ to wish away unpaid loans.


But, even with that message out there, we equally need to be clear that the Covid-19 loans and inevitable economic pressures ahead have the potential to give rise to a significant volume of complaints. The regulatory framework for the Government’s pandemic-related loan schemes is yet to be determined, but the BBRS is ideally placed to consider complaints - where they are within our scope - that cannot be resolved by participating banks themselves.


Can you explain what the Live Pilot is and its purpose?

We must get this service right, especially in light of the current circumstances. The Live Pilot – which is currently reviewing over 40 cases - is designed to help us do that by helping us test the approach we want to take and achieve fair and reasonable outcomes on a transparent basis. 


What have you found from the Live Pilot to date? 

Interim findings from our Live Pilot study have confirmed the need for a deep rethink of the system of how SME disputes with banks are handled. We need a human and flexible approach that takes the stress and cost out of seeking to resolve complaints. This is exactly what the BBRS service will do.


How is the BBRS different to the FOS?

The FOS deals in part with cases brought by smaller businesses but it is primarily for consumers. It is a much larger organisation and it focuses on investigative adjudication. The BBRS is for eligible businesses that are too large for the FOS. We will do investigative adjudication, but we will wherever possible offer formal and informal dispute resolution of various kinds. We are smaller, but because of that we can be more flexible in pursuing those types of dispute resolution that might best settle each case.


When will the BBRS launch?

The Financial Conduct Authority and the Treasury have made it clear they see the scheme as playing a real role in the post Covid-19 recovery and they have made it clear they want us launched by early autumn which is what we’re working to.


How can I find out more about the BBRS? Are you hosting any events?

The BBRS leadership team are hosting webinars on Thursday 4 June and Tuesday 16 June. You can register to attend on our website at

Temporary changes to pension tax

Are you aware of these changes for recently retired individuals aged between 50 and 55?

Are you aware of these changes for recently retired individuals aged between 50 and 55?


For public sector workers returning to support the government’s response to Covid-19, the government suspended the tax rule that would otherwise apply significant tax charges to pension income received by recently retired individuals aged between 50 and 55.


As these proposed tax changes form part of the response to Covid-19, they will initially apply in respect of payments made in the period from 1 March to 1 June 2020. The measure will only apply to people returning to roles as a result of Covid-19.


The current rules provide that, where an individual with a protected pension age between 50 and 55 retires and takes benefits before they reach the age of 55, they lose that protected pension age if they are later re-employed by their former employer, unless specific exemption conditions are met.


Losing the protected pension age means that the pension income is taxable at up to 55%, under a process known as ‘abatement’. But the government has proposed to temporarily suspend the abatement rules.


The Covid-19 bill also removes a barrier which currently prevents so-called special class nurses aged 55-60 who have claimed their pension benefits from returning to work without having their pension suspended.


Under the so-called ‘16-hour rule’ members of the scheme will see their pension suspended if they return to work and commit to more than 16 hours per week within the first four weeks.  


The suspension of this rule will allow staff to return to work immediately after retirement and continue their existing working commitments, or increase them, while still receiving their full pension benefits. 


This will remove the financial disincentive of members having their pension benefits suspended if they return immediately to a working pattern in excess of 16 hours per week following retirement.




Coronavirus Bill: summary of impacts


Coronavirus Act 2020



CGT and the disposal of residential properties

A walk-through of the real time capital gains tax service.

A walk-through of the real time capital gains tax service.


From 6 April 2020, UK residents within the charge to capital gains tax (CGT) face yet another change for direct disposals on residential properties – a return and payment of CGT has to be made within 30 days following the completion day for UK residential land (including buildings). The new regime applies to individuals, personal representatives, trustees and partnerships but not to limited companies within a charge to corporation tax on capital gains.


Failing to meet deadlines for submission and payment will trigger penalties. However, due to the slowdown in the property sales sector caused by coronavirus, HMRC has confirmed that ‘To help those selling properties familiarise themselves with the change in the rules and a new online process, HMRC is allowing a period of time to adjust and will not issue late filing penalties for CGT payment on account returns received late up to and including 31 July 2020'.


This is a significant change for people who would previously only have had to enter the details on their self-assessment return and pay the tax due in line with the self-assessment deadlines. You should have early conversations with your property clients in order to prepare them for the above steps and to avoid any unnecessary delays in filing and incurring penalties.


Excluded disposals

It should be noted that not all disposals are within the scope of this new regime. Disposals of an individual’s principal private residence (PPR) that does not produce a gain due to the main residence relief provisions within TCGA 1992 s 222 et seq do not need to be reported. Furthermore, the legislation also specifically excludes the following disposals:

  • non-residential property disposals
  • a no-gain / no-loss disposal ― transfers between spouses or civil partners 
  • a grant of a lease for no premium to an unconnected party at an arm’s length transaction ― eg the grant of a short-term residential tenancy with no premium
  • a disposal made by a charity, or
  • a disposal of any pension scheme investments.


 How to report and pay CGT for clients

HMRC online reporting of CGT service can be accessed via individual or organisations' Government Gateway ID. Authorised tax agents (ie accountants) can use their Agent Services Account (ASA) to report and manage their client’s CGT return. Accountants who already have an Agent Services Account (for MTD) do not need to create a new one.


As an agent before you can offer this service to your clients, you need to ask your clients to:

  • create a Government Gateway user ID if they do not have one
  • use their Government Gateway user ID and password to sign in and create a Capital Gains Tax on UK property account (this generates a 15 letters/digits property code)
  • give you their property account number
  • give you their UK postcode or country of residence - these details must match their Capital Gains Tax on UK property account details.


Sign in to your agent services account then select ‘ask a client to authorise you’. After you’ve been authorised, you’ll need to:

  • sign in to your ASA
  • select ‘report and pay a client’s Capital Gains Tax on UK property’
  • enter your client’s Capital Gains Tax on UK property account number
  • enter your client’s UK postcode or country of residence - these details must match their Capital Gains Tax on UK property account details
  • Go to ‘manage account’ at the top of your client’s Capital Gains Tax on UK property account to update the contact details for the account.


How to calculate capital gain on disposal of residential property

The self-assessed calculation of the amount payable on account takes into consideration unused losses brought forward or in the same tax year and the person’s annual exempt amount (individual £12,300 – 2020/21), whereas any anticipated losses on future disposals cannot be taken into account. The rate of tax for individuals is determined after making a reasonable estimate of the amount of taxable income for the year.


If your client is already within self-assessment and has to complete one, you will need to ensure that the gain is also included on their self-assessment tax return.


Once the provisional calculation has been submitted and the tax paid, it cannot be reduced (for example, because your client made a capital loss later in the year) until the client submits their self-assessment return.


CGT on residential property and carried interest is payable at rates of 18% and 28% as opposed to the normal capital gains tax rate of 10% and 20% respectively for basic and higher rate taxpayers.



Non-residents are already required to file a capital gains tax return within 30 days of the completion for all direct or indirect disposals of UK land (both residential and commercial) which met the non-residence condition. The return is required irrespective of whether a gain accrues on the disposal or not.


All other CGT disposals are normally reported on the seller’s self-assessment return submitted from 10 to 22 months after the disposal takes place.


Useful resources


HMRC Guidance


FAQ for Residential BTL

Tax free childcare scheme

Comprehensive guidance on the government's support for childcare.

Comprehensive guidance on the government's support for childcare.


The government’s initiative to support people with the cost of childcare, the Tax-Free Childcare scheme, was opened to all qualifying families in February 2018.


Tax-free childcare is not an employer scheme. It is a government scheme that is available to working parents, including self-employed, with children under 12 years old (or under 17 if disabled). The scheme is available in England, Scotland, Wales and Northern Ireland. The scheme operates directly between the government, parents, and childcare providers via an online account.

If individuals already have a Government Gateway account, they can sign in on the first page. If not, a Government Gateway account can be created by following this link.


How the scheme operates
For every 80p the parent(s) pays into the Childcare Account, the government will contribute 20p, up to a maximum amount of £2,000 per child per year (and £4,000 per child per year for a disabled child). 


Parents must use this on registered childcare including childminders, nurseries, breakfast and holiday clubs, as long as the childcare provider is signed up to the scheme.


Children will be covered by the scheme up until the last day of the week in which the first September following their 11th birthday falls. If they are disabled, this is extended to the last day of the week in which the first September following their 16th birthday falls.

Adopted children are eligible, but not foster children.


If an employer pays directly into a tax-free childcare account, the amount will be subject to income tax and Class 1 NIC via payroll.



Individual parents/guardians or pairs of parents must:

  • be in work (including sick leave or annual leave). If not currently working, an individual parent might still be eligible provided their partner is working and the individual is receiving Incapacity Benefit, Severe Disablement Allowance, Carer's Allowance or Employment and Support Allowance
  • be earning at least national minimum wage for 16 hours a week (over the next three months). For self-employed who are not expecting to make enough profit in the next three months, they can use an average of how much they expect to make over the current tax year. A self-employed individual will be exempt from meeting the minimum earnings level in their first 12 months of their self-employment   
  • not be in receipt of any tax credits, universal credits or employer-supported childcare
  • the scheme is not available if an individual claimant has income of more than £100,000 or, where the claim is made as a couple, one or both of the claimants has income of over £100,000.  (For a joint claim, both partners must work or one must be working and the other receiving Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or Employment and Support Allowance.)  To test the £100,000 limit each partner is looked at separately. A couple earning £99,000 each would still be eligible, even though their combined income is over £100,000, as individually their incomes are under the limit.


If a couple are separate and have joint responsibilities for the child, they should decide which of them apply for the childcare account.


Temporary changes made to the eligibility criteria for tax-free childcare and 30 hours' free childcare, during Covid-19 (this guidance will be updated when these changes end).


The changes may affect tax-free childcare if the claimant (or partner of the claimant if they have one) are:

  • on furlough
  • not able to work or working less
  • self-employed
  • a critical worker.



Tax-free childcare would be available if the claimant’s wages or partner’s wage (if they have one) is:

  • at least the National Minimum Wage for 16 hours a week
  • below the normal minimum income requirement, but they normally expect to meet the income requirement.


Unable to work or working less

Tax-free childcare would not be affected if the claimant (or partner of the claimant if they have one) are:

  • getting sick pay or statutory sick pay (SSP) – time spent on sick pay or SSP will count as working and meeting the minimum income requirement
  • taking unpaid leave to care for others, such as your children - if you expect your income to meet the minimum income requirement (at least the National Minimum Wage for 16 hours a week) after Covid-19
  • living with someone who has Covid-19 – and needed to stay at home - if you expect your income to meet the minimum income agreement (at least the National Minimum Wage for 16 hours a week) after Covid-19
  • working less, because the hours have been reduced and your wage:
    • meets the minimum earnings requirement
    • is below the normal minimum earnings requirement but you would normally expect to earn above it.


If you are made redundant

If you are made redundant, you are not eligible to apply or reconfirm you have a childcare account because you are no longer in work and not meeting the minimum income requirement.


If you start employment again and expect to earn above the minimum income requirement you can apply 31 days before you start your new job.


If you are self-employed

You should apply or reconfirm if you already have a childcare account if you are:

  • eligible to claim a grant through the Self-Employment Income Support Scheme - payments made to you through the scheme will count as earnings
  • you are not eligible for self-employed income support but would expect to earn at least the minimum income requirement.


If you are claiming Universal Credit

If you are now claiming Universal Credit and were getting Tax-Free Childcare, you cannot apply or reconfirm for Tax-Free Childcare - if you stop claiming Universal Credit you can apply for Tax-Free Childcare again.


If you are a critical worker and if you are working more and breach the maximum income threshold

If you are a critical worker, you may have exceeded the maximum income threshold of £100,000 per year. If this is because of increased hours as a direct result of Covid-19, you will still be eligible for Tax-Free Childcare for the current tax year.


Further guidance is available here:



Covid-19 and impact on VAT

Deferrals, PPE and more in this handy summary.

Deferrals, PPE and more in this handy summary.


VAT deferral

VAT registered business can defer VAT payments that are due from 20 March 2020 to 30 June 2020.


The measure applies to payment deadlines for the following VAT quarters:

  • 29 February 2020: normal payment deadline 7 April
  • 31 March 2020: normal payment deadline 7 May
  • 30 April 2020: normal payment deadline 7 June.


The deadline for settling the deferred VAT liabilities is now 31 March 2021.


The relief is automatic and does not need to be claimed; however, any direct debits set up to pay VAT must be cancelled by the taxpayer as HMRC cannot unilaterally cancel these.


When paying on account from 20 March 2020 to 30 June 2020, if any balancing payment falls outside of these dates, the amount that must settled is the balancing payment less any deferred payments. Deferring payments will not create a repayment.


Zero rating of personal protective equipment

From 1 May 2020 to 31 July, the VAT on sales and purchases of personal protective equipment has been reduced from 20% to 0%.


Cut of VAT rates on e-books

From 1 May 2020 VAT on e-books, online newspapers and journals has been cut from 20% to 0%. Previously scrapping VAT on online publications was planned to be brought in from December 2020.



Visit the ACCA UK Covid-19 Hub for advice and support for practitioners

Covid-19 impact on reasonable excuse and appeals

Covid-19 and reasonable excuses.

Covid-19 and reasonable excuses.


HMRC considers Covid-19 as a reasonable excuse for failure to comply with certain tax obligations (such as payments or filing dates), provided failure to comply is remedied as soon as it is possible to do so.


In cases other than Covid-19 related, HMRC does not require supporting evidence to be submitted with any claim but may later ask for evidence. However, if you appeal a penalty on the grounds of Covid-19, you will be required to explain how you were affected if claiming  'reasonable excuse'.


HMRC also extended the normal 30-day deadline for appeals by an additional three months for Covid-19 related failures. This extension applies to penalties issued in February 2020 or later.



Visit the ACCA UK Covid-19 Hub for advice and support for practitioners

Covid-19 impact on maternity, paternity and adoption pay

We explain changes to ensure furloughed employees are not disadvantaged.

We explain changes to ensure furloughed employees are not disadvantaged.


Working families in the UK benefit from maternity, paternity and adoption pay that in some cases is seen as more generous than the minimum equivalent EU rights. It also seems unlikely that there will be any adverse changes as a result of Brexit.


We explain these rights in our Employment Law guidance: Family Friendly rights that is free to members.


Furloughed employees

Since we issued our guidance, there has been a change in the calculation of leave for employees addressing the fact that a furloughed employee may be disadvantaged. The Entitlement to Statutory Maternity Pay and other forms of parental or adoption pay are calculated based on average earnings over an eight-week assessment period. For maternity allowance, entitlement and the rate payable is also determined by looking at average earnings over a 13-week period.


The current Covid-19 regulations (Coronavirus Job Retention Scheme) were amended on 23 April 2020 to avoid penalising employees taking family-related leave, meaning statutory payments will be based on full pay rather than the amount received when furloughed. Employees claiming maternity and related pay on or after 25 April will be assessed on their usual, full rate of pay.


The legislation can be found here and HMRC guidance is available here.



Visit the ACCA UK Covid-19 Hub for advice and support for practitioners



The importance of letters of engagement

How to make the best use of your engagement letters.

How to make the best use of your engagement letters.


A letter of engagement is a mandatory requirement which sets out the legal relationship between a professional firm and its client.


It should be provided before any work is undertaken as it sets out key information including the scope of the contract, who will be responsible for the work undertaken, what fee will be charged and when the work should be completed by. All of this will help to protect the firm in the event of any future misunderstandings which could lead to a complaint or claim for professional negligence. 


Whilst every letter of engagement will vary – and there are numerous templates available online - there are a number of key areas that should be considered when drawing up your letter.


These include:

  • scope of work
  • responsibility for your work
  • you client’s responsibilities
  • limitation of liability (For further information regarding limiting liability, visit our Resource Centre)
  • fees
  • instructions.


Of particular importance to a professional indemnity insurer is whether or not you exclude liability for third party advice. This is not to be confused with the standard liability of third-party rights clause, where you seek to exclude liability to a third-party to whom a client has disclosed advice or information. Rather, this clause is to exclude liability for advice provided by a third party e.g. a financial adviser, whom you have recommended to your client.


We have seen a number of claims brought against accountants for advice which was not provided directly by them. In particular in the area of tax mitigation where accountants have referred clients to specialist scheme providers. Where there has not been an express exclusion of liability for this third party advice the accountants have been drawn into claims where a scheme has come under the HMRC spotlight and the client has found themselves facing large tax penalties.  


Another area where we have seen claims arise, includes going beyond the scope of work set out in your engagement letter. In one example, our Insured was engaged to provide advice in relation to tax returns, but along the way, was asked for advice relating to VAT/Capital Gains Tax. The insured was later held liable for providing incorrect advice and was required to pay the VAT plus interest and penalties which went above and beyond the limit of their professional indemnity policy. In the event that this type of request occurs, you should include a provision in your letter for what will happen if the client’s instructions change, as it may be necessary to issue an amended letter of engagement.


Other areas where claims occur include a failure to specify who has authority to give instructions and by what method. It is important that you stipulate who has authority to instruct, particularly if you have joint clients or if your client is an organisation, and by what means, as poor communication is a key contributory factor in many claims.


Clarity of instructions is also important when it comes to financial transactions and cyber security. Specifically, it is important to be clear who has authority to make bank transfers and who is responsible for advising changes to bank details. Any change in payment instructions should be independently verified before a payment is made.


The above are just some of the common issues we see arising out of engagement letters, if not properly addressed.  This is not a full analysis and of course there are many others factors to consider when drafting your engagement letters, guidance for which can be obtained from your regulating body or other legal or professional services.


To discuss the contents of this article or should you have any other questions, please contact a Lockton adviser on 0117 906 5057 or



See also ACCA's expanded support on letters of engagement

Business assets disposal relief

Apart from its name, what else has changed with regards to entrepreneurs’ relief?

Apart from its name, what else has changed with regards to entrepreneurs’ relief?


Since its introduction in 2008, the lifetime limit for entrepreneurs' relief had steadily increased to £10m until 10 March 2020.


However, at Budget 2020 the Chancellor announced two major changes:

  • a new name: business assets disposal relief (effective in tax year 2020-21 onwards) on which you’ll pay tax at 10% on all qualifying assets
  • a reduction in the lifetime limit from £10m to £1m.



Lifetime limit

Date of disposal: 

Lifetime limit £

From 6 April 2008 - 5 April 2010


From 6 April 2010 - 22 June 2010 


From 23 June 2010 - 5 April 2011


From 6 April 2011 - 10 March 2020


From 11 March 2020



The current legislation on Entrepreneurs’ Relief is found within Part 5, Chapters 3, 3A and 4 of Taxation of Chargeable Gains Act 1992 (TCGA 1992) sections 169H to 169V. The legislative detail for the above changes will be introduced in Finance Bill 2020.


It has been announced that the Finance Bill will also provide that the lifetime limit must take into account the value of Entrepreneurs’ Relief claimed in respect of qualifying gains in the past. Therefore, any entrepreneurs who have already claimed this relief on past business disposals for gains in excess of £1m will no longer have access to this relief. It is anticipated that the reduction will not affect 85% of the claimants.


Qualifying disposals

The following disposals attract entrepreneurs' relief:

  • a disposal of the whole or part of a business owned by the individual throughout the two-year period ending with the date of disposal
  • associated disposals, ie a disposal of, or a disposal of an interest in, an asset in use for the purposes of a business, at the time at which a business ceases to be carried on, where the business was owned by the individual throughout the two-year period ending with the cessation of the business. The disposal must be made within the three-year period beginning with the date of cessation, provided that the asset has not been used for any purpose, other than that of the business, during the intervening three-year period
  • a disposal of, or a disposal of an interest in, shares or 'securities' of a company, where the company is the individual's 'personal company' and is either a 'trading company' or the 'holding company of a trading group' and the individual is an officer or employee of the company; or, where the company is a member of a trading group, of one or more companies which are members of the group. For all disposals with effect from 6 April 2019, these conditions must be satisfied throughout either:
    • the two-year period ending with the date of disposal (one year for disposals prior to 6 April 2019), or
    • the two-year period (one year for disposals prior to 6 April 2019) ending with the date on which the company ceases to be a trading company without continuing to be or becoming a member of a trading group or ceases to be a member of a trading group without continuing to be or becoming a trading company. In this case, the disposal must be made within the three-year period beginning with the date of cessation.


An individual's personal company is a company in which they hold at least 5% of the ordinary share capital, in which they are able to exercise at least 5% of the voting rights by virtue of that holding and must have 5% entitlement of profits that are available for distribution and assets on winding up the company or disposal proceeds if the company is sold.


Entrepreneurs’ relief planning points

  • Top up employee/director shareholdings to ensure they pass the 5% threshold
  • Fragment holdings within a family to maximise the relief available
  • Combine smaller holdings between family members so they can qualify
  • Entrepreneurs' relief may be claimed on any of the following events:
    • a normal sale
    • a gift
    • a transfer (for example, at undervalue)
    • company winding-up under ESC C16
    • company purchase of own shares (assuming that capital gains treatment applies)
    • where a capital sum is derived from the asset
    • incorporation of a business.


Associated disposals

Watch out for cases where a company director or partner in a partnership owns a property and lets it to the company or partnership. If this property is sold, then to qualify for the relief, both of the following must apply:

  • you’ve sold at least 5% of your part of a business partnership or your shares in a personal company
  • you owned the assets but let your business partnership or personal company use them for at least one year up to the date you sold your business or shares - or the date the business closed.


Government consultations – still time to have your say

Details of three important consultations affecting accountants.

Details of three important consultations affecting accountants.


The deadlines for responses to many of the government’s consultations/calls for evidence have been revised - reflecting the simple fact that individuals, businesses and professional bodies have been otherwise engaged recently!


Here, we highlight three you may wish to respond to.


Call for evidence: raising standards in the tax advice market is now open until 28 August. It is an important call for evidence that is relevant to a large number of members and future members.


It asks for views and evidence on several issues under the following headings:

  • the scope of the market for tax advice and services
  • the characteristics of good and bad practice
  • current government interventions
  • international models
  • possible approaches to raising standards.


The paper draws on PCRT and highlights that the government is seeking the following from any intervention in the market:

  • ‘market transparency, so that taxpayers have the information they need to choose an adviser that meets their need, and are able to steer clear of unsuitable providers
  • that customers who want to engage a tax adviser are able to access reliable advice from an appropriately competent professional who maintains high ethical standards
  • [that] market access is preserved so that customer can continue to get reliable advice should they wish to
  • to enhance tax compliance.’


There is also positive recognition of the work accountants/agents do, with the paper stating that ‘Many agents adhere to the high ethical standards outlined in the Professional Conduct in Relation to Taxation (PCRT), developed by seven professional bodies'.


It goes on to highlight that ‘HMRC has long recognised the value of good tax advisers in helping their clients to get their tax affairs right’ and that ‘good advisers are vital to an efficient tax system. They help customers to:

  • keep good tax records, either through keeping those records themselves or providing guidance on suitable systems and processes
  • carry out tax calculations
  • file returns and organise payments.’


A key question being asked is ‘What more could the government do to promote the work of good advisers?’


One of the discussion paper points highlights that 'Recognising the good work that many professional bodies do to maintain standards, one option which would meet the objectives for reform would be to introduce a legal requirement for anyone who want to provide tax advice on a commercial basis to belong to a recognised professional body'. Another suggestion is that 'Advisers could be required to satisfy a fit and proper person test in order to register, and this test could include provisions such as:

  • possessing relevant qualifications or length of professional practice
  • having professional indemnity insurance
  • being registered for AML supervision
  • not having been subject to a penalty for promoting or enabling tax avoidance
  • up to date with their own tax affairs
  • up to date with responsibilities as a company director ie was not an undischarged bankrupt or a disqualified director
  • not having been expelled by a professional body for misconduct.'


Do have a look at the document and please do send in your thoughts to ACCA by the end of July to with the subject headline ‘Call for evidence: raising standards in the tax advice market’.



Tackling Construction Industry Scheme Abuse is open for comment until 28 August with the planned introduction from April 2021. It includes the explanation of a new power which would allow ‘HMRC to correct the CIS deduction amounts claimed by sub-contractors on their Real Time Information (RTI) Employer Payment Summary (EPS) returns’ and it seeks views on implementation.


Preventing abuse of the R&D tax relief for SMEs: second consultation is open for comment until 28 August. It is a consultation on the delayed introduction of the PAYE cap that was announced as part of the Budget 2020. In the Budget, it was announced that the introduction of the cap would be delayed until 1 April 2021 to allow for further consultation. It’s highlighted that ‘the PAYE cap will include a minimum threshold of £20,000. For payment claims below £20,000 the PAYE cap will not apply.’ The areas being considered as part of this consultation are the role of Externally Provided Workers and Managing R&D.


Covid-19 – a thank you!

Meet our members who have provided tremendous help and support to our ACCA family.



Above are some of our members who have helped and supported our ACCA family.


Thank you from ACCA for all the great feedback you have sent – we have used this to support our ACCA family and have also used your great thoughts and insights when ‘discussing’ issues, concerns and changes with regulators and government.


When the Covid-19 situation unfolded, nobody really knew what we would be facing. But unprecedented circumstances have called for unprecedented responses, with every day bringing new practical challenges to face. The accounting profession is on the front-line helping clients and businesses to adapt and respond to the coronavirus crisis, while also having to adapt to different circumstances and ways of working themselves. 


Over the past couple of months, it has been crucial for us to provide you all with timely, valuable and practical guidance. But we couldn’t do that alone. So, we want to say a huge thank you! 


With ACCA as a platform to reach as many members as possible, you have without hesitation shared your personal journeys, given invaluable technical advice and provided much-needed feedback. 


You have continued to generously give advice, share insights about policy issues and loan schemes, reveal your resumption plans and much more. This has been pivotal in shaping the support packages we have provided to all of our members.


We have had a huge amount of positive feedback about the support we have provided, but we must pass this on to you. As you have played a vital role in this. 


  • 'I just wanted to thank you and the team collectively for the Covid-19 information sent out overnight – which I have selectively circulated to clients and immediate feedback is very positive – so thank you all and well done!'


One member finding the resources ‘absolutely invaluable’, highlighting the speed with which she received the information and the practical nature. ‘It’s a fantastic resource and means you’re not necessarily going straight to the lawyers or spending hours yourself researching something.’ 


  • 'I would like to say a big thanks for supporting and helping all the ACCA members during this Covid-19 crisis. Stay safe.'


In such an unsettling period, there’s been a huge wave of support, generosity and openness. We’ve had some brilliant responses from across all sectors and we’ve seen the ACCA family come together in many ways.


Your insights and experiences have also been instrumental in helping us give feedback to policymakers, including the Department for Business, Energy & Industrial Strategy (BEIS), HMRC and many others.


People will remember how you responded during this time. You could have remained fixed on your own agenda and refused to collaborate. But you haven’t.



So, thank you – from Glenn Collins, Lilly Aaron, Yogesh Dhanak, Lloyd Powell, Mirela Dewshi, Radha Garg, Pat Delbridge, Bhopinder Chouhan, Sam Clark, Chris-Dian Carter, Eve Bielawska, Kanchan Joshi John Duggan and all at ACCA UK  





Covid-19 podcasts, webinars and other resources for practitioners

Quick links to podcasts, webinars and more…

Quick links to podcasts, webinars and more…

ACCA UK produces resources to support you and your teams in the work that they undertake. That includes keeping you up to date on technical matters, helping you develop new income streams through diversified work, as well as support during Covid-19.


You can find all of our UK practitioner webinars on ACCA’s CPD resource finder but we’ve highlighted a few below:


Technical webinars

IR35 – the extension of IR35 to the private sector

Speaker: Louise Dunford, LD Consultancy Limited


The first Budget of a new era

Speaker: Paul Soper, tax lecturer and consultant


Benefits in Kind update

Speaker: Dr Ros Martin, consultant and lecturer


What’s changed in FRS 102?

Speaker: Steve Collings, audit and technical partner at Leavitt Walmsley Associates Ltd


VAT & Duties

Speaker: Gwen Ryder, independent consultant


The 20 most common errors when dealing with VAT and property

Speaker: Robert Warne, Partner and Head of VAT at Crowe UK LLP


Where are we with Making Tax Digital?

Speaker: Dean Wootten, Wootten Consultants Limited


Expand your services

You’ll find webinars, articles and guidance on:

  • mediation, conciliation and the expert witness
  • probate
  • research and development.


In our Expand your services hub on our website.


Covid-19 webinars


Business funding – how to help your client and stay compliant

Speaker: Paul Surtees, Capitalise


Your clients’ Covid-19 business continuity plan

Speakers: Mark Jenkins and Phil Sayers, The Gap


From a desk-based accountant to a cloud-based accountant in 60 minutes

Speaker: Graeme Tennick FCCA, Graeme Tennick Accountants


From a traditional accountant to the accountant of the future in 60 minutes

Speaker: Graeme Tennick FCCA, Graeme Tennick Accountants


Covid-19 podcasts

We’ve done two podcasts with ACCA members Carl Reader and Alastair Barlow which you can find at:


The first podcast was recorded when the UK first went into lockdown. Carl and Alastair discussed how the accountancy profession has always been driven by external forces of which Covid-19 is the latest.


In the second podcast a month later, Carl and Alastair talked about how they now had the time and headspace to think about their practices and what they want to achieve. Topics covered include benchmarking, nicheing and next-level software.


LinkedIn community

We’re grateful to all our members who have shared their thoughts and insights to support our ACCA family. We’re currently sharing some of those thoughts and sector insights from practitioners with niche practices via LinkedIn.


You can see them either by joining ACCA’s Practitioners’ Sector LinkedIn group or connect with/follow Pat Delbridge – Member Networks Manager at ACCA. If you would be willing to share some sector insights then please email Pat at



Visit the ACCA UK Covid-19 Hub for advice and support for practitioners

Free engagement letter resources for ACCA members

We have expanded our free engagement letter resources for members - see what's new!

ACCA UK has expanded its free engagement letter resources for members and now has the following available:

  • Engagement Letters for accounts production factsheet
  • Engagement Letters for tax practitioners factsheet


The tax engagement letters suite includes a new stand-alone document - an example subcontractor agreement that can be used by a practitioner acting as a subcontractor to a regulated firm engaged in public practice. It can also be used by a subcontractor with a firm.


Each of the main factsheets contains a covering letter with a privacy notice, standard terms and conditions of business, schedules for various specific services, and cancellation notices for consumers. These factsheets are in Word format and will be kept updated over the years so members will always have a free current resource that they can use for engagement letters.


In addition, we have a schedule of services for furlough


For practices wanting to go one step further with an onboarding product, we have partnered with Practice Ignition who are offering a version of their product with ACCA templates.



Elsewhere in this issue, browse an article looking at the importance of letters of engagement