CharteredONE
ISSUE 28 SPRING 2021
The official magazine of the Liverpool Society of Chartered Accountants
Reflections on the budget
A million steps in March
DSG Help SpeedoMick
Equality, diversity & inclusion developments ICAEW Member Support
MARCH - it's a month and it's a verb - and both have just started! Having seen the Welsh deservedly overcome the English at the end of February, it was highly appropriate for two of our members to launch a sporting fundraiser on St David's. Chris Wainwright, on our Business Members Committee and and Martyn Best, our Editor and Past President are aiming to complete 1,000,000 steps between them during March to complete the fundraising needed to install a lift at Tranmere Rovers stadium to enable disabled fans and those with mobility challenges gain access to the main stand. They hope to have this installed ready for the return of fans, probably at the start of the new football season.
As you also know, another of our members, Mark Palios is Chairman, and we have many members who are fans of Tranmere Rovers, and will be very excited by their current league position, and their recent (full report next issue) appearance in the Papa Johns EFL Trophy final on 15th March. A million steps is 16,130 each, every day, and each step will be made easier knowing they have the support of those of you kind enough to help donations welcome of course, and also your support in reaching more fans would be excellent. Donations would be gratefully received at: TRANMERE ROVERS STADIUM LIFT FOR DISABLED FANS - a Sports crowdfunding project in Birkenhead by Martyn Best (crowdfunder.co.uk)
LSCA Business
The President's Words It will soon be time to think of the AGM and next year’s committee and we will be considering how we adapt to the pandemic and the impact it has had on this year."
S
o a new year starting, as last year finished, like no other.
We continue as Chartered Accountants to exist in a dynamic environment where our clients and businesses face many challenges. As you might expect presidential activity has been limited to some Zoom calls with the other District Society Presidents, and if I said very few Society dinners and events, I would actually mean, none at all. We very much hope that as things progress this year we will be in a position to once again hold physical events but as you might expect it still
seems too early in the process to do that. As a Society we have been trying to keep in touch with our members, and offering them online resources and meetings, and we have been well supported by the ICAEW, and within these pages we highlight many of the activities which should be of interest. It will soon be time to think of the AGM and next year’s committee and we will be considering how we adapt to the pandemic and the impact it has had on this year. One thing that never changes though, is our wish to invite others and we
welcome other members who would like to be involved and I would urge anyone who is interested to get in touch. Finally, I hope you are enjoying our digital Chartered ONE, and do please pass it on to any colleagues within and beyond the Society. Until next time, my good wishes to you all. In the meantime, please stay safe. Best wishes,
ROB YOUNG President
CharteredONE
www.charteredone.co.uk
ISSUE 28 Spring 2021
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LSCA Business
Contents 20
22 03 THE PRESIDENT'S WORDS
16 KPR
05 REFLECTIONS FROM OUR EDITOR
18 LSCA - EQUALITY, DIVERSITY & INCLUSION
06 COODEN TAX CONSULTING: 2020: THE YEAR OF THE EMERGENCY CASHFLOW FORECAST
20 CAROL MCLACHLAN A BRAVE NEW VIRTUAL WORLD FOR ACA'S
11 DAVID CRADDOCK
22 DSG AND SPEEDO MICK - A GREAT EVERTON COMBINATION
14 ICAEW BUSINESS MEMBER SUPPORT OVERVIEW 15 TAX UPDATE WITH MARION HODGKISS
41 LEGAL RSS
19 ICAEW NORTH WEST REGION WHAT'S ON - JANUARY/MARCH 2021
08 ICAEW - MAJOR POST-BUDGET DISCUSSION 12 DSG - CAPITAL GAINS TAX CHANGE ON THE HORIZON?
40 OPUS - WHEN TO SPEAK WITH AN INSOLVENCY PRACTITIONER
24 TUESDAY'S TIPS WITH ANDY BOUNDS 26 MEMBER PROFILE - TIM HILL 28 ICAEW - EVENTS & ACTIVITIES 30-39 TECHNICAL REPORT
Chartered One is designed and published on behalf of the Liverpool Society of Chartered Accountants by Legal RSS. Advertising/Features martyn.best@charteredone.co.uk 07798 700500 COVER PHOTO Front cover kindly supplied by Gary Millar, former Lord Mayor of Liverpool.
LIVERPOOL SOCIETY OF CHARTERED ACCOUNTANTS
PRESIDENT Rob Young president.liverpool@icaew.com CHARTERED ONE EDITOR Martyn Best martyn.best@charteredone.co.uk For all content and advertising enquiries please contact Martyn Best.
The Liverpool Society of Chartered Accountants was founded in 1870 and is the oldest district society in the Institute of Chartered Accountants in England & Wales, and was one of the four founding societies of the ICAEW. The Society has an illustrious history and has provided in Harmood Banner, Arthur Green and Ian Morris, three National ICAEW Presidents. Awarded the Freedom of the City of Liverpool in 2011, the Society continues to play an active role in local and ICAEW issues. There are over 1.7m chartered accountants around the world – talented, ethical and committed professionals who use their
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expertise to ensure we have a successful and sustainable future. Over 150,000 of these are ICAEW Chartered Accountants. We train, develop and support each one of them so that they have the knowledge and values to help build local and global economies that are sustainable, accountable and fair. The ICAEW have been at the heart of the accountancy profession since we were founded in 1880 to ensure trust in business. We share our knowledge and insight with governments, regulators and business leaders worldwide as we believe accountancy is a force for positive economic change across the world.
LSCA Business
Reflections from our Editor We have some exciting events looming this coming month, and without doubt there will be anticipation and review of the forthcoming budget"
Finally, after a year of great sadness, distress and such major impact to all of our lives and those of our loved ones, we can see clear light to the end of this. We are surely now on the last lap of this pandemic, and I hope that by the time our next Chartered ONE is published we will start seeing evidence of the return to that now much-loved “normal”.
W
ell, probably now for the last time in 2021, may I wish you a very Happy New Year.
I think I have stretched this greeting as far as I can, so, let us now look forward to Spring, to Easter, to the Summer that we missed last year, and of course to the liberating benefit of the vaccines. I was actually expecting to have mine around May-time as clearly my years would have indicated that, and thankfully, with good health my place in the queue was clear. However, to my astonishment, my GP called me one afternoon in early February and invited me to receive my vaccine the following morning.
I was rather taken aback, and said, “Surely not, I’m not old enough!” This did bring some amusement, and she explained that due to receiving more supply than expected, and having whisked through the more obvious candidates, they were now going through patients alphabetically. So, my early position in the alphabet, which had only ever given me a mild benefit in the calling out of the school register brought a welcome intervention from Pfizer – and if anyone has any misgivings at all, let me dispel them. A barely noticed minor tingle, and a 15 minute rest, and I was freed into the world, and I hope that many of you are now in that more relieving situation.
We have some exciting events looming this coming month, and without doubt there will have been much debate and discussion about the Budget, and we will have given many good insights and webinars. Sporting-wise, matters are awakening, and if I may use that description to include an activity that two of our members are embarking upon, may I refer you to the 1 MILLION STEPS IN MARCH and urge you to support those fine gentlemen. You will have noticed the details of this on Page 2. So, my very best wishes to you – stay safe and stay healthy, and of course to nicely circle back to the start of these reflections – KUNG HEI FAT CHOW. With very kind regards, MARTYN BEST Editor & Past President
www.charteredone.co.uk
ISSUE 28 Spring 2021
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LSCA Business
2020: The year of the emergency cashflow forecast Well, nobody expected a year quite like that one. I doff my cap to those of you in the profession who have supported your clients throughout the year with all of the new terms and rules that have come into play with Furlough, CBILS, BBLS, SEISS or any of the other myriad of schemes that have been put in place to support businesses and their employees.
I
t may well be the first year on record where a majority of the profession spent more of their time in the present and the future rather than the past. Our clients wanted up to the minute bookkeeping, they wanted to know when they would see the cash from any work they were still doing or when the furlough funds might arrive and when their loan would arrive and whether they would make it through.
Your Support
It became the year to find support with things! Hopefully, you found useful tools like Capitalise to compare and find funding across a broad spectrum of lenders with BBLS, CBILS and more traditional funding for those businesses that bucked the trend, or perhaps you bubbled up with a finance broker who supported your clients. 6
LSCA Business
You might have also sought out Futrli or Float to support with cashflow forecasting, especially if your clients have made the jump to cloud accounting, These newer entrants to the market will have certainly seen their market access plans getting a re-write during the year. Or you may have dusted off your old excel spreadsheets and just gave them the quick once over before setting them to work a new. Whatever you did, you clearly did it well for the majority of businesses. Outside of those in food and beverage and entertainment industries, most businesses have managed to plod along and survive through this awful year and into 2021, despite the first two lockdowns and in spite of this new lockdown 3.0. The Next Funding Squeeze Will there be another squeeze on finances ahead? I suspect so, BBLS and CBILS will soon have to begin repayments when the government stops paying the interest in Q2 this year. How will you be able to support your clients then? Well perhaps they might be able to extend their BBLS or CBILS loan to the maximum if they haven’t already done so, or convert their BBLS loan to a CBILS loan before the end of March if the scheme isn’t extended further. Or is there another way? Tax Reliefs, particularly R&D Tax Relief, remain significantly misunderstood. The scope for claiming is huge, and whilst it won’t be of benefit to a majority of your limited company clients, it would probably benefit between 5% and 20% of them. Over the last 8 years we have worked with a number of diverse companies to support them with claims, from a small company developing a range of Green Tea, to a medium-sized debt collection business that bought up bad debts from Wonga at a very low price and sought to obtain repayments at a manageable rate. From a start-up designing a new range of organic cosmetics, to a global business that processes hops, to a company developing online school diaries as an EdTech solution, to a company developing a new range of papers manufactured from agricultural waste, to a company designing food dryers, we’ve seen most things. The Dilemma Unlike the pandemic, the Tax Relief has been available to SMEs since 2000. It has only really been over the last couple of years that many businesses have begun to understand its benefit, so If you don’t know by now that R&D Tax Relief can help your clients’ significantly boost their cashflow by reducing their tax liability or offering a R&D Tax Credit, payable in Cash, if they surrender their losses, then read on. If you do know, I am sure the question you may have been asking yourself on several occasions over the last 5 years is “how do I sell R&D Tax Relief to a client that may have been doing R&D for several years?”
The Solution Whether you know about R&D Tax Relief or not, bringing in an external expert is a great solution! We work directly with businesses but also partner with a number of Accountants who refer their clients to us or who we support by reviewing claims and technical reports. We can work with you to identify those clients, either through direct intervention and a targeted marketing campaign or through a more generic series of communications. We will work with you as an external expert to help your clients secure probably the most rewarding Tax Relief on the statute books and pay you a handsome referral fee. By telling your clients that you have brought in an expert to support you, you are providing them with peace of mind. The last accountant we partnered with went through their entire client list with us and we identified around 20 businesses that had potential. We have now prepared claims for 9 of them, one wasn’t sure, and one had been doing R&D 5 years ago, when they talked to the accountant about it, but no claim was ever submitted, the other 9, when we approached them to establish what they were doing in more detail weren’t actually doing any R&D, but were glad we had informed them about it. Our Expertise I am an accountant professionally, I spent 10 years in practice predominantly for a large regional firm in West Kent, where I first came across R&D Tax Relief and worked with a client who was developing large scale water purification systems that the MOD purchased. I moved into industry in 2006 and spent 6 years in Clinical Research and then after redundancy spent 14 months at a World Championship winning Motorsport team. Whilst my principle roles in those two businesses were financial reporting, both were R&D intensive businesses, so I made it my mission to develop my expertise in this area and obtain as much Tax Relief as I could for them. In September 2013, after a little bit of moonlighting, and having honed my skills, I started working full time in Cooden Tax Consulting and haven’t look back. We are a niche tax consultancy and only work with companies who may be able to claim R&D Tax Relief, Video Games Tax Relief or Patent Box. The business has evolved into a team of 4 now and is looking to grow further. We are also hoping that during 2021, we will be adding a grant writing service to support our clients with applications to Innovate and other funders. The First Step If you’d like to talk to us in more detail about our range of services to help you support your clients, you can arrange an initial discussion with me through Calendly, you can book some time with me at www.calendly.com/simonbulteel for a time that suits you, alternatively you can contact Simon Bulteel at Cooden Tax Consulting on 01424 225345. www.charteredone.co.uk
ISSUE 28 Spring 2021
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LSCA Business
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Essentials Virtual CPD 2021 Programme
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Professional Services | Financial
How Employee Share Schemes can respond to Regional Policy David Craddock is a recognised authority in the UK and worldwide on employee share schemes and the author of The Tolley’s Guide to Employee Share Schemes. In this article, David identifies the role that employee share schemes can play towards formulating an effective regional policy to which the current British Government is committed through its manifesto pledges.
T
he Conservative Manifesto Pledges to Regional Regeneration
The dramatic onset of Covid-19 in the early months of 2020 and the ongoing unpredictable consequences of the disease would appear to have derailed the wider ambitions and manifesto pledges of the British Government for a levelling up of the regions, notably in the North and the South West of England. With explicit reference to the General Election of 12th December, 2019, the Prime Minister has personally expressed the debt that he believes he owes to constituencies that transitioned to Conservative to give him the substantial majority in the House of Commons. Indeed, it is no coincidence that the last General Election is known as The Brexit Election, as one of the prime causes of the Brexit campaign was the demand for the levelling up of the regions that had lost much of their economic significance due to the process of increasing globalisation over the last 30 years. Addressing regional economic disparity must continue to be a priority of government and, when properly implemented it has the potential to be a significant part of the recovery from the economic devastation left in the wake of the pandemic. Simply to refer to the government funds that have been committed to the HS2 rail project is insufficient to meet the needs of regional regeneration and, in reality, a
distraction from the true economic imperatives when companies have become used to meetings by Zoom and Microsoft Teams, thereby making a significant proportion of business rail travel redundant. Part of the massive historical success of the USA in economic policy from the nineteenth century onwards has been the multitude of business centres across the 50 states, with each state engaging in its own experiment to produce excellence, the results from which all the other 49 states can learn and derive benefit. This is a stark contrast to the UK with its reliance on London and the South East, and travel to London from the regions for business. The commitment of the British Government must be to raise the major cities – Liverpool and Manchester, Leeds and Newcastle, Birmingham and Bristol – and the smaller cities also, to have a fully self-sufficient business infrastructure and reduce the dependence on London. Surely it is only with that decentralisation of economic power that the regions will have the capacity to develop and demonstrate their initiative, their innate inventiveness and their independence. Then if that regional economic regeneration is encased within a new political framework of a federal nation-state, following the USA or German model, the opportunity exists to save the union and stem the tide of separation in Scotland, Wales and Northern Ireland. www.charteredone.co.uk
ISSUE 28 Spring 2021
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LSCA Business Professional Services | Financial
The Fallacy of “Tax-and-Spend” Strategies The fallacy of “tax-and-spend”, whether it be of a Keynesian disposition or otherwise, becomes obvious in the light of a clear examination of the current predicament for many companies. The large corporations of big business have the cash resources and accumulated reserves to withstand the assault of Covid-19 and, provided they continue to have a market relevance, they will survive and go on to thrive once again. But for many small-to-medium size companies, the exposure to market forces and their current prospects may be very different, particularly if they are lumbered with debt repayments of their Covid-19 loans at a time when their profit margins have yet to recover. Furthermore, lockdowns act like a form of regressive taxation, impacting the worst on the poorest and most vulnerable individuals either through their employing companies or selfemployed businesses. Unfortunately, given the current aggressive nature of the virus and the emergence of even more deadly and contagious variants, there may not be an alternative to lockdowns in the short-term.
So why tax these companies or individuals further or deny them existing tax reliefs when they are already strained to breaking point? Surely an increased tax burden imposed by government would make no sense whatsoever when what is really required for these companies and individuals is incentive to recover with the aid of the most friendly fiscal and monetary policies possible. The continuing tax incentives through the capital gains tax regime, notably through the tax-advantageous employee share schemes and the Business Asset Disposal Relief, previously known as Entrepreneurs Relief, is essential to ensure that businesses know that they can commit to economic growth and their owners realise benefit on retirement without the imposition of punitive taxes. Remember, tax acts directly as a decelerator to economic growth. Furthermore, regardless of the sheer magnitude of the increase in the National Debt to fund the support during the pandemic, this is not the time to organise its repayment. The British Government is only now paying back the debt incurred to fund the operations of World War II. The key to the country’s recovery from the pandemic will be economic growth and, so long as the ratio of GDP to debt is manageable, there is no express need to raise tax rates on the
false pretext of having to pay down the National Debt. At this present time, for the regions, priority should be given to attracting the outsourced businesses that are returning home as part of the process of deglobalisation, accelerated by the identification of China as the source of the virus. There is, of course, a natural alignment between the economic deglobalisation of the world, as countries organise themselves into regional trading blocs (or, as in the case of the UK through Brexit, completely decouple from the EU trading bloc) and decentralisation to the regions within the UK of both economic and political power.
The Alternative System of Economics So, let’s now explore the employee share scheme proposal as an alternative system of economics. The modern-day origins of employee share ownership derive from the work of Louis Kelso, an economist and lawyer working in 1956 on the West Coast of the USA to deliver an alternative economic system for the ownership of a successful newspaper company, Peninsula Newspapers, based in Palo Alto in California, whose founder and sole shareholder had decided to retire. The employee motivational basis for the employee ownership solution was that capital values rise faster than wages and, in most companies, this is dramatically apparent. The employee share ownership model, therefore, properly implemented and properly communicated to the employees, is the natural mechanism to act as an accelerator for wealth creation, i.e. for the existing shareholders and for the employee shareholders. The requirement, therefore, for regional economic regeneration, is to establish the firm linkage between employee share schemes and regional policy. This could take the form of additional tax reliefs embedded in the employee share scheme, maybe in the form of an additional corporation tax deduction, if a company introduces an employee share scheme in a designated region. In this context,
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Professional Services | Financial
the employee share scheme acts as the invisible hand, rather than relying on the clumsy tools of grants and subsidies which were the recourse of governments in the 1960s and 1970s. Through embedding tax-advantageous employee share schemes into regional policy, with all the consequential motivational and worker self-esteem benefits that the linkage would bring, this would contribute towards the internal strength of each region, as manufacturing centres, as service provider centres and as financial centres, generating their own wealth to fund their own infrastructure. The avoidance of grants and subsidies takes the hand of big government away from proceedings in favour of employee share schemes contributing towards a free-market solution regional policy. The smaller the interference from central government, whether in economic power or in political power, the greater the role of the individual citizen, enhancing the status and self-esteem of the empowered individual citizen in contributing to the dynamic business life of the region.
The Unique Contribution of Employee Share Schemes Bringing into the regions the power of employee share schemes as part of a formulated regional policy represents a strategy of regional economic reinvigoration. Each region represents its own economy, albeit with interconnectedness with the other regions as well as international trade. The unique contribution of employee share schemes lies in having the potential at the same time: (1) to increase the productivity of the company, (2) to increase employment levels or at least avoid unemployment while at the same time, (3) awarding non-inflationary pay increases linked to productivity. Numerous empirical studies from universities and institutes in the USA and the UK support this prognosis, including Rutgers University and Cass Business School. The higher levels of productivity derive from the individual personal motivation together with the more co-operative working patterns and the breakdown of barriers between management and workforce. The stability in employment
levels derives from the recognition of employee share scheme rewards, potentially combined with a cash profit share, as variable remuneration which as a variable percentage within the total reward package avoids unemployment when trade in any given year for any reason falls. Increases in employment levels through company growth arise through the buoyancy, energy and efficiency injected into the company courtesy of the share ownership culture. The operation of this self-regulatory mechanism to deal with fluctuating income levels over a given business cycle avoids the need for heavy stimulus through fiscal and monetary measures, thereby curtailing inflationary pressures in the economy. Applied to the regions or applied to the national economy as a whole, this recipe for economic outcomes offers the alternative system of economics that can facilitate recovery from this damaging period of Covid-19, as well as implement the Conservative manifesto pledge to support the regions and without excessive central government expenditure.
David Craddock will be very pleased to discuss your employee share scheme initiative with you. David’s contact details are as follows: T: 01782 519925 | M: 07831 572615 E-mail: d.craddock@dcconsultancyservices.com Visit: www.davidcraddock.com David Craddock Consultancy Services Specialist in Employee Share Ownership and Reward Management, Management Buyouts, Share Valuation and Investment Education
www.charteredone.co.uk
ISSUE 28 Spring 2021
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LSCA Charity
WHILST CHARTERED ONE WAS PUBLISHED JUST AFTER THE BUDGET, THIS ARTICLE BY DSG SHOWS ITSELF TO STILL BE A RELEVANT READ AS A PRELUDE TO MANY OF THE DECISIONS MADE.
Capital Gains Tax Change on the horizon? The Chancellor of the Exchequer, Rishi Sunak, has announced that the date of the next Budget will be on Wednesday 3 March 2021.
CGT rates Various options to align or increase CGT rates are discussed in the OTS report.
The Budget will set out the next phase of the plan to tackle the virus and protect jobs. Could we also see tax rises or reforms?
Currently rates are 10% for basic rate taxpayers and 20% for higher rate taxpayers on most assets (including shares). Residential property gains are taxed at 18% for a basic rate taxpayer and 28% for a higher rate taxpayer. Business Asset Disposal Relief (previously known as Entrepreneurs’ relief) provides a 10% relief for business owners, generally on the sale of shares. Until 11 March 2020 this relief was available for £10m of gains, the limit after this date was reduced to £1m. The top rate of income tax is currently 45% for gross income in excess of £150,000.
In July 2020, an inquiry into the UK tax system and a review of Capital Gains Tax (CGT) was launched within the space of two weeks. The Office of Tax Simplification (OTS), undertaking the CGT review, have published their first report which has a focus on the policy design and principles underpinning the tax. Recommendations in four main areas, relating to CGT, have been made: • More closely align CGT rates with income tax rates, or address boundary issues between CGT and income tax • Reduce the level of the annual exemption • Remove the CGT uplift on death • Consider replacing Business Asset Disposal Relief (previously known as Entrepreneurs’ relief) with a relief more focused on retirement.
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The report highlights that multiple rates are confusing, administratively complex and don’t always provide certainty to a taxpayer straddling the basic and higher rate boundary, who won’t know their liability on a particular disposal until they know their total income for that tax year. Therefore, it follows that we could see all CGT rates aligned to one single rate or an alignment closer to the current income tax rates. A complete alignment to income tax would remove the need for capital v income anti avoidance
LSCA Business
measures and is likely to require wider changes across both taxes. There is also consideration in respect of the boundaries between CGT and income without an alignment of rates. Two particularly relevant areas for SMEs are the use of share-based remuneration and the accumulation of profits in smaller owner managed businesses (OMBs). One possible approach discussed is whether the profits accumulated within the business are taxed at dividend rates, rather than subject to CGT rates on a liquidation. Aligning CGT rates with income tax is not a new concept, with this being the case for 20 years up to 2007/08. Changes to align rates, or a change to the tax treatment of retained profits on a liquidation, will potentially see business owners paying up to 35% more on a business sale. Business Asset Disposal Relief (formerly known as Entrepreneurs’ Relief) The policy objective of this relief has historically been linked to both the stimulation of business investment and/ or a relief when business owners retire. The OTS believe the relief is mistargeted if it is designed to encourage business investment, such incentive needs to apply at the time the investment decision is made, for example, the Enterprise Investment Scheme which already exists. If the policy objective is for a relief of retirement, then suggestions in the OTS report are; increase the minimum shareholding to say, 25%, so it applies to owner managers rather than a broader group of employees, increase the holding period to ensure the relief goes to people who have built up their business over time and reintroduce an age limit to reflect that the intention is to benefit those who are retiring. Linking such a relief to retirement and/ or age is not a new concept – CGT retirement relief existed until 1998 with that legislation forming the foundations of Entrepreneurs’ Relief. When will changes apply? Tax rises generally take effect from the start of the next tax year (6 April 2021) or the date of the budget. Given the pandemic continues at pace, it may be that significant changes are deferred to the 2022 Budget (Autumn 2021), to take effect for the tax year from 6 April 2022.
• If there is no trade buyer or senior management team, consideration of Employee Ownership Trusts (EOT) could be an alternative option. An EOT is a special form of employee benefit trust that acquires the share of a company on behalf of its employees. Future profits or bank funding can be used to fund the purchase price and the sellers can secure a 0% tax rate if structured in a particular way. • Use of family investment companies and/or transfer of assets to a spouse. • Ensure efficient use of capital losses. • Defer gains by utilising the EIS reinvestment relief. Summary and next steps Given the new mutant strain of the virus and a likely January lockdown for parts/all of the country, March is likely to be too soon for significant changes to the UK tax system. The Budget is expected to focus on the economic recovery and protection of jobs.
However, the record levels of national debt certainly mean that tax rises are inevitable at some stage. Therefore, whether you are considering an exit or looking to acquire a new business, the CGT regime will change in the future so engaging with advisers at an early stage will ensure any plans can be considered in light of the expected changes.
However, smaller changes or increases in rates, for the upcoming tax year are possible. What can you do? •C omplete a disposal this tax year, for example, if there is a transaction in early stages of negotiations or due diligence, ensuring completion before the next budget date will protect against any rate increases. •B ring forward any succession or retirement plans if commercially possible, for example, MBO transactions or share buy-back transactions.
www.charteredone.co.uk
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LSCA Business
Business Member Support Overview UPDATES FOR MARCH 2021 You can find more information about all the below at www.icaew.com/business and get in touch at business@icaew.com 1. KEY INSIGHTS TOPICS THIS MONTH BREXIT COVID-19 and Government Support • B udget 2021 – a keenly awaited and monumental Budget – find all ICAEW’s analysis here • I nfrastructure and Recovery – published in Feb 2020. Interviews with Chartered Accountants spread globally across sectors, focused on infrastructure investment and the recovery. • P ractical business advice for businesses of all sizes, the self-employed and specific sectors. This is updated regularly with the latest updates in Government guidance and support. Brexit • B rexit Hub – ICAEW’s guidance, and you can find specific sector-by-sector information here. • O ur most viewed Brexit resources: UK VAT after Transition period; How UPS is tackling post-Brexit teething problems; Brexit and COVID drive audit process rethink. • E mail Brexit related queries to brexitsupport@icaew.com Internal Control and Business Resilience • M odern Slavery – ICAEW’s newly launched platform helping you to affect real and permanent change. Pentland Brands on tackling transparency in their supply chain on 17th March. • I nternal Audit and resilience – ICAEW’s newly launched platform focused on practical methods to build resilience within your business’ control systems. • F raud – supporting your business to combat the current increase in fraudulent activity. Mental health and wellbeing in Lockdown • H ealth and wellbeing during COVID-19 – including a recent article on imposter syndrome. • L eadership, Development and HR – the Business and Management Faculty’s wide-ranging resources cover communication, motivation, and resilience. For full access, join the Faculty here. • I f you or your teams would benefit from further support, remember CABA can help. 14
Highlighting ICAEW’s members in business • Business Spotlights and Pandemic Perspectives – interviews with business leaders across the UK reflecting on their businesses and experiences. Watch on-demand conversations with Drax Power, Naked Wines, and the Eden Project. • Finance for the Future Awards – now welcoming applications from innovative Chartered Accountants that are driving forward effective finance functions in businesses and practices. All of the above is published on ICAEW’s Insights Hub (www.icaew.com/insights) . Get concise updates on these issues and many more in ICAEW’s Daily, Weekly or Monthly emails. Keep your preferences updated here.
2. KEY WEBINARS AND ROUNDTABLES THIS MONTH Webinars All webinars can be found at ICAEW’s events page. ICAEW Virtually Live 2021 is now available to book here. DATE
TITLE
08/03/21
Excel tip of the week (this is our most popular event with business members)
10/03/21
Business Bitesize: fundraising, Brexit and the impact of the National Living Wage
15/03/21
In conversation with Stephen Boyle, The Auditor General Scotland, on the importance of good governance in the public sector
Climate change and corporate value: what companies 22/03/21 really think
23/03/21
Company Voluntary Arrangements (CVA): a retailer’s perspective
23/03/21
Finance in a Sustainable Future
24/03/21
Data analytics live Q&A: Data strategies and case applications in business
24/03/21
Motivating your team: A three-pronged approach
25/03/21
Insight Leadership: Your guide to being a better leader
LSCA Business
Local events and support As well as webinars, ICAEW’s regional team hosts business member forums, at which you can network with your peers and feedback into ICAEW’s discussions with policy makers. More about regional activity here.
4. GET YOUR VOICE HEARD Member’s insights and suggestions have been used to shape policy, support and resources within government and other key external stakeholders. Contribute to these conversations by getting in touch with us, attending your local business member network or by filling out this short form.
Technical support ICAEW is here to support you during these challenging times, be it an ethical, technical, or general question via the below channels: • ICAEW’s Help sheets – concise guidance on emerging and longstanding issues • Support Members Scheme – confidential advice from your peers • Member enquiries and ICAEW Helplines – open to any enquiry by email, webchat, and phone
4. GOOD TO KNOW - ONGOING SUPPORT FROM ICAEW Topical updates on today’s issues (further to the Insights Hub): Global Recovery Hub; Coronavirus Hub; Redundancy Hub; Going Concern Hub Training • T rain the next generation – attract, build and retain talent • A cademy – virtual learning and coaching for your development • B oard Director Programme – 50% off online CPD for aspiring and current directors and NEDs
Tax update with Marion Hodgkiss Marion gave her traditional review of the Budget and gave a topical tax update including a review of the recent Finance Bill and its implication for individuals and businesses. Marion also covered the tax issues arising from the Covid19 support packages, together with details of any further developments. https://events.icaew.com/pd/19865/liverpool-society-of-charteredaccountants-spring-tax-update-with-marion-hodgkiss
www.charteredone.co.uk
ISSUE 28 Spring 2021
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LSCA Business
Going Concern Assessments - use the right forecasting tools for the job! n Edition 27 of Chartered One we considered the different interpretations of the Going Concern Statement required under IFRS and FRS and pointed out that both the FRC and the ICAEW had issued guidance during 2020 to assist management and auditors with the tricky matter of Going Concern assessments in the Covid era.
I
Not long after we had gone to press, the FRC issued a further news release which confirmed audit firms have implemented additional measures to enhance their evaluation of companies’ Going Concern assessments since the start of the Covid-19 pandemic1. That was the good news. The results of the review itself were carried on a separate linked document, here, which identified that the review was on a sample of eleven audits which covered the seven largest UK audit firms. Some of this could be considered the not so good news!
1. https://www.frc.org.uk/news/november-2020/audit-firms-enhance-going-concern-assessments
Picture Credits - https://cfo.economictimes.indiatimes.com/
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LSCA Business
The heading to Appendix 6 of the results of the review had this to say – “There was an inconsistent approach to testing the integrity of the Going Concern forecast models” This seems somewhat euphemistic when one considers what is then revealed – and bear in mind – these are a sample from the seven largest audit firms in the UK! -O n one audit the integrity of the forecasting model was not adequately tested. -O n another audit there was insufficient evidence of the testing of the forecasting model. -O n two further audits the audit procedures were limited to manual testing; the approach would have been enhanced by the use of automated spreadsheet tools.
Good forecasts don’t have to be complex! To produce reliable forecasts, management should be employing purpose-built forecasting software based on robust double entry type architecture which produce fourway reports, forecast balance sheets, profit and loss accounts, cashflows and funds flow statements." In a section highlighted as “Good practice examples” -G iven the complexity of the models, some audits also used data analytical procedures, including Computer Aided Audit Techniques (“CAATs”), to test the integrity of the cash flow models….. on three audits, we found that the use of specific tools to check the mathematical and mechanical accuracy of the models highlighted matters such as circular references, formulaic anomalies and hidden cells/input fields. - I n some cases, the auditors had engaged specialists to assist in checking the integrity of the forecasting models. Forecast 5 is just such a forecasting programme. Developed in New Zealand to replace the very popular but now no-longer-supported and unstable Sage Winforecast, Forecast 5 delivers fast, accurate forecasts and with integration to Power Query for, eg, covenant evaluation being added shortly, Forecast 5 is arguably the most suitable tool for developing Going Concern Assessment forecasts.
Given the propensity for spreadsheet models to generate all sorts of flaws, many not at all obvious to management, let alone “circular references, formulaic anomalies or hidden cells/input fields” why does the FRC appear to be condoning the use of “spreadsheet tools” to prepare forecast for “Going Concern” assessments. Spreadsheets like Excel are wonderful tools - but are demonstrably not for building reliable forecasts! The FRC’s own text says it all – “Given the complexity of the models….” Good forecasts don’t have to be complex! To produce reliable forecasts, management should be employing purpose-built forecasting software based on robust double entry type architecture which produce four-way reports, forecast balance sheets, profit and loss accounts, cashflows and funds flow statements. With these forecast reports, all integrated and balanced, management – and the very relieved auditors – can concentrate on the important issues of whether the inputs are sound and reasonable and focus on the outputs, generated in familiar accounting format, rather than worrying about formulaic anomalies and hidden cells and input fields! Or having to hire in specialists to check the integrity of the forecast models! As stated above – good forecasts don’t have to be complex. Comprehensive yes, dealing with multi currencies, multi bank accounts, consolidations, just about any type of loan imaginable, fixed assets, autocalculated depreciation, wages, PAYE, NI, Pensions, multiple stock and WIP calculations, invoice discounting, various capital structures, departments, cost & profit centres and gross profit percentages, Key Performance Indicators, What if scenario planning; these are the sorts of features available in a comprehensive forecasting package. Why ever would any company or their auditors wish to waste manpower - and expose themselves to the wide and varied array of problems from multiple sources using Excel for their forecasts as highlighted in the European Spreadsheet Risks Interest Group website, here? When there is purpose built reasonably priced forecasting software available? To discuss your forecasting requirements, to learn more about the features and benefits of Forecast 5 or to organise a demonstration of Forecast 5, please contact the UK Distributor. Johnny Kipps of KBR Ltd 18, Bowling Green Road Castletown, Isle of Man, IM9 1EB Johnny@Forecast5.co.uk, or phone 07770 608 900 www.Forecast5.co.uk
www.charteredone.co.uk
ISSUE 28 Spring 2021
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LSCA Business
Liverpool Society of Chartered Accountants – Equality, Diversity & Inclusion Barbara Boyle, is our Society’s DIVERSITY CHAMPION, and here she expresses some of her aims and hopes to highlight the many opportunities we have as a Society to add to this hugely important agenda.
M
One of the key initiatives that Barbara is developing is a very good working relationship with our fellow professionals. Here she discusses recent progress: The Liverpool Law Society have their own Chair of ED&I in Nina Sahu, and a recent meeting between myself and Nina started to create some aims and ideas. 1 Aims: Develop collaboration across Liverpool Professional Services. What can we learn from each other? Establish best practice. 2 Background to Nina’s role Nina Sahu (Liverpool Law Society Chair of ED&I) The Liverpool Law Society ED&I committee was set up last year. Anyone who wanted to join it could do so, and different volunteers and members have different interests. 3 Activities and / or proposals undertaken by LLS that could be used by LSCA:
• Engage HR Directors: Create best practice policy for law recruitment, especially for larger law firms in Liverpool. - Use of “blind” CVs - Request recruiters to provide a diverse range of candidates • Invite our large firm to sponsor a range of event • An Equal Pay event would address multiple “characteristics” such as: race, gender, LGBT, disability • Hold an event for “Allyship” that addresses the protected characteristics. 4 General observations about Diversity We both agreed and noted a general lack of engagement from the wider Liverpool area when requesting people get in touch to progress diversity matters e.g. in reference to the New Gen Accountants network primarily based in London and the South East. Nina noted that it takes time to change culture. Also people may not want to stand out – e.g. they may not want to be known as “the Asian Accountant / Lawyer” or as the “gay Accountant / Lawyer”
5 Next steps and actions 5.1 Progress the idea of having a subcommittee on ED&I for Liverpool Accountancy firms. It could span a wider audience than LSCA committee and should involve representatives of larger firms in Liverpool. 5.2 Reach out to the larger Accountancy firms in Liverpool and see what they are doing on ED&I. 5.3 Reach out to other district societies – with large metropolitan areas such Manchester, Bristol, Leeds. Have a round table discussion and share ideas. (The last national ICAEW one attended by myself was in Feb 2019) 5.4 Identify sponsors for an event 5.5 We will also continue to develop these close links with the Liverpool Law Society and look to further engage with the other professional bodies in the city.
I would be really pleased to hear from anyone if they would like to become involved with these initiatives.
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LSCA Business
ICAEW North West Region What's on March/April 2021 DATE
EVENT
LINK
25 Mar
North West Practice Members’ Network
more info/book
Various
NED training and certification programme
more info/book
26 Mar
2020 bitesize Women in Leadership programme
more info/book
Various
IFRS refresher
more info/book
Various
North West Charity sector insight group
more info/book
8&9 Apr
Leading change in the finance function
more info/book
14 Apr
Southport Members' Forum
more info/book
14 Apr
CABA Personal Development Courses 2021
more info/book
14 Apr
CABA Digital downtime: striking the right balance
more info/book
15 Apr
North West Retired Members' Virtual Coffee Morning
more info/book
15 Apr
Roadmap to recovery: building our future economy
more info/book
16 Apr
Bring the numbers to life with commercial insight
more info/book
Various
Essentials CPD Virtual Programme 2021
more info/book
19 Apr
Essentials Virtual CPD 2021 Programme: Employment Taxes Update - Monday 19th April 2021
more info/book
21&22 Apr
Intermediate trend forecasting and analysis
more info/book
21 Apr
Career conversations
more info/book
22&23 Apr
Business acquisition and due diligence
more info/book
22 Apr
North West Tourism and hospitality insight group
more info/book
26 Apr
Technician to influencer
more info/book
27 Apr
Lean accounting - make your finance function more efficient
more info/book
27 Apr
Essentials Virtual CPD 2021 Programme: Budget 2021 Tuesday 27th April 2021
more info/book
27 Apr
Accessing grant funding hosted by ICAEW North West
more info/book
www.charteredone.co.uk
ISSUE 28 Spring 2021
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LSCA Business
A brave new virtual world for ACA's Carol McLachlan, one of our Past Presidents, and recent Chair of our LPD Committee offers her thoughts on some of the implications for our working life following the impact of Covid-19
T
hanks to my research interests over the years, I am often asked by the accountancy media to contribute articles, advice and soundbites. When I received this week’s journo request, it occurred to me that I could be sharing some of this (self-styled!) wisdom with our local members in Merseyside, North Wales and Chester. I’m currently researching a doctorate exploring how the boundaries of ACA careers are changing and I have also completed a research master’s on ACA CPD. If any of our readers would like to send in any questions, I will do my best to respond and it would be great to publish these (even if anonymously) in future editions of Chartered One. This month I was asked about the challenges of starting a different role or taking on new responsibilities during a pandemic when we are largely working from home. So here goes… Rather close to home, in March 2020 my own son started his post-university 20
career as a Town Planner and unsurprisingly his expected daily commute from Wirral to Chester has morphed into a takeover of our family dining room. Over the eight months of working, he’s probably spent about one week in the office and maybe a week out in the field. But he’s doing well; passing his six month probation, he’s fully immersed in his new professional team, despite the aftershock of joining the world of work, actively participating and initiating all sorts of virtual social activities. Full marks to Chester Council for supporting and making this work. For firms and businesses wondering how they can support new starters, recent promotees and anyone taking on new responsibilities, here are some tips: FOR THE BUSINESS All the best practice stuff about integration, induction and ongoing learning and development is as relevant as it was pre-Covid 19, but now, it’s needed in spades. Processes
and systems can be adapted for a virtual work environment but the potential for blindspots is massive. Despite daily supervisory check-ins by phone or video conferencing, there are still hours and hours when the individual is likely to be working alone. Contrast this with the physical environment where asking a question is as simple as turning to the incumbent of the adjacent desk, watching and copying cultural norms, as well as being spotted by other departmental members as in need to support. As an employer the first thing is to be aware of the potential for missed cues, and make checkins, formal and informal, much more frequent. In trying to replicate traditional best practice, remember that this is not the sole domain of a line manager, peers and team members all play a part in socialisation and the learning and development journey too. Enquiryled conversations, initiated by a diverse range of co-workers, with an emphasis on quantity as well as
"While you should be active in asking for help and advice, seeking out new resources and ways of working, be realistic about the pervading context, as we all navigate the choppy waters of unchartered territory."
quality, can make a big difference to assimilating to a new role. As individuals, we all have different learning styles and approaches and while ‘theorists’ and ‘reflectors’ may well find aspects of virtual working align with their needs, the ‘pragmatists’ and ‘activists’, who just want to get stuck in, are likely to find the remote world more challenging.
By far the over-riding message for the individual is to remember that this is a brave new world for all of us: colleagues, managers, clients and other stakeholders, we are all in highly uncharted waters."
This applies equally to the new starter, a promotee or, in fact, any employee taking on new tasks and activities during home working. Along with check-ins, which can support development as well as relationship building, on-camera working can also be a big help. Now, while this might sound to akin to organisational espionage, presented in the right way, it can be useful in replicating the social and cultural dynamic of the workplace. I probably wouldn’t mandate it, but offering it as an optional tool can be helpful in fostering team-work, as well as for ‘company-keeping’, pairing up online for parallel working with a virtual buddy. FOR THE EMPLOYEE By far the over-riding message for the individual is to remember that this is a brave new world for all of us: colleagues, managers, clients and other stakeholders, we are all in highly uncharted waters. In 2020 there really isn’t such a thing as a ‘stupid question’. We are all stupid, or at least novices in
this way of working. So ask, ask and ask again. Don’t make assumptions and risk getting too far down the line, riding the wrong track. Whether it’s how the tech(nology) works or getting to grips with a new tech(nical) concept, I am now witnessing much more tolerance, patience and humility throughout organisations than in the pre-pandemic milieu. And that of course is a two-way track, be prepared to work with your boss and organisation to help them help you. Speak up, make suggestions and be prepared to experiment with new ways of working. And be kind to yourself! You may well find it harder to make the progress than you might have expected in a traditional set up. You also need to invoke your own personal patience and tolerance. While you should be active in asking for help and advice, seeking out new resources and ways of working, be realistic about the pervading context, as we all navigate the choppy waters of unchartered territory. While many employers are currently hyper-vigilant regarding employee wellbeing, it is up to you to manage yourself, with or without, the support of the organisation. Whether that is setting and maintaining domestic-work boundaries, keeping connected (socially and professionally) or investing in your mental heath through talking channels or relaxation therapies, your employer can’t do it for you. Discover the tools and then, please use them! If you would like to ask Carol a question to be covered in a future edition of CharteredOne, please email her at Carol@2mac2.com or via her website www.theaccountantscoach.com
www.charteredone.co.uk
ISSUE 28 Spring 2021
21
LSCA Charity
DSG AND SPEEDO MICK - A GREAT EVERTON COMBINATION
Our Past President, Andrew Moss of DSG gives us an insight into the inspirational SpeedoMick Many of you will be familiar with SpeedoMick - a mad Evertonian, loved by football fans of all denominations, who goes to matches in his blue budgie smugglers with only a hat and scarf for additional warmth! All in the name of charity of course! In late 2019/early 2020 SpeedoMick (real name Michael Cullen) walked from John O’Groats all the way down to Lands’ End, in that same attire, in all weathers, raising a significant amount of money for charity, including a single cheque for £50,000 from one anonymous donor. He brought great joy to all who met him along the way and got a fantastic reception complete with marching 22
band when he eventually arrived at Lands’ End having covered almost 1,000 miles! He picked up a special award for his efforts from the Last Leg team on Channel 4 which was broadcast on New Year’s Eve. Over the course of lockdown, life has been tough for all of us including Mick, who has a history of mental health issues and alcoholism, both of which have been more prevalent in the news over the last 10 months or so. Loneliness and isolation have become words featuring in everyday conversations. Fortunately, Mick has been able to channel some of his energy into establishing the SpeedoMick Foundation as a registered charity with the help of Paul Bibby, former managing partner of MSB, Andy Bell, CEO of A J Bell, Adam Gough, Director of Natural Land, who helped Mick out on the walk, and Andrew Moss of DSG, Chartered Accountants, all of whom are trustees of the Foundation.
The Foundation will focus on helping organisations who look to help young and disadvantaged people with issues similar to those above which often lead to poverty.
LSCA Charity
Mick is planning his next big adventure to take place when lockdown restrictions ease and travelling around the UK is a bit more acceptable than it is now! Watch this space!
Michael has been through some tough times but turned his life around by focusing on his own fitness and helping others. He is a really positive force to be around and brings a lot of joy to a lot of people." - Andrew Moss Monies raised on the John O’Groats to Lands’ End walk have been lodged with the Foundation and will be used to provide grants to organisations to assist the provision of opportunities for young and or disadvantaged people to help remove themselves from poverty. Andrew, from DSG, and of course our Past President, was introduced to the charity by Paul Bibby and has met with Michael, aka Speedo, a number of times and commented: “it was great to meet the legend that is
SpeedoMick and the man behind him, Michael Cullen.
I look forward to helping Michael build what will be a fantastic charity which will help so many people less fortunate than ourselves. I might even do a bit of walking alongside Michael on the next trek, but I’m not wearing Speedos! - Andrew Moss
fortunate than ourselves. I might even do a bit of walking alongside Michael on the next trek, but I’m not wearing Speedos!” Any queries and your donations which will be very welcome to Andrew Moss at DSG Chartered Accountants. More information at www.theSpeedoMickfoundation.org
“Michael has been through some tough times but turned his life around by focusing on his own fitness and helping others. He is a really positive force to be around and brings a lot of joy to a lot of people. “We had a coffee on Castle Street and it was clear that he is a well-loved and recognisable figure, even fully dressed! It is great to be involved with the charity, looking after the finances (obviously!), with a strong blue contingent on board. “I look forward to helping Michael build what will be a fantastic charity which will help so many people less
www.charteredone.co.uk
ISSUE 28 Spring 2021
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LSCA Business
WITH ANDY BOUNDS IT'S TUESDAY EVERY DAY
COMMUNICATION TOP TIPS
– get a lot MORE done, in a lot LESS time
Andy is also a member of the Liverpool Society of Chartered Accountants, and he has kindly agreed to share with us some of his famous Tuesday Tips.
Communication Expert Andy Bounds helps companies communicate better and sell more. Awarded the title Britain’s Sales Trainer of the Year and Liverpool Business Personality of the Year, Andy has worked in 40+ countries, with some of the world’s largest and most famous companies.
These words of wisdom and practical insight come out, not very surprisingly around 08:45 each Tuesday morning, and every Chartered ONE will now contain some of the best from the previous month.
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LSCA Business
SO, TO START US OFF, HERE IS A BROADLY TOPICAL ONE FOR US ALL:
AND IF YOU LIKED THAT ONE – YOU WILL LOVE THIS:
I used to be a Chartered Accountant (I know – I’m surprised too).
Don’t watch the Star Wars films.
I then worked for a company that taught Accountants how to pass their professional exams. All exam questions had the same layout – loads of info, and the questions underneath. The best way to answer them was to go to the bottom to read the question, then go to the top and read the info – now knowing why you’re reading it. But students often forgot and started reading at the top. So one day, ten minutes before home time, I gave them a question I’d written. It was the longest one they’d seen – 12 pages. I told them they could leave as soon as they completed it. All of them looked at me with utter hatred. How could I set such a long, hard question so close to home time? Then one started laughing, walked to the front, handed in her answer sheet, and left. She’d realised my trick. She’d looked at the bottom of page 12 and saw “Question: write your name – 100 marks”. It’s the same with meetings. If you don’t know the Exam Question you’re hoping to answer, it’s just like 12 pages of info – all talk, but no point. And, as the old saying goes, if you don’t know where you’re going, you end up somewhere else. So next meeting… Action Point
Instead, just read the titles – they tell you what happens. (Brief background – goodies are Jedi, and baddies are Sith/the Empire) The titles are: 1. 2. 3. 4. 5. 6. 7. 8. 9.
The Phantom Menace Attack of the Clones Revenge of the Sith A New Hope The Empire Strikes Back Return of the Jedi The Force Awakens The Last Jedi The Rise of Skywalker
Which means, without watching the films, you know this is what happens: 1. 2. 3. 4. 5. 6. 7. 8. 9.
A baddie appears There’s a fight The baddies win The goodies have a new chance The baddies win again Now the goodies win Here we go again No we don’t Yes we do!
In fact, Star Wars is the perfect example of “the rule of titles”… Your titles should tell the story In other words, when you read just them, you understand the flow of your communication.
…read the Exam Question first. What’s the point of your meeting? Is it to make a decision? Agree an action? When you know this, you’ll get there much quicker.
You can use this rule with presentations, documents, anything with titles. Which means…
(Oh, and if you realise the only point of your meeting was to “update each other”, maybe cancel the meeting, and write a memo!)
… Next time your comms include titles, write all the titles first – before any content. Once you get the flow right, it’s easy and quick to build the content around that.
Action Point
You can email him on andy@andybounds.com and join his online sales training programme at www.andyboundsonline.com www.charteredone.co.uk
ISSUE 28 Spring 2021
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Member Profile Left to right: Tim Hill with Mark Carney
Tim Hill, one of the Society’s members has an interesting tale to tell and following our story on his TFG (The Financial Game) project in an earlier issue of Chartered ONE, he now presents an update. I was born 4 February 1949 in Smithdown Road, within a mile of the Women’s Hospital where three of my grandsons were born some 60 years later. Liverpool has been good to me and I qualified as a Chartered Accountant in 1974 with PMM / KPMG and soon headed for South America before landing up as financial controller of Club Caribbean, Runaway Bay, Jamaica, the best address I’ve ever had. Two of my children attended Liverpool University, and my eldest daughter is a consultant in the Royal and my son was striker for the first team. I’ve had clients in Liverpool and been able to maintain excellent friendships in this great city. The pandemic caused concerns for all of us, and mine were added to by writing this book, which provided a welcome distraction during 10 chemo sessions from March to October last year and now monthly Radium 26
223 gives me a warm glow – thank goodness for the NHS our National Treasure. This is the URL for the second edition which is also available on Kindle: https://www.amazon.co.uk/Lucky-Bastard-TimothyOliver/dp/1913662543/ref=sr_1_fkmr0_1?crid=1JAP1 HCU4HSV3&dchild=1&keywords=lucky+bastard+timo thy+oliver&qid=1614066705&s=books&sprefix=luck y+bastard%2Ckitchen%2C158&sr=1-1-fkmr0 My favourite endorsement says:
“In this witty and heartfelt memoir, Tim celebrates all of life’s joys and trials: family, friendships, love, travel, politics, education, adoption, social perceptions, rejection, resilience, opportunity, inclusivity, positivity, and freedom.”
LSCA Business
These pictures will give you a small tempting sample of some of my stories. Chartered Accountants have colourful lives.
Peru
Bongo Shorty
Guatemala
I have also been working on The Financial Game (TFG), which has been well received in schools leading to an almost unique partnership with Rotary and the Welsh Government said it could have been written specifically for New Curriculum Wales. The app was acclaimed by learners in Coleg Cambria who said this interactive way of learning is easily accessible and it was fundamental in helping Michelle obtain Level 4 AAT in one year. I taught on the MBA course at Glyndwr University and in playing the original Lego version of TFG gave the students a totally new way of looking at accounts the majority of whom had a first degree in Accountancy. Following this success I was asked to teach HNC to mature students and present to Galileo Galilei, Italian students visiting local companies and Higher Education Colleges. Universities have said it would be invaluable to strengthen their Employability Audit which is often weak in the area
Tikal
Coleg Cambria
Michelle
Tim Hill
of finance. TFG was the winner of The Federation of Small Businesses all Wales Business and Productivity Award. It is available on Microsoft Windows 10 who invested both consultancy and $s to make this possible. Due to recent illness I am no longer available to front the marketing of The Financial Game and I’m looking to hand over to a university, organisation or someone who is keen to help make this fly. If there is someone out there to help, please let me know, and I will be happy to continue to be involved. Please do get in touch to discuss further.
www.financial-game.com Please contact Tim on email tim@thconsulting.co.uk for further information.
www.charteredone.co.uk
ISSUE 28 Spring 2021
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LSCA Business
Events & Activities Many thanks to those of you who were able to join us today to hear from David Green of BAE Systems – a fascinating insight into how David, the Finance function and the global giant have adapted during the pandemic. The interview was recorded and can be viewed here. The full series of Pandemic Perspectives interviews can be seen here. For those of you who were able to join us, we would be grateful if you could let us have your feedback and suggestions for further topics using this link https://app. keysurvey.co.uk/f/41553706/b8a6/ There are many events coming up over the next few weeks – below is a selection and you can view all events here. DATE
EVENT
LINK
25 Mar
North West Practice Members’ Network
more info/book
14 Apr
Digital Downtime
more info/book
15 Apr
2021 Roadmap
more info/book
21 Apr
Career Conversations
more info/book
22 Apr
‘No jab, no job?’ – Covid-19 Update
more info/book
27 Apr
Accessing Grant Funding
more info/book
28 Apr
Big Data, Corporate Advisory And Business Investment
more info/book
Various
Essentials (including tax, audit, financial reporting, soft skills)
more info/book
All of these events and more can be found at www.icaew.com/events ICAEW member colleagues and contacts.
Essentials CPD The 2021 programme will be launched shortly and we would appreciate your support in sharing this with your colleagues. https://events.icaew.com/pd/19212/ essentials-virtual-cpd-2021-programme?sourc e=search&txt=brexit&rid=232
28
Member insight Please share your member insight with the local regional team, your views are important and will be fed back through the ICAEW network.
LSCA Business
Latest ICAEW news
Information hubs
New consultations: Government launches three new consultations about filings at Companies House
BREXIT–the latest resources and advice for ICAEW members and their clients. The transition period ended on 31 December 2020 and a UK-EU trade deal has been agreed. There are new rules, effective 1 January 2021. Find a range of resources to help you navigate this new chapter. Could I particularly highlight the impact on Audit - https://www.icaew.com/regulation/workingin-the-regulated-area-of-audit/the-impact-on-brexit-on-auditrights-in-the-uk-and-ireland
https://www.icaew.com/library/subject-gateways/law/ legal-alert/2021-01/new-consultations-governmentlaunches-three-new-consultations New law: Government extends temporary relaxations that allow limited company shareholder 'meetings' to take place virtually https://www.icaew.com/library/subject-gateways/law/ legal-alert/2021-01/new-law-government-extendstemporary-relaxations New consultation: Government proposes changes to the law on non-compete clauses in contracts of employment
Business advice service (BAS) - Please do help us by promoting BAS to your contacts in business by explaining what the service is all about and pointing them to our new webpage. A further promotional push with LEPs, growth hubs, chambers and so on is in planning, and further press releases are also planned across the UK to raise awareness of this important service to local businesses.
https://www.icaew.com/library/subject-gateways/law/ legal-alert/2021-01/new-consultation-governmentproposes-changes-to-the-law-on-non-compete-clauses
Latest ICAEW updates within the Coronavirus Hub - A reminder of the main Coronavirus Hub web link, including the Help for business section and a growing collection of sector-specific content relating to coronavirus. Just one of the recent areas of support is the Redundancy hub for employees and organisations.
New law: Government plans to make 'economic abuse' a domestic abuse crime
Latest ICAEW updates within the COVID-19: global recovery Hub - Global recovery news and insights and accountancy's role in global recovery.
https://www.icaew.com/library/subject-gateways/law/ legal-alert/2021-01/new-law-government-plans-tomake-economic-abuse New law: COVID-related legal protections, for commercial tenants in arrears of rent in England, extended to 31 March 2021 https://www.icaew.com/library/subject-gateways/law/ legal-alert/2021-01/new-law-covid-related-legalprotections-for-commercial-tenants-in-arrears New law: Living Wage and National Minimum Wage rates confirmed for April 2021 https://www.icaew.com/library/subject-gateways/ law/legal-alert/2021-01/new-law-living-wage-andnational-minimum-wage-rates-confirmed
Alex Pilkington Regional Executive, Liverpool
ICAEW helplines and support - Details of which telephone helplines are available, and alternative live web chat facilities, can be found here. An advisor will be able to take your query and resolve it or connect you with the relevant teams. CABA courses - Learn how to support your physical and mental wellbeing and build your resilience in these challenging times. Upcoming live webinars, on-demand webinars and online courses enable you to achieve your goals, wherever you are in the world. Communities – many of which are available at no cost to join As always, please do get in touch with me, if you have any questions or comments. Kind regards, Alex.
T: +44 (0)192 559 4284 M: +44 (0)7876 035 943 E: Alex.Pilkington@icaew.com
ICAEW Jackson House, Meadowcroft Business Park, Pope Lane, Whitestake, Preston, PR2 2YB, United Kingdom icaew.com
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ICAEW Technical Strategy Department Technical Report A. HIGHLIGHTS AND PRIORITIES With 2020/21 the most challenging reporting season many members will have experienced, we have produced a framework to help think through the issues. Our new campaign highlights business risks and aims to help company boards assess the impact of COVID-19 on business strategy. Faculty resources explore the accounting and audit consequences.
The National Security & Investment Bill, currently making its way through Parliament, is a step-change in merger control regulation in the United Kingdom. The Corporate Finance Faculty has been actively engaged with politicians and policymakers since these changes were first mooted in 2017 and has been working with government to help ensure the regime is proportionate and operates smoothly.
The Business and Management Faculty and Business Law team have launched a modern slavery hub. It provides guidance to members on how to comply with the Modern Slavery Act, how to spot the signs of slavery and how to report it. The hub will be updated over the coming months with sector specific guidance and additional support for members in practice icaew.com/modernslavery.
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1. STRENGTHEN TRUST IN ICAEW CHARTERED ACCOUNTANTS AND THE WIDER PROFESSION elping members with a challenging 2020/21 H reporting season (help!) 1. Unprecedented levels of government support and other interventions continue to keep business failures at low levels. Nevertheless, we expect significant scrutiny of 2020/21 reports from investors seeking to understand increased leverage and future prospects. We have been highlighting issues and sharing insights to help members address these risks. Since the launch of our first campaign on the 2020/21 reporting season, the Financial Reporting and Audit & Assurance Faculties have supported publication of 28 articles in the ICAEW Daily newsletter. Recent topics include goodwill impairment and narrative reporting. The Business & Management Faculty continued this work in February/ March with a social media campaign aimed at business leaders. Based on six key questions for 2020 reporting, this new resource examines the impact of COVID-19 on business strategy. 2. In depth Know-How from the Financial Reporting faculty explores accounting consequences of COVID-19 in Planning for the 2020/21 reporting season. Primarily aimed at preparers of larger private and smaller listed company accounts, these resources are complemented by a new Audit and Assurance Faculty guide on Auditing government support schemes. Staff from the Audit & Assurance Faculty and Financial Services Faculty have continued to engage with credit reference agencies and other stakeholders to ensure that referencing appropriately takes account of audit reports and company filing deadlines and does not unnecessarily constrain the supply of credit to SMEs or impact the ability of the businesses to contract with one another. This included meeting with the Financial Conduct Authority, Bank of England and Financial Reporting Council. We have facilitated a roundtable discussion with the reference agencies, regulators, and government to be chaired by David Rule, FRC, in March.
Helping members address heightened economic crime risk (help!) 3. To help address heightened fraud risks in the current environment, we’ve released new resources to help build awareness of the risks and danger signs to watch out for.
While financial pressures on businesses have increased incentives for fraud, government stimulus funds have given new opportunities for criminal exploitation. 4. The fourth instalment in our joint series AML the basics was published on 25 January and the fifth instalment on 22 February. Money laundering often involves international cash flows and we collaborated with the International Federation of Accountants to give this global reach. The fourth instalment looks at asset transfers, one of the primary ways in which criminals layer or integrate the proceeds of crime into the legitimate economy. The fifth instalment explains how tax work can be vulnerable to abuse by criminals, and details the red flags to look out for. We’re also producing more interactive resources for members on risk assessment. How to use open-source research to find out more about your clients was published on 26 January. 5. The theme for March’s Insights newsletters will be fraud and economic crime.
ICAEW’s blueprint for audit reform 6. While we await publication of BEIS’ white paper on corporate governance and audit reform we have continued to take forward actions ourselves to help member firms enhance audit quality and develop audit services to better deliver what stakeholders are asking for. ICAEW’s manifesto for audit was the theme for our member Insights newsletters in January. They explore key themes from the manifesto and how members are evolving audit services. 7. We have created a new online resource on audit reform with information on the reviews and our activities. 8. Since the launch of Sir Donald Brydon’s review into the quality and effectiveness of audit, ICAEW has been leading thinking by exploring some of the key themes in corporate governance and audit reform. Our thinking on how companies might strengthen internal controls over financial reporting should position us well to respond to proposals we are anticipating in this area in the forthcoming BEIS white paper. 9. In January and February we have been developing a paper to take forward Brydon’s recommendation that companies publish an audit and assurance policy. We have issued an article summarizing the findings of our
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report and expressing strong support for an Audit and Assurance Policy as a means of engaging shareholders. The full report will be published in March and a related webinar held on 14 April. 10. We also continue to call for action to help reduce the pressure on smaller audits by expediting the development of a proportionate auditing standard for less complex entities. Following our open letter from Michael Izza to the IAASB calling for action, we met senior IAASB representatives to offer advice and assistance.
2. HELP TO ACHIEVE THE SUSTAINABLE DEVELOPMENT GOALS
Positioning ICAEW Chartered Accountants with key audiences in governments 13. We have three members in key government positions for COP26. Alok Sharma is the President of COP26; Andrew Griffiths is the UK’s Net Zero Business Champion; and Anne-Marie Trevelyan, the UK International Champion on Adaptation and Resilience for the COP26 Presidency. We have reached out to all three. Michael Izza and Richard Spencer have met with Anne-Marie Trevelyan and she is speaking at a FinBiz2030 (the finance and business grouping of One Young World alumni) in April. We have also met with Nigel Topping, UK High Level Climate Action Champion for COP26.
3. SUPPORT THE TRANSFORMATION OF TRADE AND ECONOMY
11. This year’s Climate Change meeting of governments at COP26 in Glasgow promises to be hugely significant to the profession as we are increasingly asked to step up to help measure progress. As one of his first acts President Biden has taken the USA back into the Paris Agreement. John Kerry, recently appointed as the US climate envoy, has said of the Glasgow meeting that it is “last best chance” to avert climate catastrophe. This will be very significant globally, and to the UK as it seeks a closer trading relationship with the US. We are engaging with the UK-US trade negotiations and sustainability will be a key chapter in that. 12. We have been preparing for ICAEW’s activities in the run up to and around the COP. Last year we held events at London Climate Action Week in July and November. This year we have a full programme of events. These include a regular drumbeat of articles for ICAEW’s newsletter, workshops based on the WWF film Our Planet: Too Big To Fail, we are planning events with the Public Sector team and with BAM’s Internal Audit, we are regularly hosting events for the UK Regional Teams and are in discussions with our international colleagues (in SE Asia and Europe) about supportive events they would like to run. There will again be a London Climate Action Week in June/July. Our big event is to host a 10-day Climate Summit for members. There will be pre-recorded events as well as live and we will run 2-3 each day. We are also looking at the feasibility of running a daily ‘today at COP’ series during COP26.
rucial 2021 budget sets the direction for future C tax policy
Preparing for COP26
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14. As the UK moves out of the COVID-19 crisis we now need to reignite the economy and start to work out how we pay down some of the debt we have incurred in supporting businesses through it. The Chancellor’s 2021 Budget on 3 March is likely to be the start of major changes to the UK tax system. In advance of the budget we published research based on a survey of member views and have written to the Financial Secretary to the Treasury and the Chancellor. But quite what the Chancellor will say we will only find out on 3 March. The Tax Faculty is hosting a Budget webinar special on Friday 5 March to explore the announcements in detail.
Making Tax Digital prepares for further expansion 15. The start of Making Tax Digital for corporation tax may not be until April 2026, but the Tax Faculty has been urging action now that the consultation period is under way. We now have three taxes running along the Making Tax Digital (MTD) development track in tandem: VAT, income tax for self-assessment (ITSA), and corporation tax (CT). 16. The Tax Faculty has had two meetings to give direct feedback to HMRC on the MTD for CT consultation and a draft response has been prepared for submission by
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5 March 2020. We have raised concerns, in particular, about the need for quarterly reporting. The Tax Faculty has also been exploring whether some of the reporting burdens could be eased if the tax year end is changed. Anita Monteith wrote an article for the FT explaining the history behind why the UK tax year ends on 5 April and why it should be changed. 17. The Tax Faculty’s MTD for ITSA working group met to discuss progress with the pilot. There was also discussion on how practices of different sizes choose software, what steps might be needed to upload clients to the platform, and what might be the minimum requirements for the quarterly submissions. The group had particular concerns around the road map which appears to leave insufficient time for enough taxpayers to be put through a complete end to end trial. 18. The faculty has ongoing engagement on the MTD for ITSA regulations, expected to be laid before parliament in the spring. We continue to press HMRC about why quarterly reporting is needed and encourage this requirement to be scoped out of initial MTD requirements. 19. More than 300 participants joined KPMG’s former Global Head of Tax, Jane McCormick on Tuesday 2 February for the Tax Faculty’s Hardman Lecture 2021: Making Tax Digital - what does it mean for tax professionals. Governments, taxpayers and agents around the world are grappling with how digital technologies will transform tax systems, and in this headlong rush to digitalise, Jane examined the key issues and what we can learn from emerging best practices.
Employment status remains a key issue in tax policy (help!) 20. The Faculty has published detailed guidance to support medium and large businesses in the private sector who will be impacted by the forthcoming ‘IR35’ changes to off-payroll working. The guide is aimed at engagers who will need to determine the tax status of contractors and, where necessary, treat these contractors as ‘deemed employees’ for tax purposes which impacts the finance and payroll process.
roviding support on Brexit tax and regulation P issues (help!) 21. The Tax Faculty guides to VAT and rules of origin continue to receive high traffic as people seek guidance on the technical implications of Brexit. We selected these two topics as areas particularly relevant to our members and where people will need to build knowledge fast. 22. We have also produced a Financial Reporting Faculty guide Brexit - reflections on implications for financial reporting which sets out key considerations for 2020 year-ends and beyond. The guide is part of a programme of guidance on the reporting implications of Brexit, and also includes two new webpages, on the IFRS endorsement process in the UK and on the UKEB. 23. We met the Technical Director and staff from UK Endorsement Board (UKEB), an important new feature of the UK financial reporting landscape, to consider the future endorsement process, transparency/due process, plans for UKEB/ICAEW engagement, and future UKEB influencing activities. The latest edition of the Financial Reporting Faculty’s magazine By All Accounts featured an exclusive interview with Pauline Wallace, Endorsement Board Chair. 24. We published an updated Audit and Assurance Faculty guide on Brexit-related risk factors.
4. MASTER TECHNOLOGY AND DATA
I mprove visibility of the professional implications of technology 25. The Tech Faculty will continue to promote and expand on our 2020 work on practice automation with ICAI and on technology risk, with ongoing discussion of these topics and their implications for the profession through blogs and webinars. 26. The Tech Faculty also plans to develop new thought leadership work – on the future of climate and technology and a third edition of ‘Digitalisation of Tax: International Perspectives’ focused on the latest developments and pandemic response. These are targeted for Q2 2021.
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27. The Excel Community will build on its offering by releasing a tool for accountants to measure their abilities against our Spreadsheet Competency Framework, and develop new guidance.
and staff time to this activity is greatly appreciated, particularly when that time has been at a premium due to Coronavirus and related disruptions. In total, there have been some 420 applications and 72 interviews.
28. The Tech Faculty is supporting a new Cyber Awareness campaign from the National Cyber Security Centre, which launched on 26 February. Kirstin Gillon attended a roundtable discussion with Matt Warman MP, Minister for Digital Infrastructure, and NCSC staff, to support the campaign. An article from NCSC was published in the Daily newsletter and social media activity is planned through March. The campaign targets micro businesses and sole traders and focuses on six basic but important steps they should take to improve their cyber security.
B: OTHER DEVELOPMENTS ACCOUNTABILITY GROUP Audit and assurance faculty
5. STRENGTHEN THE PROFESSION BY ATTRACTING TALENT AND BUILDING DIVERSITY
33. Responded to consultations from the FRC on ISA (UK) 240 and from the IAASB on fraud and going concern. These key consultations evaluate potential approaches to tackle recent well documented shortcomings of audit in relation to fraud and consider how audit work might be recalibrated in this area. ICAEW’s response involved extensive consultation with members and careful assessment of the potential effectiveness of the measures proposed by the IAASB.
Diversity and inclusion on ICAEW Committees 29. The annual committee review has seen a step change in approach to ensure we are living our values around member engagement, commitment to the public interest, and diversity and inclusion and recognising the vital role that Technical Strategy boards and committees play in the quality of ICAEW’s work. 30. The contributions of individual committee and staff members through their networks has been supplemented and supported by a co-ordinated campaign. This has included paid-for advertisements on Facebook and LinkedIn and posts on all ICAEW social media accounts and the ICAEW homepage. We have also used the reach provided by the ICAEW daily and monthly newsletters and faculty ebulletins, ICAEW Council members, APA newsletters, links on the ICAEW Volunteer page, regional promotions, ICAEW community circulars and ICAEW jobs. 31. The step change in promotional activity has led to unprecedented levels of interest and applications with a consequential increase in shortlisting and interview activity. The commitment of board and committee chair
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32. Nigel Sleigh-Johnson chaired a meeting on 22 February with representatives from 10 institutes across the world from the Global Accounting Alliance. We discussed how reporters and auditors had been affected by the pandemic in each member’s jurisdiction and shared views on challenges of the 2020/21 reporting season.
34. Responded to the FRC’s consultation on ISRE (UK) 2410 on review engagements. 35. Hosted a 2021 Training, Software and Methodology Providers’ Meeting on 12 February, including sessions on upcoming UK ISAs, and monitoring deep dives by ICAEW’s QAD, the FRC and ACCA on going concern, asset valuations, scalability, professional scepticism and challenge of management.
Corporate Governance
36. ICAEW has welcomed a proposal for new EU law which obliges company directors to have due regard for stakeholders’ interests, and which requires companies to conduct due diligence on their supply chains.
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Financial reporting faculty
38. Updated UK Regulation for Company Accounts factsheet, with the focus specifically on accounting periods beginning before 1 January 2021.
44. Kirstin Gillon, Tech Faculty and Rick Payne, Business and Management Faculty, worked with Vanessa Heywood to deliver a webinar for Saudi Aramco on finance transformation. The webinar drew on a wide range of our thought leadership work and covered finance function development, data and technology and the implications for people. The webinar attracted over 100 attendees, was very well received and will help to develop the relationship with Saudi Aramco. It is hoped that Saudi Aramco will begin training ACAs and put people through the Data Analytics Certificate
39. Published recordings from the 2020 Information for Better Markets Conference which explored the theme The Financial reporting system: seeing the bigger picture. Recordings from this thought leadership event can be found here.
45. We published two detailed guides to support finance professionals in business and they continue to adjust forecasts and plans in line with the latest lockdown guidance - A guide to scenario planning and How to improve your forecasting skills.
40. Published two new guides on the accounting implications of contract modifications under IFRS 9 and IFRS 15. COVID-19 checklists for FRS 102 and FRS 105 preparers have also been updated.
Corporate Finance Faculty
37. Following submission of our letter in December 2020 to the IFRS Foundation consultation on sustainability reporting, our response has been shared with other interested stakeholders, including BEIS. Lord Callanan, Minister for Climate Change and Corporate Responsibility.
41. Raised, and continue to raise, awareness of consultations relating to reform at Companies House. Articles were arranged for the Daily newsletter and a new webpage was published, to set out developments in this key project and ICAEW’s response to BEIS.
BUSINESS GROUP Business and management faculty
42. The Internal Audit Panel published two reports on operational resilience. 43. The Faculty has held a number of webinars this year including “Interview techniques for the Zoom age” and “Are your procurement activities really adding value in 2021” both of which scored excellent feedback from attendees.
46. The February edition of Corporate Financier led with a cover story International Insecurity – a review of the impact on M&A of geopolitics and the UK’s new law to screen deals. The magazine also updated members on meetings held by David Petrie with Nadhim Zahawi MP and Lord Grimstone on the National Security and Investment Bill. On page 7 of Corporate Financier, Technical Strategy Board member, Jon Moulton, explains why he’s “Not a fan of the ESG club”. 47. The Corporate Finance Faculty convened two meetings with market participants as part of its work leading ICAEW’s input to the Call for evidence – Review of UK Listings currently being led by Lord Hill. Working closely with Chris Locke at EY the two sessions comprised one involving expert representatives from Capital Markets teams in ICAEW member firms and the second included senior principals, advisors and investors. 48. In collaboration with Oxford University Press, the
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Corporate Finance Faculty launched a new revised edition of Private Equity Demystified, by John Gilligan and Mike Wright. The Faculty has negotiated a licence to enable its members to gain access to an electronic version of the 400-page textbook. John Gilligan and David Petrie also joined a podcast organised by leading private equity commentators Fund Shack to discuss the book and its key findings.
Financial services faculty 49. The Faculty hosted a webinar conversation COVID-19: A scientific perspective - looking to the future with Professor Peter Piot of the London School of Hygiene & Tropical Medicine, Special Advisor on COVID-19 Research & Innovation and Hitesh Patel, Chair of the Financial Services Faculty Insurance Committee, moderated by Zsuzsanna Schiff. Over 900 people registered and there were over 70 questions asked of the Professor. The Faculty will look to continue this collaboration with LSHTM given the clear demand for, and appreciation of, such expertise. 50. A further meeting with Sam Woods, CEO of the Prudential Regulation Authority was held in February. As well as representation of UK firms, US audit partners were also in attendance for a discussion on the different outcomes from the FASB’s CECL standard and the IASB’s IFRS 9 standard in relation to the 2020 year-end. 51. The Faculty is working with UK Finance, The Association of Corporate Treasurers and others to create LIBOR transition resources for smaller businesses in advance of the cessation of LIBOR at the end of this year. 52. Sir Dave Ramsden, Deputy Governor of the Bank of England gave his first speech on bank resolution, hosted by the Financial Services Faculty.
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Tech faculty
53. The faculty held meetings with a wide variety of external stakeholders to share expertise, member experience and develop relationships. These included discussing crypto with the IMF, data with the Open Data Institute and cyber security surveys with the Department of Culture, Media and Sport and Ipsos Mori. 54. David Lyford-Smith represented ICAEW at meetings of the FRC’s XBRL Governance Committee and Accountancy Europe’s Tech Net. Kirstin Gillon represented ICAEW at meetings of the IFAC Technology Advisory Group and the Innovate UK Next Generation Services Advisory Group. Kirstin Gillon also participated in an IFAC event on Ethical Leadership in an Era of Complexity and Digital Change, along with other ICAEW colleagues.
TAX, LAW AND ETHICS GROUP Tax faculty 55. COVID-19 and the self-assessment filing deadline: HMRC’s announcement of a waiver of late filing penalties for self-assessment returns filed by 28 February 2021 was followed by an announcement on 18 February 2021 of an easement on late payment penalties. The faculty engaged with HMRC on these easements and published information for members. 56. Helping members with COVID-19 support schemes: The faculty engaged with HMRC on CJRS issues, particularly those associated with the publication of details of claimants. Engagement on SEISS was limited in advance of the Budget announcement on the fourth grant. 57. Engagement with Ministers and parliament: Frank Haskew and Anita Monteith met with the Financial Secretary to the Treasury Jesse Norman to discuss the ICAEW Tax Faculty pre-Budget submission and also a separate submission on Making Tax Digital for Income
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Tax Self-Assessment (MTD for ITSA). Anita Monteith was quoted in the Treasury Committee’s report Tax after coronavirus which was published on 1 March 2020. 58. Raising standards - professional conduct and PI: On 18 February Frank Haskew and colleagues from ICAEW’s PI team met with HMRC to discuss ICAEW’s rules and experiences of how the PI market operates for chartered accountants and its role in supporting standards and upholding the public interest. This will help inform the forthcoming publication of a consultation document on compulsory PI for the providers of tax services, as set out by HMRC on 13 November 2020. 59. Engagement with HMRC and OTS: Caroline Miskin, Anita Monteith and Richard Jones attended a meeting with a new HMRC team working on implementing the proposed new regime for late submission and payment penalties. The proposals, including draft legislation, were consulted on in 2016-18 – see a summary of responses published in 2017 here. Updated legislation is expected in Finance Bill 2021 or 2022. 60. Frank Haskew, Anita Monteith and Caroline Miskin attended a meeting with HMRC Tax Administration Review Framework (TAFR) team; a call for evidence is expected to be published on tax consultation day, 23 March 2021. 61. Regular engagement forums have included Representative Bodies Steering Group on 10 February, Charter Stakeholder Group on 11 February, Virtual Communications Group on 15 February, IR35 Forum on 19 February and Trusts and Estate Agent Advisory Group on 24 February. A special meeting of IR35 Forum to discuss tax/NIC offsets was held on 16 February. 62. Caroline Miskin, Anita Monteith and Richard Jones along with members across various of the Tax Faculty’s technical subcommittees met with the OTS to provide
feedback on its call for evidence on third party data recording in personal tax accounts and income tax returns. 63. New DAC 6 resources: The DAC6 hub on ICAEW’s website has been refreshed and updated to reflect the position regarding reporting to HMRC post-the UK’s withdrawal from the EU.
Business law 64. Data Protection and Brexit – new guidance published on data transfers once the transition period ended (January 2021) and then updated when draft adequacy decision published (Feb). Further guidance will be issued when and if the adequacy decision is approved or rejected by EDPB (due by end June 21) 65. Consulting and preparing draft responses for member comment on the BEIS companies house consultations (with Financial reporting faculty). 66. Published (and publicised through Insights) new ‘essentials’ guide on paying dividends.
Ethics and Economic Crime 67. Presented to the London Society of Chartered Accountants about members’ ethical obligations in relation to misuse of government support schemes. This gave an overview of the types of fraud most commonly seen on the Bounce Back Loan Scheme, the Coronavirus Job Retention Scheme and the Self Employed Income Support Scheme. 68. A number of meetings were attended with the Home Office about a potential Fraud Charter for the accountancy sector. The detail of this is still under development and is due to be shared more widely later in the year.
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ICAEW know how Technical Report PUBLICATIONS ISSUED DATE
TITLE
AREA
TYPE
13/01/21
Movement of goods - introduction to the UK-EU TCA
Tx F
Guide
14/01/21
Rules of Origin
Tx F
Online resource
20/01/21
The Modern Slavery Act 2015: An introduction for accountants
BL
Guide
20/01/21
The Modern Slavery Act : Section 54 transparency in supply chians statements
BL
Guide
21/01/21
Fraud and COVID-19 government support guide for auditors
AAF
Guide
21/01/21
The Modern Slavery Act: Actions for internal audit
BMF
Guide
21/01/21
How to spot victims of modern slavery
Multiple areas
HTML & PDF Guide
21/01/21
How to report modern slavery and human trafficking
BL
HTML & PDF Guide
22/01/21
Paying Dividends: The essentials
BL
Guide
25/01/21
AML: The Basics: Asset transfers
BL
Factsheet
29/01/21
Modern Slavery Statements; good and bad practice
Multiple areas
HTML & PDF Guide
31/01/21
LLP SORP 2020 annual review
FRF
Guide
05/02/21
UK endorsement of IFRS
FRF
Online resource
05/02/21
UK Endorsement Board
FRF
Online resource
08/02/21
Update to Brexit & Risk guide
AAF
Online resource
08/02/21
How to spot victims of modern slavery
BL
HTML & PDF Guide
09/02/21
Coronavirus: (Update) BBLS
CFF
Online resource
11/02/21
Contract modifications under IFRS 15 revenue from contracts with customers
FRF
Guide
22/02/21
Contract modifications under IFRS 9 Financial Instruments
FRF
Guide
25/02/21
AML: The Basics: Tax services
BL
Factsheet
26/02/21
2020 reporting year-ends: questions for the Board
BMF
Guide
28/02/21
Using open innovation
BMF
Guide
28/02/21
ESG in investment and transaction decisions
CFF
Guide
28/02/21
Red Flags : Signs of modern slavery
BL
HTML & PDF Guide
28/02/21
The Modern Slavery Act: section 54 transparency in supply chains statement checklist
BL
HTML & PDF Guide
28/02/21
Modern Slavery around the world
BL
HTML & PDF Guide
28/02/21
Modern Slavery Statements: Good and Bad Practice
BL
Guide
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EVENTS HELD DATE
TITLE
AREA
TYPE
11/01/21
Maintaining wellbeing during audit busy season
AAF
Webinar
13/01/21
MTD for corporation tax consultation
Tx F
Webinar
19/01/21
DAC6 affects SMEs too
Tx F
Webinar
21/01/21
What UK businesses and their boards need to know about the 6th carbon budget
Sus
Webinar
26/01/21
Bitesize Briefing: Amendments to UK GAAP for COVID-19-related rent concessions
FRF
On-Demand Recording
26/01/21
Review of UK Listings: Roundtable for Lord Hill with reporting accountants
CFF
Roundtable
27/01/21
Excel Tip of the Week Live - your questions answered (part 3)
TeF
Webinar
28/01/21
2020/21 Reporting: Going concern and impairment
FRF
Webinar
31/01/21
Modern Slavery - how to spot it
BL
Webinar
02/02/21
Hardman: Making tax digital - what does it mean for tax professionals
Tx F
Virtual event
02/02/21
Review of UK Listings: Roundtable for Lord Hill with lead advisers and principals
CFF
Roundtable
03/02/21
VAT reverse charge in the construction industry
TxFy
Webinar
04/02/21
Brexit and audit
AAF
Webinar
04/02/21
UK M&A in a Post-Covid World
CFF
Webinar
10/02/21
Interview techniques for the Zoom age
BMF
Webinar
11/02/21
MTD for income tax self-assessment
TxF
Webinar
11/02/21
COVID-19: A scientific perspective - looking to the future
FSF
Webinar
12/02/21
The Modern slavery Act 2015: An Introduction
BL
Webinar
12/02/21
The Modern Slavery Act: section 54 Transparency in Supply Chain Statements
BL
Webinar
15/02/21
IR35 and employment status
TxF
Webinar
22/02/21
Going concern and impairment - your questions answered (Bitesize briefing)
FRF
Webinar
23/02/21
Getting research & development claims right
TxF
Webinar
23/02/21
Getting more value from your procurement activities
BMF
Webinar
26/02/21
Improving use of charts in Excel
TeF
Webinar
26/02/21
Speech by Bank of England Deputy Governor Sir Dave Ramsden on bank resolution in conjunction with ICAEW
FSF
Webinar
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Professional Services | Financial
When should a business speak to an insolvency practitioner? A question that is on any businesses owners’ mind when facing financial and operational challenges that threaten the continuity of the business. Many assume that an insolvency practitioner should be contacted at the point the company becomes insolvent, but this is not what we would recommend – it is far more beneficial for an IP to be contacted much earlier.
T
ypically, we have two scenarios when we are contacted. Either the business is having problems and the management are aware of the cause OR, the business is having problems and the management are at a loss of the clear route cause; which is more often the case. Common problems we regularly see are: 1) Battling overdraft facility 2) Arrears in HMRC payments 3) S upplier issues affecting delivery of own products/services 4) Staffing issues e.g. can’t find staff or can’t hold onto staff 5) Balance sheet and/or turnover reduction 6) Client erosion All too often, multiple indicators are showing themselves and with the overwhelming pressures, the management are in the thick of trying to resolve the problems, convinced they can fix them
without external help, often patching up issues rather than implementing longerterm fixes. Current Challenge An insolvency outlook report by Atradius(1) forecasts business failure rates will increase by 10% this year in Britain. External influences and economic change can often be the final blow for a business that has already been struggling. There are many businesses across the UK which have been ‘surviving’ rather than thriving and one small change such as an increase in interest rates can send them over the edge. In light of growing challenges, it is important that companies act with speed if the owners/Directors identify problems in the business; before the challenges become too big. Often, when we are engaged earlier, there are likely to be more options to rescue a
business rather than implement an insolvency process. We want to be working with Stephen Berry, businesses Partner at Opus as early as possible so that we can help them with solutions to recover their business rather than taking them down the insolvency route. This is where we can best support the management team. As well as recommending and implementing known and tried methods to help the business, we have a number of contacts who can help the struggling business if a new viable plan can be identified. For more information about our services, please call us on 0151 705 9115, email liverpool@opusllp.com or visit the website www.opusllp.com.
1. https://www.cityam.com/global-insolvency-rates-tipped-to-reach-10-per-cent-in-the-uk/
RESTRUCTURING & INSOLVENCY
Taking the Stress out of Distress At the point a business is in distress, the business owners and/or Directors need support from people they can trust, that are visible and readily contactable. For your clients, we know that means not only having people who understand the nature of their work, but also the local business market. Opus is a business advisory, restructuring, insolvency and exit management practice. The Partners are focused on commercially driven results and take a proactive approach towards tackling business challenges with an assurance of confidentiality. 40
Chartered One - Winter 2019 Advert - Opus 02-131119.indd 1
0151 705 9115 liverpool@opusllp.com www.opusllp.com twitter.com/opus_llp linkedin.com/company/opus-llp/
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LSCA Business
www.charteredone.co.uk
ISSUE 28 Spring 2021
41
I t h a s n ev e r b e e n e a s i e r t o out s o u r c e y ou r l e g a l a c c o un t s f un c ti on
C as hroom are the Ex perts Cashroom Services Legal Cashiering
Management Accounts
Payroll Credit Control Statutory Accounts and Tax Returns Consultancy Services
Why choose Cashroom? Cashroom has a dedicated team of over 90 experts in accounting, technology and the legal sector and support over 200 UK law firms using the full range of practice management systems.
"Cashroom, especially our dedicated cashiers Michael and Tom are brilliant, it all works like clockwork. We love the Portal, it is user friendly and Cashroom are always developing and improving it. Outsourcing our finance function to Cashroom has made our life easier." IMRAN RASHID, DN LAW LIMITED
Alex Holt Director of Business Development E: Alex.Holt@thecashroom.co.uk T: 07817 420 466
