CharteredONE
ISSUE 32 SPRING 2022
The official magazine of the Liverpool Society of Chartered Accountants
Planting a Tree for the Jubilee – starts in Liverpool”
Drinks are on the house for entrepreneur with help from Reward Finance Group’s business finance
Chris Wainwright Cycles on...
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LSCA Business
The President's Words It was with great pleasure that before Christmas I was able to chair my first LSCA committee meeting in person, and we continue to build upon that."
J
ust as we feel our world is returning to normality, we see events beyond our control.
However, for the things that we can control, it was with great pleasure that before Christmas I was able to chair my first LSCA committee meeting in person, and we continue to build upon that. It was great to actually see people and also to be able to hold our annual committee Christmas lunch, and you will see a reference to our returning Annual Dinner elsewhere in Chartered ONE.
It was also greatly pleasing to be able to assist the Lord Lieutenant and the High Sheriff with the planting of two trees in St Nicholas church garden, and as you will see inside, I do have many talents. It was always our intention to plant some trees in memory of the event, and it has just take slightly longer than we hoped to achieve, and I am sure that my predecessor as President will be delighted. This is intended as a legacy of our 150th anniversary and also in support of the Queen’s Green Canopy appeal,
and in the coming months a plaque will also be placed next to the trees so as you can identify them. As I move into the final months of my presidency I have a number of in person events to look forward to as the world starts to open up again, and in my final President’s Words in the next issue I hope to provide a fuller report on such events. Best wishes,
ROB YOUNG President
CharteredONE
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ISSUE 32 Spring 2022
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LSCA Business
Contents 18 15 16 02 L EGAL RSS 03 THE PRESIDENT'S WORDS 05 REFLECTIONS FROM OUR EDITOR 06 THE FUTURE OF INSOLVENCY REGULATIONS 10 DAVID CRADDOCK 14 REWARD FINANCE GROUP 16 PLANTING A TREE FOR THE JUBILEE STARTS IN LIVERPOOL 18 SMARTVAULT 20 CHRIS WAINWRIGHT CYCLES ON...
20 22 LIVERPOOL SOCIETY OF CHARTERED ACCOUNTANTS – EQUALITY, DIVERSITY AND INCLUSION 23 ICAEW NORTH WEST REGIONAL PROGRAMME OF EVENTS JANUARY – MARCH 2022 24 ICAEW - BUSINESS CONFIDENCE MEETING: LEVELLING UP 25 DO YOU REMEBER? 26 ICAEW HAS APPOINTED ROBERT LLOYD GRIFFITHS OBE AS ITS NEW DIRECTOR IN WALES. 27 DOCUMENT DIRECT
28 H M TREASURY PUBLISHES PROPOSALS FOR REFORM OF R&D TAX RELIEF 29 D SG - THE TREASURY HAS REJECTED PLANS PROPOSED BY OTS TO REFORM CGT 30 DSG - ADDITIONAL GOVERNMENT SUPPORT FOR BUSINESSES IMPACTED BY OMICRON 31 D SG - EXPANSION OF MAKING TAX DIGITAL FOR VAT FROM APRIL 32 W ORKING IN CHESTER? LOOKING TO GROW YOUR PROFESSIONAL NETWORK? 33 LEGAL RSS 34 O PUS 35 ICAEW - INFORMATION HUBS 36 TECHNICAL REPORT 38 LEGAL RSS
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 report upon one of the long overdue legacies of our Sesquicentenary, which we all know was our 150th anniversary, and the locating of two trees at Liverpool Parish Church, and the wonderful symbolism of growth and hope."
D
ear readers and members,
Welcome back to another issue of Chartered ONE.
winter days, and nothing could more represent this than the planting of two trees.
Having experienced Brexit, Trump, Covid, can we all believe the latest episode of this curious century.
We report upon one of the long overdue legacies of our Sesquicentenary, which we all know was our 150th anniversary, and the locating of two trees at Liverpool Parish Church, and the wonderful symbolism of growth and hope.
Our thoughts are certainly with everyone in Ukraine, and we hope a degree of sense within the world will soon be prevailing.
We also give our readers some extra hope with news that our beloved Annual Dinner is returning. News of this and the date are within.
Closer to home, we are emerging from the pandemic, and from the dark
Continuing the theme of hope, we see that our three football clubs have
Let us hope by the time you read this, that we are all feeling a little safer.
differing degrees of that quality, with hopes of avoiding relegation, winning a rare Premier League title, and hopes of promotion all very much in the air. Finally, we all have hope that our lives are returning to a better normality, and I wish you all continuing health and wellbeing, and see you all next issue. Kind regards, MARTYN BEST Editor & Past President
CharteredONE is designed and published on behalf of the Liverpool Society of Chartered Accountants by Legal RSS.
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ISSUE 32 Spring 2022
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LSCA Business
The future of insolvency regulations There is a very important consultation taking place, and our members have been asked for their views.
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The background and details are below, and in particular the Society has been asked to glean from their members:
What experiences do you have of the insolvency system? How could the system be improved (eg. achieve better outcomes for all creditors)? Any other comments/observations?
LSCA Business
Executive summary
Background
On 21 December 2021, The Insolvency Service issued proposals for reform of insolvency regulation. The reforms could materially impact ICAEW and those of its members involved with insolvency work. The deadline for responses is 24 March 2022.
ICAEW’s Independent Regulatory Board (IRB) intends to respond to this consultation. ICAEW will submit its views in its own response, which will be led by Reputation & Influence and will draw upon insights from its volunteer groups including Technical Strategy Board and the Insolvency Committee. We are particularly keen to hear views from business – including those with experience as creditors and in insolvency. We want to highlight to government what we see as the most critical issues with the current system and help identify practical solutions that can be readily implemented. Coming out of the pandemic and with monetary policy tightening we believe that any actions identified must be capable of both taking effect in short-order and avoiding disruption in a period of potentially heavy demand for insolvency services.
The proposals are at an advanced stage, having followedon from a call for evidence in 2019 to which our Professional Standards Department (PSD) responded (Rep 107/19). We expect that action will result in the fairly short-term. We want to present to government what we believe are workable, practical solutions to the issues observed. The purpose of this paper is to explore the solutions that we believe should be considered. We need your views on whether you believe these changes would be effective as well as examples of how they would affect you. Some of the issues and solutions are highly technical and may only be familiar to Insolvency Practitioners. But the insolvency system is relevant to all businesses and we want to help government get to a system that is good for the wider economy. For a summary of the issues we recommend you read Part A and Part B of the consultation document’s Executive Summary. The Insolvency Service are heavily influenced by the report of an All-Party Parliamentary Group, co-chaired by Kevin Hollinrake MP, of September 2021 (APPG report). This was critical of the profession and the regulatory regime. It concluded the regulatory system ‘fails to sanction many mis-conducts, is slow and has a lack of transparency’. They identified conflicts of interest where ‘the IP not only advised that the company should go into insolvency but was then rewarded with the appointment’. The FT Editorial Board concluded that ‘a forecast wave of post-pandemic business failures should prompt an overhaul’. The proposals also reflect growing concern around consumer ‘volume IVA’ providers and abusive practices in these markets, centring around inadequate or misleading advice. There are five key proposals. One is that the four recognised professional bodies (RPBs) which currently licence and regulate insolvency practitioners (IPs), including ICAEW, should be replaced by a single regulator (being an arm of the Insolvency Service). In responding to the government, it is crucial that we present a balanced and representative position to help them decide on the best course of action in the public interest. We will be engaging with Insolvency Practitioners through our Insolvency Committee and want to balance this input with wider consultation with business, boards and professional advisors. We view the Technical Advisory Committee as a key constituency and are interested to hear your perspectives on the insolvency regime.
The proposals for a single regulator and firm regulation will require primary legislation. Government reserved the power to create a single regulator through secondary legislation through reforms in 2014, but this does not enable the reforms now proposed.
The proposals and our initial stance The five proposals are as follows. These are being considered by the IRB and ICAEW’s Insolvency Committee, but their feedback is not yet reflected below: (1) Creation of a single government regulator - We opposed the idea that a single regulator is necessary in Rep107/19 and provided substantial evidence, including as to likely costs involved in the change. Our evidence has largely been ignored. While the evidence remains the same, we recognise the debate has moved on and it may now be time to consider whether regulatory consolidation could help respond to the issues government has raised. If there is to be a single regulator, it should be independent of government, particularly as government is often the biggest creditor and, following recent changes, has preference. (2) New regulatory framework for licensing of firms and individuals Under the current insolvency regime, IPs are licensed as individuals, not as firms. This can create difficulties in enforcement etc, and this has been manifested in the volume IVA sector where large unregulated firms employ only a few IPs for many thousands of cases. We have campaigned for firm level regulation (like audit regulation), e.g. in Rep 107/19, and welcome the general thrust of this proposal. We have concerns about some of the detail. www.charteredone.co.uk
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LSCA Business
(3) New public register of authorised firms/individuals This is unobjectionable, but the Insolvency Service (or RPBs) could do this without legislation. (4) New Compensation Fund We agree that there should be a compensation fund put in place as a last resort to pay out where losses have been suffered by creditors due to fraud or lack of insurance cover etc, but the proposals go beyond this and have not been well explained or developed. The risks of increased costs and liabilities need to be considered. (5) Reform of the current insolvency bond process IPs are required to have insurance bonds (a general bond and a bond for each case) against their fraud and dishonesty. We agree that the process is flawed and needs reform. Questions about professional indemnity insurance also arise which overlap with the issue of a compensation fund. Of the five issues, (1) and (2) are the most significant and the intended focus for R&I. We will need to decide how much resource to devote to the others if we may cease to be an RPB.
Proposed approach Alongside ICAEW’s independent Regulatory Board’s work in this area, we have considered some of the issues arising through the Insolvency Committee in the past and are holding two extraordinary meetings to discuss further before their next scheduled meeting in March. The consultation was also discussed at the last Technical Strategy Board meeting last month. We recognise government’s concerns and believe we have a strong role to play in helping it to deliver structural changes to address the issues outlined in the consultation. We agree that having an effective and appropriate system is imperative as we face a possible wave of insolvencies following the pandemic. We have already campaigned for firms to be regulated in the IVA/consumer debt market (most recently in Rep 119/21). IPs frequently refer to the burdens of being personally liable as office holders, but the proposals may open the door to greater financial liability for firms (both fees and fines) and impact the market (eg, small v large firms). Government consulted on bonding in 2016 and we may base our response on comments we made then (Rep 192/16). It is, however, unclear why it has taken 6 years to bring forward these proposals and why they are now deemed urgent (for implementation in advance of any single regulator implementation). Some commentators have highlighted that the process for setting Statements of Insolvency Practice could be streamlined by separating it from the regulatory role of the Recognised Professional Bodies. We would like to explore this further during our consultation with members.
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We did not support the introduction of a reserve power to create a single regulator at the time (Rep 47/14) and do not find the latest consultation document persuasive on the point. However, having a single regulator would put an end to debate about whether the risk of systemic arbitrage or inconsistent practice between RPBs is real or merely perceived by some, and it may well be that during the course of our evidence-gathering phase we rethink our original stance on this matter. We think it is important that, if there is to be a single regulator, it is an independent regulator, and this means being independent of government, not part of it. Government is not an impartial or neutral participant in this process, with HMRC often being classified as a preferential creditor. Government should therefore either nominate an existing RPB to be the single regulator (if any are prepared to take on the role) or create a new equivalent (with all the cost and disruption that would entail). We are concerned that the persistent reference to our oversight as ‘self-regulation’ misunderstands the independent structure we have had in place since 2015 and fails to recognise the important role that professions have in society. R&I will consider building on suggestions it has already made (eg, REP 119/21) that regulatory responsibility for consumer debt/insolvency should be passed to FCA. This could open the door to the creation of a single regulator for corporate/business insolvencies, which might most naturally be ICAEW.
Why it matters We agree with government that a good insolvency regime is important for the economy. We also agree that the UK’s regime is one of the best in the world, albeit the crown may be slipping due to incoherent and piecemeal regulatory reforms by government. We believe that the single government regulator proposal will be damaging as currently envisaged and therefore it is in the public interest to oppose it. ICAEW is the largest single regulator of IPs. ICAEW was formed in part to address perceived bad practices arising from insolvent companies in the nineteenth century in the public interest. If the proposal is taken forward, it will appear that criticisms of the profession have been vindicated and could damage our reputation. Underlying rationale for the single regulator proposal The evidence and rationale for the proposal are weak, with reference to ‘perceptions’ as much as to facts. We do not believe the reasons given at the time of the call for evidence were persuasive (see REP 107/19). We believe that since then the APPG report referred to above has had a disproportionate and unmerited influence. It catalogues many regulatory failures or alleged regulatory
LSCA Business
failures, creating an unfavourable picture of the profession as a whole. Many of the behaviours outlined could be prevented by change in regulation rather than change in regulatory framework. For instance, although we do not think it should do so, government could ban advisors from subsequently taking insolvency appointments or could ban IPs from participating in bank panel arrangements. Nevertheless, there are a number of structural changes that could be made, as we outline above, which we believe could help address the issues observed. Moreover, while it is unclear why those involved believe having a single regulator would prevent such events from recurring, it is clear that debate has now moved on and the creation of a single regulator may now be a likely outcome from the consultation. Plan of action In advance of making our submissions, we expect to liaise with the other RPBs and R3 (the main insolvency trade body, which includes creditor groups) and our volunteer groups, including Insolvency Committee. We would also like feedback from members in business. We are considering raising selected issues (including potential impact on staff and our ability to continue to act as an RPB) with ministers as a matter of urgency. We expect to raise our views and concerns in the press and, potentially, with selected Members of Parliament and are working with our Public Affairs department.
We will need to be selective on the points we wish to make. As with audit, where there are proven cases of deficient performance (conflicts etc) it can be difficult to defend the status quo or overcome inferences that non-proven cases are analogous. Some of the APPG commentary is emotive and simplistic and those concerned are unlikely to be persuaded by any evidence or receptive to nuance. It is inevitable that there will be examples of bad practice and with insolvency there are always losers. We are therefore likely to focus on tangible disadvantages of the proposals, eg, additional costs, disruption pending implementation, dangers of having a government department as regulator (obvious potential conflicts).
Questions for the committee - What experiences do you have of the insolvency system? - How could the system be improved (e.g. achieve better outcomes for all creditors)? - Does the committee have any insights on the effectiveness of government versus professional bodies as regulators? - If government becomes the single regulator, what mechanisms can be applied to control its costs (which it proposes should be covered by the firms (not individual IPs) being regulated)? The link to the gov.uk article is here: The future of insolvency regulation
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Professional Services | Financial
The Added Advantages to Your Business from Cash Profit-Sharing David Craddock is a recognised authority in the UK and worldwide on employee share schemes and cash profit-sharing systems and is the author of Tolley’s Guide to Employee Share Schemes. In this article, David identifies the role that cash profit-sharing systems can fulfil in making a significant contribution to the growth of a business, drawing on his own experience of leading projects dating back to the 1980s and 1990s when he spearheaded the introduction of cash profit-sharing into a series of market leader quoted companies in the UK to his most recent case study experience in acting as adviser to the private company, Nomad Goods, Inc, a dynamically led and fast growing business based in Santa Barbara, California.
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The Multi-Dimensional Benefits of Cash ProfitSharing Systems
The opportunity for a cash profit-sharing system to contribute to the strength of a business lies in the multidimensional benefits that it has the capacity to deliver for any business – whether a company, a partnership, or even a sole trader. To embrace profit-sharing indicates an awareness on the part of the employer of the delight that is given to the human spirit, in this case that of the employees, when the contribution that they have made to the profit resulting from their work endeavours is recognised in tangible form. The profit-sharing cash pay-out gives them part-ownership of the profits. Furthermore, the invitation to employees to join in a profit-sharing initiative acts as a unifier across all departments, divisions, and geographical regions of the business as all employees are aligned towards the objective of growing the value of the business. Properly implemented and consistently communicated, profit-sharing acts as a bulwark against any tendencies that 10
may exist in the business towards the destructive effects of departmental protectionism, it brings into focus a clear vision of the objectives of the business and it drives the
Professional Services | Financial quest within the employee workforce for more efficient and effective ways of working. How can all this be achieved through cash profit-sharing? Well, by providing the motivation, supported by consistent communications from management who have belief in the concept, towards creating higher levels of profit, thereby generating, by definition, a bigger profit share pool, and a more substantial distribution to the employees. The most effective profit-sharing systems are those based on a pre-set percentage of annual profit, operating without a ceiling and, therefore, with the perception of no limitations which as a factor in itself has a powerful impact on the employees’ business mindset. Yes, the monetary reward is real and very gratefully received. Additionally, though, in the process of this wealth-creation activity the employees have built character, individually and as a team, growing as they delve into their inner mental recesses to discover ideas and innovations that support their own continual improvement and continuous development while at the same time enhancing the commercial status of the business.
guidance, embraced profit-sharing in the 1980s, and credited its success to the myriad of supportive worker participation policies that it introduced over the course of that decade, from works committees, quality circles and suggestion boxes to a total quality management programme and a progressive approach to employee training, development, and performance management. Probably the most high-profile case in the UK is that of The John Lewis Partnership that operates its own impressive array of human resources polices to support the development of the business that each year delivers profit share to its employees. The moral of the story is that to maximise its benefits to the business the profit-sharing system should not be expected to operate in isolation but rather be part of a suite of policies designed to stimulate belief and confidence, resolve and direction in the minds of the employees, individually and as a team. The outcome is a team result from the combined personal contributions from all employees with an individual reward and recognition given to each employee.
Some High-Profile Examples and Policy Initiatives of Cash Profit-Sharing
For the business owners, profitsharing invariably is perceived as removing the mental barriers between employer and employee, between management and the wider
The prime ceramics company, Josiah Wedgwood & Sons Limited, under my
workforce, establishing harmony in the workplace and improved industrial relations, especially when in a unionised company this policy initiative is made with the support of the trade unions. Furthermore, there is substantial evidence that the business antennae of the overall workforce is heightened as they share in the rewards of the business through profitsharing. This is particularly the case when supported by the sister human resources policies which lead them to become more educated about the business, more alert to cost savings and the elimination of waste and where, in more recent decades, the sister policies have included health benefits – from health checks to health programmes to gym facilities – to become a healthier workforce. With the employees attaching greater value to their workplace, the business benefits from a reduced rate of labour turnover with a more stabilised workforce, less absenteeism, and a reduction in the costs of recruitment as well as the costs associated with having to train and assimilate new employees. The Historical Origins of Cash ProfitSharing Systems The historical development of profitsharing is fascinating and intensely practical as a steady stream of businesses in successive generations
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LSCA Business Professional Services | Financial
have sought to unlock the benefits that derive from a successful implementation of the concept. Seminal in the development of profitsharing was The International Congress on Profit Sharing that was held in Paris in 1889 and which provided a definitional position which has survived to this day as embodying the nature of profit-sharing and containing practical indicators on its key essential components. The Paris Congress concluded that: “Profit-sharing is an agreement (formal or informal) freely entered into by which the employees receive a share, fixed in advance, of the profits” and established that: “The idea is very simple. The principle is that all workers shall become partners in the business in which they work: such partnership will confer the right to share in prosperity or profit, to share in the ownership of capital on a pre-determined basis fixed well in advance, and to come into knowledge and consultation about the operations of the business, as a statement of principle.” The moral right of the employees to own part of the profits combined with the practical application
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of an advanced commitment from the employer, usually at the start of the financial year for which the profit share will be declared, are to this day the benchmark principles for a successful profit-sharing system. In principle, a cash profit-sharing system is straightforward to implement for the employer and easy to communicate to the employees.
Profit-sharing invariably is perceived as removing the mental barriers between employer and employee, between management and the wider workforce, establishing harmony in the workplace and improved industrial relations. As an interesting observation on the practical graphics of profitsharing, in 1833 the famous English mathematician, Charles Babbage, expounded a philosophy of profitsharing derived from the system that he observed in the coal mines in Cornwall
in which payment was made according to the value of the vein based on the amount of coal extracted therefrom. He simply extrapolated the principle to a business of any size and paying employee remuneration based on the amount of profit generated. However, it was in the USA that enterprising employers became aware of the commercial advantages of profitsharing. It was there that profit-sharing developed a momentum of its own, unhindered by the class divisions of Europe which its inhabitants had left behind and with the enlightened migrants’ resolve to succeed in the new world of the Americas. In the USA, the development of profit-sharing benefited from the demographic advantage of the practical way in which the North American continent became populated. As the immigrants arrived on the east coast they moved west, claiming the land as they travelled but even after all the land had been claimed new immigrants continued to arrive. Rather than engage in conflict over land, the supply of which was now exhausted, the frontier-men established agreements on farming the land
Professional Services | Financial
together and sharing the profits and so the tradition of American profitsharing was born. The introduction of profit-sharing systems in the USA can actually be traced back to 1794 and the influence of Albert Gallatin who was the Treasury Secretary in the administrations of Presidents Jefferson and Madison. It was, though, not until after the American Civil War with the growth in industrialisation that structured profit-sharing came into its own. In 1867 the first US profit-sharing system was registered by the Bay State Shoe and Leather Company from Worcester, Massachusetts, based on an ambitious 25% share of the profits to the employees. In 1887 Proctor and Gamble established profit-sharing, giving the subject strong profile in the US business community, and opening the door to others, notably profitsharing in Sears in 1916 and Kodak the following year. The Present-Day Case Study: Nomad Based in Santa Barbara, California So now to the present time with the launch of the Nomad profit-sharing system in January 2022. Nomad is a forward-thinking, minimalist mobile device and mobile lifestyle accessories company led by its co-founder and CEO, Noah Dentzel. Nomad launched on Kickstarter in 2012 with ChargeCard, a USB cable the size and shape of a credit card and has since expanded its range to include iPhone cases and cables, Apple watch straps, portable and wireless chargers, and a range of wallets and travel products. Nomad is headquartered in Santa Barbara, California, and has employees also in Hong Kong, China, and the Philippines.
The commercial drivers for the profitsharing project were to establish a recognised framework for annual profit-sharing that could be easily implemented and communicated to employees, to create a profit-sharing system that could be applied across all the countries in which the company has employees, to strengthen the sense of unity across the international group, and to motivate the whole workforce towards the creation of economic value for the company that could be shared with all the employees. For the first year, the company agreed a profit share pool calculated as 10% of profits plus an additional amount to give the system an inaugural year bounce. Each employee was awarded profit share units based on salary level, to account for the strength of their contribution to the business, together with profit share units based on length of service, recognising the value of loyalty and service to the company. To develop the system, I acted as the consultant adviser and engaged in a substantial fact-find and employee attitudegleaning exercise through individual virtual meetings with a range of employees from their headquarters in California, as well as select team members in both Hong Kong and the Philippines. The system was launched through an energetic and enthusiastic virtual meeting at a time that would allow all employees to attend, whatever their time zone. The company is now in discussion with me for advice on sister policies that will enhance further the working of the profit-sharing.
systems, we evaluated several large, international firms, yet selected David and his team due to their extensive experience and expertise, yet focused, deeply engaged approach. David was highly consultative in nature and went out of his way to connect with Nomad team members around the world, truly becoming an extension of our team for the purposes of the project. While we were grateful for the deep experience David brought to our project, he was careful to understand our needs and particularities and culture, and to build a system with us that was refined and suited to our business. David always made himself available and bridged the time gap between California and the UK, and we look forward to working with David again in the future.”
The testimonial from Noah Dentzel for David Craddock Consultancy Services: “In seeking an expert in profit-sharing
David Craddock, the Founder and CEO of David Craddock Consultancy Services and David Craddock International, has been advising on employee share schemes and cash profit-sharing arrangements for over 35 years. He advises on every aspect of the implementation process, working personally with the client at each stage, and offering solutions and expertise on all the technical questions that require clarification during the consultation. David is also a member of the Steering Committee of The ESOP Centre and the Educational Director and Fellow of The ESOP Institute. DAVID CRADDOCK, MA(Oxon) David Craddock Consultancy Services
David Craddock welcomes an opportunity to discuss your Employee Incentive Schemes Initiative with you. Please feel free to contact David at: 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, Cash Profit-Sharing Systems and Reward Management, Share Valuation, Management Buyouts, Employee Ownership Trusts (EOTs) and Investment Education
www.charteredone.co.uk
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Professional Services | Financial
WHAT DO FINANCIAL STRAPLINES REALLY MEAN? STEVE NOBLE, REWARD FINANCE GROUP’S MANAGING DIRECTOR FOR THE NORTH WEST, THINKS IT’S ABOUT TIME THAT BANKS AND FINANCE COMPANIES CHANGED THEIR SLOGANS ‘Helpful Banking’, ‘Fluent in Finance’ just two of the straplines in use in the UK banking world. I’m not sure that either of them particularly helps or makes it easier for me to understand what they do. And it’s no better when you look at some of the slogans used by our friends across the pond to describe themselves. ‘The southern hospitality bank’ or ‘Deep roots, strong branches’ – it makes some sense how they arrived at the latter, as they have Oak in their name, but it is ‘corny’ all the same and does not describe what they do. What’s my point? Someone describing themselves as being “helpful” in banking or “fluent” in finance is a very self opiniated statement isn’t it - surely it is for the customer to decide whether the organisation has been helpful or explained their fluency in a way the customer can understand and likes. We tend to dwell on these customer focused slogans, emphasising that they are here for the customer, trusted business partners and all that jazz, when the truth is that the customer themselves determine and decides whether the experience, service and support they have had is worthy of satisfaction. Some may remember the much-berated Midland Bank slogan – OK I am going back quite a bit. They called themselves the ‘Listening bank’ which was a media headline writers’ dream when it fell on deaf ears.
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Contrast the corporate slogans used in finance with those in the consumer space “because you’re worth it”, “open happiness”, “think different” - all aimed at the sensory and emotional side of us, asking us to make purchases based on how we feel and think, not ramming a message home telling the customer how good we are. Hopefully a sense of a new normal is just around the corner if we accept the scientist and analysts views of the current situation we find ourselves in. However, let’s be honest, and no matter how sceptical or cynical you may be to the events of the last two years, the future of our world both in business and personally, has changed materially for the coming period. I originally sketched this piece in late November before this latest series of tumultuous events affected the entire planet. The problem therefore of making a fiveyear plan would appear fraught with fundamental challenges, simply based on the events of the last six months! What is undeniable though is that for the next two to three years, as our economy resurges - and it will do - there will be challenges and choices, opportunities and problems, joy and despair - lots of contrasting emotions depending how things play out for you and your clients. Many of you may not have heard of Reward Finance Group, as your clients may not have needed a short-term working capital injection to help them through a tricky
patch or to help the business to grow by quickly seizing an opportunity. I could run through a series of short snappy points highlighting what we do, how we do it and why we are a top set of folks who you will love dealing with, but that’s for others to determine. What I do know is that we have worked with hundreds of businessmen and women in SMEs over the last eleven years, providing hundreds of millions of pounds worth of funding to support them. Reward has achieved consistent year-on-year growth over that period, so that tells us we must be doing something right. And what’s our slogan? “Driving Business Forward”, the honest truth of that though is best measured by our clients because they determine it.
What is undeniable though is that for the next two to three years, as our economy resurges - and it will do - there will be challenges and choices, opportunities and problems, joy and despair - lots of contrasting emotions depending how things play out for you and your clients.”
Jason Hughes and Mike Calvert
DRINKS ARE ON THE HOUSE FOR ENTREPRENEUR WITH HELP FROM REWARD FINANCE GROUP’S BUSINESS FINANCE At Reward, we fund many entrepreneurs in the region, so we were pleased when Gary Beggs of Pomegranate Commercial Finance in Liverpool introduced us to Jason Hughes. Jason has several successful businesses. As well as retailing cars and motorbikes, he also owns the very popular indoor karting track, Kart World in Burscough. He spotted the opportunity to buy a derelict pub, which already had planning permission for a residential development. For Jason, this was a chance not to be missed, as his vision was to demolish the building and, by also using the large car park, build three houses on the site. Two of the plots had already been sold off plan, which would pay for the development, with Jason keeping the third plot for himself. When Mike Calvert, our business development director in the North West met Jason on site, he told him that he used to own the pub but sadly the new owner was unable to maintain it as a going concern and closed it five years ago. In the meantime, he had applied for and
was granted planning permission to knock it down and build eight houses. As soon as he heard that he was retiring and selling it off he knew he had to buy it, especially as it had been given the go ahead to change it from commercial to residential use. However he needed to act quickly so he wouldn’t miss the opportunity, as there was a great deal of interest in the site. Mike and the Reward team were impressed with the scheme, reducing the plans from eight houses to three and, together with the merits of the site, they quickly organised Business Finance funding to buy the pub and progress the development. Speaking about the deal, Mike said, “Jason is a well-known entrepreneur in the area with a number of successful businesses. He is a shrewd operator and we quickly recognised his strategy to build and sell two homes which would, in effect, completely fund the third for himself. With the right security in place, we had no hesitation in turning around the funds in a few days so he could grab the opportunity.”
www.charteredone.co.uk
Jason is a well-known entrepreneur in the area with a number of successful businesses. He is a shrewd operator and we quickly recognised his strategy to build and sell two homes which would, in effect, completely fund the third for himself. " For further information contact: Steve Noble, MD North West on 07802 297929 email steve.noble@rewardcf.com, or Mike Calvert, BD Director North West on 07858 518562 email mike.calvert@rewardcf.com www.rewardfinancegroup.com
ISSUE 32 Spring 2022
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LSCA Business
“Planting a Tree for the Jubilee – starts in Liverpool” Marking the Queen’s Platinum Jubilee and the 150th Anniversary of the Liverpool Society of Chartered Accountants Our 150th anniversary celebrations – the famous SESQUICENTENARY – were sadly disrupted, like many aspects of our lives, by the pandemic. One of the many imaginative ideas developed by our Past President, Andrew Lovelady concerned the planting of trees in our Region. Many different locations were trialed and tested, and many obstacles appeared. However, we are delighted to report that Andrew’s vision has finally been realised and on Friday, 11 February, our President Rob Young played a key role in planting two trees in the Churchyard of the Liverpool Parish Church to mark the occasion of the Queen’s Platinum Jubilee and the 150th Anniversary of the Liverpool Society of Chartered Accountants. The trees a “Scarlet Hawthorn” and a “Pin Oak” were planted as part of the Church’s and the Society’s commitment to the Queen’s Green Canopy programme (QGC) which is a unique tree planting initiative created to mark Her Majesty’s Platinum Jubilee in 2022, which invites people from across the United Kingdom to “Plant a Tree for the Jubilee” thus leaving a lasting legacy for future generations to enjoy.
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Robert Owen JP DL, the Vice Lord-Lieutenant of Merseyside, commented that, “The Queen’s Green Canopy is a large scale and wonderfully imaginative project which will not only mark, in perpetuity, Her Majesty’s remarkable, unique and ongoing 70 years of dedicated service but will also bring significant environmental benefits across the nation. It’s difficult to imagine a better way to celebrate the Platinum Jubilee”. The Revd Canon Dr Crispin Pailing, Rector of Liverpool, said, “Liverpool Parish Church has always been at the heart of the business and civic communities, and I am delighted that we can use our Gardens – one of the few green spaces in the city centre – as a place of celebration. The planting of these trees marks not just longevity, but also the hope of today’s generation to leave a legacy for the future.” Rob Young, the President of the Liverpool Society of Chartered Accountants, said, “The Liverpool Society of Chartered Accountants is delighted to have trees planted in the St Nicholas churchyard by the Vice Lord Lieutenant to provide an enduring legacy of our 150th anniversary. This is part of our support for the Queen’s Green Canopy initiative with its values of sustainability for the future.” If you would like to know more about the QGC project and how you can get involved - https://queensgreencanopy.org/
LSCA Business
You will of course recall our very close relationship with Liverpool Parish Church (St Nick’s) with the Church very kindly hosting the plaques commemorating those of our members who sadly lost their lives during the two World Wars. We hope you will visit the Church when you can and seek out these two very touching connections between our Society and the Church.
From L to R: Crispin Pailing, Rector of Liverpool, our President, Rob Young , Nigel Lanceley, the High Sherriff of Liverpool and Robert Owen JP DL, the Lord Lieutenant of Liverpool.
www.charteredone.co.uk
ISSUE 32 Spring 2022
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Five ways to boost your accountancy business post-lockdown As we start to look to the future and transition to a post-lockdown mindset, many accounting and bookkeeping firms are looking at ways to take their business to the next level by streamlining their workflow and becoming more efficient.
Here are five ways you can kick-start your business now, to bring success post-lockdown: Get organised Eliminating paper from your office and shifting to secure online storage is not enough – you will still face issues searching for documents if your file structure is unorganised. Make sure your storage solution has customisable folder structures so you can route documents to their final destination and file them automatically. This will make searching for specific documents far easier.
Create repeatable workflows Set up automatic notifications, create templates, and establish a centralised location for all of your client information and important document. Integrating tools like DocuSign into your workflow and setting up custom templates to suit your business’ needs saves tremendous amounts of time. For example, you can simply send out a form for signature with one click, have it routed back to the correct folder, and instantly receive a notification that a document has been signed.
Add a client portal to your website A client portal allows you, your staff and your clients to access important documents securely at any time, regardless of location. It also allows clients to send you sensitive information securely and quickly over the internet. Don’t lose valuable time because a file exists on one machine that might be temporarily inaccessible, or even worse, lost or stolen.
Integrate your softwareEnsure the platforms you use every day communicate with each other, and avoid having to work in silos based on the software you need at that moment in time. SmartVault integrates with TaxCalc, Xero, Quickbooks and more – plus you can connect virtually any app you use to SmartVault via our print driver integration.
Set up 2-Factor Authentication (2FA) This may not save you time immediately, however turning on 2FA reduces the risk of cyberattack by 99% - this could save you a lot of time (and money) if your computer or email was hacked and sensitive information was inadvertently disclosed. Any apps that store or process sensitive information should have the option to turn on 2FA – and if they don’t, they should!
Find out more about how Smartvault can help you kick-start your business smartvault.com/see-a-demo
Rated #1 secure file sharing & document storage for accountants Streamline the way you collect source documents, organise client data and share files by using a secure, branded client portal, built for accountants and accounting firms.
In-built security and compliance SmartVault keeps you GDPR and AML compliant, with bank-grade encryption both at rest and in-transit.
Unlimited growth Add unlimited clients (for free!) and never experience a degraded service (common with on-premise storage) as you add clients & documents.
Automatic back-ups You never have to worry about losing your laptop or your hard drive failing with cloud storage - we automatically back up files as soon as they are uploaded.
Automate your workflow From collecting files from clients to eSigning within the portal and automatic filing, SmartVault helps you reach peak efficiency in as few clicks as possible.
I wouldn’t use anything else. Possibly the most seamless cloud-based solution for accountants. Christos Liondaris | Accountant and Founder | Liondaris & Co
SmartVault helps over 20,000 accountants and businesses securely share files with over 1,000,000 clients every day. Take 15-minutes to see how we can help your practice.
20,000 ACCOUNTANTS
1M+ CLIENTS
LSCA Business
CHRIS WAINWRIGHT CYCLES ON...
Chris Wainwright relaxes in front of his amazing cycling team of Connaire Cann, Tom Prytherch and Steve Price. 20
LSCA Charity
In our last issue, we shared the details of the book How did we do it? debut of our energetic member Chris Wainwright. In our team the goal was simple... keep the bike rolling as His current best selling tome, “Gentlemen, I give you .. “ regales its readers with tales of many famous business leaders of Liverpool’s recent past. Chris was also inspired to dedicate the proceeds of the book to the My Name’5 Doddie Foundation, which supports the quest, initiated by Doddie Weir to eradicate MND.
Last month, there was another amazing initiative to support the charity, and Chris could not resist joining it as around 100 cycling and rugby fans made the journey from Murrayfield in Scotland to Cardiff in an astonishing 4-man 520 mile bike relay. The rules were very simple – one van – 4 bikes – 4 riders. At least one of the bikes needs to be on the road for every mile, and they all left Edinburgh on the morning of Thursday 10th February with the match ball for the Cardiff versus Scotland Six Nations rugby match on the Saturday 12th February – so they couldn’t dawdle. Our Editor asked Chris all about it after the weekend: “ Talk about Monday blues.... The team have returned to daily life after a long weekend of what most would deem as insanity as we set out to cycle across the country, raising awareness and funds in support of Motor neuron disease and The Doddie Weir Foundation.
much as possible. We achieved this by simply rotating the 4 roles. Ride - Drive - Nav - Rest. It was vital that each team member took responsibility for their own fuelling, rest and motivation. The importance of this couldn't be stressed enough as each rider had stages to complete whilst keeping enough in the tank to be able to support each other and respond to incidents when they occurred. I can honestly say, despite being a total mixture of abilities and strengths our team worked like absolute clockwork. A well-oiled machine striving to achieve a shared goal, proving that anything is possible when you have the right tools for the job and more importantly a solid attitude. On behalf of the team I'd like to say a huge thank you to all that have donated. The total pot now sits somewhere around £300,000 and is still rising! And our contribution has just passed the £10,000 mark - amazing and my deep gratitude to everyone. Thank you also to all the amazing sponsors at The Sign Box, Document Direct, Progress Wrestling, Bathgate, Barron Financial Services, The Cross Foxes and Mersey Maritime and Northgate Van Hire. Connaire also organises some amazing adventure days at www.wheelgoodtimes.com out of the Cross Foxes in Trawsfynydd. Contact Chris at chrisw@beech-group.co.uk if you do want to help or donate.
If you've not come across the ride, allow me to introduce it, a 520-mile charity cycle ride between BT Murrayfield Stadium in Edinburgh and the Principality Stadium in Cardiff in just 48 hours for the My Name’5 Doddie Foundation. The ride is led by Doddie’s former Scotland and British & Irish Lions teammate Rob Wainwright and we were a team of 4 amongst over 100 other riders who set out to deliver the match ball for the Wales v Scotland game on Saturday.
www.charteredone.co.uk
ISSUE 32 Spring 2022
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LSCA Business
Liverpool Society of Chartered Accountants – Equality, Diversity and Inclusion
Institute related news The first video clip of the ICAEW Diversity and Inclusion workshop held in October 21 has now gone live on the institute’s website. Please see link here www.icaew. com/welcomeinclusion. The video is 9.5 minutes long and definitely work viewing. Barbara Boyle the LSCA Diversity and Inclusion champion appears towards the end with a comment “being brave and bold” about challenging the current status quo of female promotions in the profession.
She was able to make the comment on statistics based on the recent research for LSCA Chartered One article on the female past presidents of LSCA. A reminder that the institute website content for diversity and inclusion can be found on the link below: D&I Hub https://www.icaew.com/insights/ diversity-and-inclusion. If you have not clicked this link for a month or two, please do so. There is an abundance of material.
If you need ED&I help or advice or wish to share ideas, please contact Barbara Boyle via her Linkedin page:
https://www.linkedin.com/in/barbara-boyle/
22
LSCA Business
ICAEW North West Regional programme of events March – May 2022 All ICAEW events across the North West Region currently take place via Zoom unless stated otherwise. Registration for all events is available online www.icaew.com/events DATE
EVENT
10-Mar-22
NICAEW North West Q1 BCM: the levelling up agenda
10-Mar-22
Design and tax structuring for the MBO
15-Mar-22
Don't upset the tax man: VAT guidance for importers and exporters
17-Mar-22
North West Practice Members' Network
22-Mar-22
Develop your personal brand
24-Mar-22
Employment Taxes Update
24-Mar-22
ACA Qualification and Training Update hosted by ICAEW NW
24-Mar-22
ICAEW NW Legal Services Insight Group
25-Mar-22
Feelgood Fridays hosted by ICAEW North West
31-Mar-22
ICAEW North West E-Commerce Insight Group
07-Apr-22
Key Tax Update (Tax Club)
12-Apr-22
Anxiety relief toolkit
12-Apr-22
Southport Members' Forum
26-Apr-22
Budget 2022
27-Apr-22
Chester Town Group
28-Apr-22
North West Practice Members' Network
04-May-22
Accounting / Financial reporting Spring Update
09-May-22
Audit and Assurance Update Spring Update
10-May-22
Southport Members' Forum
13-May-22
Understanding mental health: skills for life
All of these events and more can be found at www.icaew.com/events
Essentials CPD The 2021 programme is now well underway 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
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.
www.charteredone.co.uk
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+44 (0)1908 248 250 24
contactus@icaew.com
icaew_uk
icaew.com
LSCA Business
Do you remember?
O
ne of the absolute highlights of our Society’s calendar was always the prestigious Annual Dinner, recalls our Editor, and Past President, Martyn Best. Our last one was incredibly back in November 2019, hosted by Andrew Lovelady, with Matthew Pariss as our guest speaker. You may recall it taking place at the Titanic Rum Warehouse with around 400 guests and a super evening it was. Well, and whisper it quietly, we may soon be back. Whilst our current President, Rob Young, despite his reelection during the pandemic, has had the frustrating absence of a Dinner to contend with, our current Deputy President Justin Lang has higher hopes. In an exclusive interview with Chartered ONE, Justin revealed that he has begun discussions for the return of our much-loved Annual Dinner.
“I do appreciate we need to ensure our Annual Dinner will be safe, and for our members to feel secure in returning to such activity, but we are now seeing some return to normality, and I hope that by November we will all feel a lot happier in going our and meeting our many friends and colleagues again. ”I am really looking forward to seeing a return of our much-loved Annual Dinner, and welcoming as many of our members and friends as possible.” Chartered ONE was able to extract the likely date – so please do keep Friday 25th November for your diary. However, Justin just would not reveal the name of his intended guest speaker, although he did tease our Editor with a few suggestions that gave him food for thought.
Save the date: Friday 25th November 2022 www.charteredone.co.uk
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LSCA Business
ICAEW has appointed Robert Lloyd Griffiths OBE as its new Director in Wales.
Robert Lloyd Griffiths, OBE.
We have a very close relationship with our members, mainly North Wales of course, but nevertheless, we wish to offer the Society’s best wishes to Robery in his new appointment. Robert will support ICAEW Chartered Accountants in Wales and the businesses they work with whilst working with key stakeholders at the Senedd. Previously the National Director for the Institute of Directors in Wales, Robert holds several non-executive and advisory positions and is a board member of Qualifications Wales. He has a degree in banking and finance from Cardiff University and was awarded an OBE in the 2014 Queen’s Birthday Honours for services to the economy and voluntary services in Wales. “It is a real privilege to join ICAEW at a time when longterm sustainable growth, good governance and financial propriety are at the top of the agenda as we begin the journey to net-zero and economic recovery from COVID-19.
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“The Institute has a fantastic reputation, with more than 3,100 members in Wales who are at the very heart of boardrooms and our economy. I look forward to meeting chartered accountants across Wales and I will strive to ensure that the voice of Welsh business is heard loud and clear.” Melanie Christie, ICAEW’s Director of Regions, said: “I am delighted that Robert has joined ICAEW to lead our activities in Wales. He has extensive knowledge and experience in key leadership roles. “ICAEW and our members will undoubtedly benefit from his skills and insights as we move forward to deal with the economic challenges we face in these difficult and uncertain times.” https://businessnewswales.com/robert-lloyd-griffiths-obeappointed-new-icaew-director-for-wales/
LSCA Business
HM Treasury Publishes Proposals for Reform of R&D Tax Relief Following an announcement at the Autumn Budget 2021 and an earlier consultation, the Government has set out plans for several changes to the qualifying criteria for enhanced tax relief for research and development (R&D) activities, alongside the introduction of tough new antiabuse measures. These changes are proposed to take effect from 1 April 2023. Extension of relief for data-related expenditure The Government has confirmed that several additional categories of data-related expenditure will now qualify for enhanced R&D tax relief, including in particular: •e xpenditure via licence payments on purchasing datasets which are used directly for R&D in a qualifying R&D project will qualify for relief, but not where the datasets can be resold or have a lasting value to the business beyond the duration of the R&D project • s taff costs related to collecting, cleansing and analysing data • c loud computing services used directly for R&D, but not the costs of data storage Restriction of relief for non-UK based R&D activity Conversely, enhanced relief for non-UK based R&D will now no longer be available. Relief will only be available in respect of staff paid through the UK payroll, and for subcontracted R&D, only where the third party performs the work within the UK. However, companies will still be able to claim for certain non-UK costs that are considered to be inputs to UK-based R&D, including in particular: 28
• software and consumables sourced from outside of the UK • data and cloud computing services sourced from outside of the UK • non-UK based clinical trial volunteers Despite these new restrictions, HM Treasury states that the Government “is interested in views from stakeholders on whether there is a case for any narrow exceptions to allow claims on some overseas activity. However, these would not include allowing claims for overseas activity on the basis that it is less expensive than in the UK.” Views from stakeholders are expected to be sought alongside the publication of draft legislation in the summer of 2022. Tackling abuse and non-compliance Estimating that error and fraud related to enhanced R&D relief claims comes at a cost of £311m, with growth in the number of unqualified/unregulated R&D advisers creating more spurious claims, HMRC is already working on additional measures to identify potential fraudulent claims and will ramp up activity in this area. A new HMRC team is being created, focused on tackling abuse, and in addition, from 1 April 2023: • all claims for enhanced R&D tax reliefs will have to be made digitally, and accompanied by additional detail • each claim will need to be endorsed by a named senior officer of the company • companies will need to inform HMRC, in advance, that they plan to make a claim • claims will need to include details of any agent who has advised the company on compiling the claim
LSCA Business
The Treasury has Rejected Plans Proposed by OTS to Reform CGT The Treasury has rejected plans proposed by the Office of Tax Simplification (OTS) to reform Capital Gains Tax (CGT), most notably the alignment of CGT rates with income tax. Following a detailed review of Capital Gains Tax by the OTS, five recommendations have been accepted by the government, which aim to offer practical simplifications for the taxpayer: • HMRC will integrate different ways of reporting and paying Capital Gains Tax into the Single Customer Account, resulting in a central reporting hub. • The 30-day deadline for reporting and paying Capital Gains Tax on the disposal of UK residential land and property has been extended to 60 days for disposals on or after 27 October 2021. • The current “no gain no loss” window on separation or divorce may be extended and the government will consult on the detail over the course of the next year. • Specific rollover relief rules which apply where land and buildings are acquired under Compulsory Purchase Orders (CPO) will be expanded and the government will consult on the detail in due course. • HMRC will improve their guidance in specific areas including the UK Property Tax Return, Business Asset Disposal Relief for farmers or others looking to retire over a period of time, and Enterprise Investment Schemes. The OTS made fourteen recommendations in total; five further recommendations are being considered and will be kept under review. Four recommendations were rejected including adjustments to Private Residence Relief when a homeowner builds a property in their garden. The government has stressed that the impact of any changes on wider tax policy and administrative burden on HMRC must also be considered.
www.charteredone.co.uk
ISSUE 32 Spring 2022
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LSCA Business
Additional Government support for businesses impacted by Omicron
Specific details of application routes and timing will be confirmed in further guidance to be published in due course. In the meantime, the Government has published factsheets summarising further key points for this new support package, available from GOV.UK here (link). In response to the growing outbreak of the Omicron variant of Covid-19, on 21 December 2021 the UK Government announced a package of additional Government support for those businesses most impacted by the outbreak and the associated newly-introduced restrictions on individuals’ freedoms. In particular, the following measures are being introduced for businesses in England: •R estaurants, bars, cinemas and theatres can apply for a one-off grant of up to £6,000 per premises. The Treasury is setting aside £683 million for these grants, which will be administered via under existing council-run schemes. Applications will open in the coming weeks. As with previous similar grants, the exact amount received will depend on rateable value: •G rants of £2,700 for rateable values up to £15,000 •£ 4,000 for rateable values up to £51,000 •£ 6,000 for rateable values above £51,000 •O ther struggling businesses outside leisure and hospitality can apply to local councils for a different grant under the Additional Restrictions Grant, which has been topped up with £102 million. •T he Statutory Sick Pay Rebate Scheme is being reintroduced, meaning business with fewer than 250 employees can claim money to cover the cost of Statutory Sick Pay for employees who are affected by Covid, for up to two weeks per employee. Firms will be eligible for the scheme from today and they will be able to make claims retrospectively from mid-January. •A n extra £30 million will be provided for arts organisations through the existing Culture Recovery Fund. 30
£683m Restaurants, bars, cinemas & theatres
£102m Other struggling businesses outside liesure & hospitality
£30m Arts organisations
LSCA Business
Expansion of Making Tax Digital for VAT from April HMRC has announced that businesses should prepare for changes to reporting under Making Tax Digital (MTD) for VAT as it is becoming mandatory for all VAT-registered businesses from 1 April this year. All VAT registered businesses must file digitally through MTD, from this date. This will affect smaller businesses as previously only VATregistered companies with income over £85,000 had to file their VAT returns through MTD. However, this is now being extended to companies who’s incomes are below the threshold. Companies need to have signed up to MTD for their first VAT return starting on or after 1 April 2022 with at least five days after their last non-MTD VAT return deadline date, and at least seven days before the first MTD VAT return deadline date or the company may have to pay VAT twice. However, they may not be required to make their first submission via MTD until summer 2022. Organisations that do not sign up will be charged a penalty.
£2,700 for rateable value up to £15,000
£4,000 for rateable value up to £15,000
£6,000 for rateable value above £51,000
With these rules in place, it will be mandatory to keep digital records under MTD. Doing this will reduce the likelihood f errors and the time spent on tax administration. MTD for VAT is part of the overall digitalisation of UK tax. Businesses with a taxable turnover above £85,000 have already been required to follow MTD from April 2019, keeping digital records and filing VAT returns using MTD compatible software. The steps to sign up to MTD VAT, businesses, or an agent on a businesses’ behalf, are: 1: Visit gov.uk and choose MTD-compatible software 2: Keep digital records starting from 1 April 2022 or the beginning of their VAT period 3: Sign up and submit their VAT return through MTD. It is possible that some VAT-registered businesses may be eligible for an exemption from MTD, if it is not reasonable or practicable for them to use digital tools for their tax. If a business has previously been granted an exemption for VAT online filing, this will carry over to MTD VAT requirements. HMRC provides clear guidance and information that is easily accessible about the exemption process. MTD for Income Tax Self-Assessment (ITSA) will be introduced a year later and will now come into effect in the tax year beginning in April 2024, giving businesses that fit this criteria more time to prepare.
www.charteredone.co.uk
ISSUE 32 Spring 2022
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LSCA Business
Working in Chester? Looking to grow your professional network ?
You are invited to attend the Annual General Meeting of the Society on Monday 16 May at 12 noon to meet members, volunteers and staff to find out more about the work of your local society and how you can be involved in the vibrant Chester business community, light refreshments will be provided. Register your interest here: Chester & North Wales Society of Chartered Accountants (icaew.com) Or alternatively come along to the local Chester Town Group a lively discussion group for members in practice based in Chester City Centre. It is the ideal opportunity for members to get together in an informal and relaxed atmosphere. Dates of 2022 meetings here: https://events. icaew.com/pd/22907/chester-town-group-2022 32
George Wood
Nick Ledingham
LSCA Business
www.charteredone.co.uk
ISSUE 32 Spring 2022
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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. 34
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/
13/11/2019 11:23
LSCA Business
Information hubs from the ICAEW BREXIT–the latest resources and advice for ICAEW members and their clients. 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. 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.
Latest ICAEW updates within the COVID-19: global recovery Hub - Global recovery news and insights and accountancy's role in global recovery. Modern Slavery – would you know what to look for? https://www.icaew.com/technical/legal-and-regulatory/ modern-slavery 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. ICAEW 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.
Alex Pilkington Regional Executive, Liverpool
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
www.charteredone.co.uk
ISSUE 32 Spring 2022
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LSCA Business
ICAEW know how
We published this in the last issue, and because it is such a wealth of information we shall be keeping this list of publications as a easy reference for you.
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
36
LSCA Business
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
www.charteredone.co.uk
ISSUE 32 Spring 2022
37
Professional Services | Financial
38
