PQ magazine, June 2020 by PQ magazine

PQ magazine June 2020

www.pqmagazine.com / www.pqjobs.co.uk INCORPORATING NQ MAGAZINE

THE VOICE OF ALL PQs

WHERE’S THE REMOTE?

P40

AAT GOALS

PQ recommends some great telly while lockdown keeps us all indoors P52

Professional stars look to AAT to secure their future

COVID CLASS OF 2020 P10

BREAD AND BUTTER P36 How a forensic examination of an exam paper can help you get that pass

BECOME AN INSOLVENCY EXPERT P34 DOUBLE UP WITH ACCA P24

REMOTE EXAMS HAVE ARRIVED Most professional bodies have now put plans in place for sitting exams remotely

P16 FINAL WHISTLE

Whistleblower lands an £8.6m settlement from SEE INSIDE Big 4 firm

FISCAL POLICY IN A POST COVID-19 WORLD, AS ENVISIONED BY TAX GURU RICHARD MURPHY

You’re sitting two papers next time – but how do you decide which ones?

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Award-winning AAT courses and apprenticeships Flexible learning to suit your lifestyle mindful-education.co.uk/students

contents PQ

IN THIS ISSUE News 04ACCA initiative Remote exams to be launched in June; and a message from the Editor 05AAT extension Association extends membership renewals for its students

06ACCA exams Association

pushes back some June exam sittings into July 08CIMA case study Don’t take a scattergun approach to the Operational case study, the examiner warns students 09IR 35 Proposed changes are flawed and unfair, says Parliamentary committee 10The jobs market Youth unemployment could hit the million mark, think tank warns 12Tech news Grant Thornton launches ‘digital accountant’ pathway for trainee intake; and Sage upgrades with AutoEntry Features, etc 14Your career Baffled by bitcoin and confused by crypto currency? Then e-Careers has the right free course for you 15Mind your Ps&Qs Lockdown is driving me crazy and I want to vent; confusion over ACCA exams; and the best of PQ’s social media 16Ethics Whistleblower lands £8.5m settlement from EY

p24

June 2020

17A post Covid-19 world ACCA

has come up with a 10-point plan for your business 18Analysis Tax guru Richard Murphy explodes some myths about what tax will look like in a Post Covid-19 world 20CIMA exams Recently qualified Brent Holden has some top advice for CIMA studiers striving for that pass 21AAT exams Mike Kirkham explains how you can best prepare for and pass your Level 3 Synoptic Assessment 22Online study Ten top tips on how to make your online studying more effective 24ACCA exams If you’re going to sit two papers in one sitting then certain combinations work while others don’t. We explain all… 26Look to the future Deloitte has gazed into its crystal ball to see

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what technology will look like in the year 2030 28CIMA exam initiative You can now complete your exam journey from the comfort of your own home 31ACCA SBR exam Tips to improve your technique, which is vital if you’re to pass Strategic Business Reporting

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32Your career Online interviews

can be tricky, so Hays has some top advice on navigating your way though them 34Insolvency qualifications We guide you through the various options through which you can become a licensed insolvency practitioner 36ACCA AAA exam Top tutor Paul Merison descontructs this paper, pointing out how and where you can score marks 38The Troubleshooter #1 Test yourself in our multiple choice quiz on variance analysis 39Home working #1 How to work productively at home while maintaining your sanity 40AAT spotlight Meet the footballers who are looking to life after soccer by studying for the AAT qualification

p28 42The Troubleshooter #2 Philip Dunn explains that when it comes to making budgeting decions you really need to know the limiting factors 44CIPFA spotlight How the institute is helping its students and members with their mental wellbeing 46Tax Zahid Ahmed helps you get a better understanding of the mechanics behind pensions contributions

48ACCA ATX exam A recent

Advanced Tax exam question is dissected by Neil Da Costa, who points to where mistakes might have been made 50Home working #2 Are you are workaholic, daydreamer or a

p42 recluse? Robert Walters has the answer 52Watch with PQ Our guide to what to watch on the telly over the lockdown period 53Careers Life at the University of Lincoln; be kind to your your eyes; and our Book Club Review 54Fun stuff – and our giveaways The columnists Robert Bruce Pandemic provides food for thought 6 Prem Sikka Government bailouts must come with conditions 8 Zoe Robinson Be positive and look forward – not everything in the world has changed 10 Mike Day The importance of wellbeing 12

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PQ news

GRAHAM HAMBLY Breaking the news that matters

ACCA has confirmed that from July it will pilot remote exams for the Applied Skills papers. The number for this first session is set at 600 as it wants to make sure the process is as smooth as possible. It is working with the learning providers to support students towards this as “they can support their students in the preparation, but also ensure they have the set-up at home – ensuring the students runs the diagnostic test, prepare their room at home to meet the requirements, etc.” We would love to hear from anyone out there who has volunteered. Meanwhile, in early May CIMA delivered its first-ever at-home OT exams. PQs in more than 70 countries have now booked to sit the exams remotely, and students in over 40 countries had sat exams by the middle of May. We can report all is going well, but you don’t have to believe me, here’s what Siemens’ Dan Ralls said: “The experience was fairly good and the online invigilator was very easy to contact to ease some of my concerns. I didn’t feel disadvantaged by sitting my exam at home and I’m really pleased to be able to continue with my studies to hit the targets I had set myself.” AAT has now announced it is working to delivering some of its assessments remotely by August (see opposite). It has also taken the bold step of extending students’ memberships by three months. And it has promised to monitor the situation and could even extend the extension. So enjoy this jammed-packed issue – 55 fun-filled pages for you. Graham Hambly is Editor and Publisher of PQ magazine and NQ magazine

ACCA remote exams by June ACCA is introducing remote exams, some of which will be up and running by June. Students will be able to sit exams at home, or in another location, all watched over by a remote invigilator. It is targeting June for the introduction of remote invigilation exams for its on-demand exams (Applied Knowledge and Foundation level exams). ACCA will then offer remote exams taking for the session-based Applied Skills exams from September (see commentary, left). ACCA said it was still exploring the situation for Strategic

Alan Hatfield

Professional exams, and updates have been promised soon. The new exams, when introduced, will be overseen by a live invigilator. ACCA also stressed there is a thorough system of

checks involving biometrics, artificial intelligence and recording. ACCA has also revealed that it will be increasing exam fees from the December 2020 sitting. The current changes will not affect September exam entry prices and students are still able to take advantage of the reduced rates by booking the early entry deadline. ACCA’s Alan Hatfield said: “Exam entry is open for September and we know students are already planning for this session. We advise students to book exams in their local centre as usual and we’ll provide updates if circumstances change.”

CIMA February case study results The CIMA February case study results are out, and as CIMA says they are a bit lower than normal. There was the option to resit the case study under the 2015 syllabus, or to take the new-look 2019 syllabus. Those taking the 2019 syllabus did substantially better than the resit candidates. The OCS 2019 syllabus pass rates was 55%; MCS 57%; and SCS was 59%. The 2015 syllabus retakes pass rates were 34% for OCS; 45% for MCS; and 52% for SCS. CIMA’s Stephen Flatman told PQ magazine: “We can see the case

are familiarising themselves with new topics and study materials.” He revealed that, overall, CIMA has seen an increase in exam registrations under the new syllabus. This means that “students continue to progress their journeys towards becoming CIMA-qualified management accountant”.

study exam pass rates for February 2020 are a bit lower than they have previously been. With the CIMA CASE STUDY – PASS RATES launch of the new CIMA Feb 20 Nov 19 Aug 19 May 19 professional qualification 2019/2015 and the introduction of the Operational 55%/34% 68% 46% 59% new content in the syllabus, Management 57%/45% 66% 64% 70% this is something we Strategic 59%/52% 64% 64% 65% expected to see as students

‘Bailouts should go in the annual accounts’ UK-registered companies that access emergency bailout funding need to record that fact in their next and subsequent annual accounts, according to financial journalists at Private Eye. This needs to happen until any taxpayer funds have been repaid, it said. The ‘In the City’ report also stressed that justification for the support should also be stated, along with its use. It went on: “For listed companies, the larger the support, the more detail to be recorded. For private companies, this reporting

should begin for any accounting period after December 2019. For listed companies, it should start from any financial statements issued after 31 March.” So how would this work? Private Eye suggested a section in the directors’ report could record any support provided in terms of guaranteed loans and staff or property costs. More detail could then be provided in the specific notes to those accounts relating to staff costs, creditors, borrowing, contingent liabilities, and post-balance sheet events.

In brief Transforming the FRC Primary legislation to create the Audit Reporting & Governance Authority (ARGA) may still be required, but the Financial Reporting Council said it making progress towards the transformation. A formal plan is now in place to streamline the governance of the FRC. A two-tier system will replace the current three tiers of committees and councils. More of its decisionmaking will be led by the Executive. The number of Board 4

members has been reduced, and will be refreshed through natural changes in rotation, producing leaner decision-making and oversight arrangements. This new governance structure is due to be implemented in January 2021. CIPFA June exams CIPFA has confirmed students will be able to take the June exams at home, or can choose a private setting other than their home – but no exams will be offered either at workplaces or CIPFA venues. The

institute is hoping the new arrangements will alleviate students’ concerns about the risk of delays to their studies as a result of Covid-19. The remote exams will be supervised by an online invigilator through ProctorU, and exams will be monitored through the computer’s webcam and microphone. CIMA online exam videos CIMA posted some ‘short & sweet’ videos to help students (and us) understand the new online

exams, which launched on 4 May. You can check them out at: https://tinyurl.com/y97qmsem Stephen Flatman, CIMA’s VP, exams, gives an introduction to the exam, he then goes through your top Q&As. There is also a guide to support resources and finally an explanation of how to use the whiteboard. PQ Magazine June 2020

news PQ

Covid-19 pandemic forces Deloitte to cancel internships Deloitte’s summer internship scheme has been ‘cancelled’ at UK offices, due to the ongoing Covid-19 pandemic. The 350 candidates will be handed a £500 goodwill payment and will be encouraged to join an online training programme. The training, which is totally voluntary, takes the form of a four-week virtual mentorship programme. Deloitte has insisted that safety was its priority when making the decision. Over at PwC its 400 undergraduate students on its internship scheme have been offered guaranteed positions on the autumn 2021 graduate training programme. That means they enter their final year of university knowing they have a guaranteed job at the end of their studies, in what could be a challenging environment for new graduates. • There are more Big 4 stories on page 10.

PQ Magazine June 2020

AAT remote exams by August AAT has announced that it is working towards making remote invigilation for some of its assessments available from August 2020. Assessments will be offered in a phased approach, and it explained it will also publish a revised synoptic schedule for impacted assessments in due course. AAT is targeting the following assessments: • Advanced Diploma in Accounting – Level 3 (Level 6 Scotland).

• Financial Accounts Preparation (FAPR). • Management Accounting: Costing (MMAC). • Professional Diploma in Accounting – Level 4 (Level 8 Scotland). • Professional Diploma Synoptic Assessment (PDSY). Other assessments will follow. AAT said: “Unfortunately, not all assessments can be taken via remote invigilation for security reasons and we are continuing to investigate possible solutions where

AAT has granted membership renewals to students who are close to completing their AAT qualification. A three-month extension has been granted to: • Students studying short qualifications. • Students studying the AQ qualification who have either one or two assessments remaining and are due to renew between 1 April and 1 June 2020. • Students who have purchased a separate End Point Assessment (EPA) that is due to expire by 30 September 2020 have been given

Three-month’s membership extension for all AAT studiers an extension to 31 December 2020. AAT CEO Mark Farrar (pictured) said: “Managing the renewals of our members in a fair and considered way during this challenging time

remote invigilation cannot work.” AAT has also revealed that it will be calculating results for students who could reasonably have been expected to complete the following qualifications this summer: • Foundation Certificate in Accounting – Level 2. • Foundation Diploma in Accounting & Business – Level 2. These calculated results will be issued on 13 August 2020. AAT will shortly be contacting all tuition providers who have students that are eligible for calculated results.

is essential. This will protect our organisation’s future and ensure we can continue to support them after this crisis subsides.” That said, Farrar emphasised AAT is monitoring the situation, and if it feels it appropriate to offer extra extensions it will.

PQ news

June’s ACCA exams moved to early July

ROBERT BRUCE Pandemic provides food for thought Sitting in lockdown we have noticed how small businesses have been astonishingly speedy at transforming their businesses. The traders at New Covent Garden, the wholesale fruit and vegetable market, are a good example. Most of their high-quality produce went to restaurants. Then the restaurant trade, by and large, vanished overnight. The wholesalers could have gone into hibernation – but they didn’t. They turned their business models upside down and within days were supplying the public at a point where supermarkets were struggling with demand. Their delivery networks changed direction. And suddenly the Bruce household found crates of fruit and vegetable being dropped off on their doorstep. The quality was revelatory. We haven’t had such fine fruit and veg before. It is but a small example. But everywhere you look you find that businesses, small local ones in particular, have found that enthusiasm, the technology that is now available, and a desire to find turnover in an utterly changed world, has paid off. It is remarkable. We need to see such enterprise in more staid sectors of the economy. In early May, the Financial Reporting Council put out a review of audit quality indicators. It found that audit firms, bizarrely, mostly monitored the quality of their audits after they had been completed. Anyone with any sense would be monitoring them at a point before or during an audit when they could be transformative. A small thing. But change, as we now know, is easy to bring about very swiftly. Robert Bruce is an award-winning writer on accountancy for The Times

Picture perfect

ACCA has decided to delay the June exam sessions in mainland China, Hong Kong (pictured), Macau, and Taiwan until July. It said that exams will now take place over one or two weeks, from 6 July. ACCA believes this will reduce the risk of it having to cancel the exams due to the ongoing pandemic. Students who have already booked will be told the exact dates and timings of the new sitting closer to the sessions. Exams in Vietnam have also been delayed until 6 July. ACCA said that results from these exams will be

with candidates on 31 July. June exams in the Middle East will not be running in Bahrain, Egypt, Iran, Jordon, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and UEA. However, ACCA confirmed June exams are currently scheduled to take place in Japan, Mongolia and South Korea. In Africa, ACCA said it has now cancelled exams in Botswana, Mauritius, South Africa and Zimbabwe. They are still running elsewhere – in Nigeria, Tanzania, Sierra Leone and Uganda, to name but a few.

Mindful Education comes to AATs’ rescue Mindful Education’s online resources have come to the rescue of thousands of AAT studiers determined to progress their studies. The latest AAT insights shows that over 5,700 new and existing AAT students have been referred by their training provider to Mindful’s site. Oldham College’s Deborah Seed

said: “Mindful Education resources have been a fantastic in our transition to online learning.” She said from a tutor’s point of view the reports are invaluable as a way to be able to track students’ progress. But, perhaps more importantly, “students love it, either to work through at their own pace, or in a virtual classroom with a tutor”.

Mindful, a PQ magazine awardwinner, works in partnership with over 30 colleges from Glasgow Clyde to Bournemouth Poole. As the lockdown entered its second month AAT revealed registration for distance learning rose 20% in the week to 23 April 2020, compared with the same week in 2019.

Three is the magic number for ICAEW sitters Some 2,944 PQs sat the March ICAEW Professional level exams, but only one sat four papers. That individual failed them all. As is usually the case, those who sat three papers were the most likely to pass them all. Some 78.5% of March sitters who opted to sit three papers passed them all, with another 12.3% passing two out of three. The problems come with those opting for just one paper. While 76.6% passed, that means 23.4% left the March

Sam Akhter

Natalie Bottcher

Professional Level March 2020

sitting with no passes – that’s 389 sitters. In all, 470 ACA PQs failed all the papers they sat at the spring sitting, and will have to wait until September to make amends. Irina MireLa Dumitrache

Audit & Assurance Financial Accounting & Reporting (UKGAAP) Financial Accounting & Reporting (IFRS) Tax Compliance Business Planning: Taxation Business Strategy & Technology Financial Management

Luke Westwood

All sitters 84.6%

First attempt 87.1%

76.2%

100.0%

86.1% 84.1% 71.8%

89.3% 85.3% 75.7%

86.9%

92.8%

80.8%

84.0%

Angela Patrick

Kathryn Stringer

Looking good: Premier Training, the award-winning online college, is celebrating 22 years of success. It asked its AAT students to send selfies of how they study. What Luke is doing in the cupboard we will never know! We think he was self-isolating before it got trendy 6

PQ Magazine June 2020

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Accountancy college of the year

lsbu.ac.uk/opendays

PQ news

PREM SIKKA Bailouts must come with caveats

Capitalism has been partially suspended for a few weeks and the much-maligned state is acting as the insurer and ultimate underwriter. Businesses are queuing for reliefs and bailouts. However, such support has to be structured and strategically used. The first port-of-call for any distressed business has to be its shareholders. After all, they receive dividends from risks. Some £400bn was paid in dividends and £61bn of cash returned to investors in share buybacks between 2011 and 2018 by the FTSE 100 companies. If they are not willing to invest, then the business entity effectively passes to secured creditors. They can take over the business and convert their loans to equity. A bail-in by bondholders will also improve corporate cash flows and survival prospects as distressed entities will not have to pay interest on their debt. In the final analysis, an insolvency administrator can seek buyers for the business. If that option does not materialise then liquidation and piecemeal sale of assets beckons. But some selected business bailouts would be needed. Government support, whether in the form of loans or an equity stake, must come with stringent conditions to improve social welfare. To prevent a spike in unemployment, recipients must give undertaking not to cut jobs for the next 12 months. They should be required to reduce carbon emissions and gender/ethnicity pay gap, increase boardroom diversity and accept curbs on executive pay and dividends. They must not indulge in tax avoidance and a pay fair share of tax. Prem Sikka is Emeritus Professor of Accounting at the University of Essex

Don’t take scattergun to CIMA’s case study exam Simply reproducing rote-learning answers or pure knowledge of a topic area will score few, if any, marks, says the CIMA Operational Case Study examiner. Similarly, taking a scattergun approach to an issue and commenting on everything that you know about it from a theoretical point of view will score poorly.

The examiner pointed out that writing “this improves decision making”, “this graph is essential”, or “planning is enhanced” is not enough to gain any marks. The markers want to see the ‘how’ and ‘why’ this is the case. A simple “because of…” at the end of a sentence can improve explanations.

Thinking you ‘remember’ the stuff you learnt from the OTQ exams could also mean you are skating on thin ice. The examiner feels you need to revise the technical material, because if you don’t have the knowledge then you can’t score well. Having awareness of the industry the case study is set in will help you in the exam hall, as it will make you think of the wider marketplace issues that might impact on decisions you could be asked to comment on.

ICB first for sitting all exams at home ICB became the first accountancy body to successfully offer all its exams in a home setting during the pandemic. With the help of a new tech partner, ICB exams now provide remote invigilation via ‘virtual’ eyes and ears in the room. ICB exam chief Peter Stewart explained that there is full flexibility to take the exam whenever it suits the candidate best: “ICB exams are available weekdays or evenings, morning, noon and night.” He stressed there is now no need to worry about availability at your

preferred centre – you are the boss! Candidates do, however, need to ensure they can guarantee a space where there will be no interruptions for the duration of the exams and their internet connection will be stable for the same duration. ICB’s first students went through

their final M8 exam on 22 April, to qualify as professional bookkeepers, and the reports are things are ‘running smoothly’. Stewart was obviously ‘delighted’. Check out ICB’s qualifications at: https://www.bookkeepers.org.uk/ Study--Qualifications

Exam initiative from ICAEW

1. Students need a reliable computer or laptop with a webcam and microphone, which meets the minimum tech requirements. 2. A quiet room with a closed door (no one else is allowed in the room during the exam). 3. A clear workspace. 4. A mobile phone to upload during the check-in process. 5. A strong internet connection. Exam sitters will not be able to take a break during the exam, can only use the on-screen calculator, and are only permitted to use the on-screen whiteboard.

ICAEW is running its Certificate Level exams temporarily via Pearson Vue remote invigilation.

OnVue remote invigilation will enable students to take their exams at home while being continuously monitored by an offsite invigilator. ICAEW, however stressed that for remote invigilation exams to run successfully students will need the equipment required to meet the tech specifications. There are five key requirements to use this exam delivery method:

Taxwatch Choose your status AAT is calling on the Office of Tax Simplification to allow taxpayers to elect to be either employed or self-employed. This would create improved tax certainty for employees and employers, while simultaneously addressing the issue of employment status and rights. AAT said it would help HMRC identify fraud more easily if both the employer/engager and the individual taxpayer was required to report. It would also remove the need for the controversial IR35 8

legislation, along with the CEST tool that is currently required for employment status determination. PapVAT scrapped on ebooks Plans to scrap VAT on e-books and e-newspapers has been fasttracked in a boost to readers and publishers during the coronavirus outbreak. The Chancellor Rishi Sunak said the zero rate of VAT will now apply to all e-publications immediately – seven months ahead of the original schedule. Sunak said: “We want to make it as easy

as possible for people across the UK to get hold of the books they want while they are staying at home and saving lives.” ‘No help for offshore firms’ Some senior figures in the UK clergy have said that companies registered in offshore tax havens should be refused corporate bailouts. In a letter to The Times they say: “We welcome the decisions of the Danish, Polish and French governments to refuse bailouts for corporations registered

in tax havens.” They go on to say that some large corporations continue to avoid their social responsibility, making huge profits yet hiding their wealth in tax havens. The church leaders point out that at least $8 trillion sits offshore, with its wealthy owners hiding from their tax and social responsibilities. They say when the pandemic ends we cannot go back to business as usual, and are calling on the UK government to foster a fair tax system that serves the common good. PQ Magazine June 2020

news PQ

Qualification Variant exams available in September – ACCA

ACCA has confirmed that it will be offering its Qualification Variant exams this September, using the planned June 2020 syllabus. And it is reminding students that variants, which are offered four times a year, will still be available as scheduled and will continue to follow the standard syllabus. Additionally, the Foundation in Accountancy, FFM, all DipFR, Russian Language and TRS exams have been cancelled for the June session. These exams will also be offered at the September 2020 exam session. Student exam entry for these papers opened on 5 May 2020. • The AA RUS exam will not be available in September 2020.

PQ Magazine June 2020

IR35 ‘is flawed and unfair’ The government must address IR35’s inherent flaws and unfairness, says the House of Lords Economics Affairs Finance Bill SubCommittee. It feels the government should use the Covid-19 pandemic to “completely rethink this legislation”. It goes further, and said it now believes the government has not sufficiently analysed the unintended behavioural consequences of the proposed reforms. Contractors are already being laid off, despite the reform’s delay. Many witnesses also told the Committee that the rules have

made them ‘zero-rights employees’, with none of the rights of being an employee or the tax advantages of being self-employed. Committee chair, Lord Forsyth of Drumlean, said: “Our inquiry found these off-payroll working rules

riddled with problems, unfairness, and unintended consequences. The potential impact of the rules on the wider labour market, particularly the gig economy, has been overlooked by the government. A wholesale reform of IR35 is required.”

Early warning systems are needed Tools for flagging signs of poor-quality audits need to be used more effectively, so corrective action can be taken, according to a major new review of their use by the Financial Reporting Council. The problem is, however, that most monitoring of audit quality indicators (AQIs), in large audit firms at least, only takes place after audits are completed! The watchdog said that consistent public reporting of AQIs can help audit committees and investors hold

audit firms accountable for achieving high-quality audit. The worry is few audit committees and investors interviewed by FRC for the report were even aware of published AQIs. That is because publicly-reported AQIs are not easily accessible or comparable across firms. The FRC’s David Rule said: “Public reporting of a consistent set of audit quality indicators is required to provide companies and investors another window on audit quality.”

PQ news

ZOE ROBINSON Be positive: not everything has changed

Although a lot has changed since last month, some things remain the same. We are now a lot clearer as to what is happening with the exams, with most being rescheduled or remote proctoring solutions on offer. The vast majority of tuition providers have successfully moved their classroom training into the virtual world, providing live tuition for students to access in the safety of home. It’s a different learning experience but it’s still learning; how you learn remains the same. However, you may need to become more self-motivated and develop a positive mindset. It’s important not to confuse a positive mindset with a belief that everything will be fine. Positivity is forwardlooking; it’s action based, with a focus on what you have achieved rather than what you haven’t. Studying from home brings practical challenges, finding somewhere to work for example, but if you’re not in the right frame of mind whatever you try to do will be less effective. This is where a positive mindset can make a big difference. Don’t think about how many chapters you have to learn but about those already covered and how many you will complete today. However, be careful, this is a technique to improve learning not make you feel better about doing nothing. The mental side of studying at the moment, when it’s harder to talk to friends and colleagues, shouldn’t be underestimated. In fact, it may well be the one of the biggest challenges students are facing right now. Zoe Robinson is Learning and Programmes Director at Kaplan Financial

Corona Class of 2020 Youth unemployment could increase to over one million in the coming months, as the Covid-19 recession punishes the ‘Corona class of 2020’ with fewer jobs and lower pay, according to the Resolution Foundation. As many as 600,000 more 1824-year-olds could become unemployed over the next year, on top of the 400,000-plus in this age group who are already out of work. As firms look to lay off staff and freeze hiring, 800,000 school leavers and graduates are entering the UK jobs market. Current estimates of a 6% rise in unemployment is twice as large as the rise following the financial crisis. The report found that the

Kathleen Henehan said: “A new maintenance support scheme could help thousands stay in education and build up their skills, while those entering the labour market for the first time should be supported by a job guarantee offering critical employment experience.”

CIPFA launches UN training programme CIPFA is launching a new training programme, in partnership with the United Nations International Fund for Agricultural Development (IFAD). The aim is to support and strengthen IFAD-funded projects in communities facing hunger and poverty. The new Achieving Project Excellence in Financial

Management (APEX) programme has been developed to improve the FM practices among key finance personnel, including the adoption of international accounting and reporting standards. CIPFA CEO, Rob Whiteman, said: “There is a clear and direct correlation between good financial management, effective project

management and achieving better outcomes.” CIPFA will deliver bespoke APEX courses in-person and via distance learning to 250 key staff in English, French, Spanish and Arabic. The two-module course will run for three years. Locations for in-person training include Senegal, Kenya, Panama, Istanbul and Vietnam.

LSBF launches free ACCA ‘masterclasses’ LSBF has launched new free ‘accounting masterclasses’, aimed at providing ACCA students with additional online support during the Covid-19 outbreak. The masterclasses are a series of short webinars hosted by LSFB tutors, focusing once a week on each ACCA paper. The schedule will run throughout May from Monday to Friday, with two or three sessions every day lasting 30

Women in work The top three countries in PwC’s latest Women in Work 2020 Index are Iceland, Sweden and Slovenia, while the UK remains in 16th place. The research shows that if the female employment rate across the OECD countries matched Sweden’s, OECD GDP would be boosted by more than £4.5 trillion. Top performing UK regions were the South West, Northern Ireland and Wales, with all regions except Scotland improving their absolute score since last year. London performed the poorest on the index due to poor female labour force participation and a high female unemployment rate. It fell three places to 12th. 10

employment rates of graduates entering the jobs market during this crisis are projected to be 13% down. Graduate pay is predicted to drop 7%. One suggestion to help is the idea of a job guarantees for young people. Resolution Foundation’s

NMC Health audit investigation The UK’s accountancy watchdog has opened an investigation into EY’s audit of the NMC Health plc financial statements for the year end 31 December 2018. The investigation will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure. Tech predictions for 2030 A tenth of UK households will have at least 50 connected cameras in 2030, and smartphones will boast an average of six lenses. These are just some of the predictions made by Deloitte at its recent Media & Telecoms 2030 & Beyond conference. Among the other predictions are

minutes each. These can be accessed through Zoom and are open to LSBF students and anyone else looking to expand their knowledge during the lockdown. Among the topics are ‘The 3 snakes of APM’, ‘How to become a Tort Master’, and ‘Why students fail AA’. The full calendar of the masterclass series can be found at https://www.lsbf.org.uk/events that 6G will have been finalised and 8k will be the default resolution for TV sets costing over £500. See our feature on page 26. The EY promise EY has said that its partners will do everything possible to navigate through the Covid-19 situation with no redundancies among its 17,000 UK employers, no people furloughed and no reduction in employee salaries. EY promised it will also continue its apprenticeship programmes for graduates and school leavers. It said it expects to recruit 1,000 graduates and apprenticeships this year. PQ Magazine June 2020

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Think ACCA, think HTFT We have a full suite of ACCA Applied Skills and Strategic Professional courses for September 2020 exams With our ACCA courses you get: Membership of our vibrant Online Learning Community and a dedicated tutor HTFT Partnership student notes and ACCA authorised study text, exam kit and pocket notes Recordings of HTFT tuition sessions to develop your knowledge Live online invites for join our new Motivation huddles and tutor-led Boost sessions Scheduled ‘live online’ revision sessions – recorded, downloadable and playable on all devices 3 x HTFT mock exams, marked, with answers and video debriefs HTFT’s innovative Exam Simulation day and live debrief For more information visit www.htftpartnership.co.uk/courses/acca/

Study CIMA, choose HTFT CIMA remote exams are here, and our HTFT live, HTFT on-demand and HTFT play resources are all here to help you prepare for, and pass, your exam. HTFT live: join our expert tutors live online for interactive Masterclasses, designed to support your application of syllabus knowledge HTFT on-demand: drive your learning, with full flexible resources that you control HTFT play: Boxsets of topic recording and Proficiency exam-style practice assessments For more information visit: www.htftpartnership.co.uk/courses/cima

A moment for reflection: A great number of our clients/students are key workers: working in the NHS, care sector, food supplies etc, and we want to take the opportunity to THANK YOU for all that you are doing during these challenging times.

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PQ tech news

MIKE DAY The

importance of wellbeing

This month I want to focus on wellbeing during these unprecedented times. I have been working for 40 years and I have certainly never felt this way before. We should all recognise that stress is a very real thing, a chemical reaction in fact. There is no reason why we should be feeling 100% right now and so don't be surprised if you are not. I am not sleeping all that well at the moment, but I know just how vital sleep is in feeling able to cope, mentally and physically, and so it’s an area of focus for me. I always try and thrive on ‘eustress’ (the beneficial kind of stress), things like leading up to presenting in public. I certainly haven’t mastered it after all these years, but I have coached myself to recognise it and use it. But at the moment it does feel more like distress (the harmful kind). And so it’s a cliché, but physical health plays a big part for me in times of distress, and so I have upped the dog walking. I have also made sure I am doing something for myself; a new hobby or a new skill. In my case it’s an electro-acoustic guitar and it’s already working. In case it helps, Xero has launched a Business Continuity Hub (tinyurl.com/ya6op8so), including advice on how to get help for your business, run your business remotely and looking after yourself and your team (the wellbeing bit). Mike Day, Director, UK Education Sector, Xero

Creating digital accountants Grant Thornton has launched a new ‘digital accountant’ pathway for its trainee intake. The pathway will incorporate five new digitally-focused modules, alongside its traditional ACA accountancy qualification programme. The new modules have been specifically designed to develop technology, process, and data audit skills. Delivered by BPP, the modules will cover: • Big data.

• • • •

Data analytics and visualisation. Cyber security. Digital innovation and disruption. Ethical and legal matters. The idea is to help address the digital skills gap in the audit market – although PQ magazine is not sure what this says about the state of the ICAEW’s current syllabus. The modules will be in place for

September’s 2020 intake and will be mandatory for all graduate and school leavers studying the ACA qualification in audit and tax. Grant Thornton’s head of audit, Fiona Baldwin (pictured), said: “Our updated, bespoke accountancy trainee programme will provide our people with a qualification that incorporates relevant digital skills alongside the traditional requisite technical accounting knowledge.”

VAT compliance for digital marketplaces Deloitte and Taxamo are to launch a new tax compliance service for digital marketplaces and their online sellers. From January 2021, the European Union is introducing new VAT reporting requirements, and the new service will enable the marketplaces and sellers to register for VAT, automatically determine the correct VAT treatment of sales, submit VAT returns and remit payments of VAT to tax authorities. The service will be fully automated, underpinned by

Deloitte’s tax compliance solutions and Taxamo’s technology platform. Deloitte’s Matt Ellis explained: “Nine months from now hundreds of thousands of online sellers will have new obligations to account for VAT in the EU on their sales. European VAT rules have the potential to be complex to administer for these global businesses.” With online marketplaces jointly and severally liable for the VAT due from sellers, the Deloitte service will allow them to manage this risk.

Virgin and O2 merge The owners of O2 and Virgin Media have sealed a £31bn ‘megamerger’, according to the latest news. The deal will see four directors from each company on the main board, with the chairman rotated every two years. It is estimated that the combined company will have 34% of the UK market, with some 46m television, broadband and mobile customers.

The new entity would also leapfrog BT to become Britain’s biggest operator. Potential savings from the tie-up have been estimated at £6bn. Telefonica, O2’s Spanish owner, has said that the deal will be a game-changer in the UK. The Competition and Markets Authority now has to approve the deal for it to go ahead.

Tech briefs 5G misinformation Conspiracy theories which place the current pandemic at the door of 5G are now the most common piece of misinformation on social media, according to

Ofcom. A survey of 2,000 people since lockdown found that more than half had seen false 12

information about the links between 5G and Covid-19. Paying the nation Did you know that 50% of businesses in the UK pay their people with Sage Payroll? This equates to over 8 million employees and 140 million payslips processed a year. Sage is now inviting you to put your knowledge to the test to see if you can pay people on time! Check here to play the game: https://paythenation.sage.com/

Scale of data hack ‘unknown’ Hackers got into the University of Warwick’s administration network last year in an attack which was kept secret, according to Sky News. The illegal access occurred when remoteviewing software was installed by a staff member, allowing the hackers to steal personal information on students and staff. The security at the university was so poor that it couldn’t identify what data had been stolen. In response, a new chief information and digital officer,

who will report directly to the vice chancellor, has been hired. Apple flaw A flaw in Apple’s mobile operating system could have left millions of iPad and iPhone users open to attack from hackers. Research by ZecOps, a mobile security firm, found that a bug in the Mail app made the devices vulnerable to sophisticated attacks. It even suggested that the bug has been used to exploit at least six high-profile victims. PQ Magazine June 2020

technews PQ

Sage unveils latest updates Bye bye Bo Royal Bank of Scotland is closing Bo, its new digital bank, after only five months. RBS said it needed to focus on lending to customers struggling to cope with Covid-19. Commentators were predicting Bo’s prospects looked gloomy after the departure of Mark Bailie in January. He had set up the digital lender at the cost of tens of millions of pounds. At the time RBS felt that Bo was a more cost-effective way to go digital, rather than buying an independent financial technology company. Launched last November using social media influencers, Bo’s bright yellow card was aimed at attracting younger customers. However, reviews weren’t great as critics said its functionality was not as good as rivals Monzo and Revoult.

Sage has announced its recent technology acquisition AutoEntry has now been embedded into Sage Accounting to “eliminate timeconsuming, repetitive and errorprone manual data entry tasks”. Meanwhile another acquisition, CakeHR, will be made available as an option for customers.

Sage is extending too the automation capability within its core product through the release of new features such as Bank Rules and Recurring Invoices. The software provider says that providing users with enhanced features such as ‘correct transactions’ will also allow

customers to quickly and easily find and correct errors. Another update broadens industry coverage, with Construction Industry Scheme compliance capability. Finally, the new Sage Accounting Plus tier will have multi-currency and inventory management capabilities.

Facebook buys stake in Joi Platforms Facebook has made its largest-ever overseas investment, buying a $5.7 billion stake (10%) in Joi Platforms, the Indian mobile network. Joi Platforms is owned by Reliance Industries, a conglomerate controlled by Mukesh Ambani, India’s richest man. The all-cash deal will help Reliance reduce debt and at the same time strengthen the social media’s company’s presence in its largest market. Facebook has 250 million users in India, and its messaging app WhatsApp has around 400 million users, making India its biggest market. The last big deal by Facebook was when it paid $22 billion for

WhatsApp back in 2014. The company is currently valued at $520 billion. The Reliance Joi Infocomm’s mobile network offers fast data plans at discounted rates. Its subscriber base has grown rapidly

since it was set up just four years ago. India is seen as having real growth potential, as out of a population of 1.3 billion only around 560 million had access to the internet last year.

Get a step ahe ead with Xero r Advisor Certiﬁcati t on Having a sound knowledge of cloud accounting software is invaluable in a competitive job market. Get the Xero Advisor Certiﬁcate and stand out from the crowd. To get starte t d, speak to one of the education providers or accounting bodies – ACCA, ICAEW, AAT, ICB, IA AB, Kaplan, Avado, Premier Training, First Intuition, The Career Academy or Reed.

PQ Magazine June 2020

PQ financial markets

Trading up Are you confused by crypto currency? Baffled by bitcoin? If so, eToro and e-Careers are here to help!

o you have an interest in trading the financial markets but are unsure where to start? As one of the UK’s leading providers of education and training courses, e-Careers has partnered with social trading platform eToro to develop a ‘Financial Training Course and Mentoring Programme’, aimed at helping individuals understand how to trade, using the eToro platform. This course is fully funded by eToro and e-Careers, so there is no cost for you to undertake this eLearning training programme. Our course will also teach you a range of essential techniques and trading principles, including: • The different types of trader. • Pips and spreads. • Trends and cyclicity. • Moving averages.

• • • •

Support and resistance. Risk management. Analysis. Psychology, and more!

Who is this programme suitable for? Our trading course is suitable for all, no matter what your background is, or what your level of training exposure has been. Are you new to investing? If you consider yourself to be a novice in the world of stocks, indices, cryptoassets and forex, this course is perfect for you. Looking to invest in your future through education? Learn the essential principles of trading, and how to trade through the eToro global trading and investment platform.

Got an eToro account already but have never traded? If you lack the confidence to trade, we’re here to help you make your first deposit and start trading. Our Financial Trading Course and Mentoring Programme comprises five core elements: • eLearning – Understand the essential trading techniques and strategies through a 12-module online course. • Mentoring – Communicate with our mentors on any aspects that need further clarification or detailing. • Webinars – Our mentors will present certain aspects of trading in far more detail, via webinars. • Face-to-face workshops* – Held at eToro’s London HQ in Canary Wharf, where you will have one-on-one time with trading experts and can go through your personal plans and investment strategies in more detail. • Exclusive Access Event* – Here you will learn from, and network with, individuals who navigate the markets daily. You can learn behind-the-scenes tips and techniques, share your strategies, and bounce your ideas from seasoned professionals to fellow newbies on the programme. Signing up is simple. Click here to register your details and an advisor will be in touch to discuss this course in more detail. * Where required, some elements may be held virtually. Neither eToro nor e-Careers can offer financial advice.

It’s what we call

digital first Give your career the ultimate flying start with the business qualification that takes you where you want to go. Register now at accaglobal.com/pq

PQ Magazine June 2020

email graham@pqaccountant.com PQ

HAVE YOUR SAY Can I have a moan? I am one of the lucky ones who is still working, albeit from home. Some of my friends have been furloughed, but their chartered firms all seem to be topping up their salaries to 100%. Which is good. However, I know from Zoom chats many are itching to get back to work, as they have exhausted their Netflix accounts! Silly me, I thought this would be an ideal time to get some real study done. I have been putting off that ACCA ethics module for an age, and thought this would be the perfect time to start. It only takes 20 hours. Unfortunately, I forgot about the kids, dogs, cats and husband! They (he) don’t

seem to know where anything is and continually interrupts me, just as I find a quiet time to sit down away from the madness. The kids

are kids, and that’s great, but they are now jumping off the walls. Sorry I know I am moaning. It’s my life and I love it, but getting ACCA qualified will mean so much to me and my family, and I know it will be worth it all in the end. Oh, and thank you PQ for being there. Always a bright light in the often-dull world of accountancy – sorry, but it can be a bit boring. Have you seen the AAA syllabus! Jenny, Hull The editor says: I love this letter – a PQ mug is on its way to Hull, Jenny! It shows a real-world insight into the lives of PQs. As you say being ACCA qualified will make a massive difference to your future and that of your family. That’s what ACCA can do for you.

Our star letter writer wins a fantastic ‘I lovePQ’ mug! ACCA pilot confusion I have just been on Facebook and one of the tuition providers is claiming that ACCA is offering home exams to the Applied Skills, AFM and SBL papers in July. When students asked to sit these exams they were told (by the provider) only those who had paid for the ‘premium’ service would be allowed to go forward for what is being described as ‘a pilot’. But is it true? PQ magazine, can you do your stuff please, and find out what is going on? I know in June the Applied Knowledge and Foundation level will have remote invigilation, but the latest from the ACCA says that it will be September before Applied Skills papers will be offered to all students. If the ACCA is running a pilot how is it deciding who can sit? Surely it is not leaving it to the private tuition companies! A leading independent tutor, name and address supplied The editor says: We understand that the ACCA has approached its Platinum providers to help with a pilot to test remote sitting for the Applied Skills exams. It wants 600 students sitting exams each day in early July. It seems sensible to us that the ACCA pre-tests in realtime home exams before they go live. Remember, students who put

Sorted, thanks to pqjobs.co.uk

themselves forward for this are in effect guinea pigs, and are helping with the future success of this programme.

Come on, AAT Everyone seems to be moving over to home invigilated exam sittings.

Everyone that it except AAT! I have now officially had enough of studying for assessments when there doesn’t seem to be any end date in sight. I just can’t get motivated anymore. Come on AAT, tell us what you are planning. Name and address supplied

social media ROUND-UP As PQ magazine went to press, the AAT was the only body to announce that it was reducing membership fees for some of its AAT students. It has granted a three-month extension for students close to qualifying. Some PQs were confused: “I assume when they say 1 or 2 remaining they mean at level 4, and therefore for people close to completing the qualification and not level 2 and 3. They are not going to please everyone, but I personally agree with the solution they have in place.” Another said: “Think they should extend across the board”. However, Georgia said: “I’m level 2 with only synoptic left and I have extension.” So, if you are level 2, 3 or 4 and due for renewal within the specified dates you get an extension. Well done, AAT. There was lots on social media too about multinationals who take out loans but don’t pay their fair share of taxes. This hit a note with many. The former head of the UK parliamentary public accounts committee, Dame Margaret Hodge, said all multinational companies that avoid paying tax in the UK should be made to repay their pandemic bailout. She also said these companies should not be paying any dividends until the money has been repaid. Lots of you agreed. How these loans are recorded in annual reports is also important. We also picked up on the fact that many ACCA PQs are planning to sit two exams come September, to ensure they keep on track for qualification. Which two papers you take is key. The experts suggest sitting one numerical and one more descriptive paper. Timothy said he was sitting AFM and SBL. “Seems a good mix of calculations and theory. It’s a nice balance instead of two heavy calculation papers or two theoretical papers, which may turn out to be boring.” Spot on Timothy, that’s the way to go.

PQ Magazine Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ | Phone: 020 7216 6444 | Email: graham@pqmagazine.com Website: www.pqmagazine.com | Editor/publisher: Graham Hambly graham@pqmagazine.com | Associate editor: Adam Riches | Art editor: Tim Parker | Contributors: Robert Bruce, Prem Sikka, Zoe Robinson, Mike Day, Tony Kelly, Phil Gammon, Edward Netherton | Subscriptions: subscriptions@pqmagazine.com | Origination services by Classified Central Media If you have any problems with delivery, or if you want to change your delivery address, please email admin@pqmagazine.com

Published by PQ Publishing Ltd © PQ Publishing 2020

PQ whistleblowing

Whistleblower wins £8.6m

in damages from EY

Y has been ordered to pay $10.8 million (£8.6 million) in damages to a whistleblower who said the firm had been covering up evidence of a client in Dubai suspected of money laundering and gold smuggling. Auditor Amjad Rihan sued EY after the firm forced him out of his job in 2014. Rihan had led an audit where he felt money laundering was taking place. However, EY decided not to report the activity to the relevant authorities. In a High Court ruling, Mr Justice Kerr found that the accountancy firm had breached its professional duties in its handling of the 2013 audit of Dubai-based Kaloti Jewellery International. He said EY bosses were “responsible for suggesting to the company involved that it should draft its compliance report in a manner that masked the reality of the Morocco gold issue”.

The managing partner at the time was accused by Justice Kerr of never having read the International Federation of Accountants’ ethical code, which sets out the standards expected of the profession. Rihan was awarded $10,843,941 and £117,950 in damages. He said: “Almost seven years of agony for me and my family has come to an end with total vindication by the court. My life was turned upside down as I was cruelly and harshly punished for insisting on doing my job, ethically, professionally and lawfully in relation to the gold audits in Dubai.” He went on: “I really hope EY use this judgement as an opportunity to improve, and avoid such events happening in the future.” EY told the press that it will appeal the ruling. It said that its assurance team had “uncovered serious irregularity and reported them to the proper authorities”.

Have you booked your exams for September 2020 yet? Find out more: accaglobal.com/bookexams

PQ Magazine June 2020

ACCA & Covid-19 research PQ

Dealing with disaster ACCA’s global survey provides businesses with a 10-point plan for the post Covid-19 world, says Jamie Lyon

he coronavirus crisis has caused a systemic shock to the global economy. There is even talk of a ‘Pre-Covid-19’ and ‘Post-Covid-19’ world, and this is the world in which PQ readers will need to navigate from now on. ACCA’s global research Covid-19 global survey: inside business, impacts and responses looks at the impact of Covid-19 so far on organisations and the global business community, and it’s clear from the findings that this is only the start of the story. Over the coming weeks and months different regions of the world, countries, businesses and organisations in all sectors will seek to navigate a way through the crisis, using different strategies and interventions to respond to the crisis in what will be a continuously and fast-changing situation. ACCA’s report provides advice for organisations in how to respond based on the ‘3As’ (the capacity to adapt to, anticipate and absorb climate extremes and disasters). 1. Think ‘people first’. Pay attention to the physical and mental health of employees and develop appropriate plans for the resumption of work. Put in place a communications plan that will engage and update employees regularly and human resources policies that address crisis measures. 2. Accept the short-term focus and demonstrate true leadership. Timelines and targets will need to be refocused on near and mid-term horizons. Senior leaders in organisations need to accept a change of focus from strategic to tactical.

PQ Magazine June 2020

3. Recognise the needs of your customers and other stakeholders. Make sure you do not miss the opportunity to respond to those changing needs. Understand the impact on your supply chains, and wider relationships with stakeholders and partners. 4. Use a crisis-management team with communications skills and establish a resilience plan. Oversee major issues, formulate business contingency plans, coordinate and align implementation across different departments, and ensure speedy responses and decisionmaking. Initiate resilience planning to ensure activities across the organisation are connected in response to an event and broader business integrity is protected. Follow the data 5. Model scenarios and plan for resumption. In a crisis such as Covid-19, organisational scenarios are not constant and require regular review. It is important to understand how using analytical capabilities to assess both external and internal data can put the organisation in a stronger position and help it understand the operational and financial impact of different scenarios that may arise. Information insight

is also critically important for business resumption planning, which aims to get the organisation back up and running properly, planned in manageable phases. This requires analysis of the resources and assets that the organisation needs to safeguard in order to be able to resume. 6. Review government and fiscal policies that may be of benefit. Monitor the relief measures and policies introduced by the government and seek to use the benefits fully. Take a lead role and communicate the needs of your industry (leveraging on data insights) to relevant government agencies for appropriate policy formulation, refinement or implementation. 7. Remember: ‘Liquidity is the lifeblood’. Organisations should review their lines of credit and renegotiate their debt financing obligations. Payment periods, for example, may well be extended in the immediate term as businesses recover. Strong focus on cash management and liquidity should be in place to bridge different business scenarios, accepting that recovery to full liquidity is likely to be a long process. Anticipate & innovate 8. Look for opportunities to innovate. Organisations should consider opportunities for short or medium-term innovation. This could involve product and service development or thinking innovatively about partnerships. It could mean ensuring that employees have new opportunities for producing innovative ideas or looking again at how the organisation is deploying digital and technological innovations. 9. Review company strategies. Re-examine business models. Explore new channels to market, supply-chain diversification, new approaches to customer services, and opportunities to grow. 10. Don’t forget: fundamental business risks remain. Don’t lose sight of the fundamentals. Even in the face of Covid-19, the organisation will still face not only existing risks (e.g. cybersecurity), but also different ways of working, and strategic reactions to Covid-19 could change these risks or introduce new ones. ACCA’s global research with over 10,000 finance professionals identifies a wide range of financial challenges facing organisations of all sizes and across all sectors. To read the report in full go to To read the report in full go to: https://www.accaglobal.com/gb/en/professionalinsights/global-economics/Covid-19_A-GlobalSurvey.html • Jamie Lyon is ACCA’s Head of Business Management 17

PQ ACCA & Covid-19

Tax after

coronavirus Richard Murphy explodes some myths about how many think fiscal policy will look in the ‘new normal’ economy

veryone keeps saying that nothing will be the same when coronavirus is over. The claim assumes that we will get over coronavirus: I am not sure we will, but I will ignore that for now because whatever happens what I am quite sure of is that tax will not be the same. There are three reasons. First, the amounts of tax that we will be expected to pay might change after coronavirus, but not necessarily as most people might expect. Second, our logic about why we tax will I think change, because what we will have learned from this crisis, again in ways most people might not expect. And third, we could end up with a quite different tax system as a consequence. How much tax will we pay after coronavirus? There is a widespread feeling that because the government is spending more as a result of coronavirus taxes are bound to rise as a result. I have good news on this: I think that is exceptionally unlikely. Instead, if anything, I am expecting tax decreases over the next year or two. That is because there is a very real risk that once furlough is over there might be up to eight million unemployed people in the UK. If that is the case then the overall level of demand in the economy will be suppressed. If any lesson was learned from the 1930s, when we last faced a problem of this scale, it is that to increase tax in this situation is to make the problem worse. This is, of course, because

taking tax from someone reduces their capacity to spend. And if we reduce the capacity to spend when the economy is already facing a massive downturn, we just make things worse. So, right now do not expect any tax increases and instead anticipate cuts. Do not, however, expect this to last forever. By the time the economy begins to recover (and one day it will) I think it likely that we will have realised that things like social care, the NHS, strong education systems, better funded public services, and much more, are still important to us, then at that time we will have to begin paying for them. I then expect taxes to rise. But that may well be some time off. And what I cannot stress strongly enough is that taxes will never have to increase to pay for the deficits that we are now incurring. That is because, quite literally, they are imposing no cost on us. This needs explanation. What taxes really do Most people think that tax pays for government services. That is not the case in countries like the UK. In practice, it has always been the case that the UK government has been funded by a mix of tax and borrowing, meaning that there was never a dependence upon tax alone. Those options have now been extended. In addition to borrowing, government funding can now include both quantitative easing (QE), which now amounts to about £635 billion in the UK, or nearly 30% of total supposed UK government debt, and direct monetary funding (DMF) of government spending by the Bank of England, which simply means the government runs an overdraft with the bank it owns, and need not

pay interest on it in effect, because the money comes straight back to it. Both QE and DMF represent the government funding itself. What this means in practice is that the government’s own bank (the Bank of England) creates new loans to the government to fund its spending and never expects to have those loans repaid. And since, like all bank loans, those from the Bank of England to the government are made out of entirely new money created for this purpose tax is never involved in this process. There is, incidentally nothing novel about this: no new bank loan ever recycles depositors’ funds now, which is a fact acknowledged by the Bank of England1 in April 2014. And, despite all the claims that are often made that this will give rise to inflation of the type seen in the Weimar Republic and Zimbabwe, inflation has struggled to reach the 2% government target that has been set for the past few years. In addition, given that governments around the world, plus the European Central Bank, are all doing this when they can, no one is at risk of exchange rate crises as a consequence. What this does mean though is that tax does not need to fund the coronavirus crisis, just as government borrowing did not, because of quantitative easing, fund government deficit from 2010 to 2013, and there is absolutely no risk of inflation as a result. Nor, come to that, will the cost of this borrowing, if interest is paid, be excessive: the UK government can borrow at less than 1% at present. This is a negligible interest cost, while because most borrowing is over quite long periods, when inflation is taken into account just 37p might, on average, be repaid for every £1 borrowed as long-term debt at present. In effect, those who are queueing up to lend to our government right now (and they are) will be

1 https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy 18

PQ Magazine June 2020

ACCA & Covid-19 PQ paying for this crisis and taxpayers never will. In that case, the role of tax is quite different from that which most people expect. The reality is that, as one of the members of the Bank of England’s Monetary Policy Committee admitted2 in April 2020, whenever the government spends the payment is not made out of tax revenue. It is, instead, made out of money made available to the government by the Bank of England. The reason why tax is charged in that case is to reclaim that money from the economy to prevent excessive inflation arising. Tax does not, then, fund spending. Tax does instead cancel the inflation consequences of that spending. This radical reappraisal of the role of tax in our economy is part of a school of economic thinking called modern monetary theory (MMT) that is rapidly gaining credibility, simply because governments are, as a matter of fact, subscribing to the patterns of behaviour that it describes. But, as I have shown in my work as a professor of political economy, this gives rise to radical new way of thinking about tax3 . New approaches to tax For a start, this thinking suggests that equating government spending with ‘taxpayers’ money’ make little sense in this context. It also shatters the myth that balanced budgets are necessary. In fact, it says that if inflation is too low (and that is now the tendency in the UK) then deficits should be run. And what that implies is that governments can run deficits without having to apologise for doing so, which has been the pattern for so long. But perhaps most important of all is the fact that if tax is not funding the government then it assumes a different role in society, apart from just cancelling inflation. Sources as apparently unlikely as the Financial Times have suggested this. They suggested in April this year 4 that the coronavirus crisis requires the reversal of the policy trends of the past four decades and a revamp of the UK’s social contract. Among the ideas it promoted were greater equality and the taxation of wealth. Understanding how that might work requires a better understanding of how tax works now. Working with Prof Andrew Baker of the University of Sheffield, I have developed a method for doing this called tax spillover analysis5. Using this, it is easy to see that the current UK tax system is far from socially neutral. Over £400 billion of tax reliefs and allowances are given away each year and 81% of UK wealth is held in heavily tax incentivised assets6. In addition, the UK’s system of allowances and reliefs has a substantial redistributive effect, subsidising the already wealthy. When, as the new understanding of banking that modern monetary theory delivers, and which the Bank of England has endorsed, makes clear that savings are not required to fund investment in the UK economy, the time

has come to engage in a systematic evaluation and overhaul of the UK’s system of allowances and reliefs. That is because these reliefs cost the government money and at the same time undermine tax’s anti-inflationary potential by interfering with the integrity of the spend and tax cycle, while providing little verifiable benefit in many cases. As a result we are suggesting radical redesign of the tax system, not to raise more tax (because it is not as yet clear that is needed) but to actually make the tax system fairer. And that greater fairness is possible and probably necessary is apparent. When the combined value of income and increases in wealth – averaged over a seven-year period – are compared with the taxes paid on income and wealth in 2017/18 and the result is plotted by decile (which process simply splits taxpayers into ten groups of equal size, starting from the lowest income group and going up to the highest) this chart can be plotted 7:

that case. But not in the way most people expect. In recent work, we created a framework for assessing ‘tax spillovers’ or the vulnerabilities and weaknesses within tax systems posed by the pursuit of tax competition. From a modern money theory perspective, such a system of evaluation can help to identify weaknesses that might impair a taxation system’s aggregate ‘cancellation function’ and suggest reforms to rectify that. Such tools will be essential in the post Covid19 world, if governments are to assess whether their tax systems are delivering ‘cancellation’ effectively. The framework also enables a more precise appreciation of how specific reliefs can undermine the redistributive integrity of tax systems as a whole. In the emerging Covid-19 economy, the challenge is to overhaul tax systems so that they are no longer weighted towards the wealthy, but redistribute towards those whose precariousness has been exposed by economic shut down, while becoming more effective in relieving potential

The lowest earners in the UK have the highest effective tax rates, and the highest earners the lowest effective tax rates. The Financial Times is right to call for wealth taxation and a radical overhaul of our tax system. And if those on low pay, who we clap each week because many of them are what we now call our essential workers, are to get a better deal as a result of their work on Covid-19 then their taxes need to fall and the wealthy might need to pay more. And for those in the middle? There is no reason to worry: it’s unlikely much will change there. Tax should look different after coronavirus in

inflationary pressures. Government has both the spending and monetary levers to take the larger role in the economy demanded by the current emergency and called for by the Financial Times. But a lasting, more resilient social contract requires an accompanying rethink and reassessment of both the macroeconomic and social policy roles of tax. The qualified application of MMT to questions of tax reform and imbalances we offer provides a starting point for that. • Richard Murphy is Professor of Practice in International Political Economy, City University, London

2 https://www.bankofengland.co.uk/speech/2020/gertjan-vlieghe-speech-monetary-policy-and-the-boes-balance-sheet 3 http://www.paecon.net/PAEReview/issue89/Murphy89.pdf and https://www.cambridge.org/core/journals/social-policy-and-society/firstview 4 https://www.ft.com/content/7eff769a-74dd-11ea-95fe-fcd274e920ca 5 https://onlinelibrary.wiley.com/doi/full/10.1111/1758-5899.12655 6 https://www.cambridge.org/core/journals/social-policy-and-society/firstview 7 https://www.taxresearch.org.uk/Blog/2020/04/22/tax-after-coronavirus-tacs-there-is-significant-room-for-wealth-taxation-in-the-uk/ PQ Magazine June 2020

PQ CIMA case study

A case(study)

of believing Recently qualified CIMA student Brent Holden offers some hope and encouragement to those trying hard to study during these uncertain times

ike a lot of students, I was pleasantly surprised about CIMA’s announcement to make case study exams available from home during the Covid-19 crisis.

Since hearing this news I received my strategic case study exam results, which I sat in February 2020 – and I passed. So I’m ending my CIMA journey without needing to take a

‘home exam’, and it struck me how fortunate students are to be able to sit the exam and not wait for an update, and do it in the comfort of their own homes. I must admit I was extremely jealous on reading this news as I had to endure Pearson Vue’s strict, almost military conditions in some cases. I was feeling 50/50 on the outcome of my case study result, so the prospect of a home exam was like a dream. I hope that students sitting exams at home are able to utilise the advantage of being in familiar surroundings, avoiding the stress-free travel to the exam centres, and not sitting in a booth next to a persistent cougher. This will help them pass and relieve nerves. I have noticed an increase in negative responses from students in recent PQ editions who seemed at their wits end with CIMA, and the lack of progress is down to meaningless exam feedback and poor communication with the body. While personally I had to conquer my own CIMA demon’s, namely the OCS and F3, I can say that I never relied on exam feedback from CIMA. I tried to use advice from my training providers on mock exams to its greatest effect, as they are also qualified accountants and specialise in exam techniques and exam pitfalls. I urge all students really struggling to use their tutors as effectively as possible, even when all avenues seem exhausted, because they too will have been sat in your position, thinking the impossible. As in most things in life, two pairs of eyes are better than one. Students can begin to feel that the qualification is a huge burden in their life, a problem that’s getting in the way, like a ball and chain around their ankle. Try to see the positive aspect, that you have a fantastic opportunity to qualify in a highly regarded field. True, your friends are out having fun, while you study, but remember there will be other sunny days to come. I hope all my fellow calculatorwielding CIMA warriors will soldier on through the tough times and come out at the other end better off. There is light at the end of that long gloomy tunnel and, if I can pass I believe you all can. Self belief is the key!

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PQ Magazine June 2020

AAT exams PQ

The magnificent seven Mike Kirkham explains how you can best prepare for and pass your AAT Level 3 Synoptic Assessment

ne of the best things about being an AAT trainer is you get to see first-hand where people are struggling and can provide help, tips and solutions instantly, in a virtual or classroom setting. I love helping students understand concepts they were previously finding difficult. Something I’ve noticed, time and time again, is that students struggle with preparing for, and passing, their AAT Level 3 Synoptic Assessment. To help you understand what’s required to pass first time (and prepare you to take, and pass your Synoptic Assessment), I have outlined seven tips to help you get through this section of the course: Tip No. 1 – Ensure you have gone through the course materials in full and understand the principles, topics and techniques. Tip No. 2 – Practise as many mock exams as you can. This will help familiarise you with layout and exam question style, which is especially helpful when reporting OAR and inventory calculations. Tip No. 3 – Make sure you understand, and are comfortable with Goal Seek, VLOOKUP, Absolute Reference and can use pivot charts and tables. You will also need to familiarise yourself with

PQ Magazine June 2020

the steps required to make an Appropriation Account. Tip No. 4 – You need to ensure you’re confident with calculations for margin of safety and breakeven. For the Synoptic Assessment you’re likely to receive this data in the form of charts, or even just part of the information. If you have prepared and understand the formulas, you’ll be fine with this section. Tip No. 5 – Make sure you can comfortably write about limited companies (such as the definition, pros and cons, and the good points and bad points about them). Tip No. 6 – Ensure you’re aware of the format of the AAT Advanced Diploma in Accounting Synoptic Assessment (AVSY). This assessment is split into two parts: • Part 1: the time allowance is 75 minutes, during which you’re required to complete three equally marked tasks of 15 marks each. Each task should take approximately 25 minutes. • Part 2: the time allowance is 90 minutes, in which you should complete two tasks worth 55 marks. Task 2.1 is worth 25 marks in this section, suggesting that you should allow approximately 40 minutes for your answer.

Task 2.2 is worth 30 marks, which gives you around 49 minutes to complete. Tip No. 7 – Finally, take the time to understand what you will be asked in each section, in order to be better prepared to answer questions on any of the concepts you may face in the assessment. As an example, for Task 1.1 the recommended reading is: a. Fundamental principles, safeguards and threats b. Principles versus threats in professional ethics c. Conflict of interest If you have completed the recommended reading, you will be prepared to answer the questions surrounding that topic. I wish everyone preparing to take their AAT Exams and Assessments good luck. If you have put in the time and effort, you will have success. If you have not yet started your qualification for AAT Level 3 or 4, or you would like to embark on the CIMA route, e-Careers offers a range of courses for both AAT and CIMA qualifications. Explore our full accounting course range today. • Mike Kirkham is an AAT trainer at e-Careers

PQ home learning

Take the bull by the horns

Paul Merison has 10 top tips to help you study more effectively online

he coronavirus outbreak has resulted in face-to-face campus education being banned in many countries for the foreseeable future. If you want to study right now, it is going to be online. I have been involved in providing online learning to students worldwide for 12 years. In addition, all of our UK campus students have had additional free access to our online classes for many years. As a result, our college has experienced both the positives and negatives of online education and we have learned from the process. Here’s my advice to students.

1. It can be too convenient Many students like online because they can study on their own anonymously, whenever they like, wherever they like. Lots of flexibility and no embarrassment if you say or do something wrong as nobody knows who you are. Nice. However, in a classroom you get to hear what others are thinking, discuss your concerns with fellow students and as a result you have a better feel for how you are progressing.

Learning is not meant to be a comfortable process. The more comfortable you feel, the less you are learning. Anonymity might feel good, but it is not helping you. 2. You need to be disciplined Going to a campus class, same time every week, forces you into regular organised learning. Online is different. Whatever structure your online provider gives you, it is a lot easier not to do it and to fall behind and then defer or drop out completely. Set yourself some personal deadlines on top of whatever the tuition provider sets. 3. It can be dull What would you rather do – watch football on tv, or go to the actual game? Watching anytime anywhere is certainly convenient. But choose a provider who has thought about keeping you engaged, and who is not simply lecturing at you. 4. Talk to your tutor and other students Online, nobody knows who you are, your problems, your worries. Engage with your tutor, so they can understand you and what is best to make your studies successful. When your tutor asks or emails, reply, and aim to get some back and forth going. Use the student discussion forum – even if only one or two others do, the opportunity to test your understanding and approach with peers is invaluable. Learn by discussing. 5. Be active not passive Many students now expect information to be delivered to them via their Twitter feed or similar. Your provider will have an online platform loaded with useful content. So does the professional body whose exams you are sitting. Go explore, do not wait for it to be delivered into your lap. 6. Demand more from your provider Many tuition providers seem to have just taken classroom lectures and added a camera. Many have taken the tutor’s face (and therefore enthusiasm) off the screen entirely, and what you are left with is a slow painful death by

Powerpoint. Use a provider who adds face-to-face mentoring sessions, and whose tutors are on screen and asking students, not just telling students. 7. Choose the best provider, not the funkiest website To learn, you need good tutors who help you to construct your own understanding. The online technology is a support for the tutors, not the other way around. Poor quality tuition does not become fabulous by putting it online. 8. Go for live and interactive, not just recordings Recorded classes put online will no doubt be cheap. But then so is a second-hand textbook on eBay. Learning is an active process. Your brain needs to be challenged and you should be asking questions and getting immediate answers, so you can ask more questions. Recordings, like study manuals, are meant to be a back-up to studying, not the primary source. 9. Don’t just dismiss online learning as ‘not for me’ Many theorists believed that each person has a preferred learning method that works best for them. This has been totally disproved in recent years. You might think you prefer classroom over online, or pictures and diagrams over words, but all the research shows that everyone learns best using a variety of all approaches. Don’t miss out. 10. Use the current situation to explore your options All of us are having to rethink how we do things under the current restrictions. If you have never looked at what providers are offering online, now is the perfect opportunity. Your learning experience will be changed forever. • Paul Merison is Director of ACCA courses at LSBF PQ Magazine June 2020

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PQ ACCA exams

Dynamic duos When it comes to ACCA exam combinations, Grace Hodgetts explains how you can choose the subjects that sit best together

CCA allow you to sit up to four subjects in one exam sitting and a maximum of eight per year. Squeezing in eight exams a year is optimistic for many students, but the impact of coronavirus on our social lives or ability to go on holiday may mean you are now considering whether you have time to study for an extra exam. If you do plan to sit two subjects together at the next available exam sitting, which two should you pick? ACCA have always prided themselves on the flexibility they offer to students, so there are no rules as to the order you have to complete the exams in each level. However, there are some rules about moving through the levels and some sensible approaches to consider to ensure you have the best chances of exam success. ACCA guidance If you are sitting an exam from the Applied Skills level, you can only combine this with a Strategic Professional exam if the Applied Skills exam is your last subject in this level. Otherwise you will need to choose another Applied Skills level subject to study instead. This is referred to as

‘Modular Order’ rules on the ACCAglobal website. ACCA recommend you complete the Ethics and Professional Skills Module before attempting Strategic Professional level to give you the best chances of exam success, but you can do this at any time, so it may be worth doing this along with your current studies. This is an online module that you access via your MyACCA portal and should take approximately 20 hours. Connections between subjects In addition to the ACCA advice, there are some important connections between subjects that you should consider when choosing a second exam to sit: 1. If you are sitting Taxation (TX) maybe pick up Financial Reporting (FR), especially if you are in a tax role at work as you will see financial statements during your day-to-day tasks, so this exam should help your understanding. 2. You should have a good understanding of the financial reporting rules before you attempt to learn how to audit a set of accounts. So if you’re studying Financial Reporting (FR), why not pick up Audit and Assurance (AA) at the same time?

3. Similarly, you could sit Strategic Business Reporting (SBR) at the same time as Advanced Audit and Assurance (AAA). 4. There is some overlap between the skills and knowledge you will gain in Advanced Financial management (AFM) and Advanced Performance Management (APM) with Strategic Business Leader (SBL), so if you have chosen one of these as your option subjects you could pick up SBL too (subject to the next point). One final important point to remember: if you are a Level 7 apprentice, please be aware it is compulsory to do Strategic Business Leader (SBL) as your last exam, as this is your End Point Assessment for your apprenticeship. Overall, most combinations in each level are fine, but there are a couple of combinations it would be best to avoid. With Performance Management (PM) and Financial Management (FM), some of the syllabus areas in FM build on some quite technical PM knowledge, so students often find studying these together more difficult. For a similar reason you should avoid sitting any Strategic Professional subject at the same time as its corresponding Applied Skills subject. So avoid sitting FM and AFM, PM and APM, FR and SBR, TX and Advanced Taxation (ATX) or, finally, AA and AAA at the same time. If you intend to sit these exams in the same sitting they are scheduled on the same day so you wouldn’t be able to do both exams anyway. • Grace Hodgetts, Kaplan Financial’s ACCA product manager

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PQ Magazine June 2020

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PQ technology

Your tech come 2030 Deloitte gets out its crystal ball and predicts 6G, connected cameras and 8K TV sets are all coming your way…

eloitte has announced its predictions for the media and telecoms sector in 2030. It has said that technology will be a ferocious, disruptive whirlwind over the next 10 years. It will also be relied on to grow economies, raise living standards and may even remedy historical challenges. So, what are the main predictions for 2030? Here they are:

One in 10 households will have at least 50 connected cameras, while smartphones will have six cameras Deloitte predicts that over the next decade UK households will install multiple connected cameras in homes and vehicles, and will purchase an array of appliances and devices with integrated cameras. One in 10 households are expected to have at least 50 connected cameras by 2030. Currently, usage of dedicated connected cameras in the home is low. According to Deloitte’s Mobile Consumer Survey, just 7% of UK adults own a smart home security camera or connected video doorbell, and 2% own a pet camera or monitoring system. Over the next decade, better networks, cheaper and better cameras, 26

easier installation and the growing use of neighbourhood social media communities will drive the deployment of security and monitoring cameras. Meanwhile, Deloitte predicts that by 2030 smartphones will have an average of six cameras, with depth sensors enabling 3D images. Paul Lee, global head of technology, media and telecommunications research at Deloitte, said: “The 2030s will likely be the decade of machine vision. Cameras will be used in our homes for monitoring, as well as in our home appliances to supervise their performance. Digital eyes in our ovens will perfectly time our roasts, and lenses on vacuum cleaners will ensure a thorough cleaning of the carpets. Televisions may even come with in-built cameras, to monitor viewers’ temperaments, measure their reactions to the content they are watching and improve their advertising experiences. “An average of six cameras on every smartphone will also perfect the ‘super-selfie’ with every pore, blemish and beauty spot caught and corrected with precision. By 2030, it is likely that one or more of the cameras may be a depth sensor,

enabling a degree of 3D manipulation of the image.”

UK consumers to set up 200 million accounts for video-on-demand services by 2030 Deloitte predicts that by 2030, the average UK household will use 10 video-on-demand (VOD) services. Five per cent of households will have registered for 20 video-on-demand, video streaming or broadcaster catch-up services, with 85% having access to at least one subscriptionbased service. Two-hundred million logins will be set up in the UK to access these services in 2030, more than double the number predicted for 2020 (about 95 million). Growth will be driven by an increased supply in major VOD services, the spread in demand among all household members and the rise of advertising video-on-demand (AVOD) services. In 2019, 55% of UK adults said they had access to at least one paid-for video-on-demand service, up from 48% in 2018, according to Deloitte data. Forty-five per cent of adults had access to more than one paid-for subscription service. Lee continued: “Over the past decade, videoon-demand platforms and broadcast catch-up services became mainstream. “Currently, only a handful of platforms offer a blend of compelling content and reliable delivery at a cost. This makes it easy for households to pick and choose which one or two subscriptions to pay for. “Over the next decade, due to the launches of new platforms, we expect to see a surge in the number of paid-for video on demand services offering must-watch content. This should elicit a sharp rise in new sign-ups. “There is no specific limit on the number of services households will sign up to – the PQ Magazine June 2020

technology PQ constraint will be money, not time.” The UK will be reaching the limits of 5G, readying for 6G and contemplating 7G By 2030, 5G will have proven to be transformative to business, but its limits may have been reached and plans for the launch of 6G will be in development. Deloitte predicts that more than 1,000 companies worldwide will be evaluating or have deployed 5G in industrial environments such as factories, ports and logistics centres by the end of 2020. Lee said: “By 2030, 5G will have benefited consumers indirectly, in the form of better products and services. More flexible factories enabled by 5G will shorten waiting times for customised goods. Infrastructure, from railway tracks to suspension bridges to pipelines, should also be better maintained, thanks to 5G transmitting 8K video to machine vision capabilities that are trained to identify fissures and cracks early on. “Millions of homes may be connected via 5G, as well as fibre, in 2030 and 6G will have been designed to address the next decade’s connectivity needs.” More than one in three TVs will be sold at a lower price, in exchange for monitoring the owner’s viewing habits Deloitte predicts that, in 2030, the average viewer will continue to watch an average of four

hours of content per day on a television set. Viewers will still prefer larger TV sets and more households will be able to afford these as TV set vendors will offer screens at a lower price in exchange for the authorisation to share viewers’ watching habits. Deloitte predicts that by 2025 over a third of TVs will be sold at a low gross margin in exchange for monetisation happening post-sale. This shift in the business model will help stoke demand for 8K TV sets, which will be the default resolution for TV sets costing over £500 by 2030.

Lee added: “A decade from now people will continue to seek-out high production value content, and will still want to watch this on large screens, up to 100 inches in size. “Living rooms will be designed to accommodate ever larger screens, and more households will be able to afford larger TV sets as manufacturers will offer a cheaper price for the authorisation to share people’s viewing habits with advertisers. Many will have accepted the trade-off for their data in order to get a better quality screen.”

ACCA EXAM SUCCESS WITH LSBF’S DIRECTOR OF PROFESSIONAL QUALIFICATIONS Join Rob Sowerby, Director of Professional Qualifications in a four-part webinar which aims to help you pass your exam in the first sitting: • 26 May: What does an ACCA marker want? • 1 June: Improve your memory and pass your exam • 8 June: How to avoid failing your ACCA exam • 15 June: Study tips to pass your ACCA exam Our award-winning tutors are also running a free Accounting Masterclass covering the ACCA syllabus until 22 May so be sure to tune in! Join us for FREE on Zoom via this link: www.lsbf.org.uk/events

PQ Magazine June 2020

PQ CIMA exams initiative

Home sweet home You can now complete your CIMA journey from the comfort of your own home, says CIMAâ&#x20AC;&#x2122;s Stephen Flatman

e are experiencing unprecedented times. As the coronavirus outbreak continues to disrupt the world, governments, businesses and individuals alike are feeling its impact and need to find a â&#x20AC;&#x201C; albeit temporary â&#x20AC;&#x201C; â&#x20AC;&#x2DC;new normalâ&#x20AC;&#x2122;. Thereâ&#x20AC;&#x2122;s still a lot of uncertainty around how it will affect the world in the long term, but it is probably a safe bet to say that we have a rocky road ahead in the short term. The pandemic has, rightly so, led many test centres to close to ensure everyoneâ&#x20AC;&#x2122;s safety and wellbeing in line with official guidance. However, this also means that many of our students around the world have had their studies interrupted and were prevented from

sitting their Objective Tests and Case Study exams as planned. As a global organisation with members and students in 179 countries, we are fully committed to supporting your professional development and our priority is to continue assisting our community through these tough times. To this end, we focused all our efforts on working with our testing partner to provide a suitable online testing solution for our students to allow them to resume their professional journey and become Chartered Global Management Accountant (CGMA) designation holders. As a result, starting in May 2020, students are able to take the Objective Tests and Case Study exams from their home the first time and with minimal

Exam dates CIMA Professional Qualification â&#x20AC;&#x201C; Case Study exams Exam window remains the same as initially scheduled

Operational Case Study: 13, 14 and 15 May 2020 Management Case Study: 20, 21 and 22 May 2020 Strategic Case Study: 27, 28 and 29 May 2020

UK Apprenticeships L4 and L7 EPA1

L4 EPA 1: 2 June 2020

New exam date for L4 EPA 1

L7 EPA 1: 27, 28 and 29 May 2020

Certificate in Business Accounting and CIMA Professional Qualification â&#x20AC;&#x201C; Objective Test exams

Remote testing began on 4 May 2020

disruption amid the coronavirus outbreak. You will be able to book your exam the usual way through My CIMA. This applies to students for the CIMA Certificate in Business Accounting, CIMA Professional Qualifications and UK Apprenticeships. If you have an existing booking for a test-centre based exam you will need to cancel this, get a full refund and then schedule your new exam. Prior to scheduling your exam, you will need to test your internet connection and run a system test on the IT equipment you plan to take your exams on. The exam format will stay the same, but the presentation is very slightly different. Once you have scheduled your exams, take a look at one of the free practice tests on our testing partnerâ&#x20AC;&#x2122;s website and familiarise yourself with their look and feel. We will continue to maintain the high levels of security, reliability and fairness of our exams by using an online invigilator. We understand that your study plan might have gone slightly off track as you juggle professional and personal priorities. Make sure you make the most of the CIMA Study Planner, which allows you to create a personalised study plan that fits around your other commitments, keep study notes and track your progress. Now more than ever it is essential to plan, organise and prioritise personal, study and professional activities to make everything more manageable both at a practical and emotional level. We believe that remote testing offers a viable alternative to sitting exams in a test centre for the majority of our students under the current circumstances, but it is important that you to ensure that the remote testing solution works for you from both a practical and personal standpoint. I canâ&#x20AC;&#x2122;t stress enough that as we all navigate these difficult times, we are here to support you to help keep your career moving, and help you transform uncertainty into opportunity. For more information, please visit https://www.cimaglobal.com/Studying/ Student-Coronavirus-COVID-19-examFAQs/ â&#x20AC;˘ Stephen Flatman, Vice President, Examinations, Management Accounting, The Association of International Certified Professional Accountants

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landscape. You will even critically examine the impact of the technologies and the potential risks that they hold for the future. And, the great news is, if you already have a professional finance qualification from a recognised institution, such as ICAEW, ACCA, CIMA or AAT, you could be exempt from up to four of the course’s nine modules meaning you’ll pay less for your MSc and graduate sooner! What’s more, their MSc will also enable you to speed up your CIMA Professional Qualification by entering CIMA’s Masters Gateway route after you graduate, giving you everything you need to help your CV stand out. Take on the future of finance Delivered 100% online from the City of Manchester, you will explore the key topics

and technologies that are changing the way we do business – from governance, risk and control to FinTech and more. Throughout, you’ll use real-world case studies that will harness your strategic thinking skills and put theory directly into relevant practice. Study your way while building a global network It can be tricky to fit studying and working around other commitments such as family life. To help you with this, the MSc Finance and Strategy Global online course at Manchester Metropolitan University has flexibility at its heart, giving you the freedom to balance study with your busy work or family life while you grow your global network. This course has multiple intakes throughout the year in January, March, May, July, September and November. To find out more, visit Manchester Metropolitan’s website PQ Magazine June 2020

ACCA SBR exam PQ

Play it like Kaka Martin Jones explains the challenges of the Strategic Business Reporting exam, outlining a technique that will improve your chances of passing

n a football world before Messi and Ronaldo there was the elegant Kaka. Let’s see what he can teach us about SBR. The March 2020 SBR exam was the usual mix of the impossible and the accessible. There was enough technical content to keep a team of expert auditors busy for three weeks, but there was enough accessible content for a well-drilled student to turn out a pass within three hours… provided that student knew the tricks. So, let us look at the tricks in the context of the first requirement in the exam which was on foreign currency translation. Here is the question with the background followed by the requirement: Background Hummings Co is the parent company of a multinational listed group of companies. Hummings Co uses the dollar ($) as its functional currency. Hummings Co acquired 80% of the equity shares of Crotchet Co on 1 January 20X4 and 100% of Quaver Co on the same date. The group’s current financial year end is 31 December 20X4. Crotchet Co: functional currency The head office of Crotchet Co is located in a country that uses the dinar as its main currency. However, its staff are located in a variety of other locations. Consequently, half of their employees are paid in dinars and the other half are paid in the currency of grommits. Crotchet Co has a high degree of autonomy and is not reliant on finance from Hummings Co, nor do sales to Hummings Co make up a significant proportion of their income. All of its sales and purchases are invoiced in grommits and therefore Crotchet Co raises most of its finance in grommits. Cash receipts are retained PQ Magazine June 2020

in both grommits and dinars. Crotchet Co does not own a dollar ($) bank account. Crotchet Co is required by law to pay tax on its profits in dinars. Required: Draft an explanatory note to the directors of Hummings Co, addressing the following: (1)(a) how the functional currency of Crotchet Co should be determined. (5 marks) Here is a suggested answer: Functional currency The functional currency is the currency of the primary economic environment. This means that the functional currency is the currency that dominates the functions. Determination So, the functional currency is determined by looking at the functions and the currencies of those functions. This means looking at the currencies the entity uses with its customers and suppliers. Dollars Subsidiary functions are sometimes dominated by their parent. This does not apply to Crochet. Crochet has independence from its parent and does not even have a dollar bank account. The functional currency is not the dollar. Dinar Most entities function in the currency of their head office. But this does not apply to Crochet. Half the salaries are in dinars and some receipts are held in dinar. But everything else happens in grommits. The functional currency is not the dinar.

Grommits The sales and purchases and finance are in grommits. Grommits dominate the functions. The grommit is the functional currency of Crochet. (5 marks for 5 points) If you read the question and then the answer like reading a story then that probably looked fairly easy. But don’t be fooled. Actually, delivering an answer like the above in the exam within the exam time is a real challenge. Let’s look at the two principle tricks at play: Points Probably the most conspicuous feature of the answer is the layout. The examiner refers to these packages of heading followed by sentence followed by sentence as ‘points’. It is a style he has recommended for years, but now his advice is explicitly given in the articles under the button ‘Exam Technique’ on the ACCA SBR webpage. The idea is that for a five marker like this you slap down five points; thus meaning that for SBR your role for the three hours of the exam is to be a mechanical point slapper. KAKA Less obvious in the answer above is the mix of knowledge and application. All SBR answers must include relevant knowledge and that knowledge must then be applied to the scenario. This applies to all the requirements in the whole exam. This requirement is repeated fervently in the ‘Exam Technique’ articles referred to above, but the message is further reinforced in examiner’s comments. Often answers following this advice will result in a metronomic rhythm of knowledge then application then knowledge then application. This is why I refer to this examination technique as ‘KAKA’. But there is no need to flip backward and forward between knowledge and application. Whacking down the knowledge in full and then applying that to the scenario also often works well and that is the rhythm used above. Can you see it now? The first two points are relevant knowledge and the subsequent three points apply that knowledge. So stick to the point and play it like Kaka. • Martin Jones is a tutor at LSBF 31

PQ your career

The perfect remote interview

Remote interview coming up? Karen Young offers her top tips on how to best prepare for it

emote interviews are now part and parcel of many hiring processes now that so many of the UK workforce is working from home. It’s easy to see a phone interview as more casual because it isn’t face-to-face, or to be anxious about a video interview because of the perceived lack of real interpersonal interaction. But with the right preparation you’ll be able to nail your remote interview and make a positive first impression on a recruiter or hiring manager. Gearing up before the interview Prepare as you would for a face-to-face interview: Skipping out obvious steps like 32

packing a bag and planning out your journey, you should take the time to prepare for a remote interview just as you would a face-to-face one. At a minimum this should include: • Setting aside plenty of time in your diary for the interview – I’d recommend clearing in an hour either side of the anticipated interview time. • Researching your potential employer and the interviewer. • Reading the job and person specification thoroughly and identify what you can bring to the role in terms of skills and experience. • Practicing answering common interview questions, particularly competency-based

scenarios. • Preparing questions to ask the interviewer at the end. Doing this preparation will take a remote interview from a potentially awkward chat to an opportunity for you to impress, demonstrate your skills and professionalism and move on to the next stage of the hiring process or get offered the job! Perfect your verbal communication skills: Your interviewer may find it harder to read you in a remote interview, compared to a face-toface interview where they have the benefit of interpreting your body language. This means that any unprofessional habits are likely to stand out. Be aware of things like speaking too quickly, mumbling, covering your mouth, looking around the room or using filler words such as “um”, “like” and so forth. I’d recommend running a practice interview with a friend and recording yourself to give you the chance to practice coming across confidently though your voice and facial expressions. You also need to be mindful of where your camera is on the device you are using. You may think you are making eye contact if you are looking at the person, but you also need to look at your camera, so try and practice with someone on this, too. What to do on the day The power of a positive mind-set: Take a few moments to gather your thoughts and get in the right frame of mind. Try to calm your nerves and give yourself a pep talk if it helps, reminding yourself of all of what you have achieved and all you can bring to the role. I would also recommend visualising positive outcomes, such PQ Magazine June 2020

your career PQ as being offered the job. This will remind you of your end goal, motivating you to give your best performance during the phone or video call. Put everything in place: Check that you have a signal, full battery on your device, a glass of water and something to write with. Have the hiring manager and recruiter’s name and number saved on your device as well as on a notepad and that you are clear on who is calling who, and at what time. Be ready for the call 15 minutes before, ensuring you are in a quiet space and can talk. If you are doing a video interview, remove anything distracting from your background or even choose a pre-made background which you can do in some tech, and dress formally as you would for a physical interview, unless any other advice is provided. During the interview itself Answer the call in a professional manner: Whether you’re being called over a computer or phone, pick up within two to three rings, and answer in a professional manner, for instance, “Hello, Alex speaking”. Maintain this professional tone throughout the interview. Have all the information you’ll need to hand: Keep your CV, bullet points of your key skills and achievements, plus any headline information about the company in front of you in case you get stuck. Remember not to read these notes word for word and be careful not to shuffle the paper too loudly and give the game away! It is, however, a definite benefit to remote interviews

PQ Magazine June 2020

that you can more easily refer to a couple of succinct notes in front of you. Keep your body language natural: Even if you’re interviewing over the phone, getting your body language right can make all the difference to how you sound and come across. Sitting up straight or standing when answering questions will improve how confident you come across both visibly and through your voice, as will smiling and gesticulating. Speak at a steady and even pace: It is harder to appreciate just how fast we speak over a call, especially when we are nervous. If yours is a phone interview, sometimes walking around can help you to regulate your speaking patterns and feel more at ease – obviously this isn’t possible over video interview, so try simply pausing and taking a deep breath. As in a face-to-face interview, having a glass of water handy is a good idea, not just in case you need it, but it can also make a very natural pause to an interview and buy you valuable seconds of thinking time on your answer, without a long unnatural pause or silence in the discussion. Remember your manners: It goes without saying that you should avoid anything that could be perceived as bad manners, such as eating or chewing gum. You can be sure it will be noticed by your interviewer and put them off. You also shouldn’t do anything else that could potentially distract the interviewer (and yourself), such as scrolling through social media on your phone or clicking around on your computer.

Be aware of not interrupting as well, which unfortunately is more likely to happen during a remote interview due to you not being able to read the interviewer’s visual cues as accurately, so you can judge whether they have finished talking. Avoid interrupting the interviewer by pausing for a second once you think they have finished speaking, before you start responding. You could also take a sip of water before you answer to allow some space in-between talking. Conclude as you would a face-to-face interview: Remember to thank the interviewer for their time, and state that you enjoyed learning more about this opportunity. Reiterate your interest in the role and why you feel you are suited and clarify the next steps if the hiring manager hasn’t already done so. Again, just because this isn’t a face-to-face interview, doesn’t mean you can’t leave a strong last impression with the interviewer. Wrapping things up After the interview, if you are still interested in taking this opportunity further, I would advise that you follow up just as you would a face-toface interview. Phone your recruiter straight after the interview to give your feedback and send a thank you note to the interviewer via your recruiter, affirming again just how interested you are in this opportunity. Remember to keep your phone close by in the coming days. • Karen Young, Director of Hays Accountancy & Finance

PQ insolvency qualifications

Time to restructure your qualification portfolio? U

PQ magazine takes a look at how you can become an insolvency practitioner

nfortunately, one thing is certain in these uncertain times, there will be a growing demand for skilled people to help businesses who need saving. As in many areas you need a special qualification to act as a liquidator, administrator, voluntary arrangement supervisor, or bankruptcy trustee. Only an insolvency practitioner can undertake these roles, and to become a licensed insolvency practitioner you must sit and pass the Joint Insolvency Examination Board (JIEB) exams (https://www.jieb.co.uk). These exams are held just once a year, normally in November, and there are two papers: ‘Corporate Insolvency’ and ‘Personal Insolvency’. At the moment, and given the fact that the exams are not until November, the JIEB is proceeding on a ‘business as usual’ basis, and is hoping “that these challenging times will have settled down by then so the exams can proceed as normal”. You don’t have to pass these exams at the same sitting either, and you only need to pass one exam to obtain a partial licence. Each paper is three hours long with half-an-hour allowed for reading time. All JIEB exams are computer-based, so getting to know the software before your exam is essential. There are webinars and practice exam software to help you here. The JIEB stresses that its exams are a practical test of the knowledge and skills that insolvency practitioners use in their working lives. You can check out what has been recently been tested by looking at the past papers. The examiner’s report also gives you an idea of the sort of thing they expect to see in answers. The main tutorial organisations for JIEB are BPP (https://www.bpp.com/courses/ insolvency) and Neil Taylor Insolvency (https://

www.ntinsolvency,com). Looking at the costs of studying you can pay anything from £395 (for the manual) to £7,000 for both papers. Insolvency at the top level doesn’t come cheap. And, once you have passed the JIEB exams you will need to be licensed by one of the four recognised professional bodies (RPB), or by the Department of the Economy in Northern Ireland. There are three types of insolvency licence: a full licence, and partial licences in respect of either companies or individuals. The RPBs also offer a non-appointment taking licence. That means you can work as an insolvency practitioner, but you would not be able to accept appointments. The RPBs are CAI, ICAEW, ICAS and the Insolvency Practitioners Association (IPA). You do not have to be a member of a particular body to apply for an insolvency licence. The ACCA had been an RPB until 31 December 2019. It decided to relinquish its status and has now entered a collaboration agreement with the IPA. The application processes vary between the RPBs, but typically JIEB says you will need to: • Acquire a minimum number of hours of insolvency experience. • Demonstrate that you are a fit and proper person. • Comply with the RPBs regulations, the law, the SIPs (Statements of Insolvency Practice) and the Insolvency Code of Ethics. • Be monitored by the RPB. • Pay a fee, including the levies payable to the Insolvency Service, the Department of the Economy and the Complaints Gateway. You will also need to have a bond and professional indemnity insurance. And, if you are a member of an accountancy body, you will

probably have to have a practising certificate as well. There may, however, be some better firststeps you might want to take, to see if insolvency is for you. There are the Certificate of Proficiency in Corporate Insolvency (CPCI), the Certificate of Proficiency in Personal Insolvency (CPPI), and last but not least the Certificate of Proficiency in Insolvency (CPI). These are all offered by the Insolvency Practitioners Association, with exams held in June and December. To sit the CPI, for example, you will need to become an IPA student member. The IPA explains this is an established intermediate exam for those wanting to specialise, and ideal preparation for JIE. CPI can also lead to membership of the IPA and to entitlement to use its designatory letters MIPA. The registration and subscription fees come to just over £350 and a distance learning course around £700. The ICAEW also offer a Certificate in Insolvency, so you might want to opt for this one. What about the costs and time here? Well, the ICAEW say it will take less than 12 months to obtain the certificate. There is an initial registration fee of £140 plus VAT (no fee for ICAEW members and students) and an assessment fee of £300 plus VAT. The last online learning classroom live sessions with BPP kicked off on 17 April with the introductory module ‘Legal & Regulatory Framework for Insolvency’. The 30 hours of lectures cost £1,865 plus VAT. You also receive free membership to the Restructuring & Insolvency Community while you are studying. Check out https://www.icaew.com/ learning-and-development/academy/specialistqualifications/certificate-in-insolvency PQ Magazine June 2020

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PQ AAA exam

Know your bread and butter Paul Merison deconstructs March’s AAA exam, explaining where the points are to be picked up – and how you can achieve this

or students who will soon sit Advanced Audit and Assurance in their ACCA exam journey, here are my learning points from the AAA March 2020 paper. This was a very typical paper: • 24 marks of audit risk. • 6 marks audit procedures (tests). • 8 marks for criticising an audit report. • 6 marks of pre-acceptance issues. • 9 more marks for procedures (tests). • 10 marks on ethical and professional issues. • 10 marks for commenting on the audit strategy of another audit firm, plus ethics. That is 73 marks of what should be bread and butter to a well-prepared student, and if you are not scoring at least 45 of those marks there is something very wrong with your exam preparation, or understanding, or both. Add on the easy professional marks, and you should have passed with 23 marks still left to have a go at. Those 23 other marks In Q1, joint audit came up for the first time in years. You had to discuss it in the context of the story, but to be frank stating a few points from your memory would get a pass on this easily. Of course, if you had no idea what a joint audit is, you would probably kiss goodbye to all six marks. In Q2, a requirement that always seems to confuse students is – implications for completing the audit. If I said it is raining, what are the implications for you finishing your walk in the park, you would say “I will get wet”. All you have to say in the exam is what will happen on your audit as a result of a fraud

being discovered, which is usually going to be: • Assessing if more of this fraud could have happened (in which case, tests needed). • Reporting it to those charged with governance, as with anything important. • Assessing how material it is to the financial statements. • Reducing reliance on any evidence provided by any of the suspects. • Considering the need to report to an external authority. The above is common sense to those who understand auditing. But there is a tougher requirement, needing thought. For two accounting issues, how good is the evidence collected so far, and what additional tests are needed? (There are no marks for giving tests that the story says have already been done, or which do not address the issue in hand.) This is a very important exam question for assessing how prepared you are for AAA, as the answer cannot be memorised in advance. Weaker students cannot hide. Q2 has 17 tough marks, compared with the rest of the paper. However, the 23 marks analysed above are not the key to passing AAA. It is the 73 marks listed at the start of this article, plus the professional marks, which are predictable requirements that come up over and over again, where a solid technique from repeated practice (and tutor feedback on your answers) gets you a pass before you even begin the more challenging bits. Be good at the core questions, which always come up, and you pass.

Some achievable marks in Q1 • Three professional marks for Briefing Notes format, a short introduction, headings and paragraphs. • Two marks for spotting RPT (from requirement 1b) under-disclosure is a risk, as CEO might hide it. • Four marks for easy tests on RPT (sales invoice, board approval in board minute, read proposed disclosure note, ask CEO to confirm intention to pay). • Two marks each for spotting: – component auditor increases detection risk and explaining why. – risk of legal case not being accounted for properly (provision, contingency) and why. – risk goodwill overstated as no impairment being recognised. – incentive scheme leads to manipulation. – risk the post y/e acquisition might not be disclosed properly (EARP). – revenue being recognised early, as the company sells a subscription service so will bill in advance. • Four marks for materiality calcs on any four of the above risks. Note that more than two marks are available on most of these risks, but I am showing you what is achievable for you, not the perfect answer. This is 25 marks and a pass for Q1 – I have not even looked at 16 marks of the question here – and those 25 marks have not involved doing anything at all difficult. If you are not scoring well on these core question types, you are not going to pass AAA, so focus on the bread and butter! • Paul Merison is Director of ACCA courses at LSBF PQ Magazine June 2020

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PQ variance analysis

Time to test

yourself Philip Dunn has set you some multiple choice questions on the muchexamined topic of variance analysis. The answers are at the foot of the page

Answers

(3) D (2) C (1) C

(13) D (12) C (11) B (10) A (9) C

8. Calculate the direct labour efficiency variance. a. £750 Favourable b. £750 Adverse c. £1250 Adverse d. £500 Adverse

• Dr Philip E Dunn is a freelance author and technical editor for Kaplan and Osborne Books

(5) A

7. Calculate the direct labour rate variance for the month. a. £225 Adverse b. £240 Adverse c. £250 Adverse d. £250 Favourable

16. Calculate the fixed overhead efficiency variance. a. £2700 Favourable b. £1800 Adverse c. £1800 Favourable d. £2700 Adverse

(4) B

6. Calculate the direct labour cost variance for the month. a. £510 Favourable b. £750 Adverse c. £250 Adverse d. £1250 Adverse

15. Calculate the fixed overhead capacity variance. a. £4500 Favourable b. £4500 Adverse c. £9000 Favourable d. £9000 Adverse

(14) C

5. Calculate the capacity ratio for the month. a. 111.1% b. 96% c. 104.2% d. 106.7%

14. Calculate the fixed overhead volume variance. a. £1800 Favourable b. £1800 Adverse c. £2700 Favourable d. £2700 Adverse

(15) A

4. Calculate the activity or production volume ratio for the month. a. 93.7% b. 106.7% c. 90% d. 111.1%

1600 0.75 1250 £12750 1.1 tonnes. £120. £234240 1920 tonnes £40500 £38000

(7) C

3. Calculate the efficiency ratio for the month. a. 90% b. 111.1% c. 104.2% d. 96%.

Actual

(6) B

2. Determine the budgeted hours in the month. a. 1200 b. 1500 c. 1125 d. 1250

Budget 1500

13. Calculate the fixed overhead expenditure variance. a. £2700 Favourable b. £2700 Adverse c. £2500 Adverse d. £2500 Favourable

(16) B

1. Determine the standard hours produced in the month. a. 1250 b. 1125 c. 1200 d. 1162

11. Calculate the direct material price variance. a. £3300 Adverse b. £3840 Adverse c. £3840 Favourable d. £3300 Favourable

(8) D

Tasks:

10. Calculate the direct material usage variance. a. £19200 Adverse b. £19200 Favourable c. £32400 Adverse d. £32400 Favourable

12. Calculate the fixed overhead variance. a. £5400 Favourable b. £5400 Adverse c. £5200 Favourable d. £5200 Adverse

awsker Feeds Ltd is an SME based in North Yorkshire. It produces a single animal feedstuff that sells at £210 per tonne. Its budget and actual activity for January X20 showed the following.

Output (Tonnes) Standard labour hours per tonne Actual direct labour hours worked Actual cost of direct labour Standard usage of direct material per tonne of output Standard direct material cost per tonne Actual cost of direct material Actual usage of raw material Budgeted fixed overhead Actual fixed overhead

9. Calculate the direct material cost variance. a. £36240 Adverse b. £36240 Favourable c. £23040 Adverse d. £23040 Adverse

PQ Magazine June 2020

home working PQ Get the kids involved! While you don’t want them running the next client pitch, getting your children involved in your work may help them understand that you are in work mode. Simple indicators such as having your work notebooks out, or even what you’re wearing can help children recognise that you are not available to play until you’ve tidied away and changed into your jeans. If you’re lucky enough to have your own office space, you could ask younger children to help you to make a sign (red/green for example, or a clock showing the time that you’ll be finished for the day) for the door that shows them when you can and can’t be disturbed. Getting them involved in the sign’s creation will help them better understand its meaning and take it more seriously.

Routine is everything So how’s the homeworking going? Our friends at Mindful Education have some solid advice on being productive while staying sane at the same time

hile many have welcomed the opportunity to work from home during the coronavirus outbreak, it has proven a challenge for families with young (and not-so-young) children who are also at home as a result of school and college closures. The once-distinct line between work and home has become blurred, with kitchens, spare rooms and living rooms across the country now serving as makeshift offices classrooms. pq jobs ad 193 x 74 and 16/3/10 08:30

This can be particularly confusing for younger children, who are used to having their parents’ full attention when they’re at home. Here are a few tips to help you stay productive at work, and keep the kids happy. Get into a routine Perhaps the most touted working from home tip, setting a routine is particularly important when children are involved. There is plenty of advice out there about how to set the perfect routine, but they’re rarely suitable for everyone, so you may have to devise your own. Aim for a routine that suits everyone in your household and try to stick to it as best you can – though allow enough flexibility to enable that last minute conference call with your boss, or your toddler’s refusal to nap on Page 1 demand.

Communicate with your colleagues With much of the country currently working from home, hopefully your colleagues are understanding of the challenges that being a WFH parent can pose. It may be stressful for you, but chances are, your colleagues won’t mind at all when your child appears in your meeting asking for ice cream. To avoid any conflict, make sure you communicate any changes to your working hours, or when you expect to be away from your desk. Of course, even the best laid plans can quickly be undone by children, so try to allow flexibility in your schedule where you can. Teamwork If your partner (or other adult you live with) is also working from home, make sure you let them know if there is a period of time during the day (such as an important meeting or strict deadline) that you need to remain undisturbed. Knowing that they will be on hand to deal with any toddler meltdowns or home-schooling queries will alleviate some of the stress. Keep the lines of communication open, and make sure you return the favour!” • Thanks to Mindful Education for this article

Sorted, thanks to pqjobs.co.uk

PQ Magazine June 2020

PQ AAT spotlight

England Footballer and AAT studier Leah Williams

Football first,

Accounting with AAT. “I started my studies mainly as a back-up plan, in case my aspirations of being a footballer should ever fail,” says Sam, who has been studying for the past year. “Accounting was an area I was interested in, and it could open up a wide area of job potential.” This isn’t the first time Sam, who studies his accounting courses from home via distance learning, has shown an aptitude for gaining skills outside his first love of football. During his scholarship at Wigan Athletic, Sam studied for an A-Level in marine biology – a move that prompted Gregor Rioch, Wigan’s academy manager, to comment: “Sam was clear that football as a career can be a short one, and we were happy to support his planning for the future, be that in the short-term or at the end of his career.” With Cheshire-born Sam banging in the goals for Aberdeen mid-way through his second year playing north of the border prior to the Covid-19 outbreak, a short career in football hardly seems likely barring the obvious threat of serious injury. However, he recognises that there are greater benefits from his course than simply gaining qualifications as a potential back-up career. “The most rewarding part of my studies is knowing that I am using my spare time productively, in order to gain new and important skills within accountancy,” Sam adds. “It can be a challenge, after a full day at a physically and mentally demanding job, to find the time and motivation to sit down and learn new content. “But, at the same time, learning allows me to switch my mind away from the stresses of my job, therefore allowing me to concentrate even more when on the training ground.” Sam is also quick to recognise the encouragement that The Professional Footballers’ Association Scotland provides, not

AAT second Footballers’ careers are often short, so when looking beyond the game the AAT is an obvious next career choice for some

uring the summer of 2019, Leah Williamson’s profile grew dramatically. The Arsenal centre-back was part of an England squad that made it to the semi-finals of the World Cup, falling agonisingly short against eventual champions USA, before eventually finishing fourth after defeat in the third-place play-off to Sweden. With Arsenal winning the Women’s Super League in 2019, and current England manager Phil Neville saying about Williamson, “you get some players who are born to captain England. She’s a leader,” it’s clear that her football career has taken off. But, of course, this year is very different to previous ones, and with no football taking place Williamson is one of a number of footballers studying for the AAT accountancy qualifications. Whether it’s to provide them with an alternative career should football not work out, give an 40

option as to what to do when they retire from the game, or to work alongside football, it appears that accountancy is a strong career of choice for many footballers. Here’s three others who have taken or who are in the process of taking accounting qualifications: Sam Cosgrove Sam had an outstanding season in the Scottish Premiership last season, with his 11 goals in 21 league matches propelling his side to fourth place. Sam was named player of the month in December 2018 for his superb contribution to the team, scoring seven goals in Aberdeen’s eight league games despite also being on the receiving end of a red card at Rangers. On the side however, Sam is combining his professional career with his love of numbers, through studying an Advanced Diploma in

Sam Cosgrove Age: 23 Position: Striker Current club: Aberdeen (65 games, 28 goals) Previous clubs: Wigan Athletic, Barrow (loan), Chorley (loan), North Ferriby United (loan); Carlisle United PQ Magazine June 2020

AAT spotlight PQ

Reece Styche Age: 30 Position: Striker Current club: Hereford (22 games, 3 goals) Previous clubs: Hednesford Town, Bromsgrove Rovers (loan); Grantham Town; Coalville Town; Shepshed Dynamo; Chasetown; Forest Green Rovers, Wycombe Wanderers (loan); Kidderminster Harriers, Tamworth (loan); Macclesfield Town; Gateshead, Nuneaton Town (loan); Tamworth; Darlington; Alfreton Town

only to him but to all professionals in the country who wish to improve their skillsets outside of football. “The PFAS has a vast network of support, ranging from 24/7 careers advice to putting on free skills sessions, such as the IT course I am currently taking,” Sam says. There doesn’t appear to be an immediate hurry for this well-grounded young individual to put his accountancy skills to the test in a professional environment. But Sam is safe in the knowledge that should things not work out there’s a career in accountancy waiting for him once he has completed his qualifications. Although marine biology isn’t totally dead in the water, either… Reece Styche Reece’s footballing career is still going strong, but he now combines his on-pitch career with semi-professional Hereford, who he joined in May 2019, with a new-found role in the accounting industry. To date, Reece has played for 16 different clubs, most notably in the Conference with Forest Green Rovers (now a Football League club), with his strong goal scoring record leading to a loan spell in League Two with Wycombe Wanderers. But towards the end of his time at Forest Green, Reece took the opportunity to learn new skills in order to give him a career option once his professional playing days came to a close. “I started studying my AAT qualifications in 2014,” says Reece. “Football gave me some spare time around training, so I decided to PQ Magazine June 2020

study, starting with Level 2.” Reece no longer plays full-time, and he works as an Accounts Assistant at Safety Technology International, a manufacturer of fire safety products. It’s a role he’s been in since early 2017, during which time he has played for Tamworth, Darlington and Alfreton prior to his signing for Hereford. “I enjoy everything about my job,” adds Reece. “It has given me a solid foundation, and I get involved in every aspect of the finance department. I was also able to gain a pay rise when I completed my AAT studies and became a MAAT (member of AAT). “That, in turn, allows me to continue playing football both locally and internationally – I have five caps for Gibraltar and am hoping to build on that total.” And Reece is quick to suggest that other footballers similarly consider what they might do when their professional playing days are over. “People should have the courage and the drive to learn something different, especially with how short a football career is,” he adds. “Accounting was perfect because it was something I was interested in. I’m quite an advocate of people continuing their education whilst in football, but most players don’t think like that, unfortunately.” Rebecca Fay Rebecca’s in her second spell with Cambridge City Ladies, who she has captained for the past three seasons. She was named AAT Apprentice of the Year in 2017. “I started playing competitively with Burwell Tigers when I was 11, before moving to Cambridge City at the age of 16,” explains Rebecca. “I then spent two years with Cambridge United before returning to Cambridge City for the start of the 2016/17 season. We won promotion to the FA Women’s National League at the end of last season.”

Rebecca Fay Age: 24 Position: Centre-back Current club: Cambridge City (74 games, 3 goals) Previous Clubs: Burwell Tigers, Cambridge City, Cambridge United

Alongside her football training, Rebecca has worked hard at her accounting career. Initially doing a Level 2 apprenticeship with a property investment firm, she moved to accountancy practice Streets Chartered Accountants, working in their Cambridge branch, and completed her AAT studies at Professional Diploma level. Rebecca has since begun her ACCA studies, and is currently two exams away from becoming a chartered accountant. “I was able to almost immediately implement the skills I had learned in my day-to-day role in the workplace, and I was earning while I was learning on the job,” Rebecca says. “I certainly have no regrets about not going on to university, and this allowed me to do my studies and play football for my local club.” She adds: “Although studying to further my career prospects took priority, I also believe downtime is important. By sticking to my study plan I ensured I had time to both play football and socialise. “Having my accountancy career is something I can work in alongside my football, and it will still be there when I retire from playing.” It’s not just footballers who are gaining support from their clubs for their future careers outside of football – many top football clubs are also providing support through their community foundations. Current European champions Liverpool FC are one of six sides delivering the Leadership Through Sport and Business (LTSB) programme through their community foundations (the others being Aston Villa, Chelsea, Manchester City, Tottenham Hotspur, and West Ham United). Successful applicants learn transferable sports coaching skills that they put into practice with the foundations, as well as gaining accounting skills, starting with AAT’s Foundation Certificate in Accounting. This leads them towards paid 18-month apprenticeships, which in turn takes them down the path to full employment. Patrick Edison-Graham is one of LTSB’s recent successes. He took part in the LFC Foundation’s employment programme with LTSB, achieved his accounting qualifications, and is now working as a junior accountant for Mazars – one of the largest accountancy firms in the country. “I knew that I needed to improve my CV and make myself more appealing to employers, in order to gain access to a career in accounting and finance. I had support from LTSB and the LFC Foundation to help me with careers coaching and interview practice, while I also supported the Foundation’s coaches on various schools projects in Merseyside,” says Patrick. “Achieving my AAT qualification, along with gaining work experience and personal development definitely helped. It gave me plenty more skills to include in my application, while I felt much more confident during the interviews.” The LTSB programme helped 232 bright young people from disadvantaged backgrounds find employment in the finance industry during its first five intake years (2012-16). Some 68% of participants came from BAME backgrounds, while 52% lived in the most deprived 30% of the country. And 87% of those who have completed the programme remained in full-time paid employment at least six months on. 41

PQ the troubleshooter The use of the marginal cost model in decision making The function of the decision making process is the selection of a future course of action from a number of alternatives. It is recognised that some costs are common to every alternative and in the evaluation process they will have no direct bearing on the ranking of the alternatives. It is often the case in the decision making process that the fixed costs are disregarded as they are by definition insensitive to changes in volume of activity. It is because of the nature of fixed costs and their behaviour that marginal costing techniques are applied. The strategic objective of management is to select that course of action which will obtain from the resource base, the maximum amount of contribution, profit and thus return on investment. Case Study Hockeyskill have planned the following activity for March 2019: Products Budgeted Selling Price Volume Direct Labour per Unit

£90

£80

£72

1200

1100

1200

£36.00

£31.50

£27.00

Labour hours per Unit Direct Material per Unit

3.5

£15.00

£14.00

£13.00

Variable overhead recovery rate per standard hour £2.77 Fixed Costs for the month £36000

Know your limits

Early in the first week of the budget period March 2019, a machine in the primary preparation area, suffers a major breakdown and a replacement part from an overseas supplier and will not be available until the month end. This will effect operating hours adversely by 10% in the budget period. It will however not effect the employees’ basic working week as the original plan for the month included some overtime working. The capacity in direct labour hours required to produce the original plan was:

Philip Dunn explains all you need to know about decision making and the limiting factor

Products

n the structure and outline of CIMA P1 Management Accounting there is reference to costing to support budgets and decision making, and this includes the concept of limiting factors. It is generally accepted that businesses have one or more limiting factors or, as the late Professor John Sizer states: “a factor in the activities of an undertaking which at a particular point in time or over a period will limit the volume of output”. Within the planning stage of the budgetary cycle it will be apparent that there will be a factor or factors which will limit the organisational activities. This is often referred to as the key factor or principal budget factor, and its effects on the organisational plans must be fully assessed. Such factors are often referred to as scarce resources that limit volume and may include: • supply of skilled labour.

• • • • •

supply of materials. factory space. finance – working capital availability. plant capacity. market demand. It is often the case that a business may face a single constraint situation; however, others may experience a multi-constraint scenario. Budgetary plans are usually set some months prior to the period to which they relate. Circumstances alter and situations often arise where limits are placed on a resource or series of resources after the plans have been formulated. Where resources can limit capacity, in the short run, a business must decide on the product mix which will secure maximum contribution (and therefore maximum profit). This is the decision making process faced by the finance team in which the marginal cost model often features.

Standard hours/unit

3.5

Production and sales

1200

1100

1200

Standard direct labour hours

4800

3850

3600

= 12250 direct labour hours The limiting factor is direct labour hours and there will be a shortfall of 1225 hours and capacity will be reduced to 11025 hours. The business must therefore make a shortterm decision, which will result in the most favourable course of action to minimise the effect of this shortfall in capacity. The business needs to revise its budget and product mix, so that in the short run, it can secure maximum profit. The decision making process involves the following steps: • determine the contribution per unit of output/ product. • determine the contribution per limiting factor – the labour hour. PQ Magazine June 2020

the troubleshooter PQ • rank the products per the contribution per limiting factor, to consider the alternatives. • revise the production and sales mix. • revise the budget. Firstly, let us consider the original plan. Products

Selling Price

80.00

72.00

90.00

Total

Variable Costs Direct Labour

36.00

31.50

27.00

Direct Material

15.00

14.00

13.00

Variable Overhead

11.08

9.70

8.31

62.08

55.20

48.31

Contribution per Unit

27.92

24.80

23.69

Volume

1200

1100

1200

Contribution

33504

27280

28428

Contribution

£89212

Fixed Costs

£36000

Budgeted Profits

£53212

Limiting Factor Analysis: Products

Revised Operating Statement March 2019

Contribution per Unit

£27.92

£24.80

£23.69

Standard hours per Unit

3.5

Contribution per labour hour

£6.98

£7.09

£7.90

Ranking Contribution / Labour Hour

Contribution per Unit Volume Contribution

893

1100

1200

24933

27280

28428

Fixed Costs

Revised Production and Sales Mix

Profit shortfall £53212 – £44641 = £8571

Revised hours available

11025

Ranking (1) H3 1200 units @ 3 std hrs

3600

3850 3575 hrs

4 std hrs per unit

= 893 units

A shortfall of 1200-893 = 307 units

Revised Profit

80641 36000 £44641

Shortfall of 307 units of H1 x £27.92 = £8571 Conclusion

Ranking (2) H2 1100 @ 3.5 std hrs Available for production of H1

Total

£27.92 £24.80 £23.69

NB: The ranking per limiting factor differs from that of ranking per contribution per unit of output.

7425

£89212

Products

3575

The revised production and sales mix is viewed only from a financial perspective. The business may decide to consider alternative strategies to avoid loss of customer satisfaction in not being able to meet the demand for H2. They may in the short run be able to buy in a substitute or contract out the work. However, they may decide to spread the shortfall across all products to minimise the adverse effect on the customer perspective. • Dr Philip E Dunn is a freelance author and technical editor for Kaplan and Osborne Books

Prepare for ACCA CBEs with Sonar Education’s suite of mock exams for skills level papers: AA FM FR PM TX www.sonareducation.com

PQ Magazine June 2020

PQ CIPFA health moves

Keeping you

in mind… Alison Sweeting explains how CIPFA is helping its students and members look after their mental wellbeing

e have been in lockdown for more than a month now, and it is certainly normal to start feeling a bit fatigued. Days can start blending together, and it has been weeks since many of us have seen our friends and colleagues

face-to-face. Special attention to mental health and wellbeing is essential for staying motivated at this time CIPFA had been piloting wellbeing sessions with students in the South East region as part of a plan to support students

across all our regions. Covid-19 brought the need for emotional and mental health support into sharper relief and our response has included setting up a series of six live web classes themed around different aspects of wellbeing. These have been delivered by a CIPFA associate trainer who is also a qualified mental health first aider. Alex Wakeham, the trainer who is facilitating and delivering the webinars, said he would like to help students learn how to cope with an unprecedented situation through adopting new habits and honest discussion. He commented: “In the three years that I have been working with CIPFA I have seen first-hand the culture of kindness that exists towards both staff and students. Through the webinars, my hope is that we can all begin to look kindly on ourselves even when we don’t get it right all the time.” The content of the webinars ranges from emotional intelligence and empathy to improving sleep and work-life balance. Students can attend the live sessions and can watch the recordings if they were unable to join the live webinar, through their MyCIPFA learning account. The sessions have been well attended by students, and feedback so far has been excellent. Students particularly appreciate the focus on work-life balance, as many are struggling to manage their time with work, family responsibilities and their studies. They also enjoy the sense of community gained through interacting with other participants who are experiencing similar challenges in their daily lives. “I am certainly appreciative that CIPFA is making the effort to support its students at this remarkable time,” one participant said. “In general, the content of the sessions has underscored key factors that affect our quality of life, such as how important it is to keep work and relaxation mentally separate and to try our best to live harmoniously with those around us. I have been mindful of both things since attending these sessions and have tried to turn the words into reality.” Another CIPFA student and participant noted that the timing of the wellbeing webinars before the next round of exams was particularly welcome. “I have now attended two sessions and have found them invaluable. Alex Wakeham is a calming influence and has some fabulous tips. The sessions are interactive, and it is a relief to know that I am not the only person struggling.” After the six sessions are delivered, CIPFA will continue to plan how we can provide support to our students in the future. At CIPFA, we have worked hard to ensure that we are able to maintain business as usual even amid the uncertainty presented by the Covid-19 pandemic. Our spotlight on mental health and wellbeing is just one way that we are providing our students with the best tools to succeed. • Alison Sweeting is CIPFA’s Training Delivery Manager PQ Magazine June 2020

PQ tax

Pensions explained Zahid Ahmed helps those studying tax get a better understanding of the mechanics behind pension contributions

here are two types of pension schemes that you need to be aware of: occupational and personal. Let’s look at these two in more detail to understand how these schemes operate.

Occupational pension scheme (OPS) The scheme is only available to employees and is set up by their employers. Both employees and employers make contributions to this scheme. Should an employee pay into an occupational scheme, their contribution is deducted from their employment income, as such it reduces their employment income and income tax. Let’s look at an example: • Sufyan has employment income of £50,000 • He contributes to his occupational pension scheme run by his employer • In the tax year 19/20 he contributed £5,600 How much income tax is saved if Sufyan makes the contribution?

Step 1

PPS Step 1: Individual contributes £8,000 Step 3:

Step 2

HMRC top up the PPS with the difference £2,000

Step 2 - HMRC The £8,000 is treated as it were made net of 20% income tax – as such the Pension provider can recover the amount of tax which is deemed to be deducted at source from HMRC

Step 3

Step 2 - Payment to Pension provider As you can see, Sufyan will save £1,120 (7,500 - 6,380) in income tax; another way of looking at it is a saving of 20% of the contribution. Personal pension scheme (PPS) These schemes are run by pension providers and open to individuals, such as sole traders, and employed staff. When an individual pays into a personal pension scheme the payment is treated as if it was made net of 20% income tax. Let us consider an individual who contributes £8,000 physically into their PPS: 46

The £8,000 is referred to as a ‘net’ contribution. HMRC would gross this up: 100/80 x 8,000 = £10,000

PQ Magazine June 2020

the PQ As you can see, an individual would only need to contribute £8,000 into their pension scheme for the pot to have a value of £10,000. If you’re a basic rate taxpayer there are no further income tax implications. However, if you’re a higher or an additional rate taxpayer then your basic and higher rate bands are extended by the gross contribution (amount paid x 100/80). Let’s look at an example: • Daaniyaal has employment income of £80,000 • He makes a net contribution to his personal pension scheme of £8,000 • He has no other income in the tax year How much Income tax is saved if Daaniyaal makes this contribution, and what is his income tax liability?

Daaniyaal will save £2,000 worth of income tax should he make a net contribution of £8,000. The savings can also be expressed as 20% x £10,000 (gross donation) • Zahid Ahmed is a lecturer at LSBF

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PQ ACCA ATX exam

taxation

Neil Da Costa puts a recent Advanced Tax Exam question under the microscope, pointing out where mistakes might have been made

income in the UK. However, in so doing she would lose her personal allowance, annual exemption and be subject to the remittance basis charge.)

a. Rental income in the country of Falgar Emma has a domicile of origin in Falgar, but will be treated as deemed UK domiciled if she has been UK resident for at least 15 out of the past 20 years. Emma was UK resident from 6.4.96 until 1.2.17, which was 20 tax years. She then moved to Falgar from 1.2.17 until 1.5.20, or three tax years. Emma then resumes UK residency in 20/21. For the tax year 20/21, Emma has been UK resident for at least 15 out of the past 20 tax years so is deemed to be UK domiciled. As she is UK domiciled, she is subject to income tax on her worldwide income. This means that her rental income from Falgar is taxable in the UK even if the income is not remitted to the UK. This is because the remittance election is only available to individuals who are not UK domiciled. Her rental income will be taxed in the UK at 40% as she is a higher rate taxpayer. She can claim double tax relief for the 26% tax in Falgar even though there is no double tax treaty between the UK and Falgar as unilateral relief is available. Double tax relief is the lower of UK and overseas tax so will be 26% and the net tax payable will be 40 - 26 = 14% tax. (Note: If Emma was not UK domiciled, she could make the remittance election and by avoiding remitting the income to the UK to escape paying income tax on the rental

b. Gift Of Shares In Vyc Ltd Circumstances Resulting In The Maximum Inheritance Tax Liability (IHT) The gift of unquoted shares to Edward will be a PET and IHT is payable if Emma dies within seven years. The IHT liability will be reduced by the following: • Unquoted trading company shares in Vyc Ltd owned for two years by Emma are eligible for 100% BPR. However, if Edward sells the shares before Emma dies then no BPR is available on death. Alternatively, the shares may not be relevant business property due to a change of trade to trading in investments. • Emma’s nil rate band is £325,000. However, Emma has made another PET of £280,000 to Lily on 1.10.15 which will consume part of the NRB if Emma dies within the next seven years (before 1.10.22). The remaining NRB available for the PET of shares would be 325,000 - 280,000 = 45,000. • The tax on death will be reduced by taper relief as long as the gap between the date of the gift (1.7.20) and the date of death is at least three years. Consequently, if Emma dies before 1.2.23 then no taper relief is available. As a result of these three factors, if Emma dies by 30.9.22 then a maximum IHT liability will arise as £280,000 of the NRB would already be consumed and no taper relief would be available on death. In addition, no BPR is available on death if Edward sells the shares before 30.9.22 and does not replace them with relevant business property. A gift for IHT is computed based on the loss in value to the donor. Emma and her husband Bill are related parties and her unquoted shares will be valued based on a combined holding considering Bill’s shares as well. This means that, before the gift, Emma’s shares will be valued as part of a 54% holding, so each share is worth £19. After the gift of 10,000 shares Emma’s shares will be valued as part of a 44% holding, so each share is worth £13. The value of the PET is (35,000 x 19) – (25,000 x 13) = 340,000 Annual exemptions of £3,000 for 20/21 and 19/20 are both available which will

n this article I will be taking you through a technical debrief of Emma, which was question 2 of the Sep/Dec 2019 Advanced Tax Exam. You can download the question from the ACCA website under past exams. Overseas aspects for individuals feature regularly in the Advanced Tax so it is crucial for you to master this. In this scenario, Emma is a non-UK domiciled individual who is becoming a UK resident and needs advice about overseas rental income possibly being remitted to the UK. Emma is also planning on making a gift of shares in a UK family company, Vyc Ltd. Finally, she is also planning on selling a commercial property in Manchester. As a tax advisor in a multicultural country like the UK, it is important to understand the tax implications for non-UK domiciled individuals who are UK resident. This was a very tricky question, as many of the tax benefits generally available do not apply in this question, so I recommend you carefully read the question and think about it before looking at the solution.

be deducted before the remaining NRB of 45,000. Maximum IHT liability will be (340,000 - 6,000 - 45,000) x 40% = £115,600 Is CGT gift relief available on the gift of unquoted shares? While unquoted trading company shares are a business asset for gift relief, gift relief is only available if the donee is UK resident for the tax year at the time of the gift. Edward has been travelling in Asia so is not UK resident and the gain cannot be postponed under gift relief. (In order for gift relief to apply, Edward must be UK resident. In addition, both Emma and Edward must make a joint election within four years from the end of the tax year in which the gift took place 5.4.21 + 4 years = 5.4.25.) c. Sale of industrial property In Manchester, England Emma is a temporary non-UK resident for CGT purposes because: 1. She was UK resident for at least four out of the past seven years immediately preceding the tax year of departure (16/17). 2. Emma’s period of non-UK residence is less than five years. Emma is returning to the UK within five years, so is liable to CGT on disposals of all assets while she is abroad, if the asset was owned prior to her leaving the UK. Emma owned the Manchester property before she left the UK so even if she sells it while she is in Falgar, the gain will be taxable in the year she returns to the UK. The gain of £330,000 will still be taxed in 20/21. If Emma sells the property while abroad, this will result in a CGT liability of (330,000 - 12,000) x 20% = 63,600. The aftertax proceeds will be 330,000 - 63,600 = 266,400. If Emma sells the property once she returns to the UK, the gain will still be taxable, but she will be able to increase the sale proceeds by £60,000. This would result in a CGT liability of (390,000 - 12,000) x 20% = 75,600. The after-tax proceeds will be 390,000 - 75,600 = 314,400. There is no benefit in selling the property before returning to the UK so to maximise the after-tax proceeds, Emma should sell the property in Manchester once she returns to the UK, yielding extra after-tax proceeds of 314,400 - 266,400 = 48,000. • Neil Da Costa is a senior tax lecturer at Kaplan Financial PQ Magazine June 2020

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PQ home working

Are you a workaholic

or a daydreamer? Which remote worker are you – workaholic, daydreamer or recluse? Recruiter Robert Walters provides you with a daily schedule to keep you on track

hree personality types have emerged from our extended period of remote working, according to global recruiter Robert Walters. So, which one of the following best describes you? 1. The workaholic: works compulsively or over the hours required, and at the cost of their sleep, family time or personal life. A workaholic in this period is someone who enjoys their work and sees it as structure or differentiation to their day, or feel compelled to do it to prove there has been no change to productivity since home working has been introduced. The biggest threat to a workaholic is burnout, 2. The daydreamer: is easily distracted from tasks by activity in the home. Daydreamers find themselves in a cycle of an unfocused and then refocused mindset multiple times a day. The natural wandering of the mind can often mean that projects or work is delivered differently to how mangers may have expected. Job satisfaction for a daydreamer can often be quite low as a result. 3. The unwilling recluse: is victim to the extreme comfortableness of the home setting. The ability to stay in the same ‘hoodie’ for days, avoid small talk with colleagues, and hide behind emails as your main form of communication, can lead remote workers down a slippery slope of isolation. The workaholic Sam Walters of Robert Walters says: “No coffee or lunch breaks, lack of personal time, and minimal human interaction can be dangerous combination for workaholics heading towards burnout. As we navigate through this period and most of us have little choice but to working in our living room or kitchen, it is important to redefine the lines between work and home life.” Robert Walters has even created a suggested daily schedule: THE WORKAHOLIC SCHEDULE

Avoid starting a new task if it’s likely to be complicated or take a long time to complete 17.30 Flag any new emails for actioning in the morning 18.00 Finish work – put your laptop away or shut your study door. Go for a walk, switch on the TV or play a game to unwind The daydreamer When it comes to daydreamers, Walters says: “While working from home can present great opportunities to eliminate some of the typical distractions we face at the office, for many people the sudden lack of structure actually inhibits their productivity.” The daydreamer needs a reason to get out of bed! Substituting the commute with a quick morning jog or living-room pilates could help set daydreamers on the right track. THE DAYDREAMER SHEDULE 7.00 Wake up 7.15 Have breakfast and check your emails or catch up on the news 7.00 Wake up 7.15 Try out some yoga or light excise 7.45 Shower and get dressed 8.15 Have breakfast and catch up on your emails 8.45 Set out your daily tasks in priority order 9.00 Start work 11.00 Make a coffee or healthy snack and have a catch-up with someone from your team 11.45 Back to work 13.00 Lunch break – get up and get away from your working area. If it’s safe to do so, go outside for some fresh air; otherwise, stay indoors and read, prepare a nutritious lunch or work on a hobby. Take a full 30-60 minutes to give your brain and body a chance to recharge. 14.00 Back to work 15.30 Take a tea break, message a colleague or take a few minutes to load the dishwasher or fold laundry 15.45 Back to work 16.30 Start to wind down for the day. PQ Magazine June 2020

home working PQ 7.45 Exercise 8.15 Shower and get started 8.45 Start work – set out your daily objectives and categorise them by urgency or importance. Highlight any tasks or deadlines that you absolutely cannot miss 10.30 Make a coffee or healthy snack and have a catch-up with someone from your team 10.45 Back to work 12.15 Take a step back – revisit your daily objectives and assess your progress. If you are off track, adjust your afternoon schedule to get yourself back on track 12.30 Lunch break – get up and get away from your working area. If it is safe to do so, go outside for some fresh air, otherwise, stay indoors and read, prepare a nutritious lunch or work on a hobby. Take a full 30-60 minutes to give your brain and body a chance to recharge 13.30 Back to work 15.30 Time for a break – make a tea and get up to stretch your legs. If you have been using a computer all day, try not to look at any screens, including your mobile phone 15.45 Back to work – the final stretch! Revisit your daily objectives to assess your progress. Focus on getting your

PQ Magazine June 2020

most urgent tasks done before the end of the day 17.15 Start winding down for the day. Finish off any remaining urgent tasks, and perhaps look at re-prioritising any uncompleted tasks for the following day 18.00 Log off and shut down your computer (or, at the very least, your work emails). By giving your workday a definitive end, you can help improve your focus during the day and avoid working late into the night to finish tasks you should have completed during normal business hours The unwilling recluse When it comes to the recluses, Walters explains: “Social butterfly or not, long periods of isolation can bring any one of us down. Don’t underestimate the power of small talk, and stay in touch with furloughed workers and use this opportunity to arrange training and upskilling for yourself.” It really is worth ditching emails and chat messages for video and phone calls for anything that takes more than a couple of messages to explain. You may also need to embrace solitude. It can help you re-position your mindset and help you find opportunities to be productive when you have just got yourself for company.

PQ watch with PQ

Where’s that remote? With the lockdown still in place, you may be getting tired of re-watching comedy shows or blockbuster films. Here’s some more serious stuff…

ast time out we reviewed some great programmes to watch, which had accountancy themes. This month PQ magazine gives you some non-fiction picks to add to your ‘favourites’ list: Dirty Money This Netflix original series, now in its second series, focuses on corruption and immoral practices in the financial world. The episodes cover a vast array of topics, from the Volkswagon emissions scandal to Donald Trump’s dodgy business approaches. There are a few episodes that will be of particular interest to PQ readers, such as the episode ‘Cartel Bank’, which chronicles the discovery of HSBC’s money laundering for several Mexican drug cartels. In the episode, it explores how HSBC knowingly allowed bank accounts to be created and used by criminal organisations, and how they failed to properly staff their anti-money-laundering teams to tackle the issue. Dirty Money is an incredibly in-depth series, with thoughtout interviews with experts and individuals at the heart of the story. Even the less accountancy-

centred episodes make for great watching with regards to general ethics, and will help any PQ with getting a greater understanding of the moral landscape of the modern business world. The UK Gold This 2013 documentary is currently available on Amazon Prime, and is a rare programme among streaming services that offers a distinct UK perspective on the financial world, unlike many of the other US-centric programmes. The documentary focuses on tax avoidance in the UK, and the links between Britain and tax havens in territories such as Bermuda, the Cayman Islands, and the British Virgin Islands.

It follows various people and their experiences of the effects of tax avoidance, from poverty in the London Borough of Hackney in London, to African governments being denied millions in tax revenue from British-based companies operating on the continent. Featuring interviews from leading experts and figures in the accounting world, including PQ Award’s Personality of the Year and contributor Richard Murphy, this programme is a must-watch for anyone wanting to learn more about the dubious practices of British finance. The Accountant of Auschwitz This harrowing documentary follows the trial of Oskar Gröning, the man dubbed ‘the accountant of Auschwitz’. The 2018 film on Netflix documents the discovery, investigation, and eventual trial of Gröning. With interviews from survivors of the holocaust, legislators and historical experts, the documentary explores the idea of whether people who were involved in the holocaust (but not directly killers) were just

as complicit in the horrendous crimes as other Nazis. Gröning was one of the few Nazi death-camp workers to openly admit what was happening in the camps during an interview, but insisted he should not be prosecuted as he was simply a bookkeeper. Although the film is dark and upsetting, it serves as a very important and stark reminder of the horrors that took place during World War II. A heavy film to watch, but one that should be a reminder to everyone of their moral duty to others no matter what their job description. Crash Course This YouTube series is the brainchild of best-selling author John Green and his brother, Hank. With over 10 million subscribers and a billion viewers, this series is a giant of the world’s biggest video-sharing website. The channel produces short videos, of usually around 10 minutes in length, that explain and educate viewers on a number of different topics, including world history, science and even accountancy. The videos feature simple and understandable narration accompanied by fun and colourful illustrations. Although the videos are designed for the casual viewer (watching the accountancy videos may be a little underwhelming for most PQs), they are entertaining and a productive alternative to television shows and films. They even have videos relating to exam technique and writing structure, that some may find useful in preparation for exams.

PQ Magazine June 2020

careers PQ

The eyes have it

You only get two, but most of us take our eyes for granted. Are you doing enough to look after them? TAKE A BREAK If you work long hours in front of a screen in artificial light you increase your chances of becoming short sighted, according to some experts. So take regular short breaks away from the screen – to rest your eyes and exercise your thighs! One thing that will help is to have a proper lunch break away from your desk and computer entirely. Like the rest of your body your eyes get tired. The 20-20-20 rule is the way to keep them in shape. Make sure you look up from your screen every 20 minutes, and focus on something else 20 feet away, for 20 seconds. By looking into the distance you are helping your focusing muscles to relax, helping to reduce fatigue.

Life at the University of Lincoln James Wright, 28, is a senior lecturer/programme leader, in his fourth academic year. He has a first class degree in Accountancy and Finance from the University of Lincoln and is looking to start a PhD to research the impact of environmental accounting What time does your alarm clock go off on a working day? 7:30am, or 5:30am if I go to the gym or running before work. What’s the first thing you do when you get to your desk? Ask how my colleague Thakur is – we share an office and have a coffee to start the day. What’s on your desk? Plants, fruit, vegetables – and every accountant has a calculator, surely? What’s the best thing about where you work? The work/life balance and working in a very rewarding role helping students. No two days are ever the same. Where’s your favourite place to go for lunch? I usually make my lunches fresh to keep healthy and to help recovery if I have been out training in the morning. No vegan sausage roll fan here! What can you see when you sit at your desk? Sadly no view of the lovely Lincoln cathedral or

Brayford, only of the student Tower Bar. Which websites are your favourites and why? MoneySavingExpert.com is always an interesting read with Martin Lewis’ tips and I admire his presentational skills. Which websites do you use for work? ACCA, it has such as variety of resources for members and students. How many hours a week do you spend in meetings? On average I would say five hours a week. Be wary of the meetings with a free lunch, though… What time do you leave the office? It varies. Some days very late if we arrange student engagement events but there is flexibility around classes and overall my role is very rewarding. How do you relax? Marathon training, gym, planning trips to new countries, reading new books and catching up with family and

friends for drinks. What’s your favourite tipple? Ale all the way, easy question being a Camra member! How often do you take work home with you? Very rarely. I try to keep the workplace a working environment and home somewhere I can relax and unwind. Dealing with isolation has been a challenge. What is your favourite TV show? The original Top Gear/The Grand Tour – the ultimate job! Summer or winter? Summer no doubt, BBQ and beer garden weather is underrated. Pub or club? Pub, where all the best ideas are discussed. Who is your hero? My Dad. Hard-working, loving, caring, inspiring and always willing to offer advice. If you had a time machine, where would you go? 30th July 1966, Wembley Stadium, London. We all know what happened next!

Willis Towers Watson said: “The pandemic will accelerate the shift to more flexible ways of working, especially for companies whose staff produced as much at home as they did in the office. This trend could reverberate across the economy.”

on items such as office desks, furniture, and printer ink. Anyone who is employed and has expenses up to £2,500 needs to submit a P87 form, which can be downloaded on the Government Gateway website. Accountants at Blick Rothenberg are advising you claim online to save time. If successful HMRC will pay you by cheque or adjust your tax code. You don’t have to submit receipts with the P87, but keep them in case HMRC wants to check them at a later date.

In brief

KEEP YOUR FEET COLD AND BLINK! If the weather gets hot make sure your fan/air conditioning is facing your feet and not your eyes. Dry air from airconditioning sucks moisture out of your eyes, which makes them vulnerable to infections and even ulcers. If you do become too obsessed in the work you must remember to blink. Apparently, the normal person blinks between 12 and 18 times a minute. Once we turn on our screens this plummets to six times a minute. Experts have suggested you start consciously blinking every minute you are reading online. DIET HELPS Eating oily fish also helps prevent dry eyes. There is even such a thing as dry eye syndrome, which is common in older people. If mackerel isn’t your thing then it’s ok to go for supplements. SMOKING DOESN’T HELP Macular degeneration of the eyes is on the list of things bad things that smoking does to you. Cigarette smokers are in fact four times more likely to be blinded by AMD compared to none smokers! PQ Magazine June 2020

Putting in a shift Bosses worried about home workers becoming too distracted by home schooling and daytime TV can relax – a survey has found that Britain’s productivity has generally held up since the lockdown. The survey, by Willis Towers Watson, found that 22% of employers felt that there had been no impact on productivity, or a positive impact. However, 15% reported a significant fall in productivity, and a further 22% noted a small negative impact.

Get your P87 ready The taxman has been ‘inundated’ with claims from employees working from home during the pandemic. They are apparently looking for tax relief

The PQ Book Club: books you should read The Price of £ootball by Kieran Maguire, Agenda Publishing, £9.99 The price of football is all about understanding the influence of money on the game. Which lover of football doesn’t want to know what happens in the accounts if that multi-millionpound centre forward, signed a year ago, turns of to be rubbish? Maguire says this may be of particular use to any fan who has had Andy Carroll play for their team in recent few years! This book is all about

understanding football club finance, and you quickly understand this as chapter one explains how to read the balance sheet, and chapter two looks at the club’s profit and loss accounts. By chapter eight we reach financial fair play, where the author explains that governing body UEFA’s aim is not to make all clubs equal in size and wealth, but to encourage clubs to build for success rather than continually seeking a ‘quick fix’. But the reality is very different

from this noble intention. Instead, it has fixed the playing field in favour of the same old names. The final chapter looks at the things that every football fan should be worried about – late accounts filing, complicated club structures and footnote disclosures. PQ rating: 5/5 Maguire shines a light on the machinations of our national sport. 53

PQ got a story, funny or serious, you want to share? Email graham@pqmagazine.com PQ got a story, funny or serious, you want to share? Email graham@pqmagazine.com

Looted money returned with strings Some £250 million of cash stolen from Nigeria by former military dictator Sani Abacha has been returned by banks in the US and Jersey. The money returns with one proviso – that it is spent on the public good. The Nigeria government, which refer to the monies as ‘Abacha Loot 3’, have pledged to use the cash to build roads. The money was first laundered through the US banking system before being held in Jersey by the Doraville Properties Corporation. This company is registered in the British Virgin Islands and is held in the name of Abacha’s son Mohammed.

Branson offers island retreat

What would you do to save your company? Well, Sir Richard Branson recently pledged to put up his luxury island resort as collateral to help get a UK government bailout for his stricken Virgin Atlantic airline. In an open letter to staff the billionaire explained he was not after a handout, just a commercial loan of around £500m. Some critics have said instead of asking the UK taxpayer for aid he could draw on his own wealth, which is put at £4bn. The news came as Virgin Group’s airline in Australia entered administration.

Laziness is key A coffee with Garry? How do you tell the difference between a bot and a real person? While machines can imitate humans, they haven’t learnt to impersonate one common human flaw – laziness! Apparently, we start off all enthusiastic on social media, but end up retweeting cat pictures, and our messages get shorter and shorter. We are friendly but lazy. Meanwhile, the bots stay engaged at all time. Scientists say the differences makes it easier to spot fake accounts. As we speak, no doubt some programmers are already teaching their bots to be a little less enthusiastic.

The Institute of Certified Bookkeepers is one professional body that has stepped up to the mark during the pandemic, with its innovative updates via ICB TV. At 3pm most days ICB’s co-founder and president, Garry Carter, sits down with a coffee, and often a guest, to help bookkeepers understand the latest announcements. As it says in the blurb: “There’s no waffle, just practical advice”. Viewers are also encouraged from the start to ask questions, and this has helped guide what resources ICB then puts up on its YouTube hub. Check out the recording at: https://www.youtube.com/ playlist?list=PLImn8ERsTSbXnvQjFt6EVH7Hr987HUhnF

’ WEV E

Bags v gold If you are thinking of investing your savings (if you have any left), then maybe you should look to designer bags rather than the stock market or gold. While the FTSE 100 index gained 12% last year, Hermes Birkin handbags increased in value by 13%. This is much better than other collectable items such as art, watches and whisky. It’s not a one-off, either. The Art Market Research tracker said that over the past 10 years the FTSE 100 and gold have increased by 39%. Birkin bags grew in value by 108%

GOT THE L OT

The price of £ootball Top accountant Kieran Maguire teaches the Football Industries MBA at the University of Liverpool Management School. He is the go-to man for television and radio, commenting on all matters relating to football clubs. And, now he has a book out – ‘the price of £ootball’. True the book might need a new chapter now, but if you are looking for a football fix then this is it. We have three copies of this fantastic book up for grabs. Email giveways@pqmagzine.com, heading it ‘Price of Football’. And, three readers will be sent Maguire’s book.

Soothe your mind We have three copies of ‘Relaxing Colouring’ up for grabs this month. You can colour lots of beautiful illustrations from elephants to complex patterns. It really will help you get into the moment and forget your troubles. It’s time to sharpen your pencils and get ready for some scribbling. To get the chance to win this great book email ‘Relaxing colouring’ to giveaways@ pqmagazine.com. Remember, we need your name and address so we know where to send the prize.

Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be received by Friday 8 May. The main draw will take place on Monday 11 May 2020.

TO ENTER THESE GIVEAWAYS EMAIL GIVEAWAYS@PQMAGAZINE.COM 54

PQ Magazine June 2020

MAKING LIFE SIMPLE

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