way to go

PREM SIKKA

Brexit deal still has a way to go

The long-awaited 1,246-page Trade and Cooperation Agreement (TCA) between the EU and UK provides the basis for future trading relationships.

The TCA enacts trade barriers, reduces UK citizens’ mobility by requiring visas and restricts cultural exchanges among students by withdrawal from the Erasmus programme. A big concern is the end of mutual recognition of professional qualifications. Last February, PM Boris Johnson promised that mutual recognition of UK and EU qualifications would be to be part of the post-Brexit trade negotiations. However, that is not what has been delivered.

The effect is that, for the time being, holders of UK professional qualifications will not be able to provide statutory services, such as external audits, to clients in the EU, and vice versa. In principle, those wishing to deliver services to EU customers may need additional EU-approved qualifications. This amounts to a trade barrier. The good news is that the TCA provides a framework for securing recognition without the need for additional qualifications, but with agreements on a profession-by-profession basis with each country. The conclusion is that Brexit has not yet been done.

Accountancy bodies are already on the job as the value of their qualification depends on portability and mutual recognition. The UK government has promised to provide guidance to help them secure recognition.

Prem Sikka is Emeritus Professor of Accounting at the University of Essex

Taxwatch

Pap Time for a WFH tax?

Those working from home should be taxed to help support those whose jobs are under threat, says Deutsche Bank in a new report. Economists at the bank have said an additional tax of 5% on workers’ salaries should be added to those who opt to WFH. Such a tax in the UK would generate a pot of £6.9 billion a year, which could be used to pay low-income workers and/or those under threat of redundancy with a grant of £2,000. In the US

Crime levy ‘unacceptable’

The new £100 million Economic Crime Levy will burden UK accountants and their clients with ‘unacceptable’ fees, says the AAT.

The government is proposing to raise around £100 million a year from organisations regulated for Anti-Money Laundering (AML) purposes – this includes accountants, tax advisers, insolvency practitioners, solicitors, and conveyancers.

This new levy is in addition to AML fees already paid by 22 professional bodies to the Office New measures to address the serious failures at Nottingham City Council, have been announced by Local Government Secretary Robert Jenrick.

This follows a non-statutory review into the council’s finances in November last year.

An Improvement and Assurance Board, made up of experts in governance and finance, appointed by the department, will be set up to help the council deliver the report’s recommendations on governance When BDO announced it was paying its partners £518,000 each, it thought it would be fine to keep the £4 million it had been given by the government to pay for furloughed staff.

Well, the partners had taken a 14% hit on their pay – they were paid an average of £602,000 last year. The fall in salary is almost exactly in line with the 15% drop the tax would raise £36 billion. The 5% WFH tax would equate to around £7 a day based on a salary of £35,000. Economist Luke Templeman said: “For years we have needed a tax on remote workers. Covid has just made it obvious.”

Pap Amazon prices rise

The cost of Chinese products sold on eBay and Amazon have risen following the introduction of tougher tax rules. From 1 January all online marketplaces have for Professional Body Anti-Money Laundering Supervision (OPBAS), which was established in 2018.

AAT has stressed its support for tackling money laundering and economic crime, but opposes the idea of an annual £100m levy. It is worried that there appears to be disagreement about how best to collect the levy. Most professional bodies believe the best way to do this is through a single public agent – such as HMRC or OPBAS. However, the government appears to favour imposing responsibility and company ownership.

The council must put forward their three-year recovery plan by in BDO’s profits. Managing partner Paul England had said the partners had debated internally about the morality of accepting taxpayers’ money, and felt it was justified because it helped preserve jobs. He said: “We agree there’s a moral debate, but we think we have more of a responsibility to invest in jobs.”

That view didn’t last very long and a few days later BDO agreed to to account for the VAT paid on products sold on their platforms by third party sellers by deducting the tax at source. There were genuine worries that thousands of sellers were avoiding the tax by using fake VAT numbers and shell companies to sell their products in effect taxfree. Analysts have said the tax rule change has had an instant effect, with many items now 20% more expensive! HMRC had estimated that the online fraud could be losing the taxpayer over £1 billion a year. for collection on the professional bodies.

Phil Hall (pictured), Head of Public Affairs & Public Policy, AAT, said: “An additional £100m of costs is simply unacceptable in the current climate, which sees businesses large and small having to contend with both the effects of the pandemic and Brexit.

“There is also a disturbing lack of clarity from the Government about how it would calculate and collect such a levy fairly and reasonably, making this highly contentious and, AAT would argue,

Jenrick to tackle Notts council failings

grossly unfair.” the end of January 2021. This will set out how they will improve their financial position and review their investments. They must submit progress reports to the department on a quarterly basis.

The measures come in response to a rapid non-statutory review commissioned in November to examine serious governance and risk management issues, including those associated with the council’s private energy company Robin

BDO has change of heart over Covid cash

Hood Energy. pay back the money. The furlough money had been used to furlough first-year recruits (450 of them), and around 250 members of staff.

BDO’s bigger rivals PwC and Deloitte took the decision early on not to take furlough monies.

Mazars, a top 10 accountancy firm, then followed suit and confirmed it has repaid £1.1 million

it received from the government.

Pap Taxing times at Christmas

More than 2,700 customers filed their self-assessment tax return on Christmas Day, according to the latest stats from HMRC. The peak time for completing tax returns was 2pm to 2.59pm, with more than 200 customers pressing send on their online form. The self-assessment deadline is 31 January 2021, and HMRC has not heeded the call for it to extend the deadline for tax returns by the accountancy bodies.

ICB’s LUCA winners

“We want Garry” came the chant from the chatroom as attendees eagerly awaited the start of the first-ever virtual ICB LUCA awards. And it was ICB’s Garry Carter and Ami Copeland who announced the winners ‘Hollywood-style’

So who walked away with the prizes? Here are just some winners: • Large Training Provider of the Year 2020: Training Link. • Small Training Provider of the Year 2020: Premier Training. • Apprenticeship Training Provider of the Year 2020: MBKB Training. • Student of the Year 2020: Elizabeth Carter (Training Link). • Apprentice of the Year 2020: Maddison Cooper, employed by Whitley Stimpson Ltd (Dudley College of Technology).

Assault makes headlines

Accountant James Phipps may have been hoping his ‘severe reprimand’ and £5,060 bill for costs, handed out on 16 September by the ICAEW’s disciplinary committee tribunal, would be the end of his ‘punishment’.

Then, in early December, the ICAEW published its full report of disciplinary orders and regulatory decisions, and Phipps’ assault on ‘Ms X’ was picked up by the national daily newspapers, including The Times and the Daily Mail. The Times ran the headline: “Accountant groped women then struck her with a book”.

A well-established and growing accountancy practice is seeking to recruit an AAT part qualified trainee accountant to join their very friendly team based in Wokingham.

The role is suitable for a part AAT or ACCA part qualified accountant who wishes to progress to full qualification. Full study support will be provided.

Key elements of the AAT part qualified trainee accountant role

The former PwC accountant (they let him go) was jailed for assault in the US after drunkenly groping a sleeping woman onboard a British Airways flight, before throwing a hardback book at her when she rejected his advances.

Phipps admitted he had been drinking heavily, and despite claiming he had no recollection of the attack pleaded guilty in court. He received a sentence of 10 days in prison and 10 days’ house arrest. Interestingly, it was

JOB Of THE MONTH

AAT PQ Accountant are: • Bookkeeping and VAT returns. • Prepare and assist with management accounts. • Assistance in the preparation of year end accounts for limited companies and sole traders. • Balance sheet reconciliations. • Providing support to clients.

PwC that reported his conviction to the ICAEW.

Phipps is a lucky man, as current ICAEW guidance says the starting point for a criminal conviction resulting in a term of imprisonment is exclusion. The committee, however, took the respondent’s good character into account, and the fact that for his current employment he needs to be a member of the ICAEW.

Check out the full report at https://tinyurl.com/y2s6honx

Ideally with at least one year’s practice experience, you will have the potential to manage your own small portfolio of clients. Experience of Sage and or Quickbooks is advantageous. In return you will receive a salary of between £22k-£25k + study package.

Applications close on Thursday 21 January. For more go to https:// tinyurl.com/y4q2776g