The magazine of International Association of Bookkeepers

BOOKKEEPERTHE

April / May / June 2019

Anti-Money Laundering

(AML) – A refresher

Do you have excellent attention to detail or could you test sit the IAB’s exams?

Making Tax Digital for VAT goes live

Increases in minimum pension contributions

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International Association of BookkeepersSuite 5, 20 Churchill Square, Kings Hill, West Malling, Kent, ME19 4YU

Phone: +44 (0)1732 897750Email: membership@iab.org.ukWebsite: www.iab.org.uk

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Contents

3 Janet’s welcome Amessagefromthechiefexecutiveandthekeyfindings

from our annual members’ survey.

4 Anti-Money Laundering (AML) – A refresher

An overview of the Money Laundering Regulations and the steps to take to ensure you comply.

5 Spring statement An update from the Spring Statement which took place

on 13 March.

6 News items A selection of news items including an update on the

PAYE tax codes for 2019-2020 and information on a campaign to tackle invoice fraud.

9 Do you have excellent attention to detail or could you test sit the IAB’s exams?

We are looking for people to proof read our study text booksandtestsitexampapersforIABqualifications.

9 Technical support Find out about the wider range of free helplines available

to professional members.

10 Making Tax Digital for VAT Update on Making Tax Digital for VAT following on from it

being mandated on 1 April 2019 and what you and your clients or employer need to do if they fall under the requirements.

11 Word from Sarah: #balanceforbetter

In her regular feature, Sarah Palmer tackles the issues that matter.

12 IAB member case study A case study provided by Jane Pole FIAB AIAAP about

running her own bookkeeping practice and she gives advice for anyone looking to start their own practice.

13 Automatic enrolment: April 2019 contributions increases

Important information about the contribution increases which came into effect in April and three things employers need to check in relation to the changes.

14 Notice of Annual General Meeting Announcement of the date of the next AGM.

14 IAB London seminar and IFA conferences

These events will cover topics including Making Tax Digital, GDPR and ways to gain new clients. Find out more and book your place.

15 Meet the election candidates Discover who is standing for election and re-election at

the AGM.

16 Form of Proxy Use the form to vote at this year’s AGM.

2 | The Bookkeeper

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ARE HAPPY WITH THE FREQUENCY OF THE E-NEWSLETTERS SENT TO MEMBERS

79%

FIND THE CONTENT ON THE WEBSITE USEFUL

76%

SAY THEY ARE PROUD TO BE A MEMBER OF THE IAB

89%

SAY THE IAB HELPS THEM TO PREPARE FOR CHANGES IN LEGISLATION SUCH AS THE MONEY LAUNDERING REGULATIONS

AND MAKING TAX DIGITAL

74%

FEEL THE IAB OFFERS ENOUGH CONTINUING PROFESSIONAL DEVELOPMENT OPPORTUNITIES

74%

Welcome to this month’s edition of The Bookkeeper.

One of our highlighted topics is Anti Money Laundering. It is essential that bookkeepers and

accountants realise the importance of this. We will be out doing supervisory visits, so make sure you are complaint. Using AMLCC will help you with this.

Thank you to everyone who responded to our annual members’ survey. Your feedback is really important to us and will further assist us to ensure we are providing you with the support you need. We will be reviewing the results of the survey over the coming months. Please find below a summary of some of the key findings from the survey:

Another hot topic for you all has been Making Tax Digital, another good read on this is included in this edition, along with payroll and pension changes.

We have our seminar coming up in May, so don’t forget to book as there are limited spaces available. We have some great speakers lined up to keep you up to date. I look forward to seeing you there.

Our AGM is in June, don’t forget to vote. Your vote is important.

Janet JackChief Executive

Welcome

Annual members’ survey

The Bookkeeper | 3

What is money laundering?At its simplest, it’s “doing stuff” in relation to proceeds of crime. Criminal activity creates criminal property and doing anything connected to this criminal property is likely to be money laundering.

Criminal property doesn’t just mean physical property, it could also be, for example, the reduction in a liability. The UK has an all crimes approach to money laundering.

Are you conducting a service that is regulated for AML?If you are providing accountancy services by way of business then, whilst undertaking that business, you are regulated. It’s only when you are providing these services to a client and not when you are an employee.

Accountancy Service Providers include accountancy and bookkeeping, tax advice, insolvency and auditing. AML Guidance for the Accountancy Sector (AMLGAS) adds further detail to the Money Laundering Regulations 2017 definition of an external accountant.

Supervision with the IABTo comply with the Money Laundering Regulations 2017 all self-employed bookkeepers must have anti-money laundering (AML) supervision in place. As the IAB is an approved AML supervisor, all members in the UK to whom the regulations apply, must activate their AML supervision with the IAB by applying for an IAB practising certificate or Certificate of AML Supervision. This also brings other benefits such as access to guidance and additional resources. If you require supervision or have any queries about your supervision please visit: www.iab.org.uk/join-the-iab/important-information-self-employed-bookkeepers.

You can also contact the compliance team: compliance@iab.org.uk or 01732 897750.

“1.2.2… for the purposes of this guidance it includes any service which involves the recording, review, analysis, calculation or reporting of financial information, and which is provided under arrangements other than a contract of employment.”

“Tax adviser”….provides advice about the tax affairs of other persons, when providing such services.

AMLGAS is adopted by the accountancy AML supervisors (including HMRC) and is HM Treasury approved. If you provide services regulated for AML, then you will need to be supervised.

A link to AMLGAS can be found here: https://www.ccab.org.uk/documents/FinalAMLGuidance2018Formattedfinal.pdf.

Reporting to the NCA (National Crime Agency)If you form a suspicion or have knowledge of money laundering (or have grounds for either) it should be reported to the National Crime Agency (NCA). A regular topic is client errors.

Please read AMLGAS 6.1.14. It explains that if you find a client error that you believe to be a true error, and it’s quickly corrected, then it is less likely to be reportable.

A practical guide to AML compliance and risk managementAML is a mindset that will protect your firm. The real cost of AML is time and resource. If you want to stay in practice and out of jail, it’s essential you get it right!

When considering any AML situation, imagine there’s an independent person reviewing your actions and casting their eye over your decision making. If you’re questioning your own decision making, ask yourself what the independent person would say?

WE LOVE AMLCC – The steps to AML success.W Write it down: If it’s not written down, it didn’t happen. You’ll need a firm policy, firm risk assessment and risk assessments for all clients; all documented.E Educate and train: Training for everyone is essential; why take the risk that something is missed?L Look out for a visit: Your AML supervisor may visit but don’t forget that the Police, Trading Standards and HMRC are amongst others that could request AML evidence.O Operational and organisational: AML is part of virtually everything that happens within a firm. Many aspects of your existing procedures will need only slight amendments to be AML compliant.

Anti-Money Laundering (AML) – A refresher

4 | The Bookkeeper

Chancellor Philip Hammond had pledged no big fiscal announcements in the run-up to his Spring Statement – and he

was true to his word.He started and finished with words of warning

about Brexit, saying the uncertainty was “damaging the economy and reputation” of the UK. He said: “Leaving with no deal would mean significant disruption in the short and medium term and a smaller, less prosperous economy in the long term, than if we leave with a deal.

“Higher unemployment, lower wages, higher prices in the shops. That is not what the British people voted for in June 2016.”

There was, however, potentially good news for the UK’s small businesses when he announced plans to tackle the scourge of late payments to small businesses. The Chancellor said large companies would be required to carry out an audit to review their payment practices and publish the findings in their annual report.

Hammond was bullish on the prospects for the UK economy, saying the economy remains robust and has “defied expectations”. He said the UK’s economy had been growing for nine years in a row – and it’s expected to keep growing for the next five years.

V Verify and identify: You need to know who your clients are and verify that fact.E Evaluate risk: What is the actual risk to your firm of being exposed to money laundering? Your documented risk assessments give you scope to mitigate identified risks.A Allocate resources: There’s no denying that there is a time and effort requirement to achieve compliance. The biggest step will be to get everything in place; once done it will fall as part of your routine procedures and place less of a burden.M Monitor and update: AML is not set and forget. As your client’s change, your firm changes and recognised sector risks change, so must your AML approach.

As expected, the Chancellor said the growth forecast for 2019 has been cut significantly, to just 1.2% from 1.6% in the last Budget. Despite this, Hammond predicted the UK will create another 600,000 new jobs by 2023.

Borrowing this year will be 1.1% of GDP – £3 billion lower than forecast at the Autumn Budget in 2018. This means Hammond’s ‘war chest’ has grown to £26.6bn, up from around £15bn. In light of this, the Chancellor said he will launch a three-year spending review before the summer recess, to be ready for the next Budget.

He also announced an update to the apprenticeship deal. From 1 April, employers will see the co-investment rate they pay cut by half, from 10% to 5%. At the same time levy-paying employers will be able to share more levy funds across their supply chains, with the maximum amount rising from 10% to 25%.

In the Chancellor’s statement there was confirmation the government will apply a ‘light touch’ approach to penalties for Making Tax Digital.

Some new measures were announced including:

L Law enforcement need to know: Reporting to the National Crime Agency is the end result of effective AML procedures. If you are asking yourself, is there a crime and are there proceeds, then it’s time to consider if a report should be made.C Counter terrorist financing: Though a different goal to money launderers, many of the methods overlap.C Choose your clients, to match your risk appetite: You may have one client that makes you feel slightly worried about what the client is up to. Either get the client to fall in line or move them on – is a report required?

• Following the autumn budget, there have been successful bids from nine local areas for a share of £53 million of funding from the Local Full Fibre Networks challenge fund. This will provide next-generation full fibre connections to nearby homes and businesses. The areas are Northern Ireland, Rutland, South Essex, Stoke-on-Trent, Norfolk, Colchester, North Wales, the Shetland Islands and Isle of Wight.

• Professor Arindrajit Dube has been appointed by the government to review the latest international evidence on the impact of minimum wages. This will inform the National Living Wage policy after 2020.

• Up to £260 million has been made available to invest into the Borderlands area. This is in addition to the £102 million announced for the Carlisle Southern Link Road from the Housing Infrastructure Fund.

Other highlights include:• A review of the work of the Low Pay

Commission to be conducted later in the year.• The Competition and Markets Authority

Digital to carry out a study of the UK’s digital advertising market. Hammond also hinted at new powers to protect consumers and signalled the government’s determination to make “global tech giants pay their share” of tax.

• On housing, Hammond announced a £3bn ‘affordable homes guarantee’ scheme.

• Initiatives to help small business cut carbon emissions and reduce energy bills.

• Free sanitary products to be provided in schools and colleges from the next academic year.

• To tackle knife crime, an extra £100m allocated to police forces.

• A global review of links between biodiversity and economic growth.

There is a Spring Statement newsletter available especially for members on the Members’ Area of our website which contains further updates.

Thank you to Richard Simms FCA from AMLCC for providing this article.

AMLCC is an Anti-Money Laundering compliance software which can be used to ensure you are compliant with the regulations. It includes online client record storage, client risk assessment tool, video training, testing and certification, a compliance manual and much more. AMLCC is available for free to all Members in Practice who are supervised by the IAB. For further information and to register to use AMLCC (if you haven’t already) please visit: www.iab.org.uk/member/amlcc-anti-money-laundering-compliance and login to the Members’ Area.

Spring Statement update

The Bookkeeper | 5

MTD for VAT registration takes seven working days, warns HMRC

PAYE tax codes for 2019-20 confirm £12,500 personal allowance

HMRC has warned the registration process for Making Tax Digital for VAT,

which came into effect from 1 April, will take seven days to complete, and will not be a real time service.

The latest HMRC notification updated its guidance for businesses looking to sign up to Making Tax Digital for VAT, pointing out those that pay VAT by direct debit will need to do so at least a week – seven working days – before sending a VAT return.

This means that businesses that pay VAT by direct debit cannot sign up in the seven working days leading up to, or the five working days after sending a VAT return.

HMRC has issued the latest PAYE tax codes for tax year 2019-20 effective 6 April,

highlighting the increase in the tax-free personal allowance to £12,500.

The guidance P9X (2019) explains which tax codes employers need to change, how to change them and which codes to carry forward for the new tax year on 6 April.

From April 2019 the basic personal allowance will be £12,500 for the whole of the UK including Wales and Scotland where income tax is semi-devolved. The threshold (starting point) for PAYE is £240 per week (£1,042 per month).

The new emergency code is 1250L for all employees.

Note that for tax codes, Scottish taxpayers must be prefixed with S, Welsh resident taxpayers with prefix C.

As part of the payroll process, employers must ensure that each employee working for the

HMRC will send a confirmation email within 72 hours of signing up.

From April 2019, most VAT registered businesses with a taxable turnover above £85,000 must keep digital VAT records and use software compatible with Making Tax Digital to submit their VAT returns.

HMRC put out guidance in early February on the steps involved, which include ensuring the business has compatible software and a government gateway user ID.

There will be a soft penalty regime for the first 12 months, which means that where companies have made a genuine error in reporting they will not be fined. In February,

organisation on 6 April has a payroll record with the correct tax code to use in the new tax year.

Employees leavingIt is not necessary to change the tax code for any employee who leaves before 6 April, even if they will continue to be paid after 6 April. In this instance the 2018-19 tax code can still be used.

This does not apply to payments made after leaving if the employee has already been given a P45. In these circumstances tax must be deducted using tax code 0T, S0T for employees who had an S prefix in their code or C0T for employees who had a C prefix in their code, on a non-cumulative basis.

New employeesIf an employee starts between 6 April and 24 May, and provides a P45, follow the instructions at www.gov.uk/new-employee.

HMRC also confirmed that companies will be able to use a ‘cut-and-paste’ approach during the one-year soft landing before companies need to use digital links.

Companies will not have to file their first digital VAT return under Making Tax Digital for VAT until 1 July at the earliest, although the digital reporting requirement becomes mandatory in April.

Research conducted by KPMG with 1,000 VAT registered businesses at the start of last month found that just 12% were supportive and ready for the 1 April deadline, literally days after the proposed Brexit day on 29 March.

For employers with an agreed exemption from online filing operating a manual payroll, follow the instructions in the RT7, ‘Guidance for employers exempt from filing Real Time Information online’.

No tax codeIf an employee does not have a new tax code, carry forward the authorised tax code from the 2018-19 payroll record to the 2019-20 payroll record. Authorised codes include BR, SBR, D0, SD0, D1, SD1, SD2 and NT. Add 65 to any tax code ending in L, for example 1185L becomes 1250L. Add 71 to any tax code ending in M. Add 59 to any tax code ending in N. Do not copy or carry over any ‘week 1’ or ‘month 1’ markings.

For more detail, and for all the new income tax rates, go to https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/783517/P9X_2019_.pdf.

6 | The Bookkeeper

NEWS ITEMS

Making Tax Digital (MTD) will not be mandated for income tax or

corporation tax until 2021 at the earliest, according to Chancellor of the Exchequer Philip Hammond. He made the announcement in a written statement following his Spring Statement on 13 March.

He said: “Mandatory digital record keeping for VAT for businesses over the VAT threshold (with turnover over £85,000) comes into force from 1 April. This is an important first step in this modernisation of the tax system to which the government remains committed. The government can confirm a light touch approach to penalties in the first year of implementation.

“Where businesses are doing their best to comply, no filing or record keeping penalties will be issued. The focus will be on supporting businesses to transition and the government will therefore not be mandating MTD for any new taxes or businesses in 2020.”

George Bull, senior tax partner at RSM, said: “We were expecting MTD to be extended to income taxes and corporation taxes from 2020, but this now appears to have been deferred to an as yet unknown later date. It’s likely that HMRC will want to fully assess how MTD for VAT, which comes into force in 2019-20, is working in practice before committing to an extension.

“This is a far cry from the ‘end of the tax return’ we were promised back in Budget 2015.”

Concern over rising threat of landline scams

OTS calls for auto enrolment into HMRC’s digital personal tax account

Shock move on Making Tax Digital

HMRC is warning all households to be vigilant after seeing a rise in the number of

phone calls from fraudsters pretending to be them. In the past six months the tax authority has received 60,000 reports of phone scams. This is an increase of 360% on the six months before this.

Ironically, it appears that HMRC’s crackdown on text and email phishing scams has left fraudsters no choice but to try to con taxpayers over the phone, suggested the financial secretary to the Treasury, Mel Stride.

He said: “If you receive a suspicious call to your landline from someone purporting to be from HMRC which threatens legal action, to put you in jail, or payment using vouchers: hang-up and report it to HMRC who can work to take them off the network.”

During the last 12 months, HMRC has worked with the phone networks and Ofcom to close nearly 450 lines being used by fraudsters using boiler room tactics to steal money.

The tax authority will only ever call you asking for payment on a debt that you are already aware of, either having received a letter about it, or after you have told them you owe some tax, for example through a self-assessment return.

The Office of Tax Simplification (OTS) has called for the government to consider auto

enrolling all taxpayers into HMRC’s personal tax account service, after concerns that developing technology will cause individuals to lose sight of their tax obligations.

The OTS has published a discussion paper looking at the risks and challenges that tax simplification through technology poses.

The OTS says that although technology can ease the process of filing tax via HMRC’s Making Tax Digital programme, it may also create a future risk for taxpayers, as easier completion will not remove the need for individuals and businesses to understand and comply with their tax obligations.

So the OTS has called for government to look at auto enrolling all taxpayers into HMRC’s personal tax account service. This would work by enrolling 16 year olds into the service when they receive their national insurance number.

Auto enrolment into this service could empower individuals to understand tax and their own tax affairs more, the OTS suggests.

Currently the personal tax account allows individuals to:• check income tax estimate and tax code;• fill in, send and view a personal tax return;• claim a tax refund;• check and manage tax credits;• check state pension;• track tax forms submitted online;• check or update Marriage Allowance;

• tell HMRC about a change of address;• check or update benefits from work, for

example company car details and medical insurance; and

• find national insurance number.

Paul Morton, OTS Tax Director, said: “Technology has transformed much of our day to day lives, in some areas almost beyond recognition. Although many tax-related activities have benefited from a digital approach we are still at the early stages of the potential transformation.

“This paper explores some of the more difficult questions that new technology presents. It is important that some of these areas are addressed sooner rather than later and we hope our paper will encourage this.”

The OTS’ report suggests the following key points for the government to consider:• HMRC expanding the current personal tax

account to deliver better targeted guidance alongside looking at automatically enrolling all taxpayers into this service;

• how to mitigate the risk of taxpayers losing sight of their obligations through the use of technology;

• continuing to monitor private sector technological innovation with the potential to improve taxpayers’ experience of managing their tax affairs;

• the potential for using new technology to engage with the public more efficiently and effectively while saving resources;

• monitoring the impact of the General Data Protection Regulation (GDPR) on taxpayer choices for security and privacy, and convenience; and

• active monitoring of the impact of moves towards a cashless society and risks of digital exclusion.

The OTS says it will continue to look into the role of technology in tax simplification, and will look to gather further evidence of the role of technology and public perceptions of it through the publication of an online survey in due course.

The Bookkeeper | 7

Over 40% of businesses in the UK are unaware of the risks posed by invoice

fraud, according to research from UK Finance’s Business finance survey. Some £92.7 million was lost by businesses to such scams in 2018, according to the survey; there were 3,280 invoice and mandate scam cases involving businesses over the year, with an average loss per case of over £28,000. On the plus side, £29.6 million of the money lost to this type of fraud was returned to business customers.

Katy Worobec, Managing Director of Economic Crime at UK Finance, said: “Invoice fraud could happen to businesses of all sizes. It’s vital that all employees are trained to

identify potentially fraudulent transactions and follow the advice of our ‘Take Five to Stop Fraud’ campaign. The gangs behind this type of fraud are increasingly sophisticated and will often get hold of details that allow them to pose convincingly as regular suppliers.

“If someone contacts you asking for a supplier’s bank account details to be changed, always verify with that supplier separately on the phone or in person, using the contact details you have on file. If you suspect you’ve fallen victim to fraud, contact your bank immediately and report it to Action Fraud.”

And it seems law enforcement agencies are struggling to keep up with the fraudsters.

According to Ministry of Justice (MoJ) data, the number of convictions for fraud fell from a high of 15,500 in 2010 to under 9,000 last year. Alex Eristavi, a senior officer with the National Fraud Intelligence Bureau (NFIB), said organised criminal gangs were increasingly moving into fraud because of the potentially lucrative rewards and lack of tougher penalties by the courts. The Police Foundation, the UK’s policing think tank, believes up to 45% of fraud can be linked to organised crime, three times previous estimates.

Further information about the ‘Take Five to Stop Fraud’ campaign can be found here: www.takefive-stopfraud.org.uk.

Four in 10 firms unaware of invoice fraud risk

Late payment culture ‘hits SMEs’ productivity and stability’

Small businesses across the UK are facing major cash flow pressure, leading to

increased financial instability as a direct result of a late payments culture, according to consultant Duff & Phelps.

“Our concerns follow recent research by Bacs Payment Schemes, which claimed that small businesses are facing a collective bill of £6.7bn a year in outstanding payments owed by other companies, up from £2.6bn in 2017,” said Paul Williams, Managing Director of Duff & Phelps.

The government currently promotes its voluntary Prompt Payment Code (PPC) to encourage good practice, but late payments by larger companies remain a common pain point for many SMEs.

Williams said: “Late payments are a financial challenge for many SMEs. Delays in payments can lead to cash flow problems for small businesses, and consequently difficulties in paying their own creditors on time. Approximately 50,000 small businesses fail each year because of late

payments, amounting to a £2.5bn shortfall to the UK economy. The average value of each late payment now stands at £6,142.”

Additionally, late payments can also greatly diminish productivity and growth for SMEs, as business owners become preoccupied with managing short-term cash problems rather than focusing on long-term growth initiatives. Small businesses preoccupied with cash flow problems are also less likely to invest in company resources or staff, further limiting their opportunities to grow.”

Williams said: “Cash flow is the lifeblood of a business and late payments add to the daily stress and worry that many small business owners already have. Added to that, businesses also end up wasting hours of unproductive time chasing payments. In this modern era of technology, which is designed to enable business agility, late payments are particularly galling as there are no excuses. The day of the ‘cheque is in the post’ is long over!

“Paying companies late shouldn’t be the accepted norm. Organisations facing such financial uncertainty should promptly seek professional advice, but more can be done to avoid businesses reaching this situation in the first place.”

He added: “SMEs underpin the economy, so prioritising timely payments will help allow business owners to focus their time and energy on providing good quality products and services and adding value to the customer experience, rather than chasing outstanding payments. Lack of cash flow can have a negative impact on supply chains, staff and, ultimately, customers.”

8 | The Bookkeeper

NEWS ITEMS

Proof reading study text books:We have a range of bookkeeping and payroll textbooks, some of which are regularly updated and therefore need to be reviewed before they are finalised and made available for purchase.

If you have a strong knowledge of grammar and spelling, are able to check the content included is factually accurate and are able to proof read quickly then this opportunity could be of interest to you.

You would be required to proof read a chapter of a study text book and will need to have successfully completed the qualification at that level in order to be able to proof read the book.

We are looking for people to proof read our study text books and test sit exam papers for IAB qualifications.Further information about these opportunities can be found below:

There is a now a wider range of free helplines available to professional members. The helplines cover VAT and tax related queries and there

is also a legal advice helpline and employment law and health and safety advice line. If you need assistance with technical questions relating to other areas then we have a panel who we can pass on your queries to. If you would like to find out more about any of the helplines contact the membership team who will be happy to provide further details.

Email membership@iab.org.uk or 01732 897750.In addition to the helpline and technical advice, there is also a website

where members wishing to receive support can go to gain answers to any questions they might have.

The website has been set up by IAB member Frauke Golding FIAB. Frauke has been running her own practice for over 30 years so has plenty of bookkeeping experience. The idea for the website arose after she had been asked, on numerous occasions, whether she would mentor bookkeepers. However, she was too busy running her own businesses to give the time needed.

Test sitting IAB exams:We have a range of bookkeeping and payroll qualifications, some of which are assessed via exams. As new assessment materials are produced we require people to test sit the exams to ensure they are accurate and the instructions are clear and concise before they are made available to students to take.

You will need to have successfully completed the qualification at that level either with the IAB or another recognised awarding body in order to be able to test sit the exams.

In return for assisting with either of these opportunities you can benefit from 50% off of a self-study qualification of your choice or receive a discount when you renew your professional membership for 2020.

If you would like to find out more information or register your interest please contact Rianan Puttnam: riananp@iab.org.uk or +44 (0)1732 897750.

Anyone wishing to take advantage of this support can register to use the site and ask Frauke questions, which she will either answer herself or point you in the right direction. As well as being able to post your own questions you can also view questions asked by other users, to enable you to benefit from the support given to them.

Frauke also includes information on many of the resources she has found useful for bookkeepers and accountants and provides tips and advice in one place, which you also may find useful, making it different to the existing technical support available to you.

To find out more take a look at: www.yourlocalbook-keeper.co.uk.Further information about how to register to access the site and the cost

to join can be found here: www.yourlocalbook-keeper.co.uk/create-a-login.html.

Please note you will need to register to view the answers to any technical questions you ask.

There is no public access to the site, so no login means no access. This also helps it to stand out from other available support services.

Do you have excellent attention to detail or could you test sit the IAB’s exams?

Do you have a query you need help with?

The Bookkeeper | 9

Making Tax Digital (MTD) for VAT was mandated on 1 April 2019, and all VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are now required

to keep their VAT business records digitally and send their VAT returns using MTD-compatible software. The only exception to this is for a small minority of businesses for which HMRC are deferring mandation to ensure there is sufficient time for testing the service with them in the pilot before they are mandated to join from 1 October 2019.

If after then, the business’s VAT taxable turnover subsequently falls below the VAT registration threshold, mandation still applies unless the business deregisters from VAT or meets one of the other exception criteria, such as insolvency.

The deadlines for sending VAT returns and making payments are not changing.

Businesses need to use software to keep their business records digitally. This may include dedicated record-keeping software or a combination of software packages or spreadsheets.

Software that prepares a VAT return to send to HMRC must be MTD-compatible for those mandated to use MTD. This means it can integrate with HMRC systems to send VAT returns to HMRC. Data must be exchanged digitally between all software used by a business for VAT. The information contained with the MTD VAT return is generated by pulling information from the digital records. This information is the 9 boxes required for the VAT return.

In the case of spreadsheets, this means the software must be capable of taking the relevant information from the spreadsheet electronically and sending it to HMRC.

MTD for agentsHMRC is delivering MTD for agents at the same time they are delivering for businesses, so you can see and do what your clients can.

You can keep digital VAT records on behalf of your clients and you or they will need to send HMRC the VAT returns using MTD-compatible software.

The exception to this is for any of your clients that form part of the small group of businesses that have been deferred. HMRC made the decision to delay mandation until 1 October 2019 for a small minority of mandated businesses with more complex requirements to ensure there is sufficient time for testing the service with them in the pilot before they are mandated to join.

It’s important your clients are aware of their obligations if they join MTD for VAT. The deadlines for sending VAT returns and making payments are not changing, including for monthly, quarterly and annual VAT return schemes, but businesses do need to keep digital business records and send their returns to HMRC using MTD-compatible software for VAT accounting periods that start on or after 1 April 2019 (1 October for those that have been deferred). This also applies to businesses that operate the Flat Rate Scheme for VAT.

Signing up clients to MTDIt’s easy to sign up a client to MTD with an Agent Services Account (ASA). You’ll need your client’s VAT Registration Number (VRN), Company Registration Number (CRN) and National Insurance Number (NINO) depending on the circumstances.

If you are already using commercial accounting software, and before you have signed up your clients, you should speak to your software provider to find out when it will be MTD-compatible and what you need to do to enable the new features once you have signed up your clients.

To submit VAT returns on behalf of clients under MTD, you will need a new ASA.

You may already have a new ASA if you’ve signed up for the Trust Registration Service (TRS) or signed clients up for the MTD for Income Tax Pilot. You do not need to create a new one for MTD for VAT if that is the case – a firm should only have one ASA.

Be prepared – once your client is signed up to MTD, their returns MUST be submitted using MTD compatible software.

Businesses that pay by Direct Debit must sign up at least 15 working days before they need to submit to allow the payment to be taken.

Making Tax Digital for VAT goes live

10 | The Bookkeeper

Step-by-step guideFollow these steps if you’re an agent and you want to submit VAT Returns for your clients digitally.

1. Talk to your clients Check if and when your client will have to join Making Tax Digital for

VAT: www.gov.uk/guidance/check-when-a-business-must-follow-the-rules-for-making-tax-digital-for-vat.

Use the communications pack to make your clients aware of what Making Tax Digital is and what they need to do: www.gov.uk/government/publications/making-tax-digital-for-business-stakeholder-communications-pack/making-tax-digital-for-business-stakeholder-communications-pack.

2. Get the right software Find compatible software: www.gov.uk/guidance/find-software-

thats-compatible-with-making-tax-digital-for-vat. Before you sign clients up, you must have software that: • lets you submit returns for your clients • is compatible with Making Tax Digital for VAT3. Create an agent services account Further information can be found here:

www.gov.uk/guidance/get-an-hmrc-agent-services-account. This is different to your HMRC online services for agents account.

4. Link clients to your agent services account Further information can be found here:

www.gov.uk/guidance/link-clients-to-your-agent-services-account. You can link your clients or add new ones.5. Sign your clients up for Making Tax Digital Further information can be found here: www.gov.uk/guidance/sign-up-

for-making-tax-digital-for-vat. You’ll receive an email within 72 hours to confirm you can submit your

clients’ returns digitally.6. Authorise your software Before you can send VAT returns digitally, you’ll need to authorise your software. Ask your software supplier if you do not know how.

When connecting software to HMRC you must use your new ASA ID. If you attempt to log in with another Government Gateway ID HMRC’s systems will not be able to recognise the MTD relationship with your client and you will receive an error message and be unable to file the return.

If you have a new client who wants you to act for them for MTD you can send them a digital authorisation invitation from your ASA. You can send the link you are provided with to your client, who can then accept by signing in with their own Government Gateway details.Further help and support from HMRC can be found here: www.gov.uk/guidance/help-and-support-for-making-tax-digital.

#balanceforbetter

Beyond leading the charge for women’s voting rights in the early 20th century, the

Suffragettes introduced International Women’s Day. These trailblazing women launched a movement that has spanned over a hundred years while honoring the social, economic and political advancements of women around the world.

Fundamental values such as “justice, dignity, equality and respect” inform the theme each year and serve as an inspiration to all those who choose to participate. This year’s theme #BalanceforBetter is a call-to-action for driving gender balance across the world.

I don’t believe “Balance” is a women’s issue, it’s a business issue and the race is on for the gender-balanced boardroom, a gender-balanced government, gender-balanced media coverage, a gender-balance of employees, more gender-balance in wealth, gender-balanced sports coverage… In essence gender balance is essential for economies and communities to thrive.

International Women’s Day is a global day celebrating the social, economic, cultural and political achievements of women - while also marking a call to action for accelerating gender balance. Collective action and shared responsibility for driving a gender-balanced world is key.

This year I was extremely lucky to be celebrating the day at the Kent Women In Business Awards (KWIB), alongside some exceptionally talented and dynamic women from the county. I’m very proud to say I was voted runner up in the Professional Achievement category. It was a fantastic evening, made all the more special as I had the entire team from Women Who Count and our CEO, Janet Jack, in attendance.

I would love to hear how you celebrated the day or how you have incorporated the #balanceforbetter into your business or community.

Love to know your thoughts, Sarah Palmer, FIAB, owner of Women Who Count Kate Sheppard, Suffragette, appears on the New Zealand $10 note.

Word from Sarah

Sarah Palmer

The Bookkeeper | 11

IAB member case study Jane Pole FIAB AIAAP

Q: How did your bookkeeping career begin and what made you choose bookkeeping as a career?

A: As a child I used to pretend I had my own businesses and would write down the costs of service, customer’s details and then add the takings up for each day. I also had one of those old fashioned green phones where I would pretend to take bookings. I’ve always liked numbers. I knew one day that would become a reality.

I decided after taking my bookkeeping qualifications I would open my own business in offering Bookkeeping and Accountancy Services. I was already self-employed as I had ran my own cleaning business which was quite successful. I decided while I ran the cleaning company I would fulfil my dream of being a bookkeeper and maybe one day qualify as an accountant. I decided to close the cleaning business and start my career in accounts. The first year was especially hard as you have to find the clients and keep them. The one thing I found especially difficult was getting clients to pay you. I did not mind chasing but the relentless excuses made having a life difficult so I applied for part time positions so I could have a combination of being paid a regular salary each month and my income from being self-employed.

That plan did not work as I was offered full time work and I accepted this. I still ran my bookkeeping business but not on the scale it was originally on. I do have more clients but mainly sole traders and very small businesses which is manageable around my full time job. I really enjoy my job and the bookkeeping business is something I enjoy doing so it never feels like I am doing work.

Q: What has been the biggest obstacle in your career so far, and how did you overcome it?

A: The biggest obstacle is managing the two together and being able to support my clients as much as possible without my full time position taking over. It’s all about finding the right balance and making sure when taking on a new client you can fulfil what they need from you. I have had to say no to potential new clients because it’s all about time and whether you can be there for when they need you.

My current full time role is working for a company that sells kitchens, bedrooms and appliances. I am the only one in the accounts department so I undertake everything from payroll, VAT returns, accounts preparation to trial balance, sales invoicing, purchase ledger, sales ledger, asset management, bank reconciliation, order placing (Shopify Software), basically

everything using Sage and Brightpay software. I am also the go between for employees and the directors so am always on hand to sort any issues. It’s a very intense stressful role but one I undertake because I like being in control and I believe I can make a difference.

Q: What has been your most significant success, or the moment you’re most proud of (professionally and personally)?

A: My biggest success is having the confidence and the ability to succeed. It’s not all about being able to do the job – it’s about building relationships and maintaining relationships. People skills are so important as well as having business sense and being willing to adapt to the many situations you find yourself in. I have so many challenges which I’ve overcome by my sheer determination to be the best I can be.

Q: What are your plans for the future?A: My plan for the future is to continue my studies. I am currently

doing Level 4 AAT and the Level 3 Diploma in Payroll Management. I hope after these qualifications it may propel me to a higher position and the benefits that come with a higher position. I will continue to run my bookkeeping business as this is something I thoroughly enjoy doing.

Q: What three pieces of advice would you give to anyone looking to become a bookkeeper or start their practice?

A: My advice to anyone thinking of starting a career in bookkeeping is: • Join a professional body that supports you. The IAB have always

been there for when I needed them. All the latest information is available, as with bookkeeping and accountancy things are always changing, so be prepared to spend time adjusting to new policies, allowances and changes in legislation. Continuous Professional Development is so important so always invest in it.

• Don’t be afraid to seek guidance from other professionals. Starting out can be an exciting adventure but also daunting so never be afraid to speak up and ask. Build your confidence as this is what clients will want from you. Clients need to feel comfortable and confident in your abilities to do the job so think positive, be confident and stand tall.

• Go for it – it is such a rewarding career. Jane’s practice is called JP Bookkeeping Services – www.facebook.com/JPBookkeepingServices.

At the IAB we are always keen to hear from members and share their stories about their careers and successes. Here is a case study provided by Jane Pole FIAB AIAAP about running her own bookkeeping practice. She also gives advice for anyone looking to become a bookkeeper or start their own practice. If you have a story to share and would like to feature in a future edition of The Bookkeeper we would love to hear from you. Please contact Kelly Orford: kellyo@iab.org.uk.

12 | The Bookkeeper

Research published recently by The Pensions Regulator (TPR) shows that the vast majority of staff are continuing to save more into their pension following the increases in pensions contributions in April

last year.The on-going duties survey of employers showed less than 2% of staff

in medium, small and micro businesses asked to leave their workplace pension as a result of the increase in contributions.

The survey also showed 47% of medium sized businesses are paying at least some or all of their staff more than the minimum employer contribution, with 25% and 22% of small and micro employers respectively paying more than the automatic enrolment minimum.

In April this year, the minimum pensions contributions will increase again from 5% total to 8%. Increasing contributions should be a straightforward task for your clients to do but there are a number of checks they need to make and we encourage them to start in good time. TPR has information alerting employers to what they need to do.

While it’s not a legal duty to tell staff about the increase, we encourage employers to have the information they need about their staff’s workplace pension and how it is changing. Our research shows most employers told their staff about the increases last year and when asked by their workers about workplace pensions, they felt they had the information they needed.

The vast majority of employers are successfully meeting their automatic enrolment duties and it’s now business as usual for them. Automatic enrolment is creating a new savings culture and the increase in contributions is an important part of the policy to boost retirement outcomes.

Most employers want to do the right thing for their staff and The Pensions Regulator is there to help. However we will take action if an employer is not meeting their responsibilities. Failing to make and maintain the correct pensions contributions could result in a fine or court action.

It is not enough to just comply with automatic enrolment laws by putting staff into a scheme. Employers must also meet their duties to contribute

into their employees’ pensions every month and they must ensure they are paying in at least the minimum. Pension providers have a duty to tell The Pensions Regulator if an employer is not maintaining the correct contributions and staff can also use TPR’s anonymous whistleblowing service if they are concerned the correct payments are not being made.

Three things for employers to check:• Will their payroll deduct the increases? While many payroll providers may automate their software so

contributions are increased automatically, employers should check if their payroll software will do this. Their payroll should be ready to deduct the increased contributions when they rise in April 2019

• Is their pension scheme making the changes needed to support the increases?

Employers should also check their pension scheme is making necessary changes to support the increases and ensure they are continuing to use a qualifying scheme and the right amount of pension contributions are deducted. If an employer’s chosen pension scheme doesn’t support the increases, then they will need to talk to them about their options.

• What are they currently contributing? They may not need to take action

Employers and their staff can also choose to pay in more than the minimum contributions if they want to and employers who are already paying above the increased total minimum amounts need not take any further action.

Useful links• Guidance for business advisers: www.tpr.gov.uk/phase• Guidance for employers including a letter template to tell staff about the

changes: www.tpr.gov.uk/increase• For information relating to specific scheme rules, contact the pension

scheme provider.

Increases in minimum pension contributions – April 2019

This article has been provided by The Pensions Regulator.

The Bookkeeper | 13

Have you booked your place at the IAB seminar yet?Our next seminar is taking place on Wednesday 22nd May in London and will cover a range of topics including Making Tax Digital, attracting and retaining ideal clients through digital marketing and much more!

So why attend?:1. You can keep up-to-date with key legislation

and developments affecting you, your clients or your employer including Anti-Money Laundering, Making Tax Digital and GDPR

2. Continuing Professional Development (CPD) points

3. Network with fellow IAB members4. If you have your own bookkeeping practice or

are thinking of becoming self-employed, then get guidance on how to gain and retain your ideal clients

The seminar will take place between 9:30am and 4:30pm and attendees will receive 1 CPD point per hour. The venue for the seminar is Browns Courtrooms, Judges Court, 82-84 St Martins Lane, Covent Garden, London, WC2N 4AG.

Please find the full details of the seminar and how to book by visiting: www.iab.org.uk/event/iab-london-seminar-3.

The Institute of Financial Accountants (IFA) have arranged conferences taking place in Birmingham and Manchester in October.

Please find further information about both events below. IAB members are able to attend at the same reduced rate as IFA members. To book please contact Linda Wallace: lindaw@ifa.org.uk or 020 3567 5999.

The topics covered at both events include:• An update for practitioners and businesses

on the latest Companies House developments - Companies House

• The latest issues concerning VAT as they affect small businesses and practitioners - Vaughn Chown, Gabelle Tax

• Nine ways to attract new clients and grow your practice - David Oliver, Insight Marketing

• Back to Basics, or West to East? - Simon Gibson, Mattioli Woods• Anti-money laundering focused session - Speaker to be confirmed• Plus: IPA Books+ breakfast demo - Jon Martingale, Reckon

Birmingham conference:Date: 10 October | Time: 8:15am – 4:30pmVenue: IET Birmingham, Austin Court, 80 Cambridge St, Birmingham, B1 2NPFor further details please visit: www.ifa.org.uk/events/search-all-events/eventdetails?ec=Bir2019

Manchester conference:Date: 31 October | Time: 8:15am – 4:30pm Venue: The Lowry, Pier 8, The Quays, Salford, M50 3AZFor further details please visit: www.ifa.org.uk/events/search-all-events/eventdetails?ec=Man2019

The accounts for the year ended 31 December 2018 and the amended Articles of Association will be able to be viewed on the Members’ Area of the website 21 days

prior to the AGM. Please login here: www.iab.org.uk/login/.

NOTICE IS GIVEN that the ANNUAL GENERAL MEETING of The International Association of Bookkeepers (the “company”) will be held at 10:45am on Thursday 20th June 2019 at CIPP offices, 90 Long Acre, (Arne Street Entrance), Covent Garden, London, WC2E 9RA to consider the following resolutions which will all be proposed as ordinary resolutions.

1. To receive the report and accounts for the year ended 31 December 2018. This will be displayed on the Members’ Area of the IAB Website 21 days prior to the AGM.

2. To elect Nicky Davies as a member of Council3. To re-elect Frauke Golding as a member of Council4. To re-elect Sarah Palmer as a member of Council5. To accept the revised Articles of Association as shown on the IAB Website. This will be displayed on the Members’

Area of the IAB Website 21 days prior to the AGM. (A printed copy will be available for fifteen minutes prior to the AGM until the end of the meeting.)

Note: A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend, speak and vote at the meeting in their place. A proxy does not need to be a member of the Company. To appoint a proxy, please complete the proxy form, following the instructions about its completion and return.

By order of the Council. Sue Renaut, Chair of Council.

Date of posting: 8th April 2019Registered office: Suite 5, 20 Churchill Square, Kings Hill, West Malling, Kent ME19 4YU

Notice of annual general meeting

14 | The Bookkeeper

IAB EVENT

IFA CONFERENCES

The Bookkeeper | 15

Meet the election candidates

I became a member of the IAB in 2003, having qualified as Military Accountant with the Army where I attained the rank of WO2 in what used to be known as the Territorials (now known

as the Reserves). I subsequently became a Fellow Member of the IAB in 2011. I have been an accountant in practice since 1983, but also had periods of employment as a management accountant, company secretary and finance director in a large variety of industries including fashion and manufacturing. My additional interests include e-retail and social networking. In 2015, I was awarded the IAB Award for Exceptional Services to the Bookkeeping & Accounting Professions.

Frauke Golding FIAB

Hi, my name is Nicky Davies. I am the accounts tutor for Skills & Learning Bournemouth, Dorset and Poole and a bookkeeper, I have been a student/tutor for the last 30

years. During the last five years I have been lucky enough to have won the IAB gold centre award 4 times.

I have a significant knowledge base in teaching bookkeeping and would like to share what I have learned to help IAB and students to grow.

Nicky Davies FIAB

Vote at AGM or use the proxy form on back page

Sarah has been running her own practice, Women Who Count Ltd, since 2009 and has been a member of the IAB since 2012. Prior to this Sarah has run several other

businesses, in both the service and retail sectors. This, coupled with her upbringing in a family business, has shaped her belief that bookkeepers are the best-placed professionals to empower business owners around their day-to-day finances.

In 2012, Sarah became the UK licence holder for Pure Bookkeeping, an AU franchise that supports bookkeepers to develop their own practices. Having worked with bookkeepers overseas Sarah is keen to take this invaluable experience and help members to develop their own practices so more business owners are able to benefit from the service bookkeepers provide.

Sarah also writes her popular column for the IAB publications, called The Word from Sarah, which focuses on issues within the industry.

Sarah was short-listed and announced as runner-up for the KWIB 2019 (Kent Women In Business Awards) for Professional Development and Leadership and Management.

Sarah Palmer FIAB

FORM OF PROXY

(Please print name and address)

I of address

Postcode

being a member of the Company, appoint

This proxy form must be received by no later than 10:45am on Tuesday 18th June 2019. You can return it in either of the following ways:• By post to Suite 5, 20 Churchill Square, Kings Hill, West Malling, Kent, ME19 4YU;• By email to kellyo@iab.org.uk

Notes:

1. As a member of the Company you have the right to attend, speak and vote at the meeting. If you cannot or do not wish to attend the meeting but still want to vote you can appoint someone to attend the meeting and vote on your behalf. That person is known as a “proxy”. You can use the proxy form to appoint the person chairing the meeting or someone else as your proxy. Your proxy does not have to be a member of the Company.

2. If you wish to appoint as a proxy someone other than the person chairing the meeting, please delete the words “The Chair of the meeting” and insert the name of the other person (who need not be a member of the Company). You must initial all alterations that you make to the proxy form.

3. The completion and return of the proxy form will not prevent you from attending the meeting and voting in person should you subsequently decide to do so.

4. If you wish your proxy to cast your vote for or against the resolution you should insert an “X” in the appropriate space. In the absence of instructions or if you put an “X” in the “At Discretion” column your proxy may vote or abstain from voting as they think fit on the specified resolution, and, unless instructed otherwise, may also vote or abstain from voting as they think fit on any other business (including on a resolution to amend a resolution, to propose a new resolution or to adjourn the meeting) which may properly come before the meeting.

5. The “Vote Withheld” option is provided so that you can instruct your proxy to abstain from voting on a particular resolution. A “Vote Withheld” is not a vote in law and will not be counted in the calculation of the proportion of the votes “for” or “against” a resolution.

6. You (or your attorney) must sign and date the proxy form and insert your membership number in the space provided.

or the Chair of the meeting as my proxy to vote for me at the Annual General Meeting of the Company to be held on Thursday 20 June 2019 and at any adjournment of that meeting. This form is to be used in respect of the resolutions mentioned below as follows:-

Resolutions For Against At Vote Discretion Withheld

signed date membership number

1. To receive the report and accounts for the year ended 31 December 2018. This will be displayed on the Members’ Area of the IAB Website 21 days prior to the AGM.

2. To elect Nicky Davies as a member of Council

3. To re-elect Frauke Golding as a member of Council

4. To re-elect Sarah Palmer as a member of Council

5. To accept the revised Articles of Association as shown on the IAB Website. This will be displayed on the Members’ Area of the IAB Website 21 days prior to the AGM. (A printed copy will be available for fifteen minutes prior to the AGM until the end of the meeting.)

16 | The Bookkeeper