Do I have to be an extrovert to win business?
“I’m an introvert. What do you suggest I should do?”
At a recent training sessios, someone came up to me and said: “Your ideas about business development and building a personal brand are great and practical, and I can see how they’d work. But I do not see them working for me — I’m an introvert. What do you suggest I should do?”
What he didn’t realise is that he is probably an ambivert... I’m one, too. In a Wall Street Journal interview, psychologist Adam Grant estimated that ambiverts make up between half and two-thirds of the population. This is good news because ambivert individuals combine the best of both worlds. And they can win at business.
Ambiverts can achieve higher business development productivity than introverts or extroverts because ambiverts can listen as well as assert themselves. They’re ideal partners, co-workers, business owners, and leaders.
To be sure, “pure” introverts and extroverts do exist, but they’re exceptions. Yet it's a commonly held belief that "doing business" favours the outgoing personality. And many who don't see themselves as extroverts are wary of what they see as 'selling' or 'pitching'.
So what if you are a non-extrovert (like many accountants, I suspect) – how do you manage business development effectively? Here are a few pointers to get you started on your business development journey:
1. It’s a simple switch...
Many professionals, especially the introverts among us, think, mistakenly that business development equals sales. But, as an accountant, you did not study to be a salesperson. You are a trusted adviser!
The truth is, you wish you could just have somebody else to do the selling for you, so you can focus on delivering your expertise to your clients. Right? Unfortunately that option is not always available.
So it's a good idea to think of business development as an opportunity to build relationships - to help - not to sell.
When you do that, you can more easily implement strategies that play to your introvert tendencies. Qualities like listening, forming lasting connections, going deep rather than broad, and hyper-focusing your energy where there is the potential for the highest return.
For me, business development or business building is relationship building. This will help you to switch your mind from trying to “close the sale” to becoming a valuable source of service and advice for your clients and connections.
2. Create the right fit...
Firms and businesses need to create the "right fit" between the business development activity and the person who is responsible for it.
In my experience, if a professional is given responsibility for a business development activity that he or she isn’t comfortable with, the activity will be poorly completed or even ignored. This will definitely hurt the practice’s business development.
Play to people's and your own strengths. Different styles, different personalities, different business development activities – done by the right professionals within the practice, will attract different kinds of clients. But more importantly — certainly MORE clients.
I help a lot of professional firms achieve results, based on a strategy I explain in my book The Attention Switch.
By spending time with each member of your team individually - talking to them and asking very specific questions in the right order - you can create the right fit for professionals in your firm and the right business development activity.
3. Respect your natural tendencies...
One partner at a large accounting firm once asked me how she could be authentic in her dealings with others, given how uncomfortable she was when it came to business development activities. She worried she’d have to put on a smiley, outgoing façade. Yet I’m convinced it’s possible to be real about the business development for your professional practice or business, while still respecting our natural tendencies. Just be yourself.
4. Leverage your personality...
The key to success in business development as an introvert is to leverage your personality. Business development is often equated with high-energy, sales, pitching, hand-shaking showmanship.
But, specifically for non-extroverts, there are other, sometimes better, ways you can develop your business development activities within your accounting practice.
Make the effort and embrace the fact that not only are you an introvert or an ambivert, but you are a damn good business developer. Even if your methods are 'different'.
Taking the time to reflect and be thoughtful about how you’d like to develop your business development activities, and your trusted adviser position, is important.
I can help you maximise your results ... feel free to schedule a call with me HERE.
Business urges government to simplify UK tax
Let's simplify UK tax. That's the simple message from business to the government. And who could disagree?
A survey of 1,100 companies demonstrates a feeling that HMRC red tape is clogging up the wheels of industry.
And three in four firms reckon the cost of complying with the tax system is soaring, according to British Chambers of Commerce (BCC) research.
The BCC says: The escalating time and resources necessary to comply with the UK’s tax system reflects the need for action from government ministers and HMRC to reverse the burden and complexity of administration, and for more support from HMRC for firms trying to stay compliant.
Two-thirds (64 per cent) of groups of all sizes in all sectors believe that VAT creates the biggest administration and compliance burden. There's confusion over the plethora of rules and rates. The research, run by BCC and tax software group Avalara, suggests reducing the complexity of VAT rather than tinkering with the threshold.
Costs of preparing for MTD
Businesses are facing considerable costs preparing for Making Tax Digital. In fact the BCC has urged ministers to delay until the MTD start until 2020/21 . And that's before we get to Brexit.
According to the research, PAYE/National Insurance Contributions (54%) and Corporation Tax (41%) were identified as the next biggest sources of compliance burdens after VAT. For many businesses, calculating National Insurance Contributions remains overly complex, with firms facing significant confusion about the thresholds and rates they are required to pay.
Specifically, the BCC wants to see HMRC’s work on tax evasion to be matched by investment in support for businesses to make compliance easier. Plus there should also be greater independent oversight of all new tax proposals to assess the potential administrative burdens on SMEs, they say.
Tackle the VAT complexity
BCC chief Adam Marshall, says: “If the government wants its ‘Global Britain’ vision to become a reality, it is time to tackle the huge costs and complexities of the UK tax system, which sap away time and resources that could be better spent raising business productivity and growth.
“HMRC must be given both resources and a clear remit to focus more on supporting, rather than pursuing and punishing, small and medium-sized firms, as they work to get tax right. We want to see more investment in frontline HMRC support that’s geared towards making compliance easier for SMEs.
"There should also be greater independent scrutiny of new tax proposals with the aim of minimising the administrative burden on business. Making tax administration simpler would provide businesses with more time and headroom to focus on investment and growth.”
Richard Asquith, of Avalara, adds: “The UK’s VAT gap has remained stubbornly high at £12 billion. As a result, HMRC is stepping up investigations and pushing forward VAT as the first tax in the Making Tax Digital initiative. This new requirement, to record and report digitally, will affect the smallest businesses most – approximately 500,000 still use non-compliant spreadsheets or manual recording.
"These enterprises will have to invest in compliant software, and become familiar with its processes. HMRC’s MTD is being replicated across Europe, with countries like Spain, Italy and Hungary one step ahead of the UK, requiring live sales invoice submissions to tax authorities.”
Who's going to win the Accounting Excellence Awards?
Hundreds of hopefuls have been whittled down to a shortlist of outstanding contenders for the accounting and finance Oscars - the Accounting Excellence Awards 2018.
Joining the tried, tested and trusted categories from the previous seven years are a couple of newcomers for Year 8, the Specialist Team of the Year and the Finance Team of the Year. As ever there will be gongs for practices and software groups.
The awards are being organised by the team at AccountingWEB. Tom Herbert, editor, says the shortlist reflects "a subtle change" in the world of accounting. The sector, he adds, has seen a growth in niche firms that deal with specific clients, say from farming, medicine or the 'creative'.
A new accolade
Tom says the awards also mirror the rising influence of the "pathfinder audience" that is willing to embrace change and technology. On the software section, for instance, there is a new accolade for the practitioners' choice.
The winners will be announced at a glitzy black-tie ceremony in London's Intercontinental Hotel on September 20. The shorlist is below ... we will be taking a closer look at who's on it next week.
But, for now, congratulations to all!
PRACTICE AWARDS
Large Practice of the Year
- Duncan & Toplis
- Grunberg & Co Chartered Accountants
- Kreston Reeves
- Whitley Stimpson Ltd
Specialist Team of the Year
- Jeffreys Henry LLP
- Nordens
- Rouse Partners
- Rowleys Medical Accountants
Medium Practice of the Year
- Dunkley’s Chartered Accountants
- Green & Co Accountants and Tax Advisors
- Nordens
- Seymour Taylor
Small Practice of the Year
- The Accountancy Cloud
- Fitton and Co.
- Inca Caring Accounting
- Infinity Partnership
- the numbercruncher
- Spicer & Co UK Limited
Innovative Firm of the Year
- The Accountancy Cloud
- flinder
- Mazuma Money
- Nordens
- Soaring Falcon Accountancy
New Firm of the Year
- flinder
- Giffords Chartered Accountants
- Hoffman & Cohen
- J WIlliams & Co Ltd
- PayKeeper
- SIAL Healthcare Accountants
Client Service Firm of the Year
- The Accountancy Office
- Avery Martin Accountants
- Green & Co Chartered Accountants and Tax Advisors
- Kingsway
Practice Growth Firm of the Year
- DNS Associates
- Mercer & Hole
- Monahans
- Nordens
Finance Team of the Year
- Creative England
- Dr Will’s
- Perkbox
Practice Accountancy Pioneer of the Year
- Adrian Markey – Adrian Markey Ltd
- Darren Fell – Crunch
- Nigel Adams – Ad Valorem Accountancy Services Ltd.
- Warren Munson – Inspire
SOFTWARE AWARDS
Small Business Accounting Software of the Year
- FreeAgent
- Kashflow
- QuickBooks Online
- Xero
Small Business Accounting of the Year, Practitioners' Choice
- Capium
- VT Transaction+
- QuickBooks Desktop
- QuickBooks Online
- Sage 50 Accounts
- Xero
Enterprise Accounting/ERP Software of the Year
- Accounts IQ
- Exact Online
- Pegasus
- Sage 50
- Sage 200
- SAP Business One
Payroll Software of the Year
- BrightPay
- Capium
- Moneysoft
- The Payroll Site
- Xero Payroll
Data & Expenses Management Software of the Year
- AutoEntry (Ocrex)
- FreeAgent mobile agent
- QuickBooks
- Receipt Bank
- Xero Expenses
Professional Tax Software of the Year
- BTCSoftware
- Capium
- Keytime
- TaxCalc
- Taxfiler
Practice Management & CRM Software of the Year
- Accountancy Manager
- BTCSoftware
- Capium
- Practice Ignition
- Senta
- TaxCalc
Accounts Production Software of the Year
- BTCSoftware
- Capium
- TaxCalc
- Taxfiler
- VT Final Accounts
Practice Suite of the Year
- BTCSoftware
- Capium
- CCH
- IRIS
- TaxCalc
- Thomson Reuters
Forecasting, Planning & Analysis Software
of the Year
- Adaptive Insights for Finance
- Float
- Fluidly
- Futrli
- Spotlight Reporting
Cloud App of the Year
- Capitalise
- Chaser
- GoCardless
- Satago
- Stripe
- TSheets
Innovation of the Year
- AccountancyManager
- CCH OneClick – Wolters Kluwer Tax & Accounting Software
- Countingup
- Fluidly
- Sage Tax – Sage Group
- Tax Cloud – Myriad Associates
Software & Technology Pioneer of the Year
- Gary Turner – Xero
- Nathan Keeley – MHA Carpenter Box
- Steve Cox – IRIS Software Group
'I’d like to shake things up. Let’s embrace change, always'
TaxCalc software group CEO Tracy Ebdon-Poole talks to Accounting Insight News Editor Ian Moss abut her career, her life and her ambitions...
The here and now….
What are your favourite early career memories, Tracy?
Going from standstill to 1,000 miles an hour when Dyson took off. As MD I had to oversee expansion on an exponential scale across all areas of the business. It was seat of your pants stuff but one to tell the grandkids! Working in advertising with my Dad probably taught me the most - and that creativity is a hugely valuable commodity in business. With creative eyes you see how to zig when others zag.
How did you get into this business?
After Dyson, I’d been working in M&A and was on the lookout for business opportunities. I acquired the business assets, including the code for tax calculation software from Tax Checker and the brand name from Intuit. From thereon it was one steep learning curve!
What can accountants and finance professionals learn from TaxCalc, in a nutshell!?
Never get complacent. Keep things simple. Review your processes continually to keep the engine running efficiently. We operate in a service sector, that means we don’t just serve customers and clients, we also serve our colleagues. So communicate! Your reputation is your brand. Guard it as if it were the most precious thing. Be brave, explore, have fun but never at your client’s expense. Be yourself. The money will come.
Does the idea of information overload concern you?
Yes (that’s all the information you need, right?). That’s why we develop smart software!
What’s on the horizon for you and the sector?
Obviously GDPR and MTD are huge and I shall be at the helm as normal, working closely with all the teams.
As an influential voice, what impact do you want to have on the industry this year and in the long run?
Champion women in entrepreneurship as well as entrepreneurship in the SME sector. Encourage social responsibility. Help HMRC understand how we tick. Rally the government with the cry – ‘if we take, we must also give’ – especially when it comes to the socially disadvantaged. As much as anything I’d like to shake things up. Let’s embrace change, always.
What are your expectations for Accountex 2018?
To generate an even bigger buzz than last year. This year, we’re one of the biggest exhibitors, with even more to show and talk about. We’re unveiling our new GDPR and MTD solutions, plus new all-in-one product plans for practices of all sizes. We’re giving a talk on MTD. We won three coveted Software Excellence awards for best Tax, Best Accounts Production and Best Practice Suite – all voted for by practices, so I’m hoping to welcome even more people onto our stand (that’s Stand 250, by the way). Then, afterwards, I’m looking forward to a long, hot bath with a G&T.
Do you feel women are fairly represented in the profession?
If Accountex is a fair indicator, I’d certainly like to see more women come and say hello at the show.
Early Days
Where did you grow up?
Chiswick in west London.
Were you any good at maths at school?
No!
Trivia/Miscellany
I have a BSc in psychology. I also love to cook!
What’s your favourite film? (you’re allowed more than one)
The Devil Wears Prada – always makes me giggle.
What’s your favourite book? (you’re allowed more than one)
Harry Potter and the Chamber of Secrets. Any book on design and architecture.
What’s your favourite type of music?
Rock, classical and rap.
What’s your ideal day out?
A day with my 14-month old granddaughter, anywhere as long as we have ‘our’ time together. Posh stuff and pampering is all well and good, but proper happiness is a state of mind.
What’s your ideal holiday?
Fly & Flop.
Is money the root of all evil?
No. Greed and intolerance fit that bill. Money can be used to do great good. Ask Bill Gates.
Do you support a football team?
I prefer rugby.
Do you have a heroine or hero?
My Dad. For being wise, kind, loving, mischievous and hugely entrepreneurial.
Closing the tax gap ... it's complicated!
A few weeks ago, I wrote about the tax gap and how it was unfortunate that the figures were published at the same time Theresa May said taxes would need to rise in order to provide extra health service funding.
The tax gap, as it's quaintly known, is the difference between the amount of tax collected and the figure that should have been collected. HMRC reckons it is about £33 billion (you can read all the stats here). It and the government are happy with 'progress' in getting that figure to where it is (and it would seem has been since about 2005-06, give or take the odd billion or six.)
The 'gap' is a result of human error (deliberate or otherwise), avoidance, evasion, the grey economy etc. Not to mention an ultra-complex tax system! It is clearly difficult to work out the exact figure. Probably impossible.
Lowest for five years
Jon Thompson, HMRC’s chief, says: “The UK is the only country in the world to regularly publish their tax gap in detail and, at 5.7 per cent, it remains at its lowest for five years. I am pleased that the downward trend shows HMRC and HM Treasury’s continued hard work to tackle evasion and avoidance is working.
“HMRC is also working hard to help taxpayers get their tax right by offering support and investing in digital services to improve businesses’ record keeping and reduce errors.”
I found an interesting take on all this by Donald Drysdale, of Taxing Words, on the ICAS website. Far from rejoicing in the progress in reducing the gap, Donald suggests it is a cost the nation can't really afford.
Cumulative tax gap
He says: "Over 12 years the cumulative tax gap has reportedly amounted to an astonishing £370 billion. In relation to the nation’s finances, that’s a colossal figure."
It is more than one-sixth of current UK government debt of £1.78 trillion.
"The annual report on measuring tax gaps has become something of a public relations exercise, vindicating their strategies, excusing their failures and putting blame firmly on others," adds Donald.
It seems that small businesses are being highlighted as tax-gap problematic at the moment, which would be convenient given the Making Tax Digital exercise. (Note the above quote by Jon Thompson)
Tax lost through evasion
To read the news headlines, tax avoidance is the major sticking point, yet the £1.7 billion cost for 2016/17, is 5 per cent of the total tax gap. As Donald points out: "... tax lost through evasion, the hidden economy and criminal attacks on the tax system add up to £13.9 billion (42 per cent).
"And it is on reading this statistic that I begin to question whether HMRC are equal to the task of administering our existing tax regime, warts and all."
UK tax laws are too complex for taxpayers to comprehend and are even too convoluted for HMRC’s software engineers to programme. New tax laws, and changes to existing provisions, are promoted by governments and their chancellors and MPs, many of whom fail to understand their true implications.
"HMRC considers that a massive tax cost of £5.3 billion (16 per cent of the tax gap) relates to instances where taxpayers’ and HMRC’s interpretations of tax laws differ.
"Hardworking taxpayers are now being told that tax increases will be necessary to raise additional funding for the NHS and other public expenditure. As a quid pro quo, our broken tax system needs to be mended so that it operates more fairly. Governments and politicians must take a large slice of the blame for their serial failure to create tax laws which can be enforced."
I'm fairly new to the world of accounting .... but I would second that!
National Audit Office focuses on HMRC
“HMRC is primarily in the business of bringing in tax revenue, and numbers are up for 2017-18 which is good news. Of course it needs to be vigilant on fraud and error, which is rising in Tax Credits, and on customer service. I welcome HMRC’s recognition of the need for prioritisation, to balance Brexit pressures and other elements of its change portfolio. It is too soon to determine how effective the execution of these plans proves to be in terms of value for money.”
Amyas Morse, head of the National Audit Office, 12 July 2018
There's plenty of coverage of the National Audit Office's 14th consecutive "qualified opinion" of HMRC's accounts. The ICAEW's Economia has a big article on it. AccountingWeb's global editor John Stockdyk also sheds light on the assessment by the NAO's comptroller and auditor general Amyas Morse.
HMRC raised £605.8 billion of tax revenues this year, an increase of £30.9 billion (5.4 per cent) on 2016-17 and paid out £38.0 billion in benefits and credits (approximately one-fifth of the government’s total benefit expenditure).
The taxes that contributed to most of this increase were income tax and national insurance, which increased by £20.2 billion (6.8 per cent); corporation tax which increased by £2.2 billion (4.3 per cent); and VAT which increased by £4.2 billion (3.4 per cent).
Error and fraud estimate
HMRC’s most recent error and fraud estimate, for the 2016-17 award year, indicates that overpayments have increased to 4.9 per cent (£1.3 billion) of Tax Credits expenditure (£26.3 billion), while underpayments have increased to 0.8 per cent (£200 million).
HMRC expects the level of overpayments to increase for 2017-18, when measured. Misreporting of income is the biggest cause of error and fraud overpayments. This now accounts for £355 million of total overpayments and has increased every year since 2012-13. HMRC has had some success in reducing error and fraud relating to children and undeclared partners since revising its strategy in 2009.
Material levels of error
But, according to the Morse's report, there were "material levels of error and fraud in personal tax credits payments".
Morse says: “HMRC collected more tax revenue in 2016-17 and improved its service levels for taxpayers. However, error and fraud is rising within tax credits and HMRC needs to make it easier for claimants to get help."
He adds: “HMRC is part-way through an ambitious programme to bring in digital services and reduce its costs. In doing so HMRC must ensure it maintains adequate services if it is to protect revenue and tackle error and fraud.”
Child benefit
Stockdyk's piece points out: "Tax credit overpayments increased to 4.9 per cent (£1.3 billion) of tax credits expenditure during the year, while child benefit fraud and error accounted for about £155 million, just 1.3 per cent of total expenditure."
He adds: "While the underlying trends are not good for the department’s reputation for financial competence, help is at hand in the shape of the universal credits programme. Some 123,000 tax credits claimants transferred to universal credit during the year and another 2.7 milllion will move across between now and 2023, when they will become the responsibility of the Department for Work and Pensions – along with £6.8 billion of tax credit-related debt."
Making tax digital for business
There are several comments in the report about how HMRC is coping with change brought on by the likes of Brexit and Making Tax Digital. For instance, the NAO report says: "Last year we reported that HMRC had forecast that complying with Making Tax Digital for Business would result in net costs for businesses in the short-term transitional period.
"However, there would be £100 million annual net benefits for businesses from 2021-22. HMRC has published revised forecasts reflecting the impact of the government’s decision to change the scope and pace of the roll-out. HMRC now forecasts that there will be lower transition costs, but that ongoing costs will outweigh ongoing savings for businesses by £37 million a year in the long term."
Impact prioritisation
The NAO's press release says: "The impact of HMRC’s decisions has been to marginally reduce or delay the intended benefits from its transformation plans. The prioritisation exercise has reduced HMRC’s forecast efficiency savings from £717 million to £675 million each year from 2019-20, although HMRC expects that, ultimately, it will be able to meet its original target. It is not clear yet what impact prioritisation will have on delivery of benefits across the whole of HMRC or on its customers.
"HMRC’s transformation plans remain highly challenging but the revised delivery timeline may be more realistic. HMRC still expects to spend almost all of its transformation budget of £1.8 billion in the four years to 2019-20, even though it has stopped or delayed some of its projects."
IRIS launches digital excellence awards
IRIS is launching its very own awards to celebrate individuals and accountancy practices thriving in the digital economy.
The IRIS Customer Awards have been set up as the software group enters its 40th year. They acknowledge best practice across several areas as accountancy firms evolve beyond compliance services to capitalise on service opportunities in the digital economy.
Sion Lewis, CEO of IRIS Accountancy Solutions says, “We are delighted to launch the awards as part of our celebrations this year. We’ve seen huge changes in the industry and as practices evolve, it’s important to recognise excellence.
Life begins at 40
“For those of us who have celebrated this milestone birthday, we often talk about life beginning at 40, and IRIS is no exception – we are starting the next phase of our journey and look forward to supporting the next generation of accountancy practices.”
All UK accountants, UK accountancy firms (of any size and nature) who are a customer of IRIS Software Group (using IRIS, Keytime, PTP or KashFlow branded products) can enter the awards.
Categories include IRIS Firm of the Year (Small, medium and large categories); Client Excellence Firm of the Year; Advisory Firm for the Year; Fastest Growing Firm of the Year; Most Profitable Firm of the Year; Best Use of Technology of the Year; Marketing Innovation of the Year; Bureau/Outsource Service of the Year; Accountant of the Year; Partner of the Year; Practice Manager of the Year and Graduate / Trainee of the Year.
The closing date for entries is 3 September, with the shortlist announcement on 17 September and the winners announced at the awards dinner on 9 October.
To enter the awards visit HERE.
HMRC releases new update on making tax digital
Making Tax Digital edges ever closer. Late on Friday afternoon HMRC posted an MTD update including a list of 18 software suppliers, as it put it: "To support businesses and agents in the run up to the start of the mandatory MTD VAT service from April 2019."
The online information package includes:
- A new HMRC VAT Notice.
- A list of software developers. The post says: "HMRC is currently working with during the MTD VAT pilot that have already demonstrated a prototype of their product ready to start testing with businesses and/or agents."
- A communications pack to provide stakeholders with information to support businesses and agents to prepare for MTD.
HMRC adds: "Together, these provide additional clarity that businesses and their representatives have been asking for. As part of MTD, businesses registered for VAT with a taxable turnover above the VAT registration threshold of £85,000 will need to keep VAT records digitally and file their VAT returns using MTD compatible software. This will start from their first VAT period starting on or after 1 April 2019.
Businesses with a taxable turnover below the VAT threshold will not have to operate MTD, but can still choose to do so voluntarily.
More than 130 software suppliers are interested in Making Tax Digital for VAT, of which over 35 have said they will have software ready during the first phase of the pilot, which involves small numbers of invited businesses and agents.
The timetable for MTD now looks like this:
| Date | What's happening.... |
|---|---|
| March 2018 | Public MTD pilot for Income Tax launched |
| April 2018 | Private MTD pilot for VAT launched |
| Later in 2018 | Public VAT pilot launched |
| April 2019 | From 1 April 2019 all VAT registered businesses with a taxable turnover above the VAT threshold are required to keep digital records and send VAT returns digitally to HMRC using MTD-compatible software |
Making Tax Digital for VAT provides information to customers and adds to amendments to the VAT Regulations made earlier this year. The notice also gives guidance on the digital record keeping and return requirements of MTD for VAT including:
- Who needs to follow the MTD rules and from when.
- The digital records businesses must keep, and a series of HMRC directions that relax these requirements in certain circumstances (such as where a mixed rate supply is made, where a third party agent makes or receives supplies on behalf of a business, and where a business uses a special VAT scheme such as a retail scheme or the Flat Rate Scheme).
- How businesses must use software to keep digital records and file their returns from those digital records, including information on when programs do and do not need to be digitally linked in situations where a combination of software programs is used. Given VAT registered businesses and their tax agents already use a wide variety of different systems and programs to produce their VAT returns, the notice includes a number of illustrated examples to show customers how to ensure their specific set up will be compliant with the regulations from April 2019.
HMRC has been working closely with software providers to help them to bring a wide range of MTD products to market, and has published a list on GOV.UK of those that are already at the stage of having demonstrated a prototype product ready to start testing with businesses and/or agents.
- Accu-Man
- Ajaacts
- BTC Software
- Bx
- Clear Books plc
- DataTracks Global Private Limited
- eFileReady
- Farmplan
- Go Simple Software
- Intuit
- IRIS
- Liquid Accounts
- PwC
- Quickfile Accounting Software
- Sage (UK) Limited
- Simplifi-HQ Limited
- Tax Optimiser
- Xero
HMRC has also produced a communication pack "The pack is intended to provide source material and information which can be used to support any letters, articles, presentations, social media activity, or web content planned by stakeholders.
Businesses above the VAT threshold are not required to use MTD for their VAT returns until April 2019 but HMRC has already started piloting the changes with small numbers of invited businesses and agents. This will be widened out to allow more to join later this year. Businesses can start to prepare now by ensuring they are keeping their records digitally and by following the rules in the notice.
Debunking myths about age ... plus more on MTD
Today's theme is age. Young people make the 'best' entrepreneurs, right? Just look at the likes of Mark Zuckerberg, Steve Jobs and Bill Gates. All of them were still in their 20s when the zillions started rolling in and they'd changed everyone's lives beyond recognition.
But not so fast... the Harvard Business Review has published research that puts a slightly different complexion on the matter of entrepreneurs.
HBR looked into US census data on the ages of business founders and discovered that the average was in fact 42. And that was after they'd sifted the data to focus more on the typical high-tech start-up, as oppose, say, to a hand carwash (not that there's anything wrong with that.
High tech founders
`"In general, these finer-grained analyses do not modify the main conclusion: The average age of high-tech founders falls in the early forties, " says HBR.
"In software startups, the average age is 40, and younger founders aren’t uncommon. However, young people are less common in other industries such as oil and gas or biotechnology, where the average age is closer to 47."
"Our evidence points to entrepreneurial performance rising sharply with age before cresting in the late fifties. If you were faced with two entrepreneurs and knew nothing about them besides their age, you would do better, on average, betting on the older one.
"Although there are many other factors that may explain the age advantage in entrepreneurship, we found that work experience plays a critical role. Relative to founders with no relevant experience, those with at least three years of prior work experience in the same narrow industry as their startup were 85 per cent more likely to launch a highly successful startup."
So there you have it...
Next up... pensions and tax
Consumer magazine/website Which? has produced a good introduction to taxation, which again goes slightly counter to sommon knowledge about pensioners and tax or more specifically how much they pay.
The report says: "Pensioners in Kensington and Chelsea and Westminster have annual tax bills exceeding £28,000, while those in Stoke-on-Trent pay just shy of £1,200.
Figures ... show that 6.87 million pensioners (including around 400,000 women over state pension age but under the age of 65) forked out over £24bn in 2015-16, the most recent tax year the numbers are available for. That means state pensioners are paying an average of £3,522 a year to HMRC."
Definitely worth checking out the report in full.
Digitalisation of tax
Also worth a look is Richard Sergeant's latest report on the digitalisation of tax on AccountingWeb.
Richard looks at how technological changes in the accounting profession will affect the role of the tax adviser.
Here's a flavour of Richard's thinking and research on the topic:
Far-reaching implications
"Working in a digital tax environment, especially with clients working across borders, could have far reaching implications for the knowledge and technology required," he writes.
"Tax departments across Europe and the rest of the world are having to contemplate owning native technologies to where their clients operate in order to file directly as government portals and paper filings are phased out; creating additional overheads and challenges when it comes to consolidation and efficient handling.
"The tax department, therefore, is being asked to embrace an understanding of the broader impacts, an appreciation and use of different technology, and a shift in the services clients are now requiring."
Have a great weekend.
How do you enforce crypto regulation?
As accountants call for regulatory guidance on crypto assets, a bigger concern is brewing beneath the surface: enforcement.
Historically, with the exception of cash, global governments have enjoyed a tight grip on the the flow of money through the banking system. This has been achieved by the reporting regulations imposed on banks, brokerages and other businesses.
For example, in many jurisdictions, tax authorities are informed:
- When a company pays a dividend;
- When an managed fund pays a distribution;
- When an broker liquidates an investment; and
- When a bank pays interest.
While this has increased the administrative burden on the private sector, this reporting has benefited the taxpayer by simplifying record keeping. In turn, it has provided the tax authorities and tax accountants with confidence that investment income is being appropriately recorded.
When it comes to crypto assets however, governments have no grip on the crypto market, nor will they. It was designed that way. There’s a saying in the crypto community: “You can’t ban math.”
High probability of failure
The crypto asset sector is comprised of an ever increasing number of international corporations, as the internet knows no borders. Attempting to outlaw these would come at extensive cost, with a high probability of failure. For example, several nations have already attempted to outlaw corporations in this sector; only for these corporations to expatriate to other, more favourable, jurisdictions.
The sector also comprises of what’s called a ‘decentralised autonomous organisation’ (DAO). These DAOs are stateless, totally decentralized, peer to peer exchanges, with no staff or leadership. They are theoretically impossible to outlaw.
In their failure to outlaw or control the corporations, some governments have attempted to outlaw their citizens’ participation in the sector, under the guise of protection. While it may deter many, it has ultimately lead to motivated citizens bypassing regulatory barriers or expatriating to crypto-friendly nations.
Obscure their identity
Given the anonymous nature of crypto assets, one can easily obscure their identity without expatriating, in only a few simple steps. Such citizens are not likely to self report any gains if the market is outlawed.
Prohibition is not the answer.
By virtue of these constraints, enforcement is also extremely difficult. You cannot compel a foreign or decentralised exchange to report to local taxing authorities. The one thing governments can control is their own fiat currency.
They can compel local exchanges, by way of banking regulations, to report any inflows and outflows of fiat currency, and the taxpayer that effected these transactions.
With this in mind, this is where the regulation and enforcement conversation should have begun. Let us hope it gets there soon.