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IRIS widens education reach with BioStore deal

IRIS Software Group today announced the acquisition of BioStore, a leading provider of identity management and cashless catering solutions to UK schools and businesses.

BioStore’s solutions are used by over 3,000 UK schools and sixth form colleges to improve and streamline access control and how catering services are delivered.

The acquisition extends the IRIS education portfolio, providing solutions to manage all aspects of school management, including finance, assets and communications.

School efficiency

Its ability to deliver a step-change in school efficiency and achieve value for money in the use of resources is a prime objective of many Academy and Academy Trusts.

BioStore will sit within the IRIS Education Division, which includes PS Financials financial management; Results Squared asset management and communications; and ParentMail online payment and parent engagement, which includes the prominent messaging apps, Looked After Call and Truancy Call.

More than 11,000 education organisations use IRIS solutions, which provide essential software to 60 per cent of UK academies and 82 per cent of large multi-academy Trusts.

Four million parents

IRIS also connects schools with over four million parents and guardians and sends over 300 million messages each year from schools to parents and guardians, helping to keep them informed and process payments for dinner money and other school items.

Kevin Dady, IRIS CEO, says: “BioStore has developed some game-changing technology for the education sector and I’m delighted to welcome the business to IRIS.

"Our mission is to help all education establishments become more efficient and productive by reducing administration and delivering services that benefit schools, colleges, students and parents. This acquisition is yet another step in helping us achieve this goal.”

Innovate further

Nigel Walker, managing director of BioStore, says: “We’re delighted to be part of IRIS Software Group where we can create even tighter integrations between our respective award-winning portfolios and innovate further.

"Together with IRIS we can offer schools and businesses an end to end solution, which creates value by making budgets go further.”

by Rob Deighton

Who's making it less taxing for 200,000 start-ups?

More than 200,000 start-up businesses have been given a helping hand by the HMRC.

A streamlined company registration service, set up by the tax office and Companies House, aims to navigate the red tape hampering entrepreneurial endeavour.

So, when registering with Companies House, groups can also sign up for tax and HMRC’s digital obligations.

Industrial strategy

The change, which launched last year, removes the need for businesses to send duplicate information to both offices.

It's part of the government’s industrial strategy to reduce administrative burdens on small businesses.

Mel Stride, financial Secretary to the Treasury, says: “It’s never been easier to set-up a business in the UK. Reducing the administrative burden on small businesses is all part of this government’s commitment to support small business growth and cement Britain’s standing as a ‘Global Britain’.

Simplified process

“HMRC and Companies House are working hard to make business registration and tax easier. Previously the same information would need to be entered into a number of different platforms to register a company and register for tax, we have simplified that process.

"The government is committed to ensuring we can deliver a modern, digital tax system for all businesses and their agents supporting them to get their tax right and reducing the amount of tax lost through avoidable error.”

Backbone of the UK

Small business minister Kelly Tolhurst adds: “British small businesses, and the entrepreneurial spirit behind them, are the backbone of the UK economy employing over 16 million people up and down the country.

“Through our modern industrial strategy we are making it easier for small businesses to grow and flourish by investing in modern industries, infrastructure and skills, and making it easier to access finance.

"Anyone thinking of starting a new business in 2019 should check out the huge wealth of government advice and support available, and go for it.”

by Rob Deighton

Sir Jon Thompson, knight of the HMRC

A new year's honours list that recognises 1960s model Twiggy and ex Monty Python globetrotter Michael Palin also has space for the country's top tax official.

Arise Sir Jon Thompson, who took on the £200,000-odd-a-year chief exec job at HMRC in 2016.

Incidentally, I'm not sure how that salary stacks up with the "services" to the taxpayer knighthood tag. (Although if you compare £200k with the eye-watering £5.7m average annual bonanza for an FTSE 100 company CEO, it does start to look like a real pittance.)

Anyway, I'm sure the knighthood will give Jon some much needed momentum as he attempts to steer MTD for VAT through the Brexit labyrinth and absorb some of the criticism of the "unfair" and "pernicious" retrospective loan charge. Among other HMRC challenges in 2019.

In other HMRC news, 5,542,000 or-so taxpayers have about three weeks or so  to complete their self assessment tax returns before the 31 January 2019 deadline.

More than 11.5 million 2017-18 tax returns are due and HM Revenue and Customs (HMRC) expects the vast majority of taxpayers to complete their returns and pay any tax owed by the end of the month.

Returns online

About 52 per cent of taxpayers have already filed their returns, as of 31 December 2018, and more than 5 million have completed their returns online.

Angela MacDonald, HMRC’s director general for customer services, adds: "The self assessment deadline on 31 January is fast approaching, but there is still time for customers to file their tax returns online and on time to avoid any unnecessary penalties.

If you are completing self assessment for the first time or are yet to start your 2017 to 2018 tax return, there is a wide range of support and guidance available on GOV.UK to help at every stage of the tax return process.

by Rob Deighton

HMRC's top 10 prosecutions

HMRC  has revealed some of  the more extreme cases of tax crime that it tackled last year. It makes for interesting reading.

Fraud investigations led to 671 people being convicted over the past 12 months. In addition, HMRC has charged another 919 people and taken on 746 criminal investigations.

This year’s top 10 prosecutions:

• One of the UK’s most wanted tax fugitives, who spent more than 11 years on the run and owes more than £53m, ended up in jail after he was caught in Canada.
• Five fraudsters falsely claimed £13m in tax repayments and facilitated around 900 bogus visa applications, were sentenced to a total of more than 31 years in jail.
• An eight-strong tobacco smuggling gang that brought more than 2 million illegal cigarettes into the north-east were jailed for a total of more than 26 years.
• A tax consultant, who fled the UK before he could be arrested for masterminding a conspiracy to steal £6.9m from construction workers’ pay packets, is finally in prison. David Michael Hughes travelled to Chile, Dubai and Cyprus to evade justice but was eventually arrested at Heathrow airport after arriving from Istanbul.
• Father and son tax fugitives are behind bars after being captured in Spain and extradited to the UK. The £1m VAT fraudster son tried to avoid jail by fleeing to France in a light aircraft, while his accomplice father escaped by ferry, before they both headed to Spain.
• A company boss who was jailed for trafficking fighter jet parts to Iran in violation of weapons of mass destruction controls. Alexander George shipped military items, including Russian MiG and US F4 Phantom parts, to Iran through various companies and countries.
• The manager of a well-known male stripping troupe, who was sentenced in her absence for tax and benefit fraud is now behind bars after more than a year on the run.
• A church leader from Luton who lied about charity donations to fraudulently claim £150,000 Gift Aid repayments, was jailed for four years.
• A businessman who masterminded a £9.8m VAT fraud to fund his lifestyle of flash cars and a luxury Spanish home, was jailed for nine years. Jason Butler used money from the fraud to fund his collection of supercars, including a Ferrari Fiorano FI, a Ferrari 360, a Mercedes SL350 and a Lamborghini Murcielago. He also 'owned' a Rolls-Royce Silver Shadow, a speedboat, a home in Marbella and 96 properties in Leeds
• A company director who funded his hobby, racing high-powered sports cars in races across Europe, through a £450,000 tax scam. Simon Atkinson was already under investigation by HMRC for anti-money laundering offences when officers unearthed the six-figure tax fraud, which he used to finance his passion for racing Lamborghinis in competitive motor tournaments

The official press release says: "HMRC’s Fraud Investigation Service continues to bring in around £5 billion a year through civil and criminal investigations."

Mel Stride, Treasury financial secretary, says: HMRC’s investigative teams have been working hard to crack down on tax crimes in the UK, and hold those who would cheat the public revenue to account. The range of cases in this year’s list demonstrates how HMRC will always tackle fraud and can prosecute anyone who steals from the public or breaks the rules - from smugglers to potential arms dealers.

Simon York, director of the fraud investigation service, says:As these cases show, HMRC can and will tackle the most serious tax crime and breaches of sanctions whether committed by organised criminals, professional advisers or wealthy individuals.

We remain resolute and relentless in our determination to level the playing field and bring tax criminals to justice on behalf of the majority of citizens who pay their tax to fund vital public services.

HMRC uses the full range of both criminal and civil powers to investigate tax cheats and continues to be successful in around 90 per cent of criminal cases it brings to trial. However, work doesn’t stop there – HMRC always looks to recover the proceeds from any crime committed to secure the funds for the public purse.

by Rob Deighton

Big accountancy firms tackle partners over sexual harassment

In a week when Deloitte joined other big accounting firms by admitting they had fired male partners for inappropriate sexual behaviour or bullying, it's worth just taking a look at the following comment.

“You can’t meet someone more junior to you in a bar on a Friday evening after work and assume she or he is attracted to you [and is seeking] a one-night stand. You just can’t do it.

“Some people definitely would have to have that explained to them. So we’ve been very clear on what is acceptable in our firm.”

Fire 20 of its partners

That's Deloitte chief executive David Sproul, amplifying his company's admission to fire 20 of its 1,000 partners over the past five years.

It's staggering. Not the numbers. But the comment itself. And the fact that it had to be made. And, even worse, the fact there are 'people' (And professionals, too!) who have to have that explained to them!

I mean, are we meant to be impressed by this sudden expression of openness and honesty by the Big Four? Really? It's nearly 2019 for goodness sake!

A few more facts

Anyway, rant over. Back to a few more facts on this story...

EY  dispatched five UK partners because of inappropriate behaviour, including sexual harassment and bullying. That's out of 681 in the past four years.

Next up was KPMG. Seven of its 635 UK partners left in similar circumstances over that period.

Anti-harassment

Moving on to PwC... five out of 915. And BDO: one out of nearly 200.

Apparently, Deloitte introduced anti-harassment and discrimination training plus helplines a while back. The #MeToo movement on social media has also highlighted misconduct and other tawdry behaviour in business and politics.

Quite why the big accountancy firms have decided to open up on this now, though, is slightly odd.

Maybe the wider business community will follow. Though I wouldn't hold your breath, especially when you add those pesky shareholders into the equation...

by Rob Deighton

Investigate HMRC powers, say UK Lords

With Theresa May's no-confidence vote monopolising the news agenda, it's not surprising that important matters are getting overlooked, ignored or dipping beneath the radar.

While the accounting/tax media homed in on the House of Lords' recent comments about HMRC, it still strikes me that this issue may be edging into the above territory. It's certainly worth revisiting.

In its report titled  'HMRC Powers: Treating Taxpayers Fairly', the economic affairs committee is basically calling for a wholesale review of the UK tax authority. The report concludes that recent powers given to HMRC undermine the rule of law and hinder taxpayers' access to justice.

It's serious stuff.

Widening the role

These are the key findings of the committee...

• The government should consider widening the role of HMRC's Adjudicator or increasing HMRC obligations to respond to and act on Adjudicator recommendations.
• HMRC should urgently review all loan charge cases where the only remaining consideration is the individual's ability to pay, and establish a dedicated helpline to give those affected by the loan charge advice and support. Such action should take place well in advance of the loan charge coming into effect in April 2019.
• The government should withdraw clauses 79 and 80 of the Finance Bill, which would extend HMRC time limits to assess offshore matters to 12 years.
• The government should withdraw its proposal, for which consultation closed in October, to remove oversight of the tax tribunal from HMRC access to information about taxpayers from third parties.
• Penalties associated with General Anti-Abuse Rule and Follower Notices restrict access to justice and should be abolished.
  The government should legislate to give the First-tier Tribunal (Tax) the power to conduct judicial reviews.
• The Treasury should assess whether HMRC is adequately resourced to fulfil its charter obligations in the next spending peview.

And this is what the committee's chairman Michael Forsyth had to say on the matter. "HMRC is right to tackle tax evasion and aggressive tax avoidance. However, a careful balance must be struck between clamping down and treating taxpayers fairly.

"Our evidence has convinced us that this balance has tipped too far in favour of HMRC and against the fundamental protections every taxpayer should expect.

Taxpayer safeguards

"Since 2012, perhaps due to reduced resources, HMRC has been granted some broad, disproportionate powers without effective taxpayer safeguards. High penalties, designed to deter some taxpayers from continuing appeals against tax liabilities, are a tax on justice.

"Some of these powers disproportionately affect unrepresented and lower income taxpayers. We took some disturbing evidence on the government’s approach to the loan charge.

This is devastating the lives of middle and lower income individuals, from the private and public sector (including the National Health Service) who used disguised remuneration schemes, in many cases being required to do so by their employers.

"The charge is retrospective in its effect, claiming tax from years which should be closed to enquiry. We have included some of the personal accounts submitted to us as written evidence as an appendix to our report.

"Clauses 79 and 80 of this year’s Finance Bill would introduce another disproportionate power. Extending HMRC’s time limits for assessing offshore matters to 12 years would place an unreasonable burden on a disproportionate number of taxpayers, who would be required to retain records for two or three times longer than currently.

"We need to work together to build new principles for the tax system, taking a tough approach to tax avoidance while treating taxpayers fairly. We recommend a new review of HMRC powers, and an independent review to consider new oversight arrangements for HMRC."

by Rob Deighton

Tax accountants lag behind the MTD curve

I'm yet to see survey results that demonstrate the accounting profession is fully supportive of, and prepared for, the digital future. The latest piece of research by Thomson Reuters does little to change that.

UK tax professionals are still unsure how to get ready MTD for VAT.

About 70 per cent of the 146 tax and accounting professionals surveyed said they had developed plans, but not started implementation.

The research also found that 37 per cent will now halt changing policies until HMRC provides updates about the revised October 2019 MTD for VAT deadline for “businesses with complex requirements”.

Records maintenance

About 72 per cent say software and digital records maintenance top their MTD worry list.

Over 60 per cent of accountants still manually track VAT, despite 80 per cent saying they use the HMRC portal to submit VAT returns. That's up from 53 per cent in summer 2018.

According to Thomson Reurters: "Increased use of the portal is positive, but it is clear that finance departments are unsure on the technological and process changes they need to make moving forward."

Quick fix approach

When it comes to storing VAT info, over half of those asked still prefer the spreadsheet! And a third (34 per cent) believe that they will still use Excel to keep digital records relating to VAT post-MTD-implementation.

This would imply that they are considering a “quick fix approach to MTD for VAT”.

Kim Hau, of ONESOURCE Indirect Tax at Thomson Reuters says: “There is a real opportunity for tax accountants to embrace software that does much more than simply file a return.

"By accepting the inevitable move towards digital tax reporting, companies can use the new October 2019 deadline to implement indirect tax compliance software that will bring benefits such as automation, reporting, cost savings and improved compliance.

"It will mean businesses are ready for 2019, 2020 and other future tax changes, rather than taking a quick fix ‘sticking plaster’ approach.”

Thomson Reuters is a provider of news and information-based tools to professionals. Its network of journalists keep customers up to speed on global developments, with a particular focus on legal, regulatory and tax changes. For more information on Thomson Reuters, visit tr.com and for the latest world news, reuters.com.

by Rob Deighton

UK skills shortage reaches critical levels

With continuous demand for skilled employees in some of the country’s highest growth sectors, the UK skills gap is a major and well-publicised crisis that, according to a report by Open University, costs the country more than £2bn a year.

Further, 97% of organisations working in STEM and 96% of financial organisations have had difficulty hiring skilled employees over the last 12 months.

In the tech sector particularly, a 2017 report by Tech Nation revealed over 50% of business owners in the UK digital tech community reported a shortage of highly skilled employees, while a quarter said sourcing talent was a major challenge.

To find out more, the research team at Bidwells compared industry vacancies against undergrad enrolments in 2017 to uncover which areas have the most significant shortages.

University enrolments v average Industry Vacancies

Data: ONS average industry vacancies 2018 and HESA full-time, first degree university enrolments 2017.

 A combination of valuable economic skills and high-level technical education is critical to meet the UK’s skills needs, yet despite growing student enrolments in fields like computer science and tech, new jobs in these high-growth sectors still outweigh the number of skilled workers to fill them.

The latest British Chambers of Commerce Quarterly Economic Survey indicates the skills shortages are reaching critical levels, with 75% of businesses in the manufacturing sector and 71% in the services sector reporting recruitment difficulties. The Open University found 91% of organisations struggled to find skilled talent in the last 12 months, having to spend money on higher salaries, recruitment costs and temporary staff as a result. Brexit adds a further level of uncertainty for companies and their ability to recruit the best of the world’s talent.

High Growth Sectors Facing Challenges

The analysis of the university enrolments demonstrates the mismatch between market demand for skills and the future supply of talent is particularly acute in knowledge-based industries. This suggests current vacancies in professional and scientific tech positions are three times higher than the total number of university enrolments in these subjects.

Science and tech jobs are predicted to grow twice as fast as other occupations, with 142,000 new jobs in science, research, engineering and tech anticipated by 2023. Looking further ahead, The London Datastore projects the information and communication sector will be the second highest growing sector over the coming decade in the UK, with an estimated 45% increase in employment growth by 2050.

According to the Industrial Strategy, these sectors are the most significant to the UK’s economic future, but the shortages of suitably qualified, high-skilled labour will present a brake on the UK economy unless addressed.

Investing in Local and Foreign Talent

Will Heigham, Lead Partner for Science and Technology at Bidwells concludes:“Havin g already had a major impact on employment and skills, digitisation is set to cause even more disruption in the decades ahead, making it crucial for the current workforce to embrace continuously adapting skill sets and a changing workplace landscape. However, the analysis of UK university output underlines the fact that companies will need to continue to look further afield.

“In a survey by the British Chambers of Commerce, when businesses were asked how they would respond to a potential restriction on access to EU workers, only 43% said their business wouldn’t be affected, while some aim to pay additional costs to recruit from the EU, relocate businesses partially or completely overseas, or retain older employees.

“Preliminary results of our survey of major international R&D companies indicate skilled labour is the most important issue for companies when choosing sites for R&D facilities (Bidwells and Creative Places, 2018).  The UK urgently needs to put in place measures to both deliver homegrown talent for the future as well as ease the process for attracting the best in class globally.”

by Rob Deighton

Software leaders predict bright future for bookkeepers

The bookkeeper is an endangered species on the verge of being devoured in the technology jungle. That's what many industry observers are warning.

But it's not an opinion that was massively in evidence among the 400 or so at the Institute of Certified Bookkeepers' annual two-day summit in London this week. And they may well be right.

The idea that the future is bright for bookkeepers was not just the preserve of ICB chair and co-founder Garry Carter either. It was echoed by some of the leading lights from the jungle itself, the accounting software sector.

Change is getting faster

Sage's executive VP Jennifer Warawa recognised that the new work environment was challenging. "This is the slowest pace of change that we will see for the rest of our lives," she said - meaning that change is only going to get faster.

"Will technology take your job? No. But you need to evolve," she said. Jennifer outlined a strategy to move from being redundant to indispensable. And the key to that is remaining relevant.

Best route to the future

The best route to the future is summed up in these bullet points:

• Vertical markets - don't try to be all things to everyone.
• KPIs - focus on clear objectives.
• Packaging and pricing.
• Talent & recruitment.
• Client engagement: are you sure they're happy?
• A business development plan.

Keynote speaker Gary Turner, Xero's UK head honcho, had a captive audience... virtually. When asked how many in the room were Xero users, I reckon at least 60 per cent raised their hands. Gary brought his mum along to the show, too. She was a bookkeeper for his dad's business... and his inspiration. Nice.

Important to small business

"Everything's going to be OK," Gary told his audience. "Your role is important to small businesses. You need to harness the technology but keep the human heart.  Bookkeeping is absolutely NOT going away.

"Accounting is still hard for small firms. So it's a huge opportunity."

FreeAgent's sales VP Nick Longden also focused on the opportunities brought about by artificial intelligence with an emphasis on open banking. I liked this analogy. "Just because you have good toothpaste doesn't men you can get rid of the dentist. So it doesn't matter how good your software is, you still need a good bookkeeper."

And on the subject of good bookkeepers. Congratulations to ICB veteran Jacquie Mount, who not only delivered some great practical workshops at the summit, she also received a 'life-time' Luca award at the Summit dinner for her contribution to the institute.

by Rob Deighton