By Joanne Harris, Technical Commercial Manager at SJD Accountancy
The past few months have been busy for accountants, who have sought to help keep their clients calm, provide clarity and offer expert advice on how best to navigate this turbulent time.
With Government and HMRC guidance constantly being reviewed and updated, accountants have also had to quickly analyse the best options for support and consider if their clients are eligible for any financial assistance.
Although many people and businesses are starting to return to work, accountants still face months of uncertainty as they assist clients with helping to analyse the damage caused by the pandemic. In this climate, high standards and integrity will be essential, which means that following professional codes of ethics has never been more important to protect both accountants and their clients.
Five ethical principles to follow
The Association of Accounting Technicians’ (AAT) has five principals of accountancy that are widely recognised as; integrity, objectivity, professional competence, professional behaviour, and confidentiality. It’s vital that accountants follow this guidance closely as survival becomes the main focus for businesses everywhere.
Integrity and objectivity will come into play in almost every interaction with a client, as accountants are obliged to be straightforward and honest when giving advice. This means not paying lip service by telling them what they want to hear, but instead offering practical advice based on the reality of the situation.
For example, a client may be hoping to expand at a time when other businesses are standing still, but if this could affect their long-term stability, the associated risks must be made clear.
They may also be taking up Government support such as the Business Loan Interruption Scheme or a Bounce Back Loan. As emergency loans, they have been hailed as a solution to aid businesses with cash flow in the short-term but will be repayable with interest after a certain period of time. An accountant must provide all these facts and help the client consider both long and short-term tactics before a commitment is made.
Staying up to date is key as rules and regulations change quickly
Even the most knowledgeable accountant must ensure they stay fully informed, and this means reading up on the increasing number of changes to the law we’re seeing, as well as ever-changing HMRC guidance in the wake of coronavirus.
For this reason, professional competence is more important than ever, with guidance on the various support schemes updated frequently, and regular updates and extensions to these schemes. There are very few areas of accountancy that haven’t been impacted by the pandemic.
VAT payments are a prime example of this. The government has allowed businesses with payments due between 29th March and 30th June 2020 to defer their payment to 31st March 2021 and have postponed self-assessment payments due in July 2020 until the 31st January 2021.
Having a full understanding of all these implications and how they could help a client survive is vital for every accountant working through this extraordinary period.
Be alert with scams on the rise after coronavirus
Clients should be educated on protecting their cash from scams, which are currently on the rise as a result of COVID-19. For accountants, helping to make clients perceptive and knowledgeable about potential dishonesty is imperative.
In March, when the UK went into lockdown, the number of phishing emails reported to HMRC was up from 74 per cent since January as scammers sought to take advantage of the crisis.
As businesses wait anxiously for updates on their money, they should be regularly reminded to never interact with suspicious emails about tax rebates or refunds from HMRC. Fraud has already taken over an estimated £3.5 million from just 1,700 people in COVID-19 related scams according to Action Fraud, so staying cautious is always the best option.
A professional accountant also has a duty to scrutinise figures to make sure all accounts are being kept as they should; economic recessions have been known to uncover corporate fraud as income drops and discrepancies are highlighted.
All accountants should also remain wary of tax avoidance schemes, which are often set up to appear legitimate and trick businesses and self-employed workers to join them. Particularly in light of the upcoming reforms to off-payroll working which are now due to be implemented in April 2021, which could mean contractors working through their own Personal Service Company.
A report published by the Government in April 2020 claimed up to £1.7 billion of the £33 billion tax gap is due to tax avoidance, and it won’t be dropping down their agenda even as they deal with the pandemic.
There is no doubt that hard times are ahead for all businesses, including accountancy firms. However, coronavirus has brought opportunities as well as challenges, as accountancy skills are going to be more vital than ever during the economic recovery process.
By staying professional and sticking to an ethical code, accountants across the UK and Europe can come out of this stronger and more progressive.