We’ve partnered with human performance specialists Game Changer Performance (GCP) to bring a brand-new addition to our health and wellbeing programme.

We’ve given every person at CP the chance to take part in ‘Curve’ – a year-long coaching programme designed by GCP to boost physical and mental health.

With roots in elite sport, GCP has prepared athletes for the FIFA World Cup, the Olympics, and the F1 World Championships to name a few. So, they know their stuff. And then some.

Now, they’re branching out into the business world to help companies improve performance and increase engagement by giving people of all abilities and interests the guidance they need to reach their fitness goals, whatever they may be.

A FULLY BESPOKE, TAILORED HEALTH PROGRAMME

Focused on lifestyle, movement and mindset, the programme begins with an initial profiling process, offered via a unique health screening app. From here, GCP shape a bespoke programme for each user, with a combination of physical and digital initiatives, services and resources.

All participants will have their own one-to-one specialist coach from GCP, and they will also be able to take part in webinars focusing on any areas they need support in, such as sleep, nutritional choices and finding time to exercise.

There will also be drop-in engagement days at our offices across the UK, giving our people the chance to pick the brains of strength and conditioning coaches, performance psychologists, nutritionists and physiotherapists.

Then, in September, GCP will host a dedicated wellness day where our people can talk to experts about any issues affecting them.

Jo Giles, our Head of Facilities & Wellbeing, said:

“The uptake has been positive across the business, with people from senior management to trainees having a real appetite to engage with the profiling. The analytics showing where people need support have been invaluable and the whole programme is going to be a great benefit to the company.”

Jake Keeling, GCP Director, added:

“We want companies to benefit from the same programmes which help our elite sport clients. The aim of our programmes has always been to ensure people are better supported with their physical and mental health. Launching our Curve programme with Cooper Parry to support the health and fitness of their team has been great.

“Following the first profiling last month, our multi-disciplinary team of specialists have now created a range of bespoke, 1:1, group and company-wide services and sessions that will put in place targeted programmes to support the entire team at Cooper Parry over the next 12 months across a range of lifestyle, mindset and movement-related areas.

“Working with progressive, people-focused companies is exactly why we developed the Curve programme, so we couldn’t be happier to be working in partnership with Cooper Parry who encapsulate this and are always looking at innovative ways to better support their team.”

Find out more about GCP’s Curve programme HERE.

 

Does your auditor’s impending visit send shivers down your spine?

Often, it’s not even because they’re going to catch you out on anything – it’s because of the visit itself. The initial prep work, gathering information, arranging office space for the audit team, chopping and changing your diary to make sure you’re available.

Wouldn’t it be better if the audit team could do all their testing in their own offices and only come to you with queries?

THE SEARCH FOR A BETTER WAY

Over the past year, COVID-19 brought that scenario to life for us auditors and our clients. So, how did it go?

Well, it was a mixed bag of improvements and brand-new headaches. Office space was saved, at the cost of more time spent scanning in information. Contact was kept to scheduled Teams/Zoom meetings, but we lost a bit of personal touch and the professional comfort that comes from working closely with your auditor.

Learning lessons and listening to our clients, it’s clear many of them preferred a hybrid approach. They loved the ability to provide information to us digitally, which we would then work on remotely before coming onto site for a highly focussed, efficient visit.

In this visit, we would agree source documents which were either too cumbersome to scan, or too confidential to upload. We could also ‘press the flesh’ (bump elbows) with our clients and have full and frank discussions in glorious 3D, free from screens.

EMBRACING THE HYBRID APPROACH WITH INFLO

At Cooper Parry, one of the ways we’re embracing this hunger for a hybrid approach is by partnering with Inflo – a browser-based online audit and data analytics platform, with a whole host of time-saving bells and whistles.

Tired of running reports from your finance system for the audit team?

Inflo’s Ingest module securely and intelligently connects to your finance system, collects only what it needs and delivers it to your audit team. This leaves them with a single data set, meaning they can run their own activity reports, saving you time during the audit.

Has an old-fashioned static request list created a communication disconnect between you and the auditor?

One where you believe you’ve provided everything, but the audit team are asking for the same items? Inflo’s Collaborate module changes the request list into a dynamic, live document, meaning you’ll be able to delegate items to your colleagues while still keeping an eye on their completion.

You can upload any file type and size against each individual request, so no matter what you name it, there won’t be any confusion around what question(s) it’s answering. Comments can also be added to each request, keeping the conversations against the issue they’re looking to resolve and taking away the ‘audit noise’ from your e-mails.

Inflo is ISO 27001 accredited and has security protocols for server, website and network security, giving you complete peace of mind around the security of the information you share.

Inflo also has data analytics modules to provide insight into your own data, giving you a wider, more impactful view of what’s happening in your organisation.

ONE SIDE OF THE HYBRID COIN

In that snapshot of Inflo and its powerful benefits, you’ve seen the digital side of our hybrid approach. The other half comes from what we’re renowned for at Cooper Parry – the engaged, electrifying team of people delivering the client work – and we’ll always look to finish off any key items that benefit from our physical presence onsite, giving you the best of both worlds.

I’d be interested to hear your thoughts on this. Are you a fellow card-carrying auditor? How was remote working for you and your clients? If you’re a client yourself, how was your last remote audit? What went well and what could be better?

Let me know at bhaveshp@cooperparry.com.

Bhavesh Patel | Not for Profit Audit Manager

What does the future of health and social care look like? Where do the opportunities lie? And how can you make sure your business is best placed to seize them?

To help answer those questions, we welcomed Giles Johnson, Managing Partner at growth strategy consultancy, CIL Management Consultants, to the Cooper Parry Corporate Finance team’s third annual health and social care event.

Giles has extensive deals experience and is incredibly busy with the investment that’s going into the health and social care marketplace at the moment, working with private equity investors and companies alike to review strategy and help the investors understand the business and market dynamics they’re investing into.

Touching on big picture economic trends, long term growth trends and the other forces driving health and social care investment, Giles shared his industry musings with our audience of business leaders in brilliant fashion.

If you’d like to watch the whole thing back, you can so do here. But for now, let’s take a look at some of the key headlines.

WHAT MAKES HEALTH & SOCIAL CARE ATTRACTIVE TO INVESTORS?

To answer this question, Giles used Porter’s Five Forces framework, adding in his own, sixth force: market growth. The sectors typically tick a lot of these boxes, but equally, display some issues:

1) BARRIERS TO ENTRY

It used to be relatively easy to set up a care business, such as a children’s care home, an elderly care home, or a domiciliary care agency. But now, with the advent of technology, the regulation of CQC and Ofsted and the emergence of frameworks, the barriers to entry have gone up significantly.

Together with trust pilot websites like iWantGreatCare, where consumers are increasingly sharing their opinions, Giles sees these higher barriers to entry as one of the key reasons care markets have become more attractive to investors.

2) THREAT OF SUBSTITUTES

“This is more around the transfer of emphasis between different modes of care,” Giles told us. “So out of hospital into the community, out of care homes into live-in care, out of children’s care homes into fostering.

“The public sector itself is a provider as well as a commissioner, which can create a sort of substitution effect there, but it’s something that’s slowed down a lot – it’s not a fast-moving sector in that sense.”

3) BARGAINING POWER OF BUYERS

“Bargaining power of buyers is interesting when they have their own services,” Giles continued. “So, if you’re selling to local authorities and they’re also providers, what sort of choice is there?

“The reality is local authorities don’t tend to provide a terribly good service themselves. It’s one of the things investors get concerned about: am I selling to a single customer here? The government? The NHS? But actually, when you peel back the layers, often the buyers don’t have anywhere near as much choice as you might think.”

4) BARGAINING POWER OF SUPPLIERS

Here, Giles chose to home in on staffing, saying: “The staff in care markets are not unionised, so they don’t have collective bargaining. But they do have choice. When unemployment was really low, staffing was a real problem in the sector and, combined with the rises in the national living wage, that was eating away at margins.

“That’s something to watch out for, but there’s relatively little supply chain power otherwise.”

5) COMPETITIVE INTENSITY

Care providers markets are competitive in that there are many providers in each segment of the market but, because there is under-provision in so many areas and providers have different expertise and niches, this often doesn’t result in downward pressure on prices.

6) MARKET GROWTH

The underlying market trends and performance, as you’re about to find out, are all positive, which is clearly something investors like.

ALEX PARTRIDGE, DOUBLE OLYMPIC MEDAL-WINNING ROWER AND WELLBEING AMBASSADOR AT WAGESTREAM

Aged 15, rower Alex Partridge decided he was going to win an Olympic medal. Twelve years later, he took silver at the 2008 Olympics in Beijing, as part of the British Men’s Eights.

Having left the sporting world behind, he’s using the lessons he learnt on the water in the business world where, as Wellbeing Ambassador for the fintech startup Wagestream, he is determined to make a difference.

1) PUSH YOURSELF

“From an early age, I pushed myself to do more and be better,” Alex says. “I grew up in Indonesia, in the middle of nowhere and I loved sport and being outside. My parents were active and we were part of a community that threw itself into everything with no half measures.

“I wanted to be better and better all the time. It wasn’t even a desire to win, I was just fascinated by how far I could push myself and what my body was able to achieve.”

Following a move to the UK, Alex dabbled in sports including rugby before a chance conversation with a friend led him to the rowing club. The rest, as they say, is history.

2) KEEP GOING. NO MATTER WHAT

“Initially I was terrible,” Alex remembers. “But a big component of rowing is hard physical training and that’s what I was craving. I was 14 or 15 and pushing myself to the absolute limit, experiencing a level of physicality that you don’t get in other sports.

“Then, Redgrave and Pinsent won gold in Atlanta ’96. At that moment I knew what I wanted to do. And that changed everything.”

3) ATTITUDE MATTERS MORE THAN ANYTHING ELSE

From then on, Alex’s life revolved around his goal of reaching the Olympics. He trained three times a day, shunning the usual teenage temptations.

“I wasn’t at a sporty school and I wasn’t the best rower,” he says. “So I knew if I was going to make it I had to put serious amounts of effort in. I had the right attitude and I was lucky that I also had people around who supported me and helped me to manage my obsession so it became a positive force.”

Although he didn’t win a race for the first three years, Alex never lost his determination. “When I eventually made it to the World Junior Championships I was in the worst boat, bottom of the team. I remember sitting on the bank, praying that I’d get selected.

“I shouldn’t have been selected, no one from my school had ever been selected. But I was.”

4) IF YOU WANT IT ENOUGH, YOU CAN GET IT

Looking back, Alex says it was his mindset that swung it for him that day – that unwavering belief that he would get to the Olympics and pick up that medal. “Talking to people about it now, they say they’d never come across a 16-year-old with such purpose. They didn’t actually believe me – but they couldn’t ignore how much I clearly wanted it.”

It’s this focus that has stood him in such good stead, and he says his experience in sport provides lessons for those in business. Alex explains: “When you have a clear purpose everything you do is based on reaching that end goal. Whether that’s winning a medal or growing a business, decision making becomes incredibly easy because you don’t do anything that doesn’t align with your purpose. You don’t get bogged down with distractions.”

That’s not to say you never try anything new though. Alex adds: “To be the best you have to be open-minded, take risks and experiment. But having your purpose in mind means you can very quickly assess whether you’re still moving towards your goal. If not, then it’s not right.”

5) IT’S VITAL TO DEFINE WHAT SUCCESS LOOKS LIKE

This sense of purpose is what sets elite athletes apart from the rest of us. In team sports especially, everyone is working towards the same common goal; something that is rarely seen in other situations.

“There is one aim, pure and simple, and that’s to win,” says Alex. “That means success is easy to define – there’s a tangible measurement and a specific time period. We know exactly where and when we need to step up to perform and we train for that precise moment.”

Preparing for the Olympics took Alex and his teammates four years, to be at peak performance for five minutes. Then there were three months of fall-out as they recovered from the intensity.

In business, there isn’t the same clear timeline. “Defining success becomes much harder because the point at which you’re deemed to be successful can be quite variable,” says Alex. “You also find that although the business may have a clear purpose, there are variations within that. One individual might want to earn more, while another person is looking for faster growth. Someone else might want to further their own agenda, to the detriment of the team.”

6) BEWARE THE EGO

This emotional side is much harder to manage, in part because it’s often a subconscious response. “It’s very hard to control the way someone makes you feel,” says Alex, “but it can have a huge impact on you and your mindset. Creating the right culture is therefore incredibly important – in business as well as sport – and having a shared purpose is a big part of that.”

He illustrates this point with an example from the London 2012 Olympics. “Traditionally in rowing, there is a top boat and all the energy and effort goes into giving that crew the best possible chance of winning gold.

“In the run-up to 2012 our coach, Jurgen Grobler, announced that this time he wasn’t focusing on a single boat winning gold, but on every team member taking home a medal. This was a dramatic shift in attitude and it made a tangible difference in the way we operated as a team. Suddenly, everyone felt equal and that broke down a lot of the egos and created a great team dynamic.

“The fact is that in a boat, you really do have to play an equal part. There’s no point in trying to row twice as fast as someone else – you actually move more slowly that way. Everyone has to be going at the same speed and working together. It’s a good lesson for life.”

7) FIND A PURPOSE

It also brings us back to the sense of common purpose and the importance of having an end goal if you’re going to succeed. Upon leaving professional rowing at the age of 32, Alex suddenly found he didn’t know what his purpose was, and he struggled to adjust.

“I’d never considered what my values were outside of rowing. My whole identity had been about winning a medal and now that had gone I didn’t have a focus. I reached a crisis point and it forced me to look at who I was and what else I loved doing.

“I realised I liked helping people, to inspire them to do more and improve their lives. My inspiration was seeing other people achieve, which is where my motto ‘Inspire and be Inspired’ came from.”

It’s not surprising, given his background, that Alex’s focus initially fell on improving wellbeing and wellness.  But he soon realised that financial stress is a real and significant issue in many people’s lives.

8) FOCUS ON WHAT FIRES YOU UP

“Around 34 million people in the UK have less than £250 in savings,” he says. “That’s a huge proportion of society who, if unexpected costs arise, are forced to use a high-cost form of credit, and who find it hard to budget and are more likely to use their overdraft. They are more likely to end up in a cycle of debt with higher and higher associated costs.

“The equally shocking thing is that elements of the financial services community know this and prey on this more vulnerable group. Wagestream was doing something to stop the cycle, and that appealed to me.”

Founded in 2018, Wagestream aims to improve the financial resilience of individuals, worldwide. It allows employees to stream their earned wages into their accounts through an instant app, so they can track, budget and save their earnings in real time.

It’s simple and easy and that’s what makes it work, says Alex. “Many people don’t improve their financial lives because they’re afraid to take the first step. It’s too daunting, or time-consuming. This helps.”

9) EMPOWER YOUR TEAM

It’s the first step on a journey to change people’s relationships with money, which Alex says is an important part of the wellbeing agenda as a whole.

“There is a growing realisation that we have to invest in our wellness to be OK,” he says. “And a big part of that is about a culture change.

“I saw it in the team for the Olympics and I think it’s the single biggest lesson that I’d transfer into the business world. If you’re going to do one thing to improve your situation, invest in a positive culture and empower your team. That’s the way to be a winner.”

BEYOND THE FINISH LINE

Alex Partridge reveals the raw power of determination. He admits that he wasn’t the most naturally talented rower of his generation, yet he worked with such fury and such focus that he was selected for the Olympics, where he won a silver medal.

That would be a stunning enough story. However, the tale continues. Alex is now taking the lessons he learnt in elite sport and applying them to the business world. His number one observation is that building a positive culture among your team and boosting their wellness is the most effective way to win. Alex teaches us that by planting a seed of determination in the fertile soil of an empowering, supportive workplace culture, we can all grow into something extraordinary.

HUNGRY FOR MORE HUB CP?

It’s the community we created to celebrate and bring together the most electrifying, rebellious, entrepreneurial minds of our day.

If that sounds like you, you can get a flavour of everything we’ve done with the community so far here.

The Cooper Parry Corporate Finance team recently sealed another international deal, advising the shareholders of Apption Labs – creators of the MEATER range, as it was acquired by Traeger Grills in the US.

Based in Leicester, Apption Labs’ MEATER is a leader in wireless smart meat thermometers, taking the guess work out of cooking so users can cook meats perfectly every time.

The acquisition comes at an opportune moment for the team. They recently picked up two highly prestigious Queen’s Awards for Enterprise for outstanding achievement in Innovation and International Trade – and it’s this stomach-rumbling appetite for disruption and pushing boundaries that makes Apption Labs and MEATER the perfect fit for Traeger Grills.

Headquartered in Salt Lake City, Traeger has been at the forefront of outdoor cooking technology since the ‘80s. Its wood-pellet grill blazed a trail in the industry and remains a #1 seller worldwide, and through its WiFIRE technology, Traeger has created a connected cooking platform that allows users to remotely control and monitor their grill via a smartphone and other smart devices.

The acquisition of MEATER expands Traeger’s portfolio of home cooking devices, marking a significant step forward in its pursuit of “the ultimate connected grilling experience”.

The Cooper Parry Corporate Finance team was led by Ben Rookes, Niall Chantrill and Ollie Macildowie. We also provided Transactional Tax support on the deal, which was led by Linda Marston-Weston, our Partner & Head of Transaction Tax.

Niall Chantrill, Director at Cooper Parry Corporate Finance, said:

“We are thrilled to have supported the MEATER team on this landmark deal with Traeger. Working with such innovative, high-growth businesses – like Apption Labs – is what we pride ourselves on. The growth journey the business has been on over the past few years has been nothing short of phenomenal and is testament to the hard work of every member of the Apption team.

“We are incredibly proud to have supported on this transaction and we wish the team all of the success as they embark on the next phase of their growth journey.”

In June 2021, the Education and Skills Funding Agency (ESFA) issued the new Academy Trust Handbook 2021.

When we say “new”, it’s not really new – it’s the Academies Financial Handbook as we previously knew it, renamed as the Academy Trust Handbook (‘ATH’) to more accurately highlight the existing responsibilities of academy trusts in a wider range of areas than just finance.

While it’s now called the Academy Trust Handbook, it still references the Academies Financial Handbook in its title, which is important as all trust’s Funding Agreements and various other policies and procedures reference the AFH. That means there’s no need to go out and revise all of those documents from 1 September 2021, although in time these will need to be updated.

The ATH 2021 is effective from 1 September 2021 onwards, and as always, compliance with it is a condition of all academy trust’s Funding Agreements. So, we thought it would be helpful to break down some of the key changes below.

MORE ‘MUSTS’ AGAIN FOR 2021

One of the key aspects of the ATH 2021 is the ‘musts’ which set out each of the requirements that are mandatory for academies to follow. As always, there is a useful section in the ATH (Part 8) which summarises all the ‘musts’.

For the real enthusiasts out there, in the ATH 2021 there are 111 ‘musts’, compared to 103 in the current version. We’ll leave you to decide if that’s progress, further scrutiny and restrictions, or just greater emphasis and expectations of organisations in their use of public funds.

As well as the ‘musts’, the ATH 2021 also includes a number of ‘shoulds’. These identify minimum good practice that the ESFA believes all academy trusts should apply, unless they can demonstrate that an alternative approach is acceptable and fits their particular circumstances.

What’s clear from it all is the ESFA’s continual drive for the highest standards of financial management and governance in academies, and with the change of name and focus this year, a lot of the changes are more governance focused than before.

So, what are the key changes? These are conveniently summarised on page 9 to 10 of the ATH, but we’ve expanded on these a little further for you:

GOVERNANCE

MEMBERS

One of the key changes is putting more focus on the members of an academy trust. All academy trusts must now ensure that their members, and any prospective members, are not currently subject to a direction under section 128 of the Education and Skills Act 2008.

Now, a section 128 direction effectively prohibits an individual from taking part in the management of an academy trust. So, it’s important for trusts to ensure they have appropriate processes in place for any new member appointments, and they need to have undertaken a process to obtain this information for all existing members.

Also, a reminder that employees must not be members, and this extends to being an employee on an unpaid voluntary basis. This was a key change in the 2020 AFH and was effective from 1 March 2021, so any academy trusts which still have a provision in their Articles of Association allowing employees to be members are going to have to revise their Articles to reflect this requirement if they haven’t already done so.

TRUSTEES

Reserving places for parent trustees

Firstly, the issue of whether to have parent trustees or not has been an ongoing debate for many years, with some academy trusts continuing to have parent trustees on their Boards while others have chosen not to. Whatever your view on the debate, the ESFA are now emphasising that academy trusts should reserve places for parent trustees in their governance structures, either at a trust level or at a local governing body level.

Appointing a senior executive leader

This is a key change this year and an important one to note. From 1 March 2022, any newly appointed senior executive leader (which, in effect, is the accounting officer) can only also be appointed as a trustee if the academy trust’s articles permit it, the senior executive leader agrees to the appointment, and the appointment is agreed by the academy trust’s members.

We’ve seen an increasing number of changes at a senior executive leader level in trusts in recent years. So, if you are appointing a new senior executive leader from 1 March 2022 onwards, it’s important to ensure these considerations are followed and any appointments are appropriately minuted. It would also be good practice to ensure the senior executive leader confirms their agreement to being appointed a trustee in writing, so as to ensure a proper audit trail.

With this, it’s worth also noting that the ESFA’s strong preference is that no employees should serve as trustees, and this is an area where we are seeing more trusts choosing not to appoint the senior executive leader as a trustee.

Finally in this area, the ATH 2021 now emphasises that trusts should consult with their RSC on possible options where an existing SEL is planning on leaving the trust. This is ultimately designed to facilitate discussions on the leadership structure for the trust going forward, but it will remain to be seen what the outcomes of this will be.

Reminders around trustees’ other obligations

The other key change for trustees is to note some new sections that have now been included to remind trustees of their obligations around safeguarding, health and safety, and estates management. It’s therefore important for trustees to ensure their meeting agendas (or those of their sub-committees) include reports on these key areas.

Whilst not a change in the ATH 2021 at all, given the ongoing funding pressures and uncertainty around some aspects of funding going forward, including funding for costs incurred in dealing with the COVID-19 pandemic, it’s worth reinforcing one of the key changes from last year, which was around going concern.

This stressed that in addition to the trustees’ responsibility for ensuring regularity and propriety in the use of public funds, they must also take ownership of the trust’s financial sustainability and its ability to continue as a going concern.

Governance reviews

There is an increased emphasis on governance reviews as well, which probably reflects the ESFA’s view that these are not taking place as often as they should or are not as effective as they should be. The ATH 2021 now stresses that an external review of governance is a more powerful tool than a self-evaluation review and that the ESFA’s strong preference is for academy trusts to have an independent external review more routinely – especially if the trust is growing or there are governance concerns or issues. This is therefore something trustees should strongly consider going forward, especially if they have not had one for some time.

DBS certificates and checks

The ATH now reminds trusts of their responsibility to ensure that enhanced DBS certificates are obtained for all staff and supply staff as appropriate. This extends to all members, trustees, sub-committee members and local governing body members, except to the extent they are not engaged in any regulated activity, in which case the barred list check is not required.

FINANCIAL REQUIREMENTS

The AFH 2020 increased the expectation around what controls trusts should have in place and the level of transparency going forward. Our summary of the 2020 AFH covered these in more detail and you can refresh your memory HERE.

For the ATH 2021, there has been relatively little change in the main financial requirements, but a couple of points that are important to note are:

1) Whilst trustees must approve a written scheme of delegation for their trust, the ATH 2021 now specifies that this should be reviewed annually and where there has been any change in a trust’s management team or organisational structure.

From our experience, this is something that is often not reviewed on a regular basis, so this is a very worthwhile reminder for trusts. The best time for trustees to review the scheme of delegation is in advance of the new academic year, around the end of the Spring term or in the first meeting of the Autumn term.

2) Reminding trusts of the key documents that must be made available for public inspection if requested, which include agendas for every meeting of the trustees, sub-committees and local governing bodies; the approved minutes of each of these meetings; and any report or document considered at these meetings. The ATH also clarifies the situations in which certain items may be excluded from this information, which are often matters detailed in confidential minutes. Many trusts utilise online portals for such documents, so it’s important to ensure this information is stored in a systematic and efficient way.

One of the key changes in the AFH 2020 was in relation to the publication of executive pay, which was essentially any employees whose benefits (which means gross salary, employer’s pension contributions, other taxable benefits and termination payments) are more than £100,000.

The ATH 2021 now clarifies the ESFA’s view that this information is best published in a tabular format which shows each element of remuneration in a separate column. The most efficient process is to ensure this information is produced and published on the website at the same time as the trust’s annual report and financial statements.

The final important change to note on executive pay is in relation to off-payroll arrangements. If a trust has entered into an off-payroll arrangement with someone who is not an employee and the total payments to that person are greater than £100,000, then this must also be included in the executive pay disclosure publication. Again, this is important for trusts to consider alongside the production of the annual report and financial statements, and you should ensure there is a process for capturing any off-payroll arrangements in place.

INTERNAL SCRUTINY

Internal scrutiny has continued to be a hot topic in the academy sector over the last couple of years and the AFH 2020 introduced some key changes and clarifications, especially around this needing to cover both financial and non-financial controls. The ATH 2021 has set out some further expectations of the ESFA in this important area.

The ATH 2021 now sets out that the chair of trustees should not also be the chair of the audit and risk committee – and that’s the same whether the audit and risk committee is a separate committee or part of another committee (i.e., like a finance committee). This change emphasises the ESFA’s continuing focus on the separation of key governance roles within trusts.

The ATH 2021 also sets out that where the audit and risk committee and finance committee are separate, the same person should not be chair of both committees. So, this is something for trusts to consider in terms of their governance structures going forward.

The other key change is around considering the different options for delivering internal scrutiny in a trust. While there are a number of potential options, the ATH 2021 now sets out that the internal scrutiny work must not be carried out by a member of the trust’s senior leadership team (which includes the accounting officer and CFO). So, if you haven’t already considered how your internal scrutiny work will be delivered this year or going forward, this is an important aspect to note.

ANNUAL ACCOUNTS & EXTERNAL AUDIT

The key change here is the ESFA’s expectation that academy trusts should re-tender their external audit service every 5 years.

This is generally what we have seen in the sector, with most trusts going through a re-tender exercise, or at least a market comparison review, every 3 to 5 years, or where there has been a significant change in the trust (such as a merger of two existing trusts). When considering re-tendering, there are a number of options trusts can consider, such as the Crescent Purchasing Consortium or other procurement groups, or they can run a tender exercise themselves using audit firms that other trusts they know use and can recommend.

The ESFA have also set out that all academy trusts must consider certain specific points when evaluating the external audit re-tender. These include the auditor’s sector expertise, their understanding of the trust and its activities, whether the audit process allowed issues to be raised on a timely basis, the quality of audit recommendations, the authority, knowledge and integrity of the audit team to interact with and challenge the trusts management team, and the auditor’s use of technology.

The ESFA have also produced a good practice guide on choosing an external auditor, which can be found HERE.

DELEGATED AUTHORITIES

There is only one key change in this area, which is in relation to staff severance payments. Whilst there is still the requirement to obtain the ESFA’s approval for any staff severance payments, including a non-contractual / non-statutory element that is greater than £50,000, there is now a new requirement which is aimed more at higher executive pay levels.

Under this new requirement, an academy trust must obtain the ESFA’s approval where any employee exit package (which includes a severance payment) is for £100,000 or more in total and / or where the employee concerned earns over £150,000.

It’s therefore important for trusts to ensure their internal procedures are adapted to make sure these approvals are obtained where relevant. It’s also important for any such payments to have been appropriately approved at trustee (or sub-committee) level in line with the trust’s scheme of delegation, as this is an area where we sometimes see that this hasn’t happened.

THE ESFA’S INTERVENTION POWERS

This is an area where there are often not too many changes, but with the ATH 2021, there are a few changes that are really important to note, especially the point around cybercrime, which is increasingly an issue across the sector at the moment.

Where the ESFA has concerns about the financial management and / or governance in a trust and undertakes an investigation, the academy trust must now provide the ESFA with written authority giving permission for any third parties to provide relevant information and documents to the ESFA. This would appear to have been added in response to some more recent ESFA investigations where third party information may not have been forthcoming.

In keeping with the change of name to the Academy Trust Handbook this year and the broader focus on trusts governance, the previous Financial Notice to Improve (‘FNtI’) has now been renamed as a Notice to Improve (‘NtI’). As with the 2020 AFH, the NtI must still be published on the academy trust’s website until it is lifted by the ESFA, and all the previous requirements of a trust where a NtI is in place remain.

In another key change, the ESFA have set out that academy trusts must be aware of the risk of cybercrime and ensure they put in place proportionate controls and take appropriate action where a cyber security incident has occurred.

If a trust is also faced with any cyber ransom demands, then they must obtain the permission of the ESFA to pay any such ransom demands. This means that cybercrime is a key risk area that should be on the agenda for all audit and risk committees going forward, if not already. This would include having it as a key risk in the trust’s risk register, but also whether this area should be reviewed as part of the trust’s internal scrutiny over the coming year. We’ve certainly seen more trusts covering cybercrime risk in their internal scrutiny plans over the last year.

SO, THERE YOU HAVE IT

While there were no huge changes in the 2021 ATH, there is still plenty to digest. Hopefully, this provides a good guide of the areas that trustees, accounting officers and CFOs need to start thinking about in terms of their financial and governance responsibilities from 1 September 2021 onwards.

As ever, if you have any questions on any of the details included in this update, or just want more information, guidance or advice in relation to your academy trust, including undertaking an independent review of your trust’s compliance with the ATH 2021, then please contact any of the Cooper Parry Not for Profit team‘s academy sector specialists – Nick Simkins, Simon Atkins, Andy Jones, Glen Bott, or Sarah Chambers.

Whether it’s your child enjoying a tech-enabled educational experience from home, an online retail cash splash, tech-driven banking apps, or even a tech-enabled blood test or health triage, the pandemic has accelerated the tech-enabled services industry in a huge way.

Tech seems so normal these days. It’s embedded itself in our lives. And lurking within the world of tech-enabled consumer services is Value Added Tax (VAT).

VAT (or its equivalent in other countries) is, after all, a business tax on transactions undertaken. It’s not limited to tangible goods or services, and tech-enabled service delivery platforms are no exception to the rule.

Ignore VAT at your peril, we would suggest, but are you aware of the extent to which VAT shapes the foundations of your tech business at the set-up and design phase?

THE BURNING ISSUES FOR TECH-ENABLED BUSINESSES

Whether it’s Fintech, Edutech, Healthtech, Gaming, Betting… whatever the industry, here are the burning issues that can’t be ignored:

1) THE DELIVERY ROUTE

Are you really delivering the underlying service to the consumers, or are you facilitating the service on behalf of another provider (old school speak, are you “agent” or “principal”)?

If you are a principal, then you are truly delivering the service to consumers, and with that comes a need to understand many and varied factors to conclude your VAT reporting obligations, including the liability of the underlying services and the country where they are being provided for VAT purposes.

2) LIABILITY OF SERVICES

You buy in a VAT-exempt education or healthcare service, and your platform enables the onward sale to consumers. You just follow the same VAT liability as your supplier, right?

Unfortunately, life isn’t so simple in the world of VAT. VAT relief attaching to many services often requires the nature of the provider to be taken into account, regulatory approvals, and some reliefs might attach to individual persons providing the service as opposed to a corporate body.

Therefore, buying in a VAT-free service does not mean that you can sell it to consumers on a VAT-free basis. As a principal delivering services to consumers, it is crucially important to understand the nature of the supplies you make as a business so you can determine the VAT liability when you sell them on to the consumer.

3) LOCALITY OF THE SUPPLY

Tech enablement opens up an abundance of new customer channels in countries around the world, presenting a huge opportunity in the commercial sense. However, where do you account for VAT or the equivalent sales tax? Is it where you are established as a company? Is it where your server and outsourced services are located? Is it where your customers are located? This will need to be concluded to understand your reporting obligations.

Typically, B2C supplies are treated as being supplied in your country of establishment. So, if you are established in the UK, you’ve only got to worry about whether you pay tax here. However, electronically supplied automated services are often treated as supplied where the consumers themselves reside, not the UK, which creates a huge challenge.

In principle, you may need to understand the VAT or equivalent sales tax obligations in a whole range of countries, which is something to be avoided where possible.

4) NATURE OF THE SERVICES

The VAT liability of your service and the place of supply (where you pay any VAT or sales taxes) are driven entirely by what you are actually delivering to consumers.  This may seem obvious on the face of it, but there are two golden rules to bear in mind:

A) The wrapper of services offered to consumers may often need to meet a variety of tests in order to enjoy certain VAT reliefs.  If you are acting as a principal, the design of your holistic offering will need to be considered in great detail to conclude the liability of the underlying supplies you are providing for VAT purposes.

B) If you are marketing to consumers in multiple territories, the design of the offering itself will often impact the place at which you are liable to account for VAT or equivalent sales taxes. Without proper thought, you could be opening yourself up to multiple reporting obligations in a number of countries. Greater thought at the outset on the design of the offering may remove this obligation, leaving you only liable to account for VAT or register for VAT in a single jurisdiction.

5) WHO IS YOUR CUSTOMER?

We’ve seen a number of tech-enabled businesses working together in collaboration. This can have a big impact on the underlying VAT position.

For example, a gaming platform provider may be ready and able to deliver services to consumers in multiple territories. A tech gaming software business may license its offering to that platform provider in return for a royalty fee. This would constitute a B2B transaction which carries an entirely different set of VAT rules to consider.

The true nature of the supply chain for VAT purposes is therefore often misunderstood. Are you truly providing your services to the end consumer, or are you providing them to an intermediary platform that will sell them on to consumers as principal?

HOW CAN COOPER PARRY’S VAT TEAM HELP?

We are working with a number of tech-enabled businesses, supporting them to navigate and mitigate the many and varied issues on the journey from the design phase through to implementation and go live.

Specifically, we support clients by:

Whatever stage you’re at, we’d love to be part of that journey and help you cut through all the complexity. So, if you’d like to have a chat and learn more, get in touch with Damian Shirley, our VAT Partner, at damians@cooperparry.com, or Emma Robotham, our VAT Senior Manager, at emmar@cooperparry.com.

As part of our fast-growing Tech & High Growth ecosystem, we’re delighted to announce we’re partnering the Insurtech business that’s ripping up the rule book: Superscript.  

Since launching in 2015, Superscript have earned an enviable reputation as major disrupters in a traditionally risk-averse sector. Creating great products and a seamless experience to match, Superscript’s popular monthly subscription model (who needs cumbersome annual premiums) now covers over 1,000 business types.

By definition, Superscript is elevating the entire business insurance experience by providing cover that’s tailored to businesses rather than providing a one-size-fits-all-take-it-or-leave-it approach.

With four core values: unafraid, unassuming, unexpected and unstoppable, Superscript are, well, unrivalled in their commitment to using inspiring tech to create brilliant products.

An eye-catching and impactful above-the-line ad campaign is ensuring Superscript is on everyone’s lips.

As part of Cooper Parry’s growing partner ecosystem, Superscript joins Tech Nation, Crowdcube, CapDesk, and StartUp CFO.

Steve Leith, our Head of Tech & High Growth, describes why Superscript is such a complementary partner:

“Scale-ups need advisers who understand the challenges of rapid growth. They need to be working with products and services that take away the hassle factor, and are tailored to the speed at which they are moving.

Superscript’s approach to insurance is a classic case in point. It ensures that businesses enjoy effective cover that is focused, flexible and financially on point.

With exclusive preferential insurance rates available to Cooper Parry clients, Superscript’s offer is just part of a wide-range of services, support and advice that adds perspective, experience and value.”

You can read more about how Superscript can benefit Cooper Parry clients HERE.

HOW ELSE DO WE SUPPORT GROWING BUSINESSES?

We understand that businesses in their growth stage (from Early Stage to Scale Up and beyond) face a variety of different challenges and don’t have a lot of time to surface them and solve them. Our Tech & High Growth team seek to understand strategy and trajectory first, after which we can quickly flush out expansion and finance-related challenges they should (and shouldn’t) be worrying about.

Most commonly these include:

1) Centralising where they are taking advice from and ensuring there is a single relationship through which they can access joined-up support at speed; appointing a new adviser experienced in the growth space who can cover audit and tax-related matters commonly associated with venture and private equity funded businesses is a necessary step to support growth plans

2) Joining up this work with their R&D claims process to drive cost and time savings;

3) Supporting their fundraising activity at Series A or Series B with our specialist Raising Finance team; or

4) Getting the business “diligence ready” by surfacing and dealing with issues around corporate expansion, including international aspects like market entry, transfer pricing and IP considerations, employing people across borders, permanent establishment issues, cross border VAT and sales-taxes, and share option planning.

If you’re a scale-up reading this and thinking you could benefit from similar support, get in touch with Steve Leith at stevel@cooperparry.com

Alternatively, find out more about our work in the CP Futures Scale-Up team.

According to HMRC, 1 in 10 people in the UK have an offshore financial interest.

Now, you may be aware that HMRC have been cracking down on taxpayers declaring their offshore interests to make sure they’re paying the correct tax following their ‘No Safe Havens’ strategy from 2019.

The majority of those who had not declared their offshore assets had fallen into the trap of believing offshore assets don’t need to be declared.

It’s clear there are still plenty of misconceptions on the topic, so, we’ve debunked a few of the most common myths below.

OFFSHORE TAX MYTH #1

“Offshore assets don’t need to be declared in the UK, because they’re offshore”

You must declare your worldwide income if you are UK resident. If you think that your investments aren’t taxable, then let your tax adviser know about them and they can explain the reporting and taxing requirements for that particular investment or asset.

MYTH #2

“I wasn’t born in the UK, so I don’t need to declare my overseas income”

As a general rule, if you are UK resident then your worldwide income is taxable and should be declared in the UK. If, however, you were born overseas (non-domiciled in the UK) and do not expect to remain in the UK for the rest of your life, you can elect to claim the remittance basis and be taxed on your UK income only.

This is an active claim that must be made on your tax return. If you think this applies to you, ask us for some more information, because there are annual charges to make this election long term.

MYTH #3

“I’ve paid foreign tax already, so I don’t need to declare it again in the UK”

It’s common for foreign investments to suffer tax withholding in the country in which they are held, or for that country to require you to complete a tax return. However, this doesn’t mean that your UK tax obligations have been fulfilled. As a UK resident, you’ll still need to declare the income on your UK tax return. And you’ll get a credit for the foreign tax already paid.

MYTH #4

“I earned this money before I moved to the UK, it’s just sat growing in an investment account now. I haven’t brought it to the UK, so I don’t need to declare it”

If you’re a UK resident, the interest earned, or dividends received on investments are still taxable in the UK and should be declared on your UK tax return. If you’re UK resident but a non-domicile, you may be able to claim the remittance basis, but there could be a charge associated with this, so ask your tax adviser for more information.

MYTH #5

“It’s a foreign pension, it’s got nothing to do with the UK”

Whilst you might have earned your foreign pension whilst working abroad, when you retire back to the UK and become a UK resident again, your foreign pension is generally going to be taxable in the UK. There are some historical exceptions, so ask your tax adviser for more details.

MYTH #6

“I’ve declared my offshore income. I picked the best exchange rates so I paid the least tax possible”

HMRC have an approved list of exchange rates that should be used when converting currencies. You should use these rates instead of cherry-picking the best rate because you think it will save you tax. HMRC will query if the exchange rate used differs to what they are expecting.

MYTH #7

“My holiday home is rented and my expenses are greater than the income received, so I don’t need to report it in that country, or in the UK”

As a UK resident, you must declare your foreign rental income and expenditure, even if it makes a loss. If you have an overseas property, you may be taxable in the foreign country as well as in the UK, you may be able to claim tax relief through Double Tax Treaties. It’s also likely that the profit and loss account will need to be recalculated using UK tax and accountancy rules, meaning your taxable figure may differ to your overseas figure, for example, disallowing depreciation. 

MYTH #8

“My accountant doesn’t need to know about this, it’s offshore so it doesn’t count”

You must always declare your worldwide income if you are UK resident. If you have any overseas assets, tell your tax adviser about them. They’ll be able to tell you whether you have any tax to pay and how the income should be reported.

ANY QUESTIONS? LET US KNOW

If you’re concerned that you’ve misinterpreted the rules on declaring offshore investments and want some peace of mind, get in touch with a member of our Private Client team below:

Simon Morris | Partner & Head of Private Client Tax | simonm@cooperparry.com

Gemma Dobson | Private Client Tax Senior Manager| gemmad@cooperparry.com

Jack Carter | Private Client Tax Assistant Manager | jackc@cooperparry.com

The pandemic accelerated so many businesses’ thinking. Ours included. But if we’ve learnt anything from this once-in-a-lifetime period (touch wood), it’s that the culture card always comes up trumps.

WHAT IS COMPANY CULTURE?

Company culture is your organisation’s personality and energy. It weaves together your purpose, values, expectations, benefits and environment to create unwritten guidelines that shape how your people work, interact and make decisions.

Every company has a culture. It exists from day one. And from there on out it evolves as you hire those who fit perfectly into your vision.

Your culture is the one thing that makes your business unique. Your competitors can sell the same products as you. They can offer the same services. But they can’t replicate your culture and the way your people go about delivering them.

It’s the invisible glue that holds your company together, but as a leading figure in a business, why should you care? Is it just the latest HR buzzword? And where’s the value?

WHY COMPANY CULTURE MATTERS

Culture trumps strategy. Every single time. You can agonise over the most detailed business plans for days, months, years, but if you don’t have the culture and the people in place to help make those plans a reality, you’re wasting your time.

Company culture is like the wind. You can’t see it, but you can feel its strength. It moves and shapes its surroundings. It can be used as a source of energy to power your people and your business, but it can also have disastrous consequences when things get rough.

A strong workplace culture defines your company’s internal and external identity. It encourages and helps your people to reach their full potential, binding them together and aligning them to your purpose, values and goals.

When we hosted our Culture Carnival – a coming together of business leaders and some of culture’s brightest minds – we asked the crowd, “On a scale of 1-10, how valuable is culture to your bottom line?”

The answers from our 130 guests dominated the top end of the scale, and there was a collective agreement that creating a healthy, sustainable culture is vital in a business’s lifespan.

So, if it’s success you’re looking for, culture is the business card to play.

ATTRACT. RETAIN. THE BEST

We all want to feel energised and valued at work. We all want to be a part of something we truly believe in. And as more and more businesses open their eyes to the power of culture, having your own, impressive version isn’t simply an option anymore. It’s a must if you’re looking to attract and retain the best people.

It may sound obvious, but when your people are engaged, driven and enjoying their role and the environment they’re in, they want to keep their job. And they’ll make that happen by producing incredible work. So, when your people love what they do, your clients will love what you do, too.

A successful, happy business is a reputable one, which is particularly important with the rising popularity and influence of employee review sites like Glassdoor, and with your workplace culture at the forefront of everything you do, more people will want to work for (and with) you to get a slice of the action.

Maslow’s hierarchy of human needs states monetary rewards like pay rises, salaries and bonuses only cover our basic needs. But when we move towards creating an incredible culture and company to work for, we unlock the top of the pyramid, giving our people the psychological and self-fulfillment benefits we all crave.

HOW IMPORTANT HAS CULTURE BEEN FOR US?

In 2015 we set ourselves an ambitious 10-year vision: to grow the business 10 x in those 10 years, from £15m to £150m turnover. To become #1 in every market we operate in. And the UK’s #1 employer of choice.

We knew there was only one way we’d even come close to making that vision a reality, and that was by creating a company and a culture that our people love being a part of.

So far, that ethos has served us well. We’re on track turnover-wise, we’re opening up more and more offices across the UK, and we’re welcoming more and more brilliant ‘big hitters’ to deepen our specialisms. For four years straight, we’ve featured in the Top 25 of the UK’s Best Companies to Work For. We’re still the #1 Accountancy Firm to Work For in the UK. And we’ve picked up a handful of prizes at the last two European Engagement Awards, including Best Place to Work in Europe.

WHY SHOULD YOU CARE?

Because the culture card always comes up trumps. Across every industry. And it’s our chance to revolutionise the world of work for our people, giving them an environment to thrive in, and receiving all the business benefits that engaged, motivated, happy people bring.

To check out the rest of our culture articles, head here.

FANCY A CHAT? YOU SHOULD MEET BEN

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