Belonging to a supportive organisation like STEP come into its own in such difficult times

Denese MolyneuxWhen writing this blog, usually the first thing I do is to refer to my previous one I posted to comment or update England and Wales members on items mentioned. Not this time.

The worldwide COVID-19 pandemic has affected everyone, whether they have contracted the virus or not. It is in such circumstances that the benefits of being a member of a supportive organisation really come into their own.

Mark Walley and the team at STEP Head Office are to be congratulated on keeping things on an even keel throughout this period of immense upheaval. While managing the logistics of moving to home working, the staff have pulled together resources to help members keep fully updated, starting with the COVID-19 Technical Hub on the STEP website. After that there are any number of links to new information, from holding virtual meetings; changes to examinations; rescheduled conferences; maintaining CPD and just about any other subject of relevance. The Communications team has excelled itself in managing the STEP online offering to best support the membership.

Life goes on and in other non-COVID news, The All Party Parliamentary Group for Inheritance Tax and Intergenerational Fairness was launched on 28 January to positive media coverage. STEP’s involvement with this initiative has served to enhance our reputation and strengthened stakeholder relationships in this vital area.

The Legal Services Board is currently reviewing how to ensure that legal professionals remain competent throughout their careers. The call for evidence deadline has been extended to 26 June, and STEP will be making a submission to that review.

HMRC is keen to raise standards in the tax advice market and has called for evidence to support the UK Government’s crackdown on promoters of tax avoidance schemes. It is also conducting a review to give taxpayers assurance that advice received from professionals is reliable. Again STEP will be giving a response.

As we emerge from the unusual circumstances in which we find ourselves it will be interesting to see which parts of our lives revert to existence pre-COVID. By the time of my next blog in December, I hope we will have had the England and Wales Branch Chairs Assembly – maybe via video conference. I look forward to hearing your own experiences and sharing some new, and quite probably unforeseen, best practice.

 

Denese Molyneux TEP, Chair, STEP England and Wales Regional Committee

The COVID-19 crisis prompts a rash of philanthropic giving

Robert CaringtonOn 13 May 2020 the STEP Philanthropy Special Interest Group (SIG) in partnership with Philanthropy Impact hosted the first of its 2020 Philanthropy Programme series of events with a webinar entitled ‘Core Components of a Professional Philanthropy Advisory Practice’.

The event attracted a number of delegates from 18 different jurisdictions, and discussed a range of issues for philanthropy advisors. It was ably hosted by George King IV, Partner, MASECO Private Wealth; with Jo Bateson TEP, Partner, KPMG; Cath Dovey, Co-founder, Beacon Collaborative; and Alana Petraske, Partner, Withers Worldwide LLP, on the panel.

The current COVID-19 crisis and the deep and radical changes in society it has brought has prompted an increase in people wishing to give, and brought about a more important role for the philanthropy advisor. This means it is essential for advisors to have the right tools in place, and to be aware of clients’ shift in attitudes towards philanthropic giving, and what it involves.

Advisors need to feel comfortable about providing advice, especially while getting used to new ways of working. While much work can be done online, there are still concerns over physical actions, like signing cheques for clients, although on a positive note, many regulators have taken a pragmatic approach, recognising the need to work remotely.

A number of reasons were given for the increase in charitable giving. Clients want to be seen to be doing something, or they are using the increased ‘spare time’ to reflect on their place in society and how they could better themselves, with charitable giving being a solution. Many are acting in response to the current situation with a sense of urgency, and want to donate as quickly as possible.

During the first two weeks of the crisis, established infrastructure funds were able to utilise pre-existing networks and donate immediately and strategically. Subsequently there was a broader response, with non-regular clients and new donors emerging. Many of these had used the first few weeks to get their own affairs in order, and then wanted to act with speed. Anecdotal evidence showed that donors range from those with structures in place, to those who need preliminary hand-holding.

Even though the crisis is a generation-defining moment and clients want to donate quickly, several on the panel urged advisors to recommend clients should hold fire, and instead research their charities of interest, with a view to deploying their wealth strategically over a longer period (6 -12 months). It’s vital to manage clients’ anxiety and also assess the risk factors, as charities will be in distress for some time, and many will not survive at all. Reports show that in the UK, 40-70 per cent of charities may be dissolved in the next 12 months.

Another key, and indeed quite obvious issue is whether the client has sufficient money to give. The outbreak has brought out basic level survival instincts (such as the run on loo paper) and if someone feels under attack from the virus, they may not want to give, or feel they can’t.

The panel also suggested advisors be mindful of their own businesses, and review what they expect to happen in the next 6 months – 2 years. Points to consider include: where their work comes from, what will future working will look like, and what clients will be seeking from them. However, now is the perfect moment for advisors to be the philanthropy champion at work and integrate philanthropy into wealth planning.

The event ended with the panel highlighting what they felt were the key skills required for advisors in the industry:

  • Collaboration and the importance of building up a community which you can utilise and engage with.
  • Honesty regarding your skills, and being prepared to practice and train those who need further improvement.
  • To focus on a useful knowledge base, such as understanding what grant makers and other key players are doing.

 

 

Robert Carington is Policy Executive at STEP

PCRT: Continuing to raise professional standards

Business people discussion advisor conceptThis week we publish a short report reflecting on the use of PCRT (Professional Conduct in Relation to Taxation) by the professional bodies since the Standards for Tax Planning were added in March 2017.

STEP became a signatory to PCRT in 2011 following its inception 25 years ago by the other UK tax bodies. PCRT is reviewed annually and updated by representatives of each of the seven bodies (along with STEP, these are AAT, ACCA, ATT, CIOT, ICAEW and ICAS).

In its present form, PCRT sets outs the Fundamental Principles and Standards for Tax Planning behaviours required by all our full, associate, affiliate and student members when they are advising on UK tax (regardless of the jurisdiction in which they may be based).

While 2017 saw the Standards introduced, the version issued on 1 March 2019 was the first major restructuring in 25 years to take account of feedback from our members. The updated help sheets provide guidance on how members can apply PCRT to their day to day professional activities, exercise their professional judgement and resist any undue pressure they may receive from clients or employers to act in an unethical manner. The help sheets focus on

  • submission of tax information and tax filings,
  • tax advice,
  • dealing with errors,
  • request for data by HMRC,
  • members personal tax affairs.

Application of PCRT

STEP’s Code of Professional Conduct sets out our core standards, and PCRT supplements this. It does not stand in isolation, and any member who is found to be in breach of PCRT will likely have breached our core Code, other membership requirements, plus any regulatory requirements that members may have to abide by.

PCRT does not only affect members in professional practice. Its Fundamental Principles and Standards of Tax Planning apply to all members who practise in tax, including employees attending to the tax affairs of an employer or client, those dealing with their own tax or that of their family, friends, charities, etc, whether or not for payment, and those working in HMRC or other public sector bodies or government departments.

Tax agents who are not members of any of the signatory bodies are not ‘off the hook’ either. All agents, including those with no professional qualifications at all, are covered by HMRC’s own Standards for Tax Agents published on 4 January 2018, which incorporates the principles of PCRT.

The eagle-eyed among you will have noticed HMRC’s current call for evidence on ‘Raising standards in the tax advice market’. STEP will be responding to this call for evidence by its closing date of 28 May 2020.

How do members use PCRT?

At its simplest level, PCRT is intended to guide and assist members, enabling them to ensure that they undertake work effectively and appropriately. In practice it is being used as a reference point for professional standards, helping members make informed choices.

PCRT helps members demonstrate the required standards to clients and employers, and assist with explaining why some planning arrangements are not suitable and cannot be undertaken, helping members to support their colleagues and fellow professionals in making correct decisions, and showing a commitment to ethical practice.

As professionals, members serve their clients’ interests, but also uphold the reputation of the tax profession, and the reputation of STEP as a society, all of which take account of the wider public interest. PCRT is a powerful tool in helping us retain public confidence in the work of members.

In these various ways, PCRT appears to be working successfully in supporting members, their clients and the wider community by describing the standards of behaviour that clients can expect when seeking advice on their tax affairs.

How do the professional bodies use PCRT?

PCRT has been widely promoted and debated by the professional bodies across our member communications, and its Fundamental Principles and Standards for Tax Planning play an essential role in promoting ethical conduct among our members.

STEP, along with each of the professional bodies, has entered into a memorandum of understanding with HMRC, allowing HMRC to report to us any alleged misconduct by any of our members. Where such a report is received, we will use the PCRT Fundamental Principles and Standards of Tax Planning to assess whether an appropriate professional approach has been adopted to determine whether we need to commence an investigation under our own Disciplinary Rules.

Finally, HMRC’s report, ‘Measuring tax gaps 2019’ shows a significant reduction in the tax gap attributable to tax avoidance. While there is no direct evidence, each body is of the firm belief that the changes to PCRT have helped to support this reduction. Any questions should be sent to Sarah Manuel, STEP’s Professional Standards Manager at standards@step.org.

The above has been adapted with agreement from Tax: Raising professional standards, first published by ICAS, April 2020.

A look back at 2019 in STEP England and Wales

Denese MolyneuxI’ve learned much in my first year as Chair of STEP England and Wales. The most impressive thing I’ve seen remains something that I already knew existed; the passion and dedication of our members.

The E&W Committee are looking at how we can increase support at a local level. Getting new members involved remains the lifeblood of the Society. Those attending STEP’s global Branch Chairs’ Assembly recently will have heard the inspirational Tiger de Souza, Director of Volunteering at The National Trust, giving us an insight into increasing volunteer participation. I’m sure many will be implementing the lessons we learned from him.

2019 has been another year of significant policy developments. The planned increase in probate fees didn’t happen. This was due, in large part, to work done by STEP’s policy and communications teams and E&W former Chair Rita Bhargava TEP, whose persuasive arguments convinced the government to think again.

Many of our UK Practice Committee members’ terms are coming to an end shortly. We’re delighted that they have joined the new UK Advisory Group, which will replace the current committee. This will allow E&W to retain access to their collective knowledge, experience and capability for drafting the articles, practice notes and briefings that many of us have referenced over the years.

The UK Technical Committee, has continued to keep pace with changes to tax and legislation proposed by the government. Led by Robin Vos TEP, this committee has responded to a number of consultations on behalf of STEP. We’re lucky to have them overseeing the interests of our members and the public at large.

E&W Committee has been looking at embedding our standards for tax planning into our everyday practice. STEP’s Professional Standards committee are developing a toolkit that will enable you to demonstrate your compliance with these high standards. The first annual report, Professional Conduct in Relation to Tax, has been drafted and will be published imminently.

In September, Professor Stephen Mayson published his interim report regarding the review of legal services regulation in England and Wales. STEP has considered the proposals and Amanda Simmonds TEP and Rita Bhargava will be responding to the consultation on our behalf.

It’s been a good year for STEP, with 2020 shaping up with more exciting things to come. My thanks to Mark Walley and the STEP staff for all their hard work, as well as to the members of the E&W Committee.  Most of all, thanks to all the Society’s members and volunteers throughout E&W, without whom there would be no STEP. I look forward to meeting as many of you as I can throughout 2020.

 

Denese Molyneux TEP, Chair, STEP England and Wales Regional Committee

GDPR and trusts and estates: new guidance coming

STEP is aware that many members are looking for clarification as to how GDPR should be interpreted in the context of trusts and estates.

STEP’s Data Protection Working Group has made submissions to, and had discussions with, the Information Commissioner’s Office on this topic, and intends to publish guidance early next year (most likely in January or February 2020).

The topics covered by the guidance will include:

  • how to apply tests such as ‘number of staff’ and ‘turnover’ in the trusts and estates context;
  • the distinction between data processors and data controllers;
  • the extent to which GDPR applies to trustees and personal representatives acting in a non-professional capacity;
  • the legal basis on which trustees and personal representatives can process special category data;
  • the circumstances in which trustees and personal representatives should issue privacy notices to beneficiaries; and
  • the obligations on trustees and personal representatives when responding to subject access requests.

The Data Protection Working Group intends to add to this guidance in due course, including setting out views on matters such as the treatment of bare trusts and of attorneys and deputies.

Edward Hayes, Chair of STEP Data Protection Working Group

Meeting new friends and old at the STEP LatAm Conference in Sao Paulo

Enrique Martinez Guzman (right) I passed a busy few days in Sao Paulo last week at the STEP LatAm Conference, where I was representing STEP, together with our Chair, Simon Morgan TEP. The regional committee meeting and first networking reception set the tone for meeting many of our professional members, and it was a great pleasure to meet so many new faces.

The conference agenda ranged from the thought leadership of basketball legend Rick Fox on engaging with the new high net worths, and author and journalist Carlos A Montaner on populism in the new world order, through to practical case-study break-out sessions.

Among the highlights was the presentation of our second annual STEP LatAm Thesis Writing Competition to Enrique Martinez Guzman (pictured above, right) for his entry under the topic, ‘Tax consequences of transferring domestic and foreign property to a foreign structure’. Enrique will surely be a name to watch in the years ahead.

I was delighted to join Dayra Berbey de Rojas TEP to present the STEP Founder’s Award to two treasured members of the STEP family, John Lawrence TEP of the Bahamas, and Rosa Restrepo TEP of Panama.

In a show of support for the Bahamas during its recovery from Hurricane Dorian, members of the STEP LatAm Conference Committee presented a donation for relief efforts to Bahamas Minister of Financial Services Elsworth Johnson, raised from speakers who had generously waived their fees.

The final gala dinner was the perfect end to the knowledge exchange and networking, and made me reflect what a fabulous event this is and how well it supports the aims and mission of STEP in the region. It is also one that goes from strength to strength as membership in the region grows.

Our thanks to co-Chairs Ana Claudia Utumi TEP and Norberto Martins TEP, our sponsors, and the whole organising committee. I hope to see many of you again in Argentina next year. Will there be even more than this year’s 430 delegates next time? I would not be surprised.

Mark Walley is CEO of STEP

 

STEP attends Global Tax Advisers Platform conference in Turin

Emily Deane TEPSTEP attended the Global Tax Advisers Platform (GTAP)’s inaugural conference ‘Tax & the Future’ in Turin, Italy last week, alongside many leading European tax advisors. The event was hosted by the foundation of Confédération Fiscale Européenne (CFE) Tax Advisers Europe, which was celebrating its 60th anniversary (press release).

The GTAP was set up by the founding organisations, CFE, Asia Oceania Tax Consultants’ Association (AOTCA) and West African Union of Tax Institutes (WAUTI) in 2014 to facilitate networking links and enhanced dialogue between tax advisors throughout the world. Panel experts, including STEP’s Deputy Chair, David Russell QC TEP discussed a variety of prominent global issues including the future of global tax policy, the longevity of the global tax profession and business models and tax sustainability.

During the conference, the founding bodies of the GTAP signed the Torino-Busan Declaration, a binding document in which they define their main purposes: shaping the contemporaneous developments in the field of global taxation and ensuring the fair and efficient operations of national and international tax systems. GTAP sets out four key short-term priorities in the Declaration which include a focus on tax for growth, sustainable tax policies, tax and digitalisation and taxpayers’ rights and certainty in a fast-paced world.

The objective of the Declaration is to regroup the joint efforts of the GTAP members around these priorities, in order to draw attention on the need for recognition of the rights and interests of taxpayers, and the role of tax professionals.

STEP was a signatory to the Declaration and continues to promote the fair and efficient operation of national and international tax systems. A copy of the Declaration will be available on the CFE website in due course.

Emily Deane TEP, STEP Technical Counsel

Online probate applications update – Oct 2019

Rita Bhargava TEPHM Courts and Tribunal Service (HMCTS) recently organised a focus group, attended by practitioners from across the industry and representatives of various professional bodies, as part of its ongoing changes to the rules and processes around probate applications in England and Wales.

As Deputy Chair of STEP’s England and Wales Regional Committee, I attended the meeting on behalf of STEP.

As part of the meeting, representatives of HMCTS confirmed that the new online probate application process was scheduled to go live today, 1 October 2019. At present the system will be unavailable for more complicated applications, for example where the deceased was domiciled outside the UK or where an executor has lost capacity.

Practitioners who do use the online system will benefit from increased transparency around the status of their application; with a dashboard function tracking the progress of an application and showing which stages it has completed.

During the meeting a number of other key points were raised that practitioners may find of interest:

  • All law firms will have to apply to use the new online service, with applications being approved by HMCTS.
  • Practitioners will still be able to make paper applications. There will not be a specific time advantage to using one method over the other, as both paper and online applications will be progressed under the same timeframes.
  • HMCTS representatives have provided the reassurance that as part of the new system the original will is still going be ‘forensically’ checked by two officials.
  • When an application is made for a grant, a sealed copy of the will won’t be provided unless specifically requested. This will incur an additional charge.
  • All paper applications must now be sent via recorded delivery.

STEP will continue to monitor the changes to the Probate Service (as well as the ongoing situation around probate fees), and will provide further updates where appropriate.

Rita Bhargava TEP is deputy chair of STEP’s England and Wales Regional Committee

What’s happening in England and Wales?

Denese MolyneuxMy tenure as Chair of STEP’s England and Wales Regional Committee began in January and I would like to thank Rita Bhargava TEP for being such a hard act to follow. January also heralded the arrival of STEP’s new Chief Executive, Mark Walley. Mark has been quick to get his feet under the table and has ambitions to move STEP forward while keeping the organisation true to both its mission and vision.

The last England and Wales committee meeting pinpointed the areas that the committee felt warranted the most attention: raising the profile of TEPs in the public eye; education, career development and networking; educating professionals; and influencing government/policymakers. We are working on a plan to support and input into further work in these areas over the next year.

As detailed in Rita Bhargava’s blog in December, much has been done in recent years to raise the profile of TEPs in the public eye.  STEP’s Communications Team continue their sterling work with the ‘Talk to a TEP’ campaign and public-facing website, advisingfamilies.org, which continues to receive over 1,000 TEP searches a month.

The mammoth job of upgrading the STEP website is underway. The update will include a new member area, and a full site redesign, which should lead to big improvements and help you find exactly what you are looking for. The new site should be with us by January 2020.

The probate fees issue rumbles on. Rita Bhargava and STEP’s Policy Team have been leading the charge. Despite their best efforts, the government was, until very recently, pushing ahead with the Order. With recent political events, however, this is all looking a little less certain than before, and seems unlikely to come in much before the end of the year, and there is some speculation that, due to its unpopularity, it might not happen at all…  You can keep up with developments on the STEP Blog as they happen.

The EU Fifth Anti-Money Laundering Directive (5AMLD) is under consultation by the Treasury.  It is to the credit of our technical and policy team that they have pulled together such a comprehensive response to this consultation, and in addition have organised two roundtables with a number of senior industry practitioners to discuss the impact of the Directive in the UK. Watch this space for updates as they happen.

A hearing for the All-Party Parliamentary Group on Inheritance and Intergenerational Fairness was attended by a delegation from STEP in April. This APPG has held a series of hearings, some of which have helped inform recent recommendations in this area from the Office of Tax Simplification (see blog). We are hoping for more fundamental changes in this area, however, and look forward to recommendations from the APPG later this year.

And our Professional Development Team has a number of plans for the next year, not least the introduction of more flexible diplomas, enabling practitioners to tailor their STEP Diploma to better suit their specialisms.

Since joining the England and Wales committee six years ago, I have been constantly in awe of the amount of work that goes on behind the scenes, undertaken by committee members and the Head Office team, a fraction of which I have reported above. It is a pleasure and a privilege to work alongside so many dedicated professionals.

I look forward to updating you with further blog postings during my time as chair.

Denese Molyneux TEP, Chair, STEP England and Wales Regional Committee

STEP Employer Partnership Forum examines best practice in employee engagement

Speakers and others at our EPP ForumLeading industry practitioners speaking at last week’s STEP Employer Partnership Programme (EPP) Summer Forum discussed how to understand employee engagement, and put new ideas into practice. Particular topics for discussion included flexibility in the workplace, and understanding gender diversity and inclusion. The day was chaired by STEP CEO, Mark Walley and hosted by RSM at its London office. 

Feedback forms and focus groups

Janine Mayor noted employees can easily become disengaged or disillusioned with their roles, and that employers need to find a way to ensure that their people ‘walk into work each day wanting to give their best, and connect with the goals and values of their organisation.’

Key questions should include, ‘What are the relationships like in my organisation? Do people buy into where the company is going? and, Are they engaged with the business and recognised for their achievements?’ Janine recommended employee feedback surveys to understand their needs and wishes, noting that while managers cannot provide everything employees want, through training and good communication, they can effectively respond.

A clear and regular internal communications programme in place will let individuals know they are listened to, supported and recognised. In turn, they will feel part of, and engaged with, an organisation’s journey and goals.

Lorraine Wheeler TEP gave a case study of how her company is putting such steps into practice. She particularly highlighted the use of focus groups.

‘The views of the staff are the key benchmark for what needs to change in any company, and senior staff need to buy in to those views and the changes suggested,’ she said. ‘Focus groups bring inclusivity and also showcase cross-sections of the workforce, and the different needs of different employee demographics.’

Employees must have a ‘safe space’ in which to raise concerns, she added, and management needs to address them. ‘To engage them, they have to be involved, listened to, and taken seriously,’ she said, adding, ‘and then they need to see the results.’

Flexibility and gender diversity

The gender diversity conversation is more important than ever in 2019, as Bonnie Steiner TEP and Rina Goldenberg Lynch stressed in their discussion of workforce inclusion.

They discussed the unconscious bias still existing against women: assumptions that they can’t lead effectively, aren’t ambitious, or will abandon their careers once they have had children.

‘Gender diversity policies are vital to promote change, not just from the ethical perspective, but from the business perspective,’ Bonnie explained.

Aside from the moral implications of a bias against women in the workplace, as well as the possibility of legal complaints against gender non-compliance, the two presented the business case for companies promoting women to boards, from recruitment and retention, to business development and attracting new clients.

Moreover, a balanced male-female board will always show improved decision-making and corporate governance through the different perspectives brought to the table. 

Caroline McCague discussed the importance of increased flexibility: not just for women in the workplace, but for all employees striving to find a work/life balance, noting that too many organisations focus on the physical presence of employees in the office, rather than their goals and productivity.

‘Flexibility should be a strategic tool to supplement engagement, productivity, performance and cultural change,’ she said. ‘Creating a supportive working environment is about helping people to work in different ways as they all work towards the same organisational goals.’

Reviewing the day, Mark Walley said: ‘the Employer Partnership Programme is really important to us at STEP, as it reinforces the relationship between us and the employers of our professional members. We have a shared commitment to the professional standards that we develop, to the training and education undertaken to reach those standards and to the professionalism that is required to become and remain a member of STEP. Together, those elements provide consumers the confidence they seek and is why they come to STEP members for their advice.

‘Events such as the Summer Forum are a fabulous opportunity for EPP partners to come together, share best practice, discuss the issues that they are dealing with and take away actions they can implement right away. The levels of engagement were huge: thank you to all that joined the discussion.’

Helen Swire is News Editor at STEP.