07th October 2015
Corporation Tax – what you need to know (and more…): 18-19 November, Leicester
As charities, UK HEIs are able to benefit from a range of very generous statutory exemptions from corporation tax on chargeable gains and income, and in practice, most HEIs will not pay any corporation tax. However, the devil is in the detail and, because charities do not enjoy a ’blanket exemption‘, UK HEIs must be capable of identifying any income which gives rise to a corporation tax liability and preparing (or working with advisers to prepare) a tax return where either such a tax liability arises, the university has submitted an R&D Expenditure Credits (RDEC) claim, or HMRC have requested a return.
This practical event is for BUFDG members who need to understand corporation tax as it applies to universities and their subsidiaries in order to become more proficient at managing corporation tax, preparing CT returns and RDEC claims. The CT guidelines were updated in 2014, with some further draft revisions in 2015. This event will therefore be suitable for those seeking a refresher and/or update on changes, those who are new to the HE sector, or those who are VAT specialists whose role has changed to incorporate CT.
The course runs over two days, but is broken down into various parts and delegates can book for any or all elements of the course. The course will cover:
- Just what does the university’s corporation tax exemption cover? (Day 1)
- What kind of activities could be taxable in the university? (Day 1)
- What about income from outside the UK? (Day 1)
- How do I analyse my university’s activities for corporation tax purposes? (Day 1)
- In practice, how do I prepare and submit a corporation tax computation and return for my university? (Day 2)
- In practice, how do I prepare and submit corporation tax computations for the university’s subsidiary companies? (Day 2)
- In practice, is it possible to manage the tax position of the university’s subsidiary companies? This will include considering Gift Aid and Group Relief. (Day 2)
The presenters for the day will be Harriet Latham, Tax Manager at The Open University and Kerry Sykes, Head of Tax, University of Cambridge. The venue is College Court Conference Centre, Leicester. Places are limited to 25 so early booking is recommended. The cost per delegate is £625 for both days, or £350 for day one or day two. To book, visit the BUFDG Eventbrite page.
Future student numbers could go up or down...
The difficulty in predicting future student numbers has been highlighted by a recent blog post by HEPI director Nick Hillman. He points to a relatively-unreported commitment made twice by the government to nearly double the proportion of the most disadvantaged young people going to university, to 28% by 2020. Mr Hillman expresses surprise at the lack of coverage the target has received. He writes, it “is so bold that it is fair to ask how the change will be achieved, given the forthcoming abolition of maintenance grants, which will mean the poorest students emerge from higher education with the largest debts, the recent decline in part-time study, and the big expansion of apprenticeships”.
The current prediction from the OBR is that there will be just 1,000 extra students by the end of the current parliament, a claim Mr Hillman describes as ‘absurd’. His evidence for the figures not adding up is former Universities Minister David Willetts, speaking at a fringe event at the Conservative Conference, who said that “if everyone had the entry rate of the highest quintile, the numbers entering higher education would be much higher: 570,000 in 2011–12 instead of the actual figure of 368,000”.
The Times Higher reports on the same event, called ‘University: is it worth it?’ where Mr Willetts criticised some Conservative colleagues on their stance on mass HE. He said, “You would sit next to people at Tory events and they would say too many people go to university. [I would say] so how many kids have you got? How many of them went to university?” He added: “If there are too many people going to university, Conservative areas are the culprits”.
It's good to be challenged (or how to save 4% and reduce corruption risks by half)
A recent study by the Electoral Reform Society makes an interesting case for more challenging and dissenting views and greater accountability when driving efficiency. It shows how complacency can lead to inefficient spending, as “Councils dominated by single parties could be wasting as much as £2.6bn a year through a lack of scrutiny of their procurement processes”, compared to their more electorally competitive counterparts. The £2.6bn accounts for between 1 to 4% of all contract values. The study also used a huge data exercise to show that less electorally contested councils were at up to 50% greater risk of corruption and fraud than more contested ones.
Although related to a different sector and methods of accountability, it certainly raises questions about the importance of effective monitoring and scrutiny. Supply Management covers the report from a procurement angle, and the full report can be read here.
HEFCE Audit Committee vacancy
HEFCE is looking to appoint a new member to its Audit Committee. The Committee supports both the HEFCE Board and the Chief Executive as Accounting Officer, by giving them independent assurance about internal control, risk management and corporate governance. The Committee’s remit includes both HEFCE and those institutions and bodies that receive HEFCE funding. The successful candidate will have significant experience of working in the higher education sector at a senior level.
Further information can downloaded from the HEFCE website or requested by email. To apply, send a one-page application statement addressing the person specification contained in the information pack to this email address, accompanied by an equal opportunities monitoring form. The deadline for applications is 31 October 2015.
Are your 'essential' vacancy criteria really that essential?
Despite the best efforts of universities and their recruitment agents, and the wide range of technology at their disposal, it can sometimes still be a challenging (and occasionally fruitless) effort to recruit the right people to vacant positions. A recent article in Supply Management magazine suggests a potential issue; that employers may be too hasty in setting restrictions on potential candidates that may discourage them from applying, despite them being otherwise perfectly-suitable.
The author is a driven procurement contractor with 10 years’ experience, who was ruled out from applying for a post because the employer had specified that they only wanted candidates with permanent employment in their work history. It’s a useful reminder to ask yourself whether the ‘Essential’ elements you add to the column in the job specification really are essential. See if you can imagine someone who excelled in all other areas, but didn’t fulfil that one particular criteria. Would you really not want to interview them? It might require a little more work, but you may find that by relaxing or reframing particular criteria, you end up with a more successful appointment process.
Networking Events for Deputy Finance Directors
Just a timely reminder that there are a number of Deputy Finance Directors meetings scheduled to provide an opportunity to network with each other, share best practice and hear from engaging speakers. New attendees are always welcome!
Northern meeting - Wednesday 4th November, Durham. View the draft agenda and secure your place using the Eventbrite link here. Arrangements are also being made for accommodation and an evening meal the night before – please email Antonia Barton to register your interest.
Midlands meeting – Wednesday 9th December, Birmingham. Only a few places are left, reserve your spot here.
London and the South East – Thursday 3rd December, Central London – fully booked with a waiting list enabled!
Details of other regional events will be publicised in due course, in the meantime if you have any queries please contact Siobhain.
Do all your contracts clearly allocate risk?
Earlier this year we warned HEIs via the Fraud boards of the increased fraud risk to institutions of the move to internet-connected phone systems. An institution was the victim of 'phone hacking', where fraudsters took control of the system and then made large numbers of outgoing calls to premium-rate phone lines, in which the fraudsters had a financial stake. There's more information on how this works here.
A related case has now appeared in an article on East Midlands business link, which also highlights some of the legal implications of the issue, and makes interesting reading. The court case revolved around the issue of the allocation of risk in the contract, and emphasised how important it is for all contracting parties to agree and clearly define where liabilities lie. The article helpfully reminds us that:
“Any contract should state:
- The nature of the service being provided
- Who bears responsibility for the cost resulting from fraudulent activity
- Whether liability to pay the relevant charges for the service arises because it has been made available to the customer (irrespective of who uses it) or only if and when it is used by the customer
- What specific requirements as to system security the customer has and how these can be satisfied”
Immigration uncertainty continues in conference season
The last few weeks have been party conference season, and HE-related comment has been fairly thin on the ground. Martin McQuillan, Pro V-C Research at Kingston University has a round-up of the Labour conference on the Wonkhe website, while the THE’s John Morgan has blogged this week from the Conservative Party conference in Manchester.
Perhaps the biggest news relates to the continuing battle over immigration, and the consequences of the government’s stance for international students and universities. A few weeks ago Andy Westwood wrote on the potential softening of government rhetoric and policy on student migration, but Home Secretary Theresa May used her speech at the Conservative conference to shore up her position, particularly mentioning the need for students to remain within total migration targets, despite apparently losing support on the issue from the Prime Minister. Universities UK has responded to her speech, saying that as long as “genuine international students in the UK continue to be caught up in efforts to bear down on immigration, it will feed the perception internationally that the UK is closed for business and does not welcome students”.
Introducing “Future Professional Directors” a Development Programme for Aspiring Leaders
Future Professional Directors (formerly the Future Leaders Programme) is an enhanced leadership development opportunity for professional service staff, aspiring to director level or equivalent.
Delivered by the Leadership Foundation for HE (LFHE), Future Professional Directors includes three core modules, running over nine months from March to November 2016. Booking will open on Thursday 8 October 2015. To find out more please visit: www.lfhe.ac.uk/fpd.
Throughout the programme the emphasis will be on leading change, developing strategy, inspiring commitment and strengthening engagement. Integrated into the programme will be the opportunity to reflect on the core skills that really position individuals as leaders; aspects of personality and style, interpersonal influence, creating impact, team development, transforming relationships (conflict), organisational politics and coaching colleagues along with personal resilience.
BUFDG are representing Finance teams in the development of this programme along with other HE sector associations. By working in partnership with the LFHE and others, we can ensure the new programme provides relevant leadership development for aspiring Finance Directors to develop the skills needed to lead a professional service.
Modern Slavery Act
As you may be aware this new piece of legislation is due to come into force in October (date yet to be announced). You can find here an excellent informative article written by Martin Vincent of Weightmans which gives more background to the act and what HEIs need to do to comply. Whilst Weightmans (and others) believe that this act will apply to HEI’s this has not yet been confirmed; I contacted the home office who advised that the sector should seek legal advice. Please be aware that the public contract regulations definition of "public sector" will not be the same as the definition relevant to this Act.
Whilst the government has confirmed that it will issue clearer guidance following its launch, the requirement on HEI’s will be to provide an annual “slavery and human trafficking statement” on the home page of your website. Additionally there may be a requirement to ask questions of suppliers during the tender process, however again this is to be determined.
To read the act in its entirety please click here. Part 6 point 54 details the requirements relating to supply chains.
I will be working with Martin Vincent on a further document confirming if HEI’s will be required to comply as soon as the government issues its advice. If you have any specific questions please do get in touch.
Job of the Week
The Job of the Week is for a Deputy Payroll Manager at the University of Gloucestershire. Applicants “will be required to be hands on, have a flexible committed attitude to delivering accurate payroll services”... “and must be fully up to date with legislative changes and preferably have some knowledge of defined benefit pension schemes”. The deadline for applications is the 28th October. As usual, there are lots of other sector vacancies listed on the BUFDG jobs page.