BUFDG Digest 12 January

BUFDG

Welcome back to our first Digest of the New Year! In case you missed the last one before Christmas, you can find it here. It included news of Brexit-related changes, the most recent Chair’s Quarterly, public procurement news, research finance, and much more. 

For anyone new to H E Finance (or anyone else who needs a refresher on some of the basics), we recently refreshed our 'Intro to H E Finance' e-learning course. And not only that, it is also now the first of our e-learning courses to have undergone a rigorous accessibility audit and it has received subsequent improvements to make it as accessible as possible. The course gives a high level overview of higher education finance, looking at the H E sector, where H E money comes from, how it is spent, governance and reporting. You can access 'Intro to H E Finance' on our e-learning platform (linked from our e-learning page), along with 38 other H E finance related e-learning courses.

If you haven’t done it yet, why not take the opportunity to sign up to the BUFDG Finance Festival, taking place online from 14-16 March? It’s free to all BUFDG members, and features a fantastic line-up of challenging, informative, and entertaining speakers from the finance world and beyond.

And, if you read one ‘extra-curricular’ thing at the start of 2022, why not make your peace with uncertainty, as Wonkhe editor Debbie McVitty suggests? In her first article of the year, she writes that for HE, “the illusion of certainty may be more dangerous than confronting the reality of ambiguity”. As a result, we should “admit that nobody has a total grasp of what is happening” and focus on “exchanging information and ideas in hopes of shaping the general trajectory that change should take and finding workable ways forward”.

ESG / INVESTMENT

There is no shortage of reading material for those looking to find more about the three little words (environmental, social, governance) that are creating vast amounts of comment at the moment. Whether you see it as an ‘ESG frenzy’ or rather a proportionate response to the human world’s greatest ever challenge, there is a “growing cohort of disillusioned veterans [are] speaking out against efforts by corporations and investors to address an overheating planet, income inequality and other big societal problems.”

UBS is hosting a Time to Talk on 16^th February, looking at endowment investing, how it can be used by HEIs, and how it might fit with a sustainable or values-based approach. The session is specifically aimed at CFOs, Deputies, Treasurers and Investment Managers at universities/colleges with £10m+ of investible assets - although other institutions are very welcome. It will be hosted by Tom Dupernex, Head of Charities at UBS Wealth Management, and on the panel will be Andy Goor, Chief Financial Officer at the University of St Andrews, and Richard Turnill, Bursar at Trinity College, Cambridge. Andy and Richard will bring genuine university insight into an endowment investing approach, and there will be plenty of time for Q&A. For more information and to book, click here.

Andrew Connors, Head of HE at Lloyds Bank has written a blog for HEPI to make the case that HE and finance need to work hand-in-hand to not just meet the sector’s own commitments, but to help broader society to meet its environmental targets.

Andrew Hewett, Director of Finance at Manchester Metropolitan University & HEPA Chair plus Shakespeare Martineau ran a great webinar focused on ESG last month. You can re-watch the session here, access Andrew’s slides on  'Environmental, Social and Governance issues in Higher Education', and Smita and Udi's slides on 'Embedding ESG in Higher Education'.

TAX

HMRC issued a number of updates during the Christmas break - Andrea has summarised the relevant ones in this article.

The proposals in the draft Welsh Budget for 2022/23 keeps the Welsh Rate of Income Tax (WRIT) at 10%.  The CIOT comments that whilst the 10% remains, most Welsh taxpayers will see their income fall due to the increase in NIC (for the Health & Social Care Levy) from the start of the 2022/23 tax year.

The Scottish Government has published its First Framework for Tax. This gives a comprehensive summary of what and how taxes are devolved, and the processes and stages that the Scottish Government goes through when making tax changes. More info can be found here.

The government has published a call for evidence to ensure it has an up-to-date and well-informed view of how the umbrella company market operates.  You can read through the consultation and respond directly or provide your comments to Julia, who will feedback all members’ responses on behalf of the sector.  The consultation closes on 22 February 2022; if you have any comments, please provide to Julia by 31 January 2022.

CIOT has commented on the tax announcements in the Scottish budget.  They note that increasing the starter and basic rate bands with inflation means that Scottish earners will pay more income tax than the rest of the UK if they earn more than £27,850 (previously £27,393), but less than previous years due to the expansion of the tax bands.  However, it also notes that due to the Health & Social Care Levy, any reduction due to the expansion will be wiped out.  Those earning less than £27,850 should benefit slightly than those in the UK because of the 19% starter rate.

As of 30 December, How to make due diligence checks for Plastic Packaging Tax has been added to the range of guides covering the new tax. You can find all the rest of the developments on this page.

EMPLOYMENT TAXES

Due to the risk in Covid cases, the Government has re-introduced the statutory sick pay rebate scheme (SSPRS).  The scheme only applies to employers with fewer than 250 employees and reimburses the cost of SSP for covid related absences for up to 2 weeks per employee.

HMRC have asked BUFDG to share this message with our members in relation to the Health & Social Care Levy and, in particular, what payslips should show.

Government grants supporting individuals purchasing an electric car have been reduced from £2.5k to £1.5k with the price of the car capped to £32k (removing most executive cars). Wheelchair accessible vehicles however, retain the £2.5k grant and higher £35k price cap. Plug in Van Grants are now £5k for large vans and £2.5k for small vans. Electric motorbike grants are £500 with mopeds at £150, and both have a £10k price cap.

When calculating car fuel benefit, the cash equivalent will be increased from £24,600 to £25,300 from the start of the 2022/23 tax year. Similarly, the cash equivalent the fuel benefit for a van will increase from £669 to £688 and the cash equivalent for the benefit in kind charge of a van increases from £3,500 to £3,600.

In our last CJRS update, we advised that HMRC had updated their guidance with information on how to correct overpayments.  On the back of that update, HMRC have issued guidance on penalties if you received a grant but were not eligible or you’ve been overpaid.

Over 200 businesses have been named by the government as failing to pay their workers National Minimum Wage (NMW), costing approximately £1.2m.  Whilst the list did include a few multinational companies, the majority were small consumer facing industries (retail, care homes, hotels, restaurants).

Julia has been watching parliamentary Finance Sub Committee meetings held in December on the subject of the off-payroll working rules. Her highlight is the meeting held on 13 December where the committee members grilled representatives from the Treasury and HMRC on the problems with IR35, HMRC’s position and CEST tool, the unintended consequences (pushing people into umbrella companies) and the effect on the economy. Lucy Frazer (the Treasury’s financial secretary) defended HMRC’s IR35 CEST tool but admitted that the 2017 rules had been ‘a little rushed’. If you’re interested in how IR35/off-payroll working may develop over the next 5-10 years (a small but crucial subset of HE staff!), it’s a must watch. 

The guide on Checking how to declare personal goods you bring into or take out of the UK is a useful summary to refer staff to when they are travelling to or from overseas and taking/bringing personal items with them.  The guidance covers private vehicles, personal effects, gifts, horses and pets, and household items.

Confirmation that SI 2021/1421 increases both the blind person’s allowance and the married couple’s allowances in line with inflation, taking effect from the 2022/23 tax year. Blind person’s allowance is £2,600; the Married couples and civil partners (1935) allowance minimum amount is £3,640; while the Married couple’s allowance (2005) is £9,415 with upper income limit now £31,400.

The most recent full Tax newsletter can be found as usual on the BUFDG website.

PROCUREMENT

Achilles and Prof. Sue Arrowsmith held a webinar before Christmas focusing on Reforming Public Procurement in the UK, which covered the new public sector procurement legislation in detail. colleagues who missed the session can download the slides here. The Cabinet Office also ran two webinars in December running through the next steps of the Transforming Public Procurement Programme (catch up using this link). It will be running an additional (and final) webinar on the same subject on 13 January at 13:00, for which you can register here.

A big thank you to all members for their time and input into the Time to Talk webinar exploring Purchasing Cards (access the recording here), and to Paul Allison of CCS for sharing his knowledge and expertise. You can download a copy of Paul’s slides here, including links to further informative webinars as well as further details on Barclay’s proposal for CCS.

The Cabinet Office has published a new “Gold Standard” to improve public sector construction projects. This follows on from the publication of the Construction Playbook earlier this year. The new standard aims to tackle waste, secure value for money and drive innovation, and will have to be met by all future construction frameworks, with action plans to improve existing frameworks. Click to read the full review, including its 24 recommendations.

You can catch up on all the latest HE Procurement news in the most recent HEPA newsletter.

OTHER

UUKi has just published its International Facts and Figures for 2021. It might be useful for a whole host of reasons, not least when looking at what countries your staff or students may be visiting, working in, or attending from, with all the tax and other implications that may involve. It includes information on: where international students come from & where they study in the UK; where international staff come from (spoiler alert, mostly the EU) and what they do; an overview of the provision of UK Transnational Education and; which countries are the UK’s top collaborative partners.

Following November’s ATFS Bulletin on debt related interest-rate management, December’s issue returns to a payments theme, with an update on Secure Customer Authentication (SCA), which in one way or another will impact on all of us. The bulletin has been put together by a new team member, Carl Fleet, who joined ATFS at the start of the month from Elavon. Carl’s appointment allows Tim to confirm 31st March as his last day before retirement. There’ll be plenty of time to say goodbye before then – not least at the ATFS session at the BUFDG Finance Festival in March. As always, if you have any questions on this or any other bulletins ATFS have produced, you can connect via the ATFS Supporter Directory page.

UK universities have a key role to play in the UK’s economic recovery after the pandemic, while also needing to make the most of the investments made by students and the public. These challenges require up-to-date technology, yet expectations change frequently, and the longer a university waits to add new capabilities, the more it costs to catch up. In a new BUFDG blog post, Oracle’s Nigel Thomas explains how the technology infrastructure at universities might make improving institutional efficiency and effectiveness difficult, and what one of the solutions might be.

UCEA’s latest blog, When it comes to pensions, even UCEA’s infographics aren’t easy on the eye is written by Emelda Nicholroy, UCEA’s Head of Pensions Policy. It takes the reader on a whistle-stop tour of the current sector’s pension scheme contribution rates and explains how the latest UCEA infographic can help member HEIs illustrate the rising cost of the pension schemes.

For Universities using WPM as their online card payment platform, the announcement before Christmas of its acquisition by Flywire may have come as a surprise. Congratulations to Holger and the team at WPM, as well as to our more recent acquaintances at Flywire! Hopefully this will maintain and enhance the excellent services and products experienced by the UK HE sector.

Finally, our Job of the Fortnight is for a Head of Financial Planning and Analysis at the University for the Creative Arts.  As a member of the finance senior management team, the successful candidate “will assist in the review and implementation of the operational and finance strategies, whilst taking the lead on the Management Reporting, financial planning and forecasting”. To find out more about this exciting opportunity to lead, shape and development financial business partnering services at the University, click here. The deadline for applications is 19 January.