Gaining a payroll qualification! - The Book-keepers Forum (UK)

Taffygirl · Member

Gaining a payroll qualification!

Shamus · Forum Moderator & Expert

Hi Sian,

All depends on the requirements of your professional body.

Sounds as though you are with the ICB who will be covering you for MLR so look at their rules as to what you are allowed to do. Because they have a payroll qualification I would imagine that they expect all members offering the service to have taken it otherwise they both lose out on an exam fee and they cannot state that all of their members offering the service are equivalent.

Conversely there is no reason that you could not leave the ICB and offer the service without a professional body. Provided that you do not offer any other bookkeeping, accountancy or tax services other than payroll processing I don't believe that you even need MLR cover (Site, please correct or confirm my view on that).

The above said, do you think that you can find enough clients to make a living offering just payroll services? Would your clients expect a more well rounded service? If you are considering specialising in Payroll you may be able to get some accountancy practices interested in sub contracting to you... That said, you will need to convince them that you are worthy of their trust so bit of a catch 22 at startup of how do you show competence without clients and how to get enough payroll only clients without sub contracting?

In short, I see no reason that you would need any licence provided that your professional body whoever they may be does not dictate that you need one and then the decision needs to be, do you need them?

Good luck with your new venture,

kindest regards,

Shaun.

Cheshire · Master Book-keeper

Hi Sian
Welcome to the madhouse!

Can you please pop your first name so that it appears on the signature bar under each post - via edit profile---> signature section.

Agree with Shaun that this is a question for your governing body, as failure to follow their rules can lead to some stringent sanctions.

The HMRC site states MLR is required for 'payroll agents that provide accountancy services and/or tax advice' be careful as the tax advice covers PAYE/NI kind of taxes in my book and also that of some of the governing bodies, although what Ive not done is drill down into HMRC to check that out further. Certainly if you do go it alone and consider this is not the case I would get a written ruling from HMRC as failure to comply can result in a whopping fine and at worst imprisonment - its really not worth it to save a bit of cash!

Obviously if your client is prepared to be your employer rather than a client then that is a different matter, but bear in mind by doing that they are carrying more cost in the business by having you on the books, but it does get round any potential IR35 issues given this is your only client.

On the Accountancy referral side that Shaun mentions - consider CIPP as a payroll qualification. Plus consider AAT as more widely accepted unless you are set with staying with the ICB for some reason.

edited to correct typos

-- Edited by Cheshire on Saturday 27th of May 2017 03:33:57 PM

Taffygirl · Member

Thanks for the reply. I'm not with any professional body yet, I looked at registering with HMRC but that's so expensive! I might ring them on Tuesday and see if payroll needs registering. In one sense I don't want to be employed as I want to branch off on my own. I thought I would need to be licensed as such. The payroll is just a start, with a view to doing an accountancy qualification, so being able to bring in some income whilst training.

Cheshire · Master Book-keeper

Its not so expensive in the second year, its just the initial admin fee that makes it look that way in year one.

One of the prof bodies says on their website MLR MUST BE held for ''payroll agents if they provide accountancy services and/or tax advice - for example, if they calculate the tax liability, earnings or payments that are made to a business employees or subcontractors'', but like I said contact to HMRC is a good idea, but dont take the word for the agents who answer the phone. You will fast learn that they know very little and the information cannot be relied on in the event of an inspection/HMRC case against you, the only time this can be so is if you get the answer in black and white from them.

Taffygirl · Member

Thanks everyone, I will ring them on Tuesday. I've looked at all the options like AAT and CIPP but they are so expensive! ICB purely seems to be the option to allow me to get started quickly if that makes sense. But I am so new to this. I found a sage 50 certification course on Groupon too, I've emailed them as it's not clear if this is for the exams etc.

Cheshire · Master Book-keeper

Out of interest what is the rush?

Bear in mind you will get more work from Accountants with the AAT qualification. Plus earn more in fees. You don't need to do the full levels up to level 4 if you want to be a bookkeeper.

Don't touch the Groupon course with a bargepole! It doesn't cover exams and despite it saying it's suitable for the uk, it's based on the us peachtree sage version.

Shamus · Forum Moderator & Expert

Taffygirl wrote:
Thanks everyone, I will ring them on Tuesday. I've looked at all the options like AAT and CIPP but they are so expensive! ICB purely seems to be the option to allow me to get started quickly if that makes sense. But I am so new to this. I found a sage 50 certification course on Groupon too, I've emailed them as it's not clear if this is for the exams etc.

I'm confused,

You said that you were looking at offering Payroll only but now you are looking at Sage 50 and ICB which seems that you are looking to offer a full bookkeeping service rather than simply Payroll for which your previous experience combined with a copy of either 12pay or Moneysoft payroll would have sufficed.

It may be that we were answering a different question to the one that you actually intended.

Looking at the larger option of becoming a bookkeeper I am, as always, with Joanne in that I concur AAT to be a great start point for any career.

If you are concerned about money to study AAT talk to one of the providers of AAT courses that offer all the way through to level IV as I believe that Government support is available via the 24+ advanced learning scheme (see here : https://www.aat.org.uk/aat-qualifications-and-courses/aat-qualifications/qualification-information/funding-options)

If I have mistaken your intent and you do intend in fact still seek to specialise in Payroll I would imagine that similar options will be available with CIPP but you would need to confirm that with them.

Good luck with whatever you choose but just be sure that you know what you are buying into, how the qualification is regarded in the profession and indeed whether those you may soon seek to leverage work from have heard of the qualification that you seek to acquire.

Do yourself a favour and study Michael Porters five forces analysis and apply it to the accountancy / bookkeeping services marketplace. Consider matters such as ease of entry, infighting amongst encombants, bargaining power of customers. Then make your decision based upon that, not whats cheapest / easiest / fastest.

Decisions can be rushed into all too quickly. Take some time to analyse things properly using Porter as a framework before settling upon yours.

kindest regards

Shaun.

p.s. if your Porters Analysis comes up with a different answer to AAT then you've done it wrong. Lol, just joshin (sort of) on that ps.

Taffygirl · Member

Hi,

Sorry I did mention in my initial post that I am looking to ultimately gain an accountancy qualification (long term career plan), my concern was whether I would be able to offer payroll as a service to my client (who is a friend) without it being in effect illegal (if i need a qualification or to be registered with a professional body). It would be a stepping stone to ensure I was operating legally by payroll being the quickest qualification to obtain - does that make sense? Otherwise if I dont need a qualification and I could operate without being registered then I would do that whilst doing the payroll and then gain an accounting qualification. Sorry if it makes no sense - it does in my head!

Cheshire · Master Book-keeper

Taffygirl wrote:
Hi,

Sorry I did mention in my initial post that I am looking to ultimately gain an accountancy qualification (long term career plan), my concern was whether I would be able to offer payroll as a service to my client (who is a friend) without it being in effect illegal (if i need a qualification or to be registered with a professional body). It would be a stepping stone to ensure I was operating legally by payroll being the quickest qualification to obtain - does that make sense? Otherwise if I dont need a qualification and I could operate without being registered then I would do that whilst doing the payroll and then gain an accounting qualification. Sorry if it makes no sense - it does in my head!

So what you mean is that you want to get a payroll qualification as this gets you working self employed quicker than doing Accountancy exams? So, just for the minute ignoring your other issues until you can get written confirmation from HMRC re MLR, what is your target market? (bearing in mind that you main competition is from existing qualified bookkeepers, Accountants and payroll providers/bureaux). Would this provide a living?

Also, and I've said this many many times on here, that working for a friend is fraught with danger. Never mind the strict professional ethics issues, it can potentially lead to a whole pile of bother and a fallout, because if you do something professionally wrong and they end up with fines and penalties because of it, then they suddenly forget that you have been pals and wouldn't be afriad to sue. So get yourself some good PII if you must work work with them.

edited for typos

-- Edited by Cheshire on Saturday 27th of May 2017 11:23:07 PM

Shamus · Forum Moderator & Expert

You will forgive the confussion but in the first post it did seem somewhat mixed up in that you mentioned ICB and accountancy in the same paragraph.

Being a student of accountancy bodies such as ACCA allow members to offer bookkeeping to trial balance, VAT and Payroll services but are otherwise very restrictive over what members are allowed to do. I'm not suggesting that you pursue ACCA just using their rules as an example.

AAT is a crossover qualification where people who attain MAAT MIP are considered to be accountants.

You need to determine exactly the services that you foresee eventually offering then look for the body / qualification most suitable to that end and then look at whether you would be allowed to practice payroll whilst training under than professional bodies rules.

The only way that anything that you do could be considered illegal is if you need MLR cover and do not have it. Everything else is being in breach of a professional bodies rules and regulations which they can fine you for under your membership of that body but has no actual basis in law.

The warning there is to be very careful that you have chosen the right professional body for you and understand their rules and regulations before becoming a part of them.

Take some time to consider AAT before deciding on anything higher or lower. You never know, if you do decide to move up to one of the higher accountancy qualifications AAT is very well considered where some others that claim equivalents are not recognised at all by the big boys.

I good measure to see how well a qualification is perceived is the enter into a Reed job search and see how many hits you get for the UK. (just did it for you. ICB came back with 7... AAT came back with 3,357... ACCA came back with 8,722).

Now, the arguement there is that ICB people are geared towards self employment... But so equally it can be argued are AAT one's.

Whichever way you go is completely your choice, just take your time over it and make your decision wisely as mistakes over choice of professional body can be costly to unwind.

Shaun

Shamus · Forum Moderator & Expert

Lol Joanne,

I've had family members that I've stopped talking to before let alone friends!

Golden rule of acting : Dont work with Children or Animals
Golden rule of Accounting : Don't work with friends or family
Golden rule of business : If you find yourself tempted to set up a partnership seek psyciatric help immediately

Cheshire · Master Book-keeper

HMRC notice extract -

3.6 What types of businesses will be covered?

Businesses covered include:

accountants
auditors
tax advisers
book-keepers
payroll agents
tax consultants
customs practitioners
stock auditors
interim managers undertaking any of the activities of the businesses listed above

unless you are already supervised by the FCA or a professional body listed in Section 8 of this notice for the purposes of the MLRs 2007.

3.21 What businesses providing payroll functions wont be within the scope of the MLRs as ASPs?
Businesses wont fall within the scope when they:

provide software or hardware service support that enables the processing of payroll information providing they dont analyse or prepare financial information
undertake payroll functions in relation to temporary workers they supply to or manage for a third party
pay invoiced service fees to self-employed individuals, umbrella companies, partnerships or other corporate service providers
are umbrella companies, managed service companies, or similar bodies and undertake payroll functions for employees working on assignments for end user clients
provide recruitment or human resources management services (such as employment businesses supplying or managing temporary or contract workers) where payroll functions are incidentally undertaken as part of the providers overall business.

----------------------------------------------------------------------------------------------------

Also, direct from gov.uk for needing to register for MLR

The services they provide can be recording, reviewing, analysing, calculating and reporting on financial information for other people. This includes:

professional bookkeeping services
accounts preparation and signing
tax advice, for example:
- help with completing and submitting tax returns or duty claims
- advice on whether something is liable to a tax or duty
- advice on the amount of tax or duty that is due

--------------------------------------------------------------------------------------

You would NOT fall under any of the above exclusions by undertaking the payroll.

You will at some point get into conversations about tax eg employment allowance.

You will be recording, reviewing, (possibly analysing), calculating and reporting on financial information for other people. The tax and Ni is not calculated by your potential client. (Also be aware that you should be ensuring as part of your duty of care that the staff are getting the correct pay - ensuring minimum wage and holidays are part of that process)

You will be completing and submitting the payroll tax returns as part of the payroll process under RTI ( I am assuming RTI was in full force when you had your own business - if not and you are not aware of it, shout out)

To get the definitive answer you have to have it in writing from HMRC or its not worth a jot.

Out of interest - does your pal have software that you will use, or is this something her existing Accountant/Bookkeeper undertakes for her? What software will you be using?

Edited to sort the weird font formatting out (Still a bit odd!)

-- Edited by Cheshire on Sunday 28th of May 2017 10:35:17 AM

Taffygirl · Member

Lol! Sorry everyone! Luckily my friend lives the other side of the country from me. I don't plan on giving her any advice other than processing her payroll for her, timeframes etc are all down to her - does that make sense. It's a long term plan, I don't need to make a living more of pocket money. I home educate 4 children so it's something for me when my children have left education and I have to wait 10 years for hubby to retire. I specialise in early Years so my market would be day nurseries really. I will ring HMRC on Tuesday, I will also have a good look at AAT, I did start ACCA 6 years ago but had an opportunity for another nursery so took that instead.

Shamus · Forum Moderator & Expert

Good, you have experience of four year olds so you are now ready for the self employed... They may not be so well behaved, they will be prone to tantrums, do the opposit to what you tell them to and refuse to share anything (that includes invoices, receipts, bank statements)... Also, apparently we're not allowed to hit them cry .... Good news though, they pee themselves far less.... Although I believe that there have been some close calls on that one whilst I've been reviewing clients expenditure. biggrin

Specialisation is good but don't underestimate how crowded the market is or assume that everyone in business wants or needs a bookkeeper. Before you start consider from the outset whether you will ever make from it the amount that you will need to invest in training, insurance, professional memberships, software licences and advertising (trust me that many don't. The one's making the money are more often then not the one's selling the picks and shovels, not the one's digging for gold).

Never believe anything that anyone who is trying to sell you something tells you. No "professional" body or associated training company will attempt to tell you how much you may make or how many clients are crying out for your services, they will concentrate on how much you will learn. What you can make with that knowledge is down to you.

Good luck no matter which route that you take... But stay away from my Play Therapists or there will be drive by shootings wink ,

Shaun.

Cheshire · Master Book-keeper

Lol Shaun but so true.

Actually Sian you might find that is a good niche to have, once you are up to speed and with a good qualification behind you (#). Tag on restauarants and you could be on to a winner - only if you get the charging basis right for the extra time you will spend on it. Those sectors payroll drive me crazy with the number of staff changes, changes in hours/shifts and rotas, pro-rata stuff, statutory stuff, tips, plus the ever painful AE and all that malarky, so even when the job is handsomely paid I really carnt be ar*ed with it (anything for a quiet life), but as youve had experience of all that in a former life, it should be a less painful one for you to deal with.

# I say about the qualification here - if I was to offload such (to me) painful sectors, by way of sub-contracting out of course, such payroll it would be to someone qualified. There might be a few one man bands Accountants who might wish to do the same as me, albeit the two man and above type firms will of course have their own inhouse payroll person.

Taffygirl · Member

"Good, you have experience of four year olds so you are now ready for the self employed..."

I'm not sure they are so different to be honest - the 4yo's were the easiest to deal with, it was the parents.

I know they are two worlds apart!

Thanks Joanne, I've sent emails over the weekend to AAT, will make some phone calls this morning. My local college is running a Level 4 in September but they require me to have Level 3 first, So i'm speaking to everyone this morning (including hubby). I know it won't be cheap but its a long term plan, so prepared to do what is needed.

Thanks everyone I will be back!

Shamus · Forum Moderator & Expert

Taffygirl wrote:
"Good, you have experience of four year olds so you are now ready for the self employed..."

I'm not sure they are so different to be honest

Which surely was the whole basis of my joke.

Tut. I'm wasted on this audience.

biggrin

Cheshire · Master Book-keeper

Shamus wrote:
Taffygirl wrote:
"Good, you have experience of four year olds so you are now ready for the self employed..."

I'm not sure they are so different to be honest
Which surely was the whole basis of my joke.
Tut. I'm wasted on this audience.

I got it. Don't give up entertaining us, your funnies and Johns one liners keep us going, even if we are groaning at some of the jokes at the same time. wink biggrin

Cheshire · Master Book-keeper

Taffygirl wrote:
"Good, you have experience of four year olds so you are now ready for the self employed..."

I'm not sure they are so different to be honest - the 4yo's were the easiest to deal with, it was the parents.

I know they are two worlds apart!

Thanks Joanne, I've sent emails over the weekend to AAT, will make some phone calls this morning. My local college is running a Level 4 in September but they require me to have Level 3 first, So i'm speaking to everyone this morning (including hubby). I know it won't be cheap but its a long term plan, so prepared to do what is needed.

Thanks everyone I will be back!

Hi Sian

Dare I ask why level 4? Do you have some accounting experience (not mentioned)? Normally you would start at level two as this provides the building blocks necessary, notably the double entry. I think with you having run a business you might find some of the other subjects too easy but the double entry side is key, so you can get round that in other ways (books, others courses just coving that), but would suggest you could start at level three. Best way to find out is to sit the skills test on the AAT forum itself, print off your responses and keep them for a training providr as proof.

On the 'local' college issue, choose very carefully. There are clearly some good ones out there, but thee are also some absolutely dreadful ones. I hear a lot of people let down by lots of different colleges, one eg only 5 out of a class of 37 passed one of the level 3 exams. Now the 32 can't all be bad pupils can they! Don't go with AAT approved ones alone either, because they have HLC or whatever they are called these days on their books and again, I've heard horrendous stories and had a bad experience myself many years ago with them.

So check out independent reviews. Or consider distance learning. You can do pure go it alone, cheap as chips, or have a mix of recorded lectures, books and tutor support or even attend lectures from home. Priced accordingly. Also the likes of BPP, kaplan and first intuition do classroom based and as they are more geared to provision of a variety of Accountancy courses they are better prepared than local colleges. There are smaller firms too, sure one or two might wander in to this conversation if they see its now AAT based. But check out the award winners page on here for a start. Distance learning with the first two options don't restrict you as to when you can do and finish the course, so it's much quicker and of course generally cheaper.

Shamus · Forum Moderator & Expert

I'm still taking "Some" rather than "All" as thunderous audience approval biggrin

Morning Joanne. The four year olds analogy has given me new inspiration for a business owner reeducation program :

biggrin Image result for dunce facing corner

Taffygirl · Member

it was too early in the morning!!! lol! Nah I got it don't worry!

Taffygirl · Member

Joanne, The skills test come back as level 3 for me, so I need to look at that one first. I wont deny double entry continually confuses me! I do have background, I did my own books (albeit a softare system) and sent it all off to my accountant at the end of the year. I've done loads of basic bookkeeping courses but the skills test flumoxed me!

I have to finish off a free 4 week OU course on basic bookkeeping and accounting lol - surely that means I can go out into the big wide world alone.

I saw one of the companies did the self -study packs with all the books, tests etc but no online support, which doesn't really bother me - would you suggest that as a way to go (level 3) I remember when I looked at ACCA years ago that it is beyond confusing as so much out there!

Cheshire · Master Book-keeper

Taffygirl wrote:
Joanne, The skills test come back as level 3 for me, so I need to look at that one first. I wont deny double entry continually confuses me! I do have background, I did my own books (albeit a softare system) and sent it all off to my accountant at the end of the year. I've done loads of basic bookkeeping courses but the skills test flumoxed me! So start at level 3. Nail the double entry or this will come back to bite. Use of software even just for bookkeeping (especially for clients) needs this and its fundamental. Some good books for such recommended by Shaun in the past on here - have a trawl round the site - certainly some on the sticky posts about training will mention them.

I have to finish off a free 4 week OU course on basic bookkeeping and accounting lol - surely that means I can go out into the big wide world alone. LOL

I saw one of the companies did the self -study packs with all the books, tests etc but no online support, which doesn't really bother me - would you suggest that as a way to go (level 3) I remember when I looked at ACCA years ago that it is beyond confusing as so much out there! Depends who you go with, which were you looking at?. Try First Intuition or Kaplan. Certainly with the former you can add on the lectures if needs be, not sure about the latter re the add ons. (Speak to Nick Craggs at First)

Taffygirl · Member

It was first intution, thats handy to know you can add on the lectures if needed! Yes I need to master the double entry. I'll have a look through the sticky posts and see what I can find - thank you

Artois · Guru

Taffygirl wrote:

I saw one of the companies did the self -study packs with all the books, tests etc but no online support, which doesn't really bother me - would you suggest that as a way to go (level 3) I remember when I looked at ACCA years ago that it is beyond confusing as so much out there!

Hi Sian

Welcome to the forum.

As Sean and Joanne have said you should definitely consider AAT

I did AAT Level 2 through a training provider but then self-studied for Levels 3 & 4 which worked out so much cheaper, although you get no online support (not that I got a lot from the training provider during Level 2) you will still be able to access all the study support from the AAT website as you will still have to subscribe to this to enable you to take the exams, I found this invaluable.

I used Osborne study books and these cost about £20 for both the tutorial book and workbook, why not have a look online as you used to be able to view some sample chapters without having to order.