9th February 2021

By Valerie Steward, compliance expert and Lifecycle partner

The true impact of COVID-19 on businesses and the economy has yet to become apparent, but the latest official forecasts suggest that the £270.8billion public sector borrowing in the financial year to December 2020 could, in fact, reach £393.5billion by the end of March.

Add to this the number of accountancy deadlines that also fall that month – deferred VAT payments, Corporation Tax payments for the year ended May 2020, as well as NICs and PAYE deductions – and there are lots of changes to processes and timings, making it pretty difficult to keep on top of things.

So, as we enter this unprecedented accounting period, here are four of the most current accounting issues that we, as accountants, should be thinking about as we support our clients through the continuing COVID crisis.


The many firms currently busy doing March 2020 year-end accounts – the first to be impacted by COVID – will find themselves working with many of the 50 or so Coronavirus support schemes and grants that were introduced to support individuals and businesses during the pandemic. These were often accessed differently, with various eligibility criteria and even more varied repayment terms, periods and plans.

For busy professionals, this may present something of a quandary. Some must be accounted for on receipt, while some relate to the period of impact – which may have been earlier. From my own experience, one thing’s for sure – there are many issues around accounting for these loans, grants and other types of income.

Should they be offset against wages or recognised as income in accounts? Is it a grant that’s taxable on the business? Lots of accountants are up to speed with the schemes and how to account for them (even though we’ve never had to account for a pandemic before), but others are working on gut instinct and what they suspect to be correct.

Clearly, not accounting correctly will raise a number of issues in the future.


When it comes to fraud, accountants are watchdogs not bloodhounds. We’re not there to specifically look for fraud but we should always have our eyes open for anything untoward.

The Coronavirus Job Retention Scheme (CJRS) – also known as the furlough scheme – looks set to be the biggest area of potential deception at the moment. Launched last March to minimise unemployment, by early January the number of suspect payment tip-offs to the taxman had spiralled to over 21,000.

It’s a very real issue and we must all be aware of it. Key examples would be clients claiming the benefit for their business but not passing it on to employees. Another example – especially in private businesses – is if business owners have claimed grants and yet expected employees to continue to work. In the very early days, you couldn’t, but staff can now work part-time, which adds to the confusion and blurs the boundaries of what’s compliant and what isn’t.

As well as CJRS, we should also expect other loan schemes to become the focus of investigating authorities in coming months. The Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) are also expected to come under close scrutiny for criminal offences. I think they’ll be a little less problematic than CJRS – in theory, those who applied for them did so with the intention of paying them back – but we should all be alert to scams.

That said, we must only report suspicion, not speculation. If in doubt, accountants should be prepared to have the conversation with their client – however awkward it could be. For example, if your client has maintained 95% income but 80% of staff were on furlough, you would be expected to consider whether this was reasonable.


We’re all still finding our way through this new way of working and most of us are doing our best.

Regulators are continuing to visit firms, albeit remotely and are even tolerating a slight reduction in practice compliance in recognition of the tough times we find ourselves in. However, they still expect firms to ensure that they remain compliant with the regulations.

General day-to-day working practices make it more difficult to be 100% compliant at the moment and I believe if it looks like you’re taking your professional obligations seriously – but working in difficult conditions – you will be showed some latitude. If it appears that you’re using lockdown as an excuse to not do things properly, expect a fine.


Sometimes accountants do things that aren’t “quite right” because they don’t want to penalise their clients. The consequences of their actions – “If we do this, there’s a possibility that the business will fail and put 20 people out of work” – is a concern that is shared by colleagues across the nation. But it’s absolutely time to protect yourself and be a bit selfish.

It’s a tricky time to truly push a client to put issues right, but if you don’t – and it comes out of the woodwork later down the line that something has been overlooked – it’s likely that there will be serious repercussions. For yourself, as well as your client.

There’s obviously so much going on that we all need to be aware of, which is why Lifecycle has invited Val Steward back to host a series of online CPD webinars in March.  During the eight live sessions, she’ll tackle today’s hottest accountancy topics, clarifying issues to help practices effectively and compliantly navigate these testing times. Even better, they’re free to attend.

Lifecycle’s Spring Accounting Update programme kicks off on Tuesday 2nd March and runs through to Tuesday 30th March. Each starts at 9am, ends at 10.30am and accounts for 1.5 hours CPD.

These free events are exclusively available to Lifecycle members. If you’re not already a member of the network then you’ll be asked to register when you book your place.  Click here to see the available dates and confirm your place.

About the Lifecycle network

Lifecycle is a unique network for accountants – provided by the Leonard Curtis Business Solutions Group.

It provides member accountants with a comprehensive range of specialist services – and the expert support required – to improve their client offering at every stage of a business’ lifecycle. From company formation to cessation and all stages in between.

Lifecycle is free to join and also offers members many additional benefits. These include access to competitively priced Professional Indemnity insurance cover, a regular programme of free training and education and discounts on products and services relevant to their business and clients’ needs.

Services offered by Lifecycle include: Company secretarial and formationequity finance for SMEsdebt advisory for SMEspersonal debt advicecorporate restructuring, insolvency and cessationdebt finance for SMEscashflow maximisationproperty solutions and legal services.

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