Delivering an incentive for membership bodies to provide workforce
Comments from ACCA
February 2004
ACCA is pleased to comment on the above paper.
We are pleased to note that ACCA has been held up as an example of a membership body requiring members to keep their skills up to date as well as providing continuous professional development courses in order to do this. The whole idea of continuing professional development is very close to the heart of ACCA, hence our comments are those of an organisation that aligns itself to the learning and training philosophy behind this paper.
CHAPTER 3 ISSUES FOR COMMENT: GENERAL COMMENT
- The principles governing whether the relief should
be available are fair and reasonable. While ACCA is unlikely to be in danger
of losing its accredited body status, due to the high level of training
and skills development which it provides, care should be taken that a body
does not lose its status where membership is mandatory for anyone who wishes
to retain their professional qualification. Where there is a danger of a
body loosing its accredited status there should be a notification period where
it has the opportunity to address the issues affecting it.
- We have said previously that there should be relief for student subscriptions to the bodies where there is tax relief for the qualified member. This is particularly relevant to professional bodies such as ACCA and where the subscription provides access to courses and training related information and advice.
MEASURABLE CRITERIA
It may be difficult to measure effectively the extent to which an organisation adheres to the principles of providing substantial support for developing the skills and careers of its members. It may be that within each category there should be a benchmark against which organisations can be measured. But this will be difficult and may impede commercial decision making.
The accountancy profession can be used as an example. ACCA has a very significant commitment to training members and developing new qualifications which will enhance their skills base and status. Much material is now available over the internet. If, however, ACCA had a less global membership then perhaps there would be less emphasis on training. For example, a similar organisation with a largely UK based membership might have considered that the UK had a well developed market for training and skills development, which the membership could use. It might therefore consider it less appropriate to promote its own training courses.
Therefore, any criteria or benchmarks which are put in place must be flexible, pragmatic and low in compliance costs. Hence those bodies which provide fewer training opportunities than ACCA, due to the nature of their membership, should not be excluded from approved status.
It should be remembered that IFAC (International Federation of Accountants) now requires all member bodies to bring in mandatory CPD for all members.
MONITORING ENTITLEMENT TO APPROVED STATUS
The idea of monitoring entitlement, if implemented, should be by way of a light touch. It cannot be an exact science and this should be understood in the framework of any overview process.
While there needs to be parity of treatment between similar bodies, we question how easily this could be achieved and the cost benefits of a monitoring system. There would also need to be a steep learning curve for the arm of Government which monitored the membership bodies in understanding the exact nature of their activities and service provision. What we do not want is an onerous system of form filling and information exchange.
The monitoring regime needs to be "events based". That is to say that an organisation will only be monitored where there is a material change in its activities. For example where the organisation dispenses with a part of its training department this could be trigger for re-establishing the organisation¿s status. Therefore there would not be a specific period set for monitoring an organisation.
DELIVERING RELIEF TO INDIVIDUAL MEMBERS
While the tax relief should be available without the requirement for onerous compliance, it may become highly burdensome on the approved body if it had to administer some form of blanket recovery system for its members. The problems would be compounded further by the need to exclude overseas members. It would probably be best to leave the system as it currently stands where the individual has to claim the deduction.
The Government should not seek to increase complexity and down grade the value of the relief by restricting it to the basic rate of income tax.
WIDENING THE SCOPE OF APPROVAL OF SUB-GROUPS
As a general point organisations such as trade unions, which provide and promote training, should be considered as suitable for approved body status. The possibility of obtaining tax relief should be used as an incentive for trade unions which do not currently provide training opportunities to consider doing so. The Government should also be pro active in encouraging such organisations to develop member focused courses and development opportunities. This may mean only partial tax relief as a pro rata measure of the training opportunities which are provided.
The review has been ongoing for nearly two years. We now look forward to seeing any draft proposals for change to the current system in the near future.