VSJ – Feb 2001

Notice Board

 

The Employment Studies Research Unit at the University of the West of England is being funded by the Higher Education Funding Council for England and the Department for Education and Employment to investigate best practice in the recruitment of ‘non-traditional’ graduates. It will provide evidence of the business benefits of recruiting from a diverse range of graduates and institutions, along with identification of the obstacles that lie in the way of developing and implementing such strategies. If your organisation has good policies and practices to enable it to make the most of the new graduate labour market, please get in touch with them: email marie.morley@uwe.ac.uk, direct telephone 0117 344 3734 or direct fax 0117 344 3911.

 

Don’t forget to visit the IAP stand at DevWeek between 27 February and 1 March!

[Got an activity or event coming up? Email eo@iap.org.uk with the details.]

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Sounding Board

 

Clinton Jones, MIAP has wide experience of database systems. He’s worried about how people use less sophisticated tools as though they were a DBMS…

 

I recently completed a substantial implementation of a mid-sized ERP system that successfully provided end-to-end connectivity of the full procurement, production and distribution life cycle. What amazed me was that the CEO, an accountant, had such a penchant for spreadsheets that they could be found almost everywhere within the organisation. The ERP implementation helped to reduce their number considerably, but I couldn’t quite make them disappear completely, particularly when the CEO wanted to shortcut the way the system required things to be done. Staffing was also an issue. This was an organisation where head-count optimisation was an acute characteristic.
There can be little doubt that the spreadsheet was a godsend in computing technology for the accounting community (I am married to an accountant – I should know!). Spreadsheets have the ability to get that collection of columns and rows to do the most amazing things. With the most recent spreadsheet technologies, you have the even more powerful capability to use the spreadsheet as a database! I remember, as a student, creating ‘what-if’ macros, using data table sorts and a multitude of sophisticated queries using Lotus 1-2-3. It was database-like in functionality. You had to have some understanding of the concepts of fields and records. However I could already see the relative fragility of the tool and the limited scalability of the applications that were developed using this powerful, yet still simplistic, script-like language.
About three years ago, a friend called on me to have a look at a spreadsheet she had running on her computer. She used it to do the financial accounts for her nephew’s laundry business. She was complaining that it took a long time to do the processing. Processing? What did she mean? When I looked at the application – which is what I have to call it – I was astounded. The embedded macros were extremely sophisticated. A pathologist-friend who loved to tinker with software had developed the entire system as an ‘experiment’. He had created a mangle of processor-intensive code that stored, validated, formatted and printed transactions and reports for her – a truly amazing demonstration of the power of the spreadsheet macro! And all this in a DOS-based version of Quattro Pro!
I have just started on another ERP implementation and the first thing that struck me is that this multimillion pound business has almost all its business functionality tied up in a massive slew of Excel spreadsheets. The scope is vast, from stock accounting and reconciliation through to accounts payable and forecasting. If ever you needed a business case for investment in an off-the-shelf Office Suite, this has to be it. Spend a few hundred and get the functionality of a big system that costs hundreds of thousands. The downside is that version control is a nightmare, scalability is limited, errors are inevitable and the business risk is palpable in the event of a disaster. This is a classic case of your business processes being only as robust as your last backup of those spreadsheets.
I am in awe at the extent to which the end-user pushes the envelope with COTS packages. Is it any surprise that they balk at the cost of proper applications development? It’s time the industry stood up for itself and told the users: ‘Listen guys, you really aren’t using this package for the purpose for which it was intended!’

Something you’d like to get off your chest? Email me (Robin Jones) at eo@iap.org.uk.

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Members’ News:

 

Until recently, Robin Bennett, MIAP was IT Manager at Midlands Electricity plc. About six months ago he launched a Web site called jobsworth.co.uk. No, it doesn’t explain why you can’t possibly do whatever it is you’re trying to. Let him explain…

 

We are a salary information service, no more and no less. Our business is to enable employees and contractors to check their pay against the “going rate” for their job in their area. We provide this basic information free on condition that the visitor tells us what they do and what they earn. In this respect, our slogan “You show us yours, and we’ll show you ours!” says it all!

We have been collecting job salary information since 1997. Each week, job data is collected from newspapers, the Internet, and from submissions made on our site. The data is categorised and stored within our database. Now containing over 1 million records, we believe that it the UK’s biggest salary information database (just compare us to companies basing their information on salary surveys of possibly only a few hundred respondents). It is also the most detailed – our “location” data is based on county, for example, rather than region.

Our statistics are weighted using a unique algorithm whereby “real” jobs count for more than advertised jobs and recent jobs count for more than older jobs. A professional academic statistician has verified the statistics.

Contact Robin at robin@jobsworth.co.uk.

 

Frankie Blaskovic, AMIAP is Group Managing Director of Intensiti Technologies Plc. Here, he describes his company’s current activities.

 

We’re about to launch an exciting and revolutionary portfolio of digital security solutions, having developed strong encryption, digital certification technologies and new and enhanced Internet protocols.
For example, we can provide secured DNS in the form of iSNST (Intensiti Secure Name Services), which prevents domain name theft and squatting.  We have strong encryption tools starting at 512 bit, Anti-Denial of Service measured within product/protocols, Smart Card solutions, and a global alternative to PKI named NGKIT (Intensiti Next Generation Key Infrastructure). Morphing keys and hacker intrusion detection measures form part of the iGSNT (Intensiti Global Security Network).
The iGSN is the first of its kind. It’s a global scope network providing security services to applications regardless of size and scope. The iGSN encompasses the security infrastructure comprising certification authorities, iSNS name servers, NGKI global services, and RTA/RTR (Real time revocation/authentication) used to revoke and issue certificates in real time, and transparently, to end users. This is the first ever CA with the ability ‘instantly’ and seamlessly to revoke and reissue compromised certificates on-the-fly by its patent pending process.
Intensiti software installs wrap existing infrastructures, so no changes to them are required, hence preserving companies’ E-commerce investment and minimising the need for consultancy. Intensiti’s solutions do not fall within the US legal remits on encryption export and hence no backdoor, secret keys or weakened security is to be found within its offerings.
Contact Frankie at frankie@intensiti.com.

 

Don’t forget to email eo@iap.org.uk with items of news about you or your company.

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Work in Progress

 

Many self-employed IAP members have contacted us to express their concerns regarding the new legislation catchily entitled IR35 that may significantly affect their accounting and tax position. Here, Gordon Morrison, of Wheawill and Sudworth, the IAP’s Consulting Accountants, explains the current position and shares some of his experiences to date.

 

The purpose of this article is to update members on the way that the Inland Revenue is interpreting the IR35 legislation and to advise you as to the action you should be taking.

The original proposals, announced by Chancellor Gordon Brown in his February 1999 Budget, have caused major changes in the working arrangements of freelance contractors over the last eighteen months.

A recent survey has produced the startling statistics that 24% of IT contractors have left the UK to work abroad and an additional 18% have now taken permanent jobs. Our own statistics show that a very small percentage of contractors have taken the major step of working abroad and that perhaps 10-15% are moving to permanent positions. However IR35 is not the only reason for this. The pick-up in work that was anticipated once Y2K problems had been resolved has just not taken place, so contracts are pretty thin on the ground.

Let’s deal with some of the questions that we are asked most frequently:

How do I know if I will be caught by IR35? If your contract is effectively a provision of services through a Limited Company, then you can send a copy to the Inland Revenue for a ruling as to whether they consider it falls within the IR35 legislation.

How long will it take to receive this ruling? Our experience is that the Inland Revenue responds in six to eight weeks.  If you arrange your contract through an agency, you will always be asked for a copy of the contract that the agency has with the client. The Inland Revenue has made it clear that, if the contract terms are not identical they will regard you as being ‘caught’ by the legislation. Incidentally, all contracts were originally sent to a new office in St Austell, but, like so many things with IR35, this has changed and you can now submit contracts to your local tax office.

On what basis are my accounts prepared? The only expenses that may be deducted from income falling within IR35 are:

·         Your salary

·         Pension contributions

·         Professional indemnity insurance

·         Some travelling expenses

·         A further deduction of 5% (which includes ‘wife’s salary’).

Your expenses are not restricted in respect of income that does not fall within IR35. Accounts that contain a mixture of both types of income will obviously be complicated!

We have produced an IR35 calculator disk, which shows you how to operate your PAYE correctly. For a free copy, please telephone Barry or Evan on 020 7 730 8995. Alternatively, email barrym@wheawill.co.uk or evanj@wheawill.co.uk.

Can I improve my chances of escaping IR35 by drafting my contract differently? The answer is ‘Yes, you can!’ The Professional Contractors Group (PCG) have produced a contract that the Inland Revenue has approved under certain circumstances. However, the problem is that there is no point in having a contract that technically circumvents IR35 if the performance of the contract does not. This is the key point. We have found that most agencies have not been able to persuade most of their clients to agree to what would amount to quite important contractual changes, particularly in respect of ‘substitution’ clauses. There are well-established principles that define self-employment but, unfortunately, these have all been developed through case law rather than by statute. Case law can – and does – change.

Why don’t I forget all about IR35 and carry on regardless? The answer is quite simple. The Inland Revenue will catch up with you. If you have ignored the legislation you will be in serious difficulties. We have heard all kinds of stupid stories, such as that there is only a 2% chance of the Inland Revenue identifying a given contractor. This is rubbish. The Inland Revenue is writing to the 3000 agencies that are the principal providers of contractors for details of payments made to contractors. Local tax offices will also pick out contractors as they deal with their accounts.

Are there still unresolved issues? You can bet there are! The current problem is that it may prove essential to prepare account up to 5 April 2000 and annually to 5 April thereafter. This is because, technically, you may be taxed twice on some income otherwise. Ridiculous, we know, but there’s quite a debate raging on this at the moment!

If I need help, what can I do? We have found that many contractors know more about IR35 than their accountants. If there are any problems that you would like to talk through, please speak to Gordon or Barry on 020 7 730 8995 or email Gordon at gordonm@wheawill.co.uk.

 

Interesting project or development? Let us know at eo@iap.org.uk!