Are trading technologies on the brink of ousting bankers?

This week a Government report has called for senior bankers who are guilty of reckless misconduct to be jailed. But will banks even need human beings in future? The Independent’s Tom Peck asks Greg Davies, Barclays Wealth’s Head of Behavioural and Quantitative Finance, if he thinks digitised traders are the future.

Tom Peck: Computers don’t make decisions. They follow instructions. But banks are increasingly interested in whether human beings might be, in matters financial, intrinsically poor decision-makers. And if they are, how do you nullify the risks?

Greg Davies: You have to put the humanity back into finance. If you don’t consider human factors in decision-making, you’ll get to the wrong answer. If you don’t embrace the knowledge of how people make decisions – to insert psychology into finance theory – you’ll end up selling to an investor a solution that might be technically real but, in practice, unobtainable.

TP: It will always be difficult for humans to accept that machines can outsmart them. How do you manage those human urges, so that they act for humankind’s own good?

GD: It’s difficult. Classical finance theory is clear that what people need is simply the best-adjusted returns to meet their personal needs. But you shouldn’t give someone a portfolio of investments, put together by the mathematical whizz-kids who’ve worked it all out, and then say: ‘This is your problem too.’

I may give you this perfect portfolio, but you will have emotional responses along the journey, as things go up and down. Most of us, when we’re faced with discomfort, especially that which relates to a large part of our wealth, will feel the need to act in ways that reduce our anxiety.

When things are comfortable, when there is certainty in the markets, we will buy. But that can mean we’re buying high. Or in moments of crisis, we sell at the bottom because it’s too emotionally discomforting to hold on to the stocks.

TP: In the future, will computers really know best?

GD: Well, more and more companies that are trading their own money are starting to do so with trading technologies. There are examples, but we probably know less about the risks of algorithmic trading, as compared to the mistakes humans make.

At the height of the tech bubble, for example, people thought companies that were yet to make a single cent were worth billions. At the bleakest point of the global financial crash, people thought perfectly decent companies were worth nothing.

Telling someone to ‘buy low, sell high’ might seem like very obvious advice. But our innate psychology inclines us to do the opposite. We get in when times are good, and flee when times are bad.

It’s not irrational to sell at the bottom. You get emotional comfort, you get relief. Classical finance says you should ignore those human impulses. But I know you can’t, and it’s not irrational. But it can be very expensive.

The UK Gold, which opens the East End Film Festival

A week today The UK Gold – a documentary film which explores tax avoidance – gets its world premiere when it opens the East End Film Festival. Steven Perryman previews what to expect

Timing is everything. And Mark Donne’s second film – The UK Gold – could not have come at a better time.

With a spate of tax avoidance stories proving difficult to shift from the business pages, and David Cameron using this week’s G8 summit in County Fermanagh to clampdown on the tax avoidance of large corporations, Donne’s film has arrived just in time to join the debate.

Narrated by actor Dominic West, and featuring a soundtrack by Radiohead’s Thom Yorke and Massive Attack’s Robert Del Naja, The UK Gold incorporates the views and voices of British politicians, hedge fund managers, Vanity Fair investigative journalist Nicolas Shaxson, Private Eye’s Richard Brooks and Channel 4 News presenter Jon Snow, to expose the fundamental role the City of London plays in tax havens and avoidance.

The UK Gold Trailer from East End Film Festival on Vimeo.

The film is shot through the eyes of William Taylor – a vicar from a small parish in the London Borough of Hackney – as he reveals a modern Britain dominated by a financial sector that relies on unfair play for profit.

Shot last summer – when east London and the nation were gripped by Olympic fever – The UK Gold aims to offer a stark reminder of recession-hit Britain at a time when it is about to mark one year since the Games were in the country.

In that context, the timing is nothing short of perfect.

The UK Gold gets its world premiere at the East End Film Festival on 25 June. Tickets are available online.

Looking for divine intervention? Lionel Messi, who has been accused of tax fraud

Lionel Messi accused of tax fraud in Spain, a tax avoidance film narrated by an actor who played Fred West and Thames Water sinking in a tax storm. Steven Perryman picks his top five news stories from the past week

1. Another fine (tax) mess for Messi

Everyone loves a tax evasion story involving a celebrity, right? Only recently we have had Lauryn Hill in the slammer, Wesley Snipes freed to make more Blade films – and Gerard Depardieu suddenly showing a penchant for Ushanka hats.

Football fans can thank ball-genius Lionel Messi, then, for keeping football high in the news agenda at a time when most footballers are showing off their tattoo collections around a pool in Las Vegas.

Yep, this week it was reported that Barcelona footballer Messi and his father are being accused of allegedly defrauding the state of more than 4m euros (£3.4m). Ouch.

2. Rest bite for SMEs in Real Time Information (RTI) implementation

Real Time Information. Remember that? HMRC’s big payroll initiative that got off to a predictively sluggish start in April?

Well, it’s back in the news with HMRC announcing it will be seeking to extend the temporary relaxation of its RTI reporting rules for businesses with less than 50 employees from October 2013 until April 2014.

This is welcome news for SMEs, which means they will not be required to change their approach to payroll until halfway through the tax year.

3. The UK Gold tax avoidance film gets world premiere

It had to happen. With an endless conveyor belt of tax avoidance stories since ‘you know who’ (I’m bored of saying Jimmy Carr’s name – oops), it was only a matter of time before the arts world muscled in on the action.

And so it has transpired, with the world premiere of The UK Gold at the East End Film Festival on 25 June. The film follows Father William Taylor as he sets out to shed light on Britain’s offshore tax havens. Filmed during the London 2012 Olympics, Mark Donne’s documentary aims to reveal a modern Britain dominated by a financial sector that relies on unfair play for profit.

The film will be narrated by Dominic West – famous for playing serial killer Fred West – and feature a soundtrack by Thom Yorke and Robert Del Naja. Anyone expecting laughs should probably check out Hangover III.

4. Hodge back on Google’s case

Speaking of tax avoidance – or TA as I like to call it – Margaret Hodge has been back on Google’s case this week.

The Public Accounts Committee (PAC) – of which Hodge is Chairman – published its report into Google’s tax affairs this week, which saw it pay just over £10m on a turnover of £11.5bn over five years. Are you still awake? Good.

Hodge used the release to get on David Cameron’s back too, claiming it is ‘no excuse’ for the Prime Minister to claim tax avoidance is a global problem ahead of the G8 summit.

Which begs the question: who’s next on Hodge’s hit-list?

5. Is Thames heading for a watery grave over Corporation Tax?

Look no further than Thames Water, the UK’s biggest water firm, which it was revealed this week paid no corporation tax this financial year despite making £145m in pre-tax profit.

This may seem like another TA story – and it is – but it’s big news in that for the first time a UK-based company has come under serious fire. Marks & Spencer got some heat a few weeks back over its tax arrangements, but it went largely unnoticed because a reported a profits slump buried the news (apart from here on AAT Comment, obviously).

One to watch, particularly with Simon Evans of Thames Water proving suitably bullish in his BBC interview defending the company. Hodge v Evans? We hope so.

Steven Perryman is AAT‘s Editorial Manager

Jason became the 'OAP whisperer' in episode 7 of The Apprentice (© BBC)

Last night saw the halfway point of the current series of The Apprentice. In her second exclusive blog for AAT Comment, former contestant Katie Wright analyses the candidates at halftime – and finds Jason an unlikely ‘OAP whisperer’ and Alex ‘eyebrows’ Mills in prime position to be hired

The Apprentice never fails to entertain and educate in equal measure, and this week’s episode was no exception. We are now into the second half of the series and there is nowhere left to hide (sorry Jordan).

Whilst we have all enjoyed Jason’s inability to walk in a straight line, Luisa’s lack of business etiquette and Alex’s over-enthusiastic eyebrows, we are starting to see early signs of genius amongst this ruckus pack.

The Apprentice week 7: buying and selling task

This week’s task is an Apprentice favourite – buying and selling. The teams are to charm product-owners for the rights to sell their ‘camping’ themed accessories at the NEC Motorhome & Caravan Show. But there’s more – Lord Sugar insisted on a big-ticket item.

Kurt and Neil quickly establish themselves as project managers and the teams set about choosing and charming their way to success. Whilst Louisa implements true charm on Neil’s team, Myles manages to nauseate Nick Hewer – a real achievement considering Nick spent 11 weeks with Stuart Baggs ‘the brand’.

Schmoozing is an important part of business, of course, but to be Machiavellian is to utilise your emotional intelligence effectively. I am not convinced that Leah pursing her lips and demanding a discount is all that charming. But emotional intelligence is often underestimated in business; the ‘likeability’ factor can win over as was proven by Myles’s failure to secure both items.

So, Kurt’s team were already behind having lost out on their first choice items, so the task would be won or lost on the choice of the big-ticket item. Unfortunately good sense wasn’t following Kurt on this task and he failed at this hurdle; forgetting his target market and research to go with a retro camper-van that he ‘just quite liked’.

No sleep – or pens and paper – in The Apprentice house

On the assumption that no sleep was had the night before the Motorshow as candidates rehearsed their pitches in their heads (no pens or paper are allowed in The Apprentice house), they were all looking bright-eyed and bushy-tailed walking into the NEC.

But one candidate looked hungrier than the others – surprisingly, it was Jason. The nation must’ve hidden behind their sofas at the sight of Jason fumbling around the campers (and his words). But something strange happened – the customers loved him. After seven weeks Jason finally has a use – as the OAP whisperer. Joking aside, Jason offers something the others lack – genuine charm.

Whilst Jason wooed the customers, Myles failed to qualify leads and Kurt shocked the nation by suggesting that Leah join the big-ticket team to act as ‘eye candy’. Unfortunately Leah’s big green eyes didn’t win through and Kurt’s team failed to sell the retro campers. The results were hardly edge-of-the-seat stuff.

Why The Apprentice boardroom is like a caravan

The boardroom is not dissimilar to a caravan – it’s stuffy and uncomfortable, so it’s not unfitting that the candidates quickly find themselves chanting ‘morning Lord Sugar’ under those blue spotlights.

Natalie cried ‘tactics’ at being taken back into the boardroom and appeared to try and play to Lord Sugar’s softer side – good luck in finding that. But I always feel let down when the girls cry. That’s not to say I don’t sympathise – the boardroom takes eight hours to film and is a highly stressful situation, but whenever possible it’s important to keep tears out of boardrooms.

Whilst Natalie wiped away the tears, Lord Sugar quickly pointed out that Kurt had made every possible mistake throughout this task and quickly gave him his marching orders. Lord Sugar wasn’t finished though. What could it be? Oh wait, his finger of doom is still loaded and fell firmly in Natalie’s direction. A double firing, no less.

A task that needed charm

This week’s task was all about charm, and although Natalie and Kurt were not the least charming candidates they did lack emotional intelligence. With that in mind, it was probably the right decision.

By this part of the process you are tired, you have gained weight (thanks to constant takeaways, lattes and prêt lunches) and you are also very, very homesick. Can you imagine having no contact with the outside world for that long?

It was at this point that I was very much ready to go home and I was granted my wish in week six when dressed as a pizza I attempted to sell over-priced meatballs at a football game. But it is also at this point that we start to see winners and losers appear.

For me, Jordan is the one that got away. He seems to have got lucky throughout the process so far. All we have seen of him is over-excited boardroom celebrations.

But amongst the weak the strong will flourish and Alex is my winner so far. Yes he is young, but he has strategy.

Katie Wright, who appeared on last year's series of The Apprentice

Katie appeared on last year’s series of The Apprentice, surviving to week six. She is currently Business Development Director of Liberata, a supplier of services to local government; an ambassador to children’s charity PACT, and a member of the London Chamber of Commerce’s ‘Employment and Skills Forum’.

Apprenticeships aren’t all flogging camper vans. Find out more about AAT apprenticeships now.

Time management doesn't have to be difficult - and can save you a lot of time

Applying time management to your lifestyle can be tricky, but planning ahead can save you time in the long run. And there’s always time for a holiday, argues AAT member in practice Dawn Clarkson

If we run out of money, we can earn more. If we run out of time, there is nothing we can ever do to recoup it. Given that time is the most precious resource we have, I find it extraordinary that many people still don’t concentrate enough on how to manage it. Those who do stand out.

The most successful companies I have encountered set themselves goals and have a clear strategy to take them there. The business owners know how much they need to turn over each day to achieve their target profits.

They are clear, too, about their lifestyle: the type of house they wish to live in, the marque of car they want to drive, the hours they wish to work and the number of holidays they want to take.

Use a list to manage time management

These clients are noticeably well organised, demonstrate good time management, are self-disciplined – and expect the same from others. What are their secrets? The truth is they are remarkably simple. Never underestimate the power of the list.

They produce lists of everything they need to do to achieve their goals. Yet instead of being broad-brush schedules of overarching goals – ‘bring in £1,000 of new business this month’ – the lists are a selection of individual tasks that might contribute to those goals.

‘Call PJ Allison Butchers about doing its accounts; meet SG Smith Grocers to discuss how we might help calculate the cost of its expansion plans.’

Some tasks seem remarkably trivial – ‘sign off holiday form for Anna’ – yet they all contribute to a well-run business. (Anna is a valued employee we want to keep happy; while her holidays may not be at the forefront of your mind they are very important to her.)

Much can be achieved by breaking down the lists into small steps. This list-making is part of a wider strategy in the well-run business: plan properly. We’ve all heard the old business mantra ‘those who fail to plan, plan to fail’.

Every minute planning saves you 10

Perhaps one reason why that hackneyed phrase is so irritating is that we know it to be true. Research suggests that every minute we spend planning saves ten minutes of the working day that would otherwise be lost through procrastination or poor time management.

One of my clients explained that he plans each day of the month at the beginning of the month, plans each week the prior weekend, and plans each day the night before.

My well-organised client allocates the most important task each day to the first position on the list, the second most important to the second place, and so on. He tries to limit each day’s list to seven tasks. My client is sure this process helps with concentration and enables him to achieve more throughout the day. Being a zealous list-maker myself, I don’t doubt it.

Getting things done is a remarkably good way to reduce stress and clear the mind. Take our leisure time – that, too, is precious, and we need to ensure we don’t sully it with the minutiae of our working lives.

Why there’s always time for a holiday

Arranging to be away from the office for a fortnight is a good way to reduce procrastination. The break helps my productivity on my return and, before I go, I’m driven to complete many of the little jobs I have been putting off.

The last thing I want is for them to pop back into my head when I’m jetting off: once there they will break the spell of my holiday. The business guru Dale Carnegie once wrote that ‘… the best possible way to prepare for tomorrow is to concentrate with all your intelligence, all your enthusiasm, on doing today’s work superbly today. That is the only possible way you can prepare for the future.’

In other words, carpe diem – seize the day. Learn the lessons of the past, plan enthusiastically for the future, but realise that we live only in the present. That time in our hands is invaluable. Yet so many of us let it slip, like hourglass sand might fall, through our fingers.

Interested in how technology can help you with time management? Check out Matt Packer’s post on time management apps.

Pension auto enrolment is just one project under the eye of the UK Government's 'Nudge Unit'

Sometimes a gentle hint is all it takes, and the Government’s use of nudge theory is starting to bear fruit with its pension auto enrolment initiative. But that’s just for starters. Get set for nudge-plus, writes Public Finance’s Mike Thatcher

Who says apathy is a bad thing? When it comes to saving for our futures, a preference for doing nothing can be used to good effect.

This is exactly what the Government has done with its policy of pensions auto enrolment. Since October last year, large employers have been forced to set up company pension schemes and enrol all workers aged 22 and over who earn more than £8,105 a year.

Eventually, all employers will be covered. Employees can opt out, but they have to make a conscious decision to do so. The Government is banking on our preference for the status quo – and it seems to be working.

Pension auto enrolment’s ‘stunning’ first phase

In March, pensions minister Steve Webb said feedback from the first phase of auto enrolment had been ‘stunning’. He quipped that he would spend 2013 going up and down the country ‘stirring up apathy’.

According to the National Employment Savings Trust, the workplace scheme created by the Government, only 10% of employees have opted out since October. Auto enrolment is a clever way of persuading citizens to act in their own best interests. It’s an example of the ‘nudge’ thinking much favoured by Conservative politicians.

This eschews legislation or taxation and uses subtler influences to change behaviour, such as peer pressure, a desire to conform and inertia.

Many of the ideas originate from the work of US academics Richard Thaler and Cass Sunstein. In 2003 they coined the apparently contradictory term ‘libertarian paternalism’, which suggests that people can be nudged to act differently while still respecting their right to choose.

The nudge theory explained

The simplest example of a successful nudge is making the default option a positive outcome – as with auto enrolment. But in their 2008 book, Nudge: improving decisions about health, wealth and happiness, Thaler and Sunstein offer a wider range of possibilities.

At Amsterdam’s Schiphol Airport, for instance, the authorities were looking for a way to improve cleanliness in the men’s toilets. They decided to paint a picture of a housefly on the urinals to encourage users to aim at it and, hey presto, spillages were reduced by 80%.

Back in the UK, Thaler has been a huge influence on a Conservative Party searching for ways to cut spending. When it works properly, nudging makes people healthier and happier, while saving money at the same time. It has an obvious appeal not lost on Prime Minister David Cameron.

Shortly after coming to power, Cameron set up the Behavioural Insights Team, known as the Nudge Unit, in the Cabinet Office. Initial projects have not yet made a huge impact, but unit director David Halpern claims his team will eventually save the country billions of pounds.

Halpern points to work with HMRC, where simply telling late payers that most people had already sent in their taxes increased payment rates by 15 percentage points. This should generate £30m of savings each year.

Similarly, a trial with the British Courts Service used personalised text messages to remind people to pay their fines on time. Estimates suggest that, if implemented nationally, this could raise an annual £3m in otherwise unpaid fines and save 150,000 baliff interventions a year.

Nudge plus: how the Government plans to go one step further

These are important initiatives, but they are only a first step. Recently, the think-tank Demos proposed a ‘nudge-plus’ approach that goes further than the original libertarian paternalism concept.

Nudge-plus seeks to actively reward those who do the right thing. For example, supermarket users could be offered discounted gym membership for choosing fresh fruit and vegetables in their weekly shop.

Similarly, some of the savings from the establishment of Neighbourhood Watch schemes could be reinvested in an area through a community cash-back. And what about those who have recently joined a pension under auto enrolment?

Well, they could be incentivised to make a greater commitment to long-term savings beyond the default product. Those who are seen to be taking their retirement planning seriously could be given a rebate on their National Insurance contributions that can be invested in their chosen pension.

This would demonstrate the rewards of taking greater personal responsibility, thus acting as a nudge-plus. Inevitably, there will be criticisms that such an approach is an extension of the ‘nanny state’ – leading critic Claire Fox of the Institute of Ideas has already described nudge-plus as the ‘ugly sister of nudge’.

But if it saves money and makes people live healthier, wealthier lives, it will be hard for the Government to opt out.

Mike Thatcher is the editor of Public Finance magazine

Study apps and new technology can help make light work of revision

You might feel stressed, overwhelmed or frustrated at your progress (or lack of it) when studying accountancy. Fortunately, there are study apps and technology you can use to help you learn and revise more effectively. Technology expert Dean Evans logs in

Most of us have busy lives and juggle multiple tasks. So it can often be hard to get work done. This is especially true if you’re trying to absorb new information and learn new skills as part of studying the AAT Accounting Qualification.

Here are some tips for using new technology to give you a helping hand.

Step 1: Improve your time management when you study

Quick question: are you using your time efficiently? Or are you dilly-dallying every time you sit down to study because you don’t know what to do next and it takes you 5-10 minutes to get going?

Poor time management is a common problem. Parkinson’s Law maintains that: ‘work expands so as to fill the time available for its completion’. In other words, if you don’t plan your time, you won’t make the best use of that time. You won’t be as focused. Or as driven.

Solutions? The most powerful one is to methodically plan out your work/study on a calendar and set aside 60 or 90 minute blocks of time to tackle specific tasks or topics. Treat these as unbreakable ‘appointments with yourself’ and use timer onlineclock.net to track them.

Google Calendar might be ideal for organising these blocks into a schedule. It’s accessible via any connected device and enables you to set handy email/pop-up reminders. Or you can use a digital to-do list to give you a nudge, such as Any.do, Teuxdeux or Wunderlist. There are also a host of productivity apps available to help you claw back some precious time.

Step 2: Eliminate distractions when revising

One of the biggest obstacles to effective working or studying is our misconception that we can multitask. We can’t. We’re just not wired that way.

Having the TV on in the background while you read through course material, or reading email as soon as it arrives never allows you to devote your full attention to a task. These aren’t the only distractions either. There’s Facebook, Twitter, your mobile phone, food, drink, kids, other people… in fact, you can be distracted by anything that is more entertaining than the task you need to complete.

So switch off. Literally. Switch off your mobile phone. Tell people you don’t want to be disturbed. Start a study session with enough food and drink (within easy reach) to keep you fuelled. If you’re working on a computer, don’t just minimise your email and other websites, close them down.

There are apps that can help you with this last bit. Self Control (Mac-only) enables you to block emails and website access for a specified period of time. Freedom (Mac/PC) does the same, and its Web-muting talents come recommended by the likes of Neil Gaiman, Zadie Smith and Nick Hornby.

Step 3: Enhance your focus

When you know exactly what you’re doing and you have an environment that’s free of distractions, you’re two thirds of the way to becoming more productive. The final step is to make the most of your time and enhance your focus.

Again, modern technology can help you out here. A decent pair of noise cancelling headphones, like the Blaupunkt 2013 Comfort 112 (£50, Amazon), can shut off the outside world and fill your ears with music from Spotify.

While it’s not advisable to work and listen to music at the same time, recent research has suggested that ‘listening to music before you study or revise can have a beneficial, motivating effect’.

Online service Evernote is perfect for capturing, storing and sorting notes and ideas. It uses cloud storage, so your content is everywhere you need it to be. StudyBlue will also be useful. This Apple/Android app encourages you to make digital flashcards of your important notes, so you can test yourself on key concepts, ideas and facts. ‘A century of research has shown that repeated testing works,’ said the BBC when they looked into the most effective revision techniques.

Finally, don’t forget that you can plug into the AAT’s lively student/member discussion forums.

Dean Evans is a technology writer and fomer editor of TechRadar. Interested in apps that help you study? Then check out Matt Packer’s post on time management apps.

The UK tax system is often seen as confusing and unfair

A spate of high profile tax cases has highlighted the fact that the UK tax system is both complex and burdensome. But can it claim to be ethical? Three AAT members in practice (MIP) weigh up the arguments.

Dawn Clarkson FMAAT: Yes

For smaller businesses the UK tax system is ethical and fair.

It encourages businesses to grow. They have the opportunity to take advantage of tax reliefs and in particular the Regional Employer National Insurance Contributions Holiday for New Businesses. This in turn encourages employers to employ more people, which helps the national economy.

For larger companies, on the other hand, I think the system tolerates them taking advantage of loopholes that are unethical in themselves. Moving offshore to tax havens allows them to reduce company profits in the UK and end up paying less tax here. That is of course not ethical.

Jenni Frost MAAT: No

Why? I’m actually more concerned with morals than ethics, and I definitely don’t think the UK tax system is moral.

But in many ways it’s also not ethical. In the course of what I do, I see people on low incomes and I have to give them the bad news that they owe tax.

For some, this will mean they struggle to live of what they’ve got left. That in and of itself is not unethical. But it become unethical when large corporations are let off tax because they know how to wine and dine the right people, and who to give the sweet talk to.

This is really a slap in the face to the little people who don’t have the means to do this and who struggle to make ends meet every day. That’s unfair and unethical.

Henry Cooper FMAAT: Maybe

The answer to this question depends on your outlook.

We hear about big companies, such as Starbucks, avoiding tax. Is that okay? From an ethical point of view, probably not, but legally, the answer is not that clear. At the same time, recent technological developments and the prevalence of social media has resulted in a type of consumer democracy that can have positive as well as negative implications from an ethical point of view.

As we saw in this case, consumers are putting pressure on companies to think beyond the legal aspects of what they’re doing. In some ways, this is a positive thing, but it can also be problematic that social media is deciding how the UK tax system should be run, by swaying public opinion.

There may be cause for evaluating if the system is ethical when it allows big companies to act like this, but there can also be ethical issues associated with allowing consumers unregulated power of influence over the tax system.

For more information on ethics in accounting, visit the AAT Ethics website.

Is new technology to blame for a lack of literacy in maths?

Three AAT members in practice offer their views on whether youngsters coming into accounting have sufficient literacy in maths compared to those that went before them, and find that a reliance on new technology could be having a negative impact.

Henry Cooper FMAAT: There’s literacy in maths – and then there’s literacy in arithmetic

It’s a well-known myth that accountants are fantastic at maths.

After a meal out, everyone looks to me to work out the bill. But really, good accountants are arithmetical – and there is a significant difference between that and being mathematical.

Arithmetic is about basic, simple mathematical principles used in calculation, while mathematics is the abstract study of number, quantity and space. By muddling our terminology and using mathematical, numerical and arithmetic interchangeably we’re missing the point.

And I think that is perhaps why we are seeing a younger generation less prepared for the challenges of accountancy. By focusing on complex mathematics, rather than the maths we have all around us in our everyday life, we are making a mistake.

My daughter, who is 10, is fantastic at calculating the best deals in the shopping basket, and those are the skills our young people really need. For me, basic arithmetic skills are more important than maths. To better prepare our children for entering the profession, we need to re-evaluate our focus.

Dawn Clarkson FMAAT: Lack of literacy skills is damaging lives

The lack of numeracy and literacy skills can have a major impact on day-to-day living.

It can lead to a self-perpetuating cycle of lack of control of personal finances leading to anxiety, depression and, ultimately, further spending.

There have been considerable cultural changes over the past decades that arguably have contributed to less self control and reduced personal responsibility. While businesses may help employees improve their literacy in maths, I believe there needs to be a fundamental change to parental and educational attitudes and approaches towards basic training in self-discipline.

Once these skills are established, would individuals absorb literacy and numeracy training more easily? An interesting thought.

Jenni Frost MAAT: Technology brings its own problems

This is a tricky issue for me to comment on.

I have no kids and not enough direct contact with young adults in my everyday life. But our 19-year old trainee, who is doing the AAT Accounting Qualification and Maths A-level, gives me no worries about the quality of work the next generation of accountants will be able to produce.

I still think most accountants have a good head for numbers. What I have noticed is that there is a real generational difference between young people who rely heavily on technology such as computers and calculators to do their job, and someone like my colleague who learnt the skills manually 20 years ago.

Although she’s now brilliant at making use of new technology, she also knows the reason for why we do things in a certain way. The danger is that the next generation won’t know why they are doing what they’re doing because they’ve never been told how to do it manually.

Pressing a button and getting the answer is not solid enough a grounding to truly understand accountancy.

More information on literacy in maths can be found on the National Numeracy website.

Marks & Spencer saw its profits fall in the same week as a tax furore

This week tax avoidance has been everywhere: the high street, 10 Downing Street and across the pond. Steven Perryman picks his top news stories from the past seven days

1. Marks & Spencer’s knickers in a twist over tax accusations

Jimmy Carr can breathe easy. Finally the smarmy comedian – who was embroiled in a tax avoidance furore last year – has a UK-based ally to take some of the heat with him.

Yep, everyone’s favourite purveyor of pants, Marks & Spencer (M&S), faced criticism from tax campaigners this week over the way it structures its online sales to Europe – with one describing the operation as similar to that of American internet retail giant Amazon. Ouch.

Not good news for M&S, who also reported that its pre-tax profits fell to £564.3m, down from £658m last year, despite group sales rising 1.3% to £10bn for the year to 30 March.

You can’t help but think there are some more sleepless nights ahead for its new designer, Belinda Earl.

2. Boston tea party at 10 Downing Street

Meanwhile, over in Downing Street David Cameron’s cosy cuppa with the bosses of some of Britain’s largest multinational corporations descended into a Boston tea party.

Chief executives of companies including Burberry, Tesco, Vodafone, BAE Systems, Prudential and GSK took the opportunity to lobby the prime minister in advance of the G8 meeting in Northern Ireland, where Cameron has pledged to use UK’s presidency to tackle aggressive tax avoidance by multinationals.

Also present was Google’s chairman, Eric Schmidt, despite the internet search firm coming under fierce attack from MPs last week because of its tax arrangements. Well, you should never turn down a free lunch, right?

3. Google’s tax whistleblower goes public

So much for secrecy. Just four days on from providing anonymous ‘whisteblower’ testimony on Google to the Public Accounts Committee, the mole has gone public already.

Clearly sniffing out an opportunity for his 15 minutes of fame, former Google employee Barney Jones unveiled himself to The Sunday Times, proclaiming: ‘The real victims are ordinary taxpayers in Britain who are being cheated by Google.’

Not that Google seem bothered, with the company reportedly spending up to £1m on a lavish bash for its staff called the Zeitgeist Conference. The company has hired out the Grove Hotel in Hertfordshire, where warbling singer Jessie J will perform (when they need to empty the venue, we assume).

4. Is ‘Teflon Apple‘ losing its sheen?

They say mud sticks, but technology giant Apple has appeared Teflon coated of late.

It has ridden safely through the choppy waters of accusations of bad factory conditions, a challenge to its smartphone domination from Samsung and a first profit fall in a decade without breaking a sweat.

But, as Google and Amazon both found out this side of the pond, aggressive tax avoidance eventually catches up with you and is a potential PR own goal. This week the company’s Chief Executive, Tim Cook, gave testimony to a Senate sub-committee investigating multinational tax practices.

In it he confirmed its findings that Apple had taken tax avoidance to a new extreme by structuring companies so they did not incur tax liabilities anywhere. In his testimony Cook also refused to consider moving back a total of $100bn the company has stashed offshore until Congress considers lowering the 35% US rate.

Could this be the straw that breaks the camel’s back? Samsung will be hoping so.