Cristiano Ronaldo and the Chancellor

It’s not often that you read about the Premier League footballer Cristiano Ronaldo and the Chancellor of the Exchequer in the same sentence but things are a little bit different at the moment.

Kwasi Kwarteng, the current UK Chancellor, delivered a mini-budget and it’s fair to say there were a number of surprise features.

The chancellor pledged £45bn worth of tax cuts, funded by borrowing, as part of a plan to boost economic growth. The markets didn’t react favourably with sterling hitting record lows against the dollar and the Bank of England having to step in calm the market by buying £65bn of government debt at an “urgent pace” to help restore “orderly market conditions”.

So, what has all of this to do with Premier League footballers?

It’s no surprise that footballers of the likes of Cristiano Ronaldo of Manchester United and Kevin de Bruyne of Manchester City are well paid.

One of the chancellor’s tax cuts was to reduce the top rate of income tax from 45% to 40%. This top rate was applicable to people with taxable earnings over £150,000 per year.

The average Premier League player makes significantly more than £150,000. In fact, according to the Times newspaper the average Premier League player earns in the region of £4 million a year which approximately works out at a tidy £75,000 a week.

This reduction in tax from 45% to 40% will result in some pretty significant figures in terms of extra income hitting the players’ bank accounts.

Kieran Maguire, the renowned football author and academic highlighted that Cristiano Ronaldo will have an extra £1.3 million of net income on his £400,000 a week (yes, that’s £400,000 per week) salary from Manchester United as a result of the tax cuts.

The Premier League already pays out the highest average salary in European football and with the tax cuts there’s a possibility that the Premier League will become an even more attractive destination for top footballers.

In terms of the other top European football destinations there are a variety of tax situations.

Tax rules in Italy allow overseas players to have the first 50 per cent of their wages tax-free for five years if they have a contract for at least two years. Italy’s maximum tax rate is 43 per cent.

In France, foreign footballers can pay as low a tax rate as 27 per cent.

Spain used to have tax exemptions for football players but this has now ended and the top rate is 47%.

Germany’s top rate is 45%.

Back to the mini -budget and the Premier League players. Not every player is as well paid as Cristiano Ronaldo but the average earnings are still pretty impressive. It’s been estimated that Premier League players will be around £240,000 better off each year on average as a result of the tax cuts.

According to tax cut theories one of the benefits of reducing the tax on higher earners is the “trickle down effect”. In simple terms this is where tax cuts result in the higher earners spending more money which will then create jobs and income for other people.

So, does this mean that the Premier League footballers will be spending their additional income in the local fish and chip shop or will it be on a new Ferrari imported from Italy or another luxury holiday in the Maldives…

[3 October 2022 UPDATE: what a difference a weekend makes. This article was written last Friday and today on Monday the Chancellor announced a U-turn on the decrease in the 45% tax rates and the top rate of income tax will not be reduced to 40%. Maybe the players need to cancel that order for the new Ferrari…]

Second hand servers + personal data = $35 million

Morgan Stanley is one of the most renowned banks in the world. It started business on Wall Street in New York back in 1935 and has grown so that it now has a market capitalisation of around $150 billion and employs approximately 70,000.

It’s obviously good at a lot of things but one area it wasn’t so good at was looking after the personal data of about 15 million customers.

Probably one of the first things that come to mind when protecting the personal details of clients are the security systems to protect the data within the bank such as passwords, firewalls, etc.

The problem for Morgan Stanley though was the data that was in computer hardware that was scrapped.

The US Securities and Exchange Commission (SEC) accused Smith Barney (Morgan Stanley’s wealth management business), of “astonishing” shortcomings.

The problems arose when Morgan Stanley disposed of thousands of hard drives and servers.

On multiple occasions a moving and storage business with no experience in data destruction services was hired to decommission these hard drives.

In other words, the hard drives and servers which were being scrapped should have had all the personal details removed.

Unfortunately this didn’t happen and instead the moving business then sold thousands of these devices to a third party. This third party then resold them on an internet auction site.

Some of the devices were subsequently recovered but the SEC said that Morgan Stanley “has not recovered the vast majority of the devices”.

The devices which were recovered were found to contain “thousands of pieces of unencrypted customer data”.

The end result is that Morgan Stanley has agreed to pay a $35 million penalty to settle charges.

There’s a valuable lesson to be learnt from this as responsibility for the safeguarding of personal data remains with the organisation and this includes making sure that the destruction of hardware containing that data is done in such a way that the data is erased and does not find it’s way into other people’s hands.

Big 4 Students Cheat in Ethics Exam

Albert Einstein famously said that “relativity applies to physics, not ethics.”

The point here being that morality is a concept that applies to everyone, and there are no exceptions that make it OK for a person to lie, steal, … or cheat. This seems like a fairly intuitive observation, but as a recent news story suggests, it’s clear that not everyone abides by the rules of ethics.

A group of audit professionals working for Ernst and Young in America made national headlines back in June when they were revealed to have cheated in, of all things, an ethics exam. You’d think these students would be well versed in the difference between right and wrong, but as this ironic transgression shows, the wise words of Einstein and other moral philosophers had made little impact.

According to the results of an investigation by the Securities and Exchange Commission (SEC), 49 EY audit professionals cheated on exams over multiple years in order to acquire and maintain their Certified Public Accountant licences. They succeeded by using answer keys and sharing these amongst their colleagues. In addition to the 49 main offenders, there were several other staff members who did not cheat, but still violated the firm’s code of conduct by knowing about the offence and failing to report it.

Ernst and Young agreed to pay a record $100 million fine to US investigators, and released a statement in response to the wrongdoing:

“Nothing is more important than our integrity and our ethics,” the statement read. “We are confident that the outcomes of the undertakings will reinforce steps we have already taken in the years since these situations occurred. “Sharing answers on any assessment or exam is a violation of our Code of Conduct and is not tolerated at EY. Our response to this unacceptable past behaviour has been thorough, extensive, and effective.”

So what lessons can we learn from this story?

In short, if you’re studying for your ACCA exams, avoid any sort of misconduct at all costs, ironic or not. Here are a few tips to get you through this stressful time without resorting to cheating.

– Study: It sounds obvious but the only way to get through your exams is to study hard. Given we’re an ACCA Platinum provider of courses we’d strongly recommend one of our ACCA eLearning courses and you can register for a free ACCA demo course here.

– Be prepared: Preparation is key to exam success, so don’t leave everything to the last minute. Our courses include a unique study plan tailored for you which uses elements of Artificial Intelligence. This sets out recommended dates for studying based on your study style but the key thing is not to leave it to the last minute!

– Stay calm: Exams can be stressful, so it’s important to keep calm and not let your nerves overwhelm you. Get plenty of sleep the night before your exam, and take a moment to think about each question before you rush into an answer.

Good luck!

10 reasons to become ACCA or CIMA qualified

If you’re considering a career in accountancy, then you’ve probably already heard of the ACCA (Association of Chartered Certified Accountants) and CIMA (Chartered Institute of Management Accountants) exams. After all, a lot of people consider one of these qualifications a prerequisite to exploring this career and are often listed under required qualifications in job interviews.

However, if you’re still not convinced, here are 10 reasons to become ACCA or CIMA qualified!

1. Access to global work opportunities.

Both ACCA and CIMA are globally recognised qualifications in over 100 countries, which means that they are great qualifications for those who are considering working abroad.

2. You’ll gain practical experience.

Theoretical knowledge is important, but it often does not surpass practical hands-on experience. Both the ACCA and CIMA qualification works to prepare you for the reality of a career in accountancy, by providing you with all of the necessary skills to succeed.

3. You’ll gain expert-level knowledge.

No matter your previous experience, once you’ve got an ACCA or CIMA qualification, you are prepared to begin your professional accountancy career, because you’ve worked through an extensive and detailed curriculum.

4. You can study on your own terms.

You can study for the ACCA and CIMA certification whenever you want, meaning you can balance your studies around your career, university or childcare responsibilities. Our ACCA and CIMA courses operate online so you can also study from the comfort of your own home.

5. You can increase your earning potential.

When it comes to applying for jobs, the more skills and qualifications you have under the belt, the higher your earning potential. As a result, you can apply for higher-salaried positions within accountancy despite being relatively new to the industry.

6. You can stand out in the job market.

On average, 118 people apply for a single job opening. As a result, you need to find as many ways as possible to enhance your resume – and having additional qualifications under your belt is a great way to achieve this goal.

7. You can fight off imposter syndrome.

According to a recent study, 70% of workers experience imposter syndrome in the early stages of their career. That is the fear that they don’t belong in their position, perhaps due to a lack of experience or knowledge. As the ACCA and CIMA qualifications prepares you for a career as an accountant, it will be easier to put these worries to bed. Not only do you deserve your position, but you have all the skills you need to perform well and impress.

8. You’ll learn something new every day.

When you are studying a course as varied as the ACCA or CIMA ones you will learn a lot of new things, which is a great way to ensure you remain focused and invested in your studies.

9. You’ll progress in your career quickly.

While the speed at which you obtain your ACCA or CIMA qualification will vary depending on your study patterns (part-time, full-time etc), having these credentials to add to your CV will enable you to progress quickly in your career.

10. ACCA and CIMA are badges of honour.

The ACCA and CIMA qualifications are highly-regarded in the world of accountancy and finance – as a result, they’re a great credential to put on your resume.

If you’re studying for the ACCA or CIMA qualifications but feel as though you need a helping hand, why not sign up for one of our eLearning courses?

Led by industry experts, they are designed to help you get up to speed with your studies while developing the skills you need to succeed. Register for a free demo ACCA course today on this link or a free demo CIMA course on this link to find out more!