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Exclusive: From Elon Musk to Sam Bankman-Fried, a bad week for market geniuses – TalkOfNews.com

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From Elon Musk to Sam Bankman-Fried, a bad week for market geniuses

#Elon #Musk #Sam #BankmanFried #bad #week #market #geniuses

Are founders good or bad for business?

From the FTX bankruptcy and downfall of crypto “rock star” Sam Bankman-Fried to the chaos at Twitter, it has not been a good week for the geniuses of capitalism. Elon Musk’s abrupt and in some cases already reversed decisions since taking over the social media company back up his contention that so far his tenure “isn’t boring,” but also expose the type of corporate governance issues that are too often repeated to the detriment of shareholders.

“Without a doubt, Sam Bankman-Fried is a genius,” said Yale School of Management leadership guru Jeffrey Sonnenfeld in an interview with CNBC’s “Fast Money” on Thursday. “But what’s hard is that somebody has to be able to put on the brakes on them and ask them questions. But when they develop one of these emperor-for-life models … then you really don’t have accountability,” Sonnenfeld said.

Few would doubt the genius of Elon Musk, or Mark Zuckerberg, for that matter, but few would put them in the same class with many companies that have failed spectacularly, though Sonnenfeld says they share the link of being allowed to operate without enough corporate oversight.

“It’s not crazy to talk about Theranos, or WeWork, Groupon, MySpace, WebMD, or Naptster – so many companies that fall off the cliff because they didn’t have proper governance, they didn’t figure out, how do you get the best of a genius?” Sonnenfeld said.

In the case of Bankman-Fried, who stepped down from his CEO role at FTX as the company filed for Chapter 11 bankruptcy on Friday, Sonnenfeld pointed to the lack of a board that should have been asking tough questions.

Tom Williams | CQ-Roll Call, Inc. | Getty Images

But boards also are often unable to manage genius, Sonnenfeld said. Zuckerberg is another example. When Meta, formerly Facebook, announced it would be shifting its focus to the metaverse last year, Sonnenfeld said his board members were essentially powerless. Meta laid off 11,000 of its employees this week and announced a hiring freeze as it has faced declining revenue and increased spending on a metaverse bet that Zuckerberg has said may not pay off for a decade.

Tesla shares have not been immune from Musk’s Twitter takeover, with the stock plummeting this week after Musk told Twitter employees on Thursday he sold Tesla stock to “save” the social network. One Wall Street analyst decided that Twitter is now a business risk to Tesla.

Musk (though not Tesla’s founder) and Zuckerberg oversaw the creation of two trillion-dollar companies, though both have now lost that market-cap status in stock declines caused by a variety of factors — from macroeconomic conditions to sector-specific risks, a market valuation reset for high growth companies, and also leadership decisions.

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Market research shows that founders can be a financial risk to company value over time. Founder-led companies have been found to outperform those with non-founder leaders in early year, according to a study from the Harvard Business Review that examined the financial performance of more than 2,000 public businesses, but virtually no difference appears three years after the company’s IPO. After this time, the study found that founder-CEOs “actually start detracting from firm value.”

Major players in Elon Musk’s Twitter deal, including Fidelity Investments, Brookfield Asset Management and former Twitter CEO and co-founder Jack Dorsey, did not take a seat on the company’s board or have a voice throughout the transaction, Sonnenfeld said, which gave the deal no oversight. Musk is now splitting his time between six separate companies: Tesla, SpaceX, SolarCity/Tesla Energy, Twitter, Neuralink and The Boring Company.

Companies led by lone geniuses need strong governance first and foremost. Sonnenfeld says having built-in checks and balances and a board that has field expertise as well as the ability to watch out for mission creep is critical to allowing these businesses to function with less risk of costly blunders.

Tesla and Meta governance scores within ESG ranking have long reflected this risk.

That doesn’t mean the market doesn’t need geniuses.

“Sure, we’re better off with Elon Musk in this world as we are better off with Mark Zuckerberg,” Sonnenfeld said. “But they can’t be alone.”

Through the recent issues, these under-fire leaders have been critical of themselves.

FTX’s Sam Bankman-Fried tweeted Thursday morning that he is “sorry,” admitting that he “f—ed up” and “should have done better.”

Zuckerberg said of the mass layoffs at Meta in a statement equal parts apology and unintended restatement of the governance problem, “I take full responsibility for this decision. I’m the founder and CEO, I’m responsible for the health of our company, for our direction, and for deciding how we execute that, including things like this, and this was ultimately my call.”

Musk tweeted, “Please note that Twitter will do lots of dumb things in coming months.”

But whether an apology or an admission from genius that it too can be dumb on occasion, Sonnenfeld says these leaders would be better off letting others do the criticizing — much sooner, and much more often.

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“They have to be managed, they have to be guided and they have to have a board that can help get the best out of themselves and not let them develop this imperial sense of invincibility,” he said.


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Business

Exclusive: Walmart-owned Sam's Club plans to open about 30 new stores over next five years – TalkOfNews.com

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Walmart-owned Sam's Club plans to open about 30 new stores over next five years

#Walmartowned #Sam039s #Club #plans #open #stores #years

Shoppers stock up on merchandise at a Sam’s Club store in Streamwood, Illinois. 

Scott Olson | Getty Images

Walmart-owned Sam’s Club on Thursday said it will open more than 30 new stores in the U.S., marking its most aggressive expansion in years.

The warehouse club’s next store is expected to open in Florida in 2024. Sam’s Club also plans to open five fulfillment and distribution centers this year, with the first of those opening in Georgia.

CEO Kath McLay said the retailer wants to reach more customers, after sharp gains in sales and an all-time high in membership at its current clubs. It plans to build about 30 clubs over the next five years and likely more in the two years after, she said.

And, she added, as prices of goods and services remain high, she said Sam’s offering has become more relevant.

“During times like inflation, times when people have pressure on their household budget, it’s a time when Sam’s Club can really show up,” she said in a CNBC interview. “So I think the time is really right for us.”

For Sam’s Club, the expansion marks a return to store footprint growth. The club chain has about 600 stores in the U.S., including Puerto Rico. Yet it hasn’t opened a new club in years. It shuttered 63 clubs around the country in 2018, converting a small number of those clubs into e-commerce fulfillment centers.

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Its last major expansion was in the 2010s, when it opened five to 10 clubs per year on average. Its most recent new club opened in 2017 in Hanover, Pa.

McLay said the new stores will open in high-growth suburban areas where Sam’s Club has few stores or no stores, but declined to specify the locations, citing competitive reasons. She declined to say how much the company’s buildout of the clubs and e-commerce facilities will cost.

It will also add more people to Sam’s Club’s workforce. Each club typically employs about 150 to 175 people, McLay said. At its fulfillment centers, like the one that is coming to Georgia, Sam’s Club typically employs as many as over 1,000 people and its distribution centers average around 120 workers.

Sam’s Club’s new stores will be about 160,000 square feet — larger than Sam’s Club’s typical footprint of about 140,000. They will include extra space for a sushi island, a full-service floral area and a larger waiting area for customers with a hearing or optical appointment.

New clubs will cater to habits that shoppers picked up during the pandemic, too. There will be more dedicated space for online options, such as a canopy where drivers can retrieve orders by curbside pickup and larger coolers to help employees that prepare online orders for delivery.

A hot moment for warehouse clubs

Over the past three years, more customers have turned to warehouse clubs, including Sam’s Club rivals Costco and BJ’s Wholesale Club. In the early days of the pandemic, shoppers loaded up their pantries with value packs of toilet paper, food and more. Then, as gas prices rose last year, the clubs drew customers by offering a cheaper way to fill up the tank. And as inflation hit a four-decade high, that ratcheted up interest in buying the club’s private labels and bulk items as a way to stretch dollars.

That’s reflected in share gains. Shares of Costco, for instance, have shot up by nearly 60% since the pandemic began.

Sam’s Club is joining its competitors BJ’s and Costco in also opening stores.

Sam’s Club has seen close to double-digit same-store sales gains for more than a year, excluding fuel costs. In the most recent quarter, which ended in late October, its same-store sales rose 10% or nearly 24% on a two-year basis. Its membership income rose 8%.

Private labels are also a big draw to warehouse clubs. Sam’s Club’s private brand, Member’s Mark, accounts for 30% of the store banner’s sales and more than a third in terms of units, McLay said.

For Walmart, Sam’s Club’s expansion plans mark another bullish move for Walmart at a time when some economists anticipate a recession and other retailers hunker down for a tougher year. On Tuesday, the retail giant said it will raise the minimum wage for Walmart store employees in early March as it competes for talent.

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Jefferies retail analyst Corey Tarlowe said the club channel, in particular, tends to hold up well, even during an economic downturn.

“People don’t actually tend to cut their memberships, believe it or not because they have to buy food and they want to buy food at the cheapest possible price,” he said. “So they tend to keep their memberships and some people trade into the club channel.”

Along with its store expansion plan, Sam’s Club has stepped up efforts to compete with other grocers and clubs. It raised its membership fee in October, bringing it closer to Costco’s fee. It redesigned existing clubs to make them brighter and less cluttered. And it has added tech-enabled features to Scan & Go, a mobile app that allows customers to skip the cashier line, quickly check out at the gas pump and ship bulky items like TVs instead of carrying them home.

And in November, it knocked down the price of its hot dog-and-soda combo from $1.50 to $1.38 – to undercut rival Costco’s $1.50 combo.

Inflation is slowing but high prices of consumer goods remain sticky

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Exclusive: Making Tax Digital: Answers to FAQs on MTD for VAT, Income Tax and Corporation Tax – TalkOfNews.com

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How to develop your accountancy practice’s competitive advantage

#Making #Tax #Digital #Answers #FAQs #MTD #VAT #Income #Tax #Corporation #Tax

As an accountant, you need to ensure your practice is responding to the requirements and challenges brought about by Making Tax Digital (MTD), both now and in the coming years.

It presents a once-in-a-generation change for small business accounting, mandating more frequent reporting to HMRC and – of course – the mandated use of software for accounting.

This article aims to answer essential questions about the upcoming waves of MTD, with a particular focus on the earthquake changes within MTD for Income Tax Self Assessment (also known as MTD for ITSA).

Information here about ITSA is based on the draft Income Tax (Digital Requirements) Regulations, which itself is subject to revision and change.

What’s written below draws on webinars undertaken with representatives from HMRC and hosted by the experts at Sage, most of whom are former accountants.

The questions asked really are those put to the expert panel by practising accountants.

We cover the following:

Making Tax Digital: A practice survival guide

Need support with Making Tax Digital, for your clients and your practice? This free guide will help you get ready for MTD for VAT, Income Tax Self Assessment and Corporation Tax.

Download your free guide

Understanding which clients MTD for ITSA affects, and how, will be key to building out a practice-readiness and response plan for small business clients.

Which of my clients will be affected by MTD for ITSA?

From April 2026, MTD for ITSA will apply to businesses with income greater than £50,000 per year, and from April 2027, to those with income greater than £30,000 per year. This includes all combined income from:

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  • Self-employments
  • Property businesses (UK and overseas).

These clients will need to follow the rules for MTD for ITSA from their first accounting period that starts on or after 6 April 2026/2027.

Which of my clients do not need to use MTD for ITSA?

The following are not currently required to join MTD for ITSA:

  • Other types of partnership, including Limited Liability Partnerships (LLPs), that are not general partnerships with only individuals as partners
  • Trusts and estates
  • Trustees of registered pension schemes
  • Non-resident companies.

The types of clients mentioned above are exempt from the current digital requirements under MTD for ITSA and will continue to complete and file a Self Assessment tax return if required.

This will be the case until the government mandates their use of MTD for ITSA.

As with MTD for VAT, it’s likely MTD for ITSA will be introduced across the space of several years but we do not yet have details of any further waves beyond the first two.

Will limited companies be impacted by MTD for ITSA?

Limited companies are not within scope for MTD for ITSA but will be within scope for MTD for Corporation Tax, which is expected to be mandated from April 2026 at the earliest.

If the business is also VAT registered, will the quarters for VAT submissions be the same as for MTD for ITSA submissions?

According to the draft Income Tax (Digital Requirements) Regulations, the digital start date for income tax reporting may be different to the quarterly reporting periods for VAT.

However, we understand HMRC is looking to address this in the future for those businesses wishing to align their reporting periods to reduce their administrative burden.

Will a VAT registered unincorporated business have to do two sets of quarterly updates, one for VAT and one for MTD for ITSA?

In theory, yes.

However, if the VAT periods and Income Tax periods are aligned, it may be possible to submit the VAT and Income Tax quarterly updates at the same time.

Will VAT and MTD for ITSA deadlines be aligned (e.g. VAT is one month plus seven days whereas ITSA is end of month following)?

There is currently no guidance to indicate the reporting dates will be aligned. However, this may be addressed by HMRC further down the line.

Do MTD for ITSA thresholds apply to the landlord or each property?

The thresholds apply to the total of a taxpayer’s property income and turnover from self-employment.

The threshold would therefore relate to the landlord as opposed to individual properties.

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How many submissions will my clients need to do for a two-property rental business with MTD for ITSA?

The number of properties has no impact on the number of submissions. They will need to submit:

  • Four quarterly updates covering the income and expenses of all properties
  • An End of Period Statement with any adjustments to the net profit or loss for the period
  • A final declaration with all other income, gains and reliefs.

If a client has a self-employment business that is below the £50,000 or £30,000 threshold but they have property income that would push them over it, will they need to comply with MTD for ITSA?

The draft Income Tax (Digital Requirements) Regulations suggest that the threshold relates to the total income from a taxpayer’s self-employment and property businesses.

If my MTD for ITSA client has a single property but income is more than £50,000 or £30,000, will I now need software to do their tax submission?

Unless the client is exempt from digital reporting, the rules for Making Tax Digital for Income Tax will apply if the total income from property and self-employment exceeds the threshold.

Are partnerships affected by MTD for ITSA? When will partnerships need to comply with the rules for by MTD for ITSA?

HMRC hasn’t provided a timeline for any partnerships, including LLPs.

Will LLPs be included within the scope of MTD for ITSA?

These might be included in a future wave of MTD for ITSA mandation, but we’ve yet to receive information from HMRC.

Will MTD for ITSA apply to Construction Industry Scheme (CIS)-registered subcontractors?

Yes, there are no exclusions for individuals whose income is partially or wholly within the scope of CIS.

Will CIS rebates be generated quarterly as opposed to after the tax year with MTD for ITSA?

HMRC hasn’t indicated any changes to CIS due to the introduction of MTD for ITSA.

Visit the Accountant and Bookkeeper Making Tax Digital Hub for resources and information about how your practice can survive and thrive

The successful sign up of clients for MTD for ITSA will be the first step to improved client service, so it’s vital that you get it right.

When do my clients need to sign up to MTD for ITSA?

Your clients (or you on their behalf) will need to sign up to MTD for ITSA in advance of their digital start date (see “What is a digital start date for MTD for ITSA?” below).

How do I sign up to MTD?

There is guidance provided by HMRC for both Business sign up and Agent sign up at Gov.uk.

Will I need a new agent services account for MTD for ITSA, or will I use the same one as for VAT?

You can continue to use the same agent services account that you set up for MTD for VAT.

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However, you will need to copy your client’s existing authorisation for Self Assessment from your HMRC online services for agents account to your existing agent services account.

Will I need to renew my 64-8 authorisations under MTD (ITSA and VAT)?

If a client is not authorised on your agent services account, you can either:

  • Copy your client’s existing authorisation to your Agent Services Account, or
  • Ask the client to sign their own business up, then authorise you for Making Tax Digital for Income Tax.

Will clients already signed up to MTD for VAT need to also sign up for Income Tax?

If they meet the specified criteria, your clients (or you on their behalf) will need to sign up for MTD for Income Tax.

Is there an MTD for ITSA pilot programme?

Yes. This launched back in April 2018, albeit with limitations on what kinds of business could sign up.

However, as time goes on the pilot programme is opening to more and more businesses. Accountants can sign up clients using at Gov.uk.

MTD for ITSA-compatible software will have to be used to take part in the pilot.

The nitty gritty of MTD for ITSA revolves around digital record keeping and more regular submission to HMRC, including quarterly updates, end of period statements (EOPS) and a final declaration.

How many submissions will I need to file for my clients with MTD for ITSA?

The number of submissions will depend on the number of businesses the client has.

For each business, you will need to file four quarterly updates and an End of Period Statement to finalise business profits.

In addition, if your client has income from property then four quarterly updates and an end of period statement will need to be filed for property income.

You will then submit a Final Declaration with any other income, gains or reliefs.

How will information about personal income be submitted with MTD for ITSA?

Any non-business income will be submitted after the end of the tax year in the MTD for ITSA Final Declaration.

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Do the quarterly updates for MTD for ITSA need to include any personal income or just business income?

The quarterly updates only need to include a summary of income and expenses for the business. Non-business income does not have to be submitted periodically.

Will there be any changes to how tax is paid with MTD for ITSA?

No, MTD for ITSA only refers to digital reporting requirements.

It does not affect existing tax rules, including how and when tax is paid.

What happens if I need to amend a submission with MTD for ITSA?

HMRC has stated that corrections to a quarterly update can be made when a subsequent quarterly update or End of Period Statement is submitted, whichever is due first.

Will spreadsheets still be OK to use as a digital record-keeping solution with MTD for ITSA?

The expectation is that spreadsheets will be as acceptable for MTD for Income Tax as they are for MTD for VAT assuming they are MTD-enabled or used with bridging software.

What is a digital link under Making Tax Digital (ITSA and VAT)?

A digital link is where data is transferred or exchanged electronically and is a key component of all Making Tax Digital legislation (VAT, ITSA and likely Corporation Tax).

A digital link should not involve any manual intervention, such as copying and pasting or retyping information.

If I am using a spreadsheet to keep records, will using formulas be compliant with Making Tax Digital (ITSA and VAT)?

The definition of a digital link includes linked cells in spreadsheets.

For example, if you have a formula in one sheet that mirrors the source’s value in another cell, then the cells are linked.

What do I do if my software does not allow me to export information in a way that complies with Making Tax Digital requirement for digital links?

To follow the rules for Making Tax Digital for Income Tax, you’ll need to get compatible software.

To check which software packages are compatible, visit the HMRC website.

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Will I be able to copy and paste data with Making Tax Digital (ITSA and VAT)?

HMRC does not consider the use of ‘cut and paste’ or ‘copy and paste’ to select and move information to be a digital link.

Will the quarterly obligation periods align to the tax year or the accounting period with MTD for ITSA?

According to the draft Income Tax (Digital Requirements) Regulations, the quarterly obligation periods will depend on the digital start date for a business, which is aligned with its accounting period.

How long after the end of the quarter will I have to submit the update with MTD for ITSA?

According to the draft Income Tax (Digital Requirements) Regulations, quarterly updates are due one month after the end of the quarter.

Does the two thresholds refer to income or profit with MTD for ITSA?

The threshold refers to income rather than profit.

The draft Income Tax (Digital Requirements) Regulations suggest this relates to the income for the accounting period two years before the period in question.

For example, for a period ended 5 April 2026, this would normally be the income for the period ended 5 April 2024.

If my client has multiple businesses which each are below the £50,000 or £30,000 but collectively have income over the threshold, will they be within scope of MTD for ITSA?

The threshold relates to the sum of the businesses.

So income across all businesses that would normally be included in your Self Assessment return should be used to assess whether the individual is within scope of MTD for ITSA.

MTD for ITSA doesn’t mean the end of Self Assessment – at least not in the initial April 2026 rollout.

Self Assessment will still be a requirement for many who aren’t within the scope of MTD for ITSA.

It might even continue to be a necessity for many who are mandated for MTD for ITSA, as described below.

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If the qualifying income is below the £50,000 or £30,000 MTD for ITSA thresholds, will they continue with the current process for Self Assessment?

Yes, if qualifying income is below £50,000 in April 2026, or below £30,00 in April 2027, then they are exempt from the current digital requirements under MTD for ITSA and will continue to complete and file a Self Assessment tax return if required.

How does MTD for ITSA change the current process for Self Assessment?

Similar to MTD for VAT, MTD for ITSA requires businesses and landlords to keep their records digitally and to submit quarterly updates of business income and expenses to HMRC using MTD-compatible software.

Business owners and landlords will no longer file an annual Self Assessment tax return.

Instead, they will be required to send tax adjustments (the End of Period Statement) for each business, as well all other details to finalise their overall tax position (the Final Declaration) after the end of the tax year.

Will I still have to complete a Self Assessment tax return for my client with MTD for ITSA?

You will only need to complete a Self Assessment tax return for clients within the scope of MTD for ITSA if the information you need to submit is not supported under Making Tax Digital.

With MTD for ITSA, will the current Self Assessment process change for clients that do not have property or self-employment income but complete Self Assessment for other reasons?

No. MTD for ITSA only applies to individuals with income from self-employment or property businesses that are subject to Income Tax.

If your client is required to complete a Self Assessment tax return for another reason they will continue to do so in line with the current process.

Here are some questions about MTD for ITSA that fall outside of the main categories discussed above.

Will I still be able to offset losses between businesses with MTD for ITSA?

Yes, MTD for ITSA does not affect existing tax rules – just how the information is reported. Under MTD you can still claim loss relief as you would under Self Assessment.

What is a digital start date for MTD for ITSA?

According to the draft Income Tax (Digital Requirements) Regulations, the digital start date is the date from which a business must keep digital records and make quarterly submissions.

For self-employments earning over £50,000 per year, the digital start date is the day after the first accounting period that ends on or after 5 April 2026. For those earning over £30,000, the digital start date is 5 April 2027.

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For property businesses, the digital start dates are 6 April 2026 and 6 April 2027 based on the same income thresholds.

Will it be essential to use software to comply with the rules of MTD for ITSA?

Yes, a relevant entity must use functional compatible software to comply with the following requirements (“the digital requirements”):

(a) to record digital records

(b) to preserve those digital records

(c) to provide a quarterly update

(d)  to provide, as applicable, an end of period statement or a Schedule A1 partnership return.

Can the bookkeeping solution and the tax solution be different for MTD for VAT/ITSA, or will I need a single provider for the full process?

Bridging software is the name for solutions that combine information from different software and digitally submit the submissions to MTD.

Solutions that use bridging software will meet the MTD requirements so long as digital links are preserved

Will Sage software be compliant with MTD for ITSA?

Sage will have solutions for our customers to meet their MTD for ITSA obligations.

Sage is working closely with HMRC, accountants and small business owners to understand and build a great user experience to support the next wave of Making Tax Digital that covers Income Tax.

Will we have to pay for MTD for ITSA-compatible software?

Customers will need to be on the latest version of their Sage software to benefit from MTD for ITSA enhancements.

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This is likely to require that customers have valid software subscriptions.

Although many accountants have worked on MTD for VAT for several years, they often ask specific questions.

Here are some answers.

Do VAT-registered businesses with turnover below £85k have to follow MTD for VAT rules?

All VAT-registered businesses need to follow MTD for VAT unless HMRC approves that the business is exempt.

What were the changes in how VAT submissions could be filed in April 2021?

HMRC stopped accepting electronic VAT returns via the legacy XML gateway.

Businesses voluntarily registered for VAT and which used the XML gateway must use MTD for VAT.

How will MTD for VAT work for a group of companies sharing the same VAT number (which is to say, group consolidation)?

There is no change to the rules for VAT groups.

Will a VAT registered unincorporated business have to do two sets of quarterly updates, one for VAT and one for Income Tax?

Yes, although businesses can synchronise their year ends so the quarterly filing obligations can be completed at the same time.

Are bridging solutions still acceptable for MTD for VAT?

Yes.

Will the quarterly obligation periods for MTD for VAT align with those for MTD for ITSA?

Businesses will not be required to align their obligation periods but may prefer to align dates to simplify their business processes.

Although we don’t yet know a lot of detail about MTD for Corporation Tax, we know the broad outline of what’s planned and this is unlikely to change.

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When is MTD for Corporation Tax (CT) mandated?

The government has said it will not mandate MTD for CT before 2026.

Many have interpreted this as the government implying the first wave of MTD for CT will be introduced in April 2026.

But this is far from certain, and the government has postponed MTD scheme introduction dates several times in the past (often several times).

What do we know about MTD for CT right now?

The government recently completed a consultation phase and, as part of that, published a document that contains some details of the MTD for CT plans.

Among other things, this provides customer journey flow diagrams that show how MTD for CT is likely to function, and the role of the accountant within it.

At the moment, we know that MTD for CT will require:

  • Digital record keeping.
  • Quarterly summary updates of income and expenditure to HMRC. As with MTD for ITSA, this will show expected CT liability.
  • Digital submission of a Corporation Tax Return. This can be done by the accountant on behalf of the client following adjustments and claims for relief.

When will the MTD for CT pilot programme begin?

HMRC says it expects this to start in April 2024.

At that point interested businesses can sign up ahead of time, provided they’re using MTD for CT-compatible software.

How can I prepare clients for MTD for CT?

Many businesses mandated for MTD for CT will already have experience of MTD for VAT, so this will help with education and awareness.

However, the biggest problems are likely to be encountered at the extreme ends of the business size scale.

Small, incorporated businesses that don’t currently use digital accounting will need to make the switch to doing so.

Large businesses that have disparate systems for recording accounting data will need to ensure they’re digitally linked.

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What will be the role of accountants with MTD for CT?

At the very least, HMRC envisions that accountants or tax agents will need to step in nine months after the accounting period in order to make required adjustments, claim any reliefs, and finalise the liability.

However, this is subject to change as more detail is released about MTD for CT.

Final thoughts

Making Tax Digital is going to be one of the biggest and best business opportunities for accountants in the coming decade. Discover how to save time and money by adding automation with our ROI calculator.

Learning about its requirements are just the start.

Practice preparation programmes should already be underway to not only provide what clients need but also to make the most of all the opportunities presented.

More touchpoints with clients, the chance to adopt a more advisory role, and even the opportunity to help clients not just upgrade their software but learn how it’s used – growth in your practice really is down to your ability to exploit opportunity.

But one thing is key – you should start now and put Making Tax Digital at the heart of everything you do.

Editor’s note: This article was first published in July 2021 and has been updated for relevance.

Making Tax Digital: A practice survival guide

Need support with Making Tax Digital, for your clients and your practice? This free guide will help you get ready for MTD for VAT, Income Tax Self Assessment and Corporation Tax.

Download your free guide

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Exclusive: Are Basic Industries a Good Career Path? – TalkOfNews.com

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Are Basic Industries a Good Career Path?

#Basic #Industries #Good #Career #Path

As a child, most people were asked what they wanted to become when they grew up. It’s a tough decision. Finding the right combination of talent, passion, practicality and job security is no easy feat.

You might discover basic industries as you decide what industry you want to enter. The field provides several options, so it can take some exploration.

Keep reading for the need-to-know information on basic industries, what it entails and whether or not it is a good career path.

Related: 3 Traditionally Offline Industries That Are Going Online

What are basic industries?

A basic industry is one that manufactures materials and provides those materials to other industries. Basic industries are integral to a country’s economy, as they supply, process and develop the vital raw materials it needs to operate.

Types of basic industries

Jobs in basic industries are often labor-intensive and require various technical skills and qualifications. See some of the sectors below to see if a career path in basic industries might be interesting to you.

Agriculture

Agriculture falls under the supersector of natural resources and mining. Jobs in this sector entail crop growing, animal raising, timber harvesting and fish and animal harvesting. Any of these actions must occur on a farm, ranch or the natural habitat of the plant or animal.

This industry is irreplaceable, as it is the beginning of the food supply chain, which is the process by which food gets from its raw form, to distribution to people’s home tables.

Common locations for jobs in this sector include:

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  • Farms
  • Ranches
  • Dairies
  • Greenhouses
  • Nurseries
  • Orchards
  • Hatcheries

While it is not absolutely mandatory to have a degree to enter the field of agriculture, many workers study the major in college and prepare for their careers as early as middle school through programs like the Future Farmers of America (FFA) and 4-H.

Those who do study agriculture in higher-education complete majors including:

  • Animal sciences
  • Agriculture production and management
  • General agriculture
  • Plant science and agronomy
  • Agricultural economics

The top 10 universities in the United States for Agricultural Sciences include:

  1. University of Massachusetts Amherst
  2. Cornell University
  3. University of California, Davis
  4. University of Florida
  5. Harvard University
  6. University of Illinois, Urbana-Champaign
  7. Michigan State University
  8. Purdue University, West Lafayette Campus
  9. University of Wisconsin, Madison
  10. Iowa State University

Whether or not you’re considering pursuing an agricultural degree, you might be interested in some information on workers who enter the field.

Key career statistics about the agriculture workforce:

  • Employment: 627,210
  • Median wage: $52,000
  • Percentage of part-time employees: 13%
  • Percentage employed with occupations requiring a bachelor’s degree: 42%
  • Percentage employed with an advanced (post-bachelor’s) degree: 27%

Common titles in the agricultural field:

  • Veterinarians (Doctoral or professional degree required)
  • Postsecondary teachers (Doctoral or professional degree required)
  • Soil and plant scientists (bachelor’s degree)
  • Sales representatives for wholesale and manufacturing (high school diploma or equivalent)
  • Crop, nursery and greenhouse farmworkers and laborers (no formal educational credential)
  • Retail salesperson (no formal academic credential)
  • Farmers, ranchers, agricultural managers (high school diploma or equivalent)
  • First-line supervisors of retail sales workers (high school diploma or equivalent)
  • Chief executives (bachelor’s degree)

Related: How Technology is Fighting Agriculture’s Unsettling Age Problem

Steel and metals

With the rise of the Industrial Revolution in the 18th century, metal and steelwork became a considerable part of the world’s mechanical ecosystem. The technological advances shifted much of the focus from agriculture to industrial.

While agriculture will likely always be necessary, steel and metalwork has continued to evolve with modern technology and is a thriving industry today.

Steel and metal work jobs exist all over the country; however, five states have the highest employment of structural iron and steel workers.

The top five states, their employment numbers, mean hourly wage and annual mean wage as of 2021 are:

California

  • Employment: 7,850
  • Hourly mean wage: $34.07
  • Annual mean wage: $70,870

Texas

  • Employment: 7,240
  • Hourly mean wage: $22.00
  • Annual mean wage: $45,760

New York

  • Employment: 4,400
  • Hourly mean wage: $43.41
  • Annual mean wage: $90,280

Florida

  • Employment: 3,710
  • Hourly mean wage: $22.78
  • Annual mean wage: $47,380

Ohio

  • Employment: 3,320
  • Hourly mean wage: $29.60
  • Annual mean wage: $61,570

The five parts of the industry with the highest employment rates are:

  • Foundation, structure and building exterior contractors
  • Nonresidential building construction
  • Fabricated metal product manufacturing (3323 and 3324 only)
  • Building equipment contractors
  • Other specialty trade contractors

Generally, the steel and metal industry has positions requiring a high school diploma, an equivalent degree and a subsequent apprenticeship.

Apprenticeships allow prospective steel and metal workers to learn necessary skills and knowledge through hands-on experience and training. Many technical schools or contractor associations provide apprenticeships.

Apprenticeships in the steel and metal field can equip students with skills like:

  • Metal framework construction
  • Reinforcing and installing metals and measuring
  • Cutting and laying rebar
  • Basic math skills
  • Basic sketching skills

If you are considering an apprenticeship in this industry, be prepared to dedicate your time and attention. Apprentices complete around 144 hours of technical training and 2,000 hours of real-world job experience.

Related: 3 Stellar Steel Stocks to Buy Now

Mining, quarrying, oil and gas extraction

The mining, quarrying and oil and gas extraction industries fall under the natural resources and mining supersector.

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A miner’s job includes actions like:

  • Quarrying
  • Well operations
  • Beneficiating: crushing, screening, washing and flotation
  • Preparation at a mine site

During these job performances, miners seek to extract naturally occurring mineral solids like coal, ore and liquid minerals like crude petroleum.

There are approximately 593,300 workers in this industry and 5.7% of workers are members of a union.

Five occupations and their mean salaries in this industry include:

  1. First-line supervisors/managers of construction trades and extraction workers: $88,290
  2. Helpers — extraction workers: $42,930
  3. Mining and geological engineers, mining safety engineers: $100,000
  4. Operating engineers, construction equipment operators: $52,000
  5. Roustabouts — oil and gas: $44,890

For all other hourly employees, the average hourly earnings are approximately $33.85 per hour.

To begin work in the mining industry, you must undergo training to prepare. The National Mine Health and Safety Academy is located in Beaver, West Virginia and holds in-person courses for prospective mining professionals.

The institution also provides materials and resources for trainees who prefer to complete their training at their local training program.

The job requirements are different if you are interested in the mining sector and are drawn toward geological engineering.

Although geological engineers often work alongside miners, their roles are different. Geological engineers identify risk factors and terrain at worksites to ensure health and human safety.

Geological engineers need, at minimum, a bachelor’s degree in a major like:

  • Chemistry
  • Fluid Mechanics
  • Physics
  • Math
  • Lab Work
  • Field Experience

The top 10 U.S. universities for geosciences are:

  1. California Institute of Technology
  2. University of Colorado, Boulder
  3. Columbia University
  4. University of Maryland, College Park
  5. University of Washington, Seattle
  6. Harvard University
  7. University of California, Irvine
  8. Princeton University
  9. University of California, Los Angeles
  10. Massachusetts Institute of Technology (MIT)

In addition to higher education, you will likely need to complete an internship or fellowship to gain real-world experience in the geological field of your choice.

There are also types of geological engineers that need to complete additional licensing to be qualified for positions.

Related: 4 Oil and Gas Stocks to Buy Before the Winter Freeze

Chemicals

Chemical manufacturing is a subsector of the manufacturing sector. This subsector takes organic and inorganic raw materials and transforms them into products through a chemical process.

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Groups in the chemical manufacturing industry include:

  • Basic chemical manufacturing
  • Resin, synthetic rubber and artificial synthetic fibers and filaments manufacturing
  • Pesticide, fertilizer and other agricultural chemical manufacturing
  • Pharmaceutical and medicine manufacturing
  • Paint, coating and adhesive manufacturing
  • Soap, cleaning compound and toilet preparation manufacturing
  • Other chemical products and preparation manufacturing

Occupations in the chemical manufacturing industry and their salaries include:

  • Chemical equipment operators and tenders: $52,470
  • Chemical technicians: $57,140
  • Chemical engineers: $105,550
  • Chemists: $83,960
  • Mixing and blending machine setters, operators and tenders: $42,820
  • Packaging and filling machine operators and tenders: $37,980

While some of the occupations on this list require higher-education degrees, others do not. For example, becoming a chemical technician requires a high school diploma or GED equivalent.

In addition, a chemical technician must have prior experience in the sector, a HazMat certification, likely a forklift certification and general skills.

On the other hand, a chemical engineer requires a bachelor’s degree, Fundamentals of Engineering (FE) certification, a master’s degree, a Professional Engineering (PE) certification and a state license.

The top skills required by chemical engineers include:

  • Technical skills
  • Mathematics
  • Analytical skills
  • Critical-thinking skills
  • Creative thinking

The top 10 U.S. universities for chemical engineering are:

  1. Massachusetts Institute of Technology (MIT)
  2. Georgia Institute of Technology
  3. University of Delaware
  4. University of California, Berkeley
  5. Stanford University
  6. University of Illinois, Urbana-Champaign
  7. California Institute of Technology
  8. University of Texas, Austin
  9. University of Minnesota, Twin Cities
  10. University of Wisconsin, Madison

The states with the highest employment level and their corresponding annual hourly wage and annual mean wage are:

Texas

Annual hourly wage: $79.07

Annual mean wage: $164,470

Pennsylvania

Annual hourly wage: $49.26

Annual mean wage: $102,450

California

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Annual hourly wage: $46.60

Annual mean wage: $96,920

Michigan

Annual hourly wage: $52.72

Annual mean wage: $109,650

New Jersey

Annual hourly wage: $59.28

Annual mean wage: $123,300

Related: From Salt To Sustainability: How Tata Chemicals Is Driving Growth On the Back Of Innovation

Textile mills

Textile mills are a subsector of the manufacturing sector. Textile mills take a natural or synthetic basic fiber and transform it into a product that is manufactured further into items used for industrial or individual use.

Textile mills transform materials into items like:

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  • Apparel
  • Sheets
  • Towels
  • Textile bags

Textile mills consist of three different types of mills, which are:

  • Fiber, yarn and thread mills
  • Fabric mills
  • Textile and fabric finishing and fabric coating mills

Common occupation titles in textile mills and their mean salaries include:

  • First-line supervisors/managers of production and operating workers: $59,450
  • Inspectors, testers, sorters, samplers and weighers: $33,960
  • Textile bleaching and dyeing machine operators and tenders: $31,620
  • Textile knitting and weaving machine setters, operators and tenders: $34,250
  • Textile winding, twisting and drawing out machine setters, operators and tenders: $32,110

Related: Future of Textile Technology and Apparels Trend

Utilities

Utilities are a subsector of the trade, transportation and utilities supersector. The utility sector has several different establishments and services that go with those establishments.

Industry groups in the utilities subsector include:

  • Electric power generation, transmission and distribution
  • Natural gas distribution
  • Water, sewage and other systems

Utility establishments and their services include:

  • Electric power: Generation, transmission and distribution
  • Natural gas: Distribution
  • Steam supply: Provision and distribution
  • Water supply: Treatment and distribution
  • Sewage removal: Collection, treatment and disposal of waste through sewer systems and sewage treatment facilities

Common occupation titles in utilities and their mean salaries include:

  • Control and valve installers and repairers, except mechanical door: $77,160
  • Electrical engineers: $110,230
  • Electrical power-line installers and repairers: $87,660
  • First-line supervisors/managers of mechanics, installers and repairers: $105,750
  • Meter readers, utilities: $58,120

Electrical engineering may stand out to you as a potential occupation in the basic industries. To become an electrical engineer, you will need a bachelor’s degree and participation in an internship or other practical experience.

The top 10 U.S. universities for electrical engineering are:

  1. Massachusetts Institute of Technology (MIT)
  2. Stanford University
  3. University of California, Berkeley
  4. California Institute of Technology
  5. Georgia Institute of Technology
  6. University of Illinois, Urbana-Champaign
  7. University of Michigan, Ann Arbor
  8. Carnegie Mellon University
  9. Cornell University
  10. Purdue University, West Lafayette

Related: 3 Utility Stocks to Weather Market Storms

Paper

Paper manufacturing is a subsector of the manufacturing sector. The paper manufacturing subsector is also made up of converted paper products, paper and pulp.

Pulp is a raw material generally made from cellulosic (vegetable) fibers or other materials like minerals, artificial fibers, rags, straws, grasses and bark. Paper, pulp and converted paper products are grouped because they are part of a vertically connected process.

This process includes three parts:

  1. Pulp manufacturing: Separating the cellulose fibers from other impurities in wood or used paper
  2. Paper manufacturing: Matting fibers into a sheet
  3. Converted paper products: Paper and other materials are cut and shaped with techniques that include coating and laminating activities

Occupations integral to the paper manufacturing industry and their mean salaries include:

  • Cutting and slicing machine setters, operators and tenders: $44,150
  • First-line supervisors/managers of production and operating workers: $75,050
  • Industrial production managers: $119,980
  • Industrial truck and tractor operators: $42,780
  • Paper goods machine setters, operators and tenders: $45,430

Industrial truck and tractor operators make up approximately 758,290 jobs in the U.S. workforce. This occupation is vital to the industry.

To become an industrial truck and tractor operator, you must fit job requirements like having a high school diploma or GED, a relevant driver’s license and a completed apprenticeship or other practical experience.

Related: 3 Reasons Why Paper Packaging Can’t be Beat

Pros and cons of working in basic industries

Like any other industry, every job title has pros and cons. See below for more information about the ups and downs of working in basic industries.

Pros of working in basic industries:

  • Job stability: Basic industries are only attractive to some. While it takes a particular dedicated type of worker to embrace a basic industry job, that also means plenty of job opportunities and a high level of job stability for those in the industry.
  • Low barrier to entry: There are thousands of jobs in basic industries that do not require higher education. Instead, many occupations require practical experience or certifications, which are much more affordable than college degrees.
  • Training opportunities: Once a worker enters the field, there are many adjacent jobs for which their employer may provide training. Technology is constantly evolving, so there are many training opportunities for workers to learn how to operate new technologies.
  • Opportunity for growth: Basic industries are niche, so there are many opportunities to train and grow in that environment.

Cons of working in basic industries:

  • Labor-intensive jobs: Basic industry jobs can be tough on the body and the mind. They are the opposite of desk jobs — workers must constantly move, lift and operate heavy machinery. The environment often has high stakes and long work hours, which can affect mental health.
  • Workforce based on the economy: While many basic industry jobs are essential and ineffective by the economy, others might be subject to furloughs or layoffs in an economic downturn.
  • Possible hazardous working conditions: Some basic industry occupations are subject to unsafe working conditions like chemicals, pollutants and other dangerous situations with locations and machinery that often contribute negatively to personal and environmental health.

Basic industries and the environment

It’s no secret that industrial practices have damaged the environment and contributed to climate change. The Industrial Revolution was one of the most significant inciting incidents to the manufacturing industry boom.

At the time, people had no idea the long-term effects fossil fuels from large manufacturing plants would someday have on the planet. While so many improvements have been made, industrialization’s carbon footprint from basic industries still occurs today. Keep reading for specific environmental impacts from basic industries.

Water pollution

Water pollution occurs when natural or manufactured chemicals contaminate a water source.

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While some water pollution can be identified as murky, odorous or containing trash, the even more dangerous situation is when contaminated water looks completely safe. Natural gas and oil leaks, generally from human activity, cause water pollution.

Air pollution

Air pollution occurs when natural or manufactured hazardous substances contaminate the air. Sometimes, air pollution can be seen, like smog; however, other times, the air might look normal.

According to the World Health Organization, 99%of the world’s population breathes in air contamination, such as particulate matter, carbon monoxide, nitrogen dioxide or sulfur dioxide. Too much inhalation of any of these chemicals can cause serious health issues.

Soil pollution

Soil pollution comes from contaminated soil and can harm people or animals who touch, breathe or ingest its toxic properties. It might not seem like soil contamination would affect a large amount of society; however, contaminated soil can be a massive detriment to the entire ecosystem.

Contaminated soil can generate pests and diseases. The animals who eat those pests or the soil are then eaten by larger animals up the food chain.

This is not only harmful to the animals affected but to the humans who consume those animals that now contain bacteria. Contaminated soil can affect the health and food security of the entire planet.

Global warming and climate change

Greenhouse gases, like carbon dioxide and methane, are emitted from landfills and agricultural industries, which ultimately causes global warming.

Climate change is caused by global warming, as temperatures shift and weather patterns change. These changes affect the entire planet’s ecosystem.

Top sources of greenhouse gas emissions

Six significant industries contribute to greenhouse gas emissions. Three of those six are basic industries, including utilities, agriculture and other basic industries. Look below to see where the manufacturing industry ranks compared to the other greenhouse gas emitters.

  • Utilities: 25%
  • Other basic industry: 24%
  • Commercial and residential: 13%
  • Land use and forestry: 13%
  • Agriculture: 11%

How can basic industries reduce their carbon footprint?

As the world learns more about climate change and prevention, basic industries can adopt strategies to do their part in cleaning up manufacturing practices.

Waste management

Hazardous waste is a huge contributor to pollution and must be treated and discarded properly to protect the ecosystem. Basic industries can practice strict and clean waste management strategies, including treatment, transportation and disposal, to help reduce their carbon footprint.

Recycle, reduce, reuse

How basic industries treat, transport and dispose of recyclable materials matters. Making sure recyclables are separated is the first step. Large manufacturing plants can also practice upcycling by reusing materials or finding alternative uses when possible.

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Mitigate greenhouse gasses

Making the switch to clean and renewable energy is a massive step toward reducing greenhouse gas emissions. In addition to that, gas capture programs can reduce overall gas waste.

More intelligent land use

Before large plants build locations, they should consult ecological experts to ensure the site does not threaten or destroy nearby wildlife. Sites should also have emergency plans in place should a fire, oil spill or another accident occur.

Current technology

Technological advances have produced much cleaner, safer and more efficient machinery. Basic industries can implement these new technologies to reduce their carbon footprints and improve energy efficiency.

One of the most significant switches to consider is utilizing renewable energy, like sun, wind or water.

Promoting environmental awareness

For industries to grow in this area, they must stay current with environmental education.

Two ways to stay up-to-date include performing environmental impact assessments and studying ecological changes. Employee training and company policies are other ways to raise industry-wide awareness.

Related: 5 Ways Technology Can Help Tackle Air Pollution

Companies that care

Each year, more and more companies in various industries pledge to reduce their carbon footprint. The United States Environmental Protection Agency (EPA) created the Green Power Partnership Fortune 500® Partners List, highlighting companies that have adopted green power resources to conduct operations.

Below, you will find eight companies in primary industries that have made commitments and the green power resources they utilized the most.

8 basic industries companies committed to green power

  1. Owens Corning: Solar, wind
  2. The Boeing Company: Small-hydro, solar, wind
  3. Crown Holdings, Inc./USA Beverage Division: Wind
  4. Cummins Inc.: Solar, wind
  5. Lockheed Martin: Various
  6. Textron Aviation: Wind
  7. General Dynamics Land Systems/Central Office: Wind
  8. General Dynamics Land Systems/Scranton: Various

The bottom line: Are basic industries a good career path?

Basic industries are widespread, have a low barrier to entry and many are essential occupations. If you are looking for a career that generally offers solid job security and plenty of opportunity for growth, basic industries can be a good career path.

One drawback to working in basic industries is the health and environmental risk that comes with the territory. Because many sectors of basic industries involve manual labor, there can be dangerous jobs you must complete or hazardous materials you must work with.

When choosing the right industry for you, it is essential to weigh all the details and logistics of each occupation. However, if you conclude that working in basic industries has more pros than cons, then basic industries is a good career path for you.

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