ISSUE 02THE SCOTT-MONCRIEFF BUS INESS JOURNAL

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C H A R I T Y C H E C K L I S T – S O U N D A D V I C E AC R O S S T H E B OA R D 08

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£50 B I L L I O N H E I S T H I TS T H E U K 18

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EXCLUS IVE INTERV IEW WITH

FOUR OF TODAY’S

ENTREPRENEURSAT THE UK’S L ARGEST

TECH INCUBATOR, CODEBASE

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As far as Scott-Moncrieff’s specialist areas go, the arts and heritage sector is one which might surprise some. Nevertheless, the firm has been a trusted partner to some of the leading artistic and cultural organisations in Scotland for many years. With a client list that comprises the best in opera, dance, theatre, galleries, libraries, festivals and museums, the team is never short of creative inspiration.

A sector not without its challenges, sound financial and business management is a vital element of

the behind the scenes work that goes on to ensure the vibrant, innovative, educational, thought provoking and entertaining work of these organisations is delivered. As they say, ‘the show must go on’, and our experts work alongside our arts clients to make their creative vision possible.

INSIDE SCOTT- MONCRIEFF:

PERFECTING THE ART OF BUSINESS

Creative Scotland is the public body that supports the arts, screen and creative industries. Scott-Moncrieff provides internal audit and IT assurance to the organisation, supporting a crucial part of their business, which is to distribute funding from the Scottish Government and the National Lottery. This funding enables people and organisations to work in, experience and develop creative projects all over Scotland.

CultureNL wraps up all of the different aspects of arts and culture in North Lanarkshire, managing the main entertainment venues, community facilities, museums and library services as well as overseeing play services and arts development. Working alongside the organisation, Scott-Moncrieff provides essential support on the finances, providing corporate tax and VAT compliance, and audit services.

In 1991, British Rail handed over the arches underneath Glasgow Central Station to be used as a temporary theatre venue. Almost 25 years later, The Arches has earned its place as a much-loved Glasgow institution. As well as theatre production, the programme includes club nights, live music and exhibitions. Almost as diverse as the programme is the range of services provided by Scott-Moncrieff – covering audit, accountancy, corporate tax, compliance, VAT consultancy and business planning.

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EXCHANGE HIGHLIGHTS

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19Designed by The Marketing Cafe Ltd. All correspondence to: Exchange Magazine, Scott-Moncrieff, Exchange Place 3, Semple Street, Edinburgh EH3 8BL, T: 0131 473 3500. © 2015 Scott-Moncrieff. All rights reserved. No part of this publication may be reproduced by any means without the written permission of the copyright owners. Although every effort has been made to ensure the accuracy of this publication, the publishers cannot accept responsibility for any errors or omissions.

Scottish Ballet has been wowing audiences across the UK and internationally for more than 45 years with a high-level mix of ballet and contemporary dance. Whilst a dance ensemble is always referred to as a ‘company’, Scottish Ballet can be described as such in more ways than one. As with any business, keeping the show on the road depends on sound finances, and Scott-Moncrieff supports this requirement by providing a wide range of audit, corporate tax, VAT and employer services as well as business planning and systems support.

Scottish Opera is the largest performing arts organisation in Scotland. The Company takes top-quality opera to Glasgow, Edinburgh, Aberdeen and Inverness and over 30 other theatres, village halls and community centres across the country each year, and works with people of all ages through the ground-breaking work of its Education team. Scottish Opera has recently completed a multi-million pound transformation of its Glasgow home, Theatre Royal Glasgow, turning it into a modern and lively performance space that celebrates the theatre’s heritage. Scott-Moncrieff’s services hit the right note with this client, providing audit, corporate tax and VAT services.

To the magic of the silver screen, and the Centre for the Moving Image, which was established in 2010 with a mission to be at the forefront of the development of a vibrant and successful film industry and culture across Scotland and beyond. Scott-Moncrieff support the CMI’s activities in Aberdeen (Belmont Filmhouse) and Edinburgh (Filmhouse and the Edinburgh International Film Festival) in the form of audit, accountancy, corporate tax and VAT services.

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D & ESTATES

The 49 recommendations from the Agricultural Holdings Legislation Review Group are just that –

recommendations. Some, all or indeed none may be taken forward, although it is highly likely that some will progress.

However, although the Review Group has made recommendations in a number of areas, some concluded that the UK and Scottish Governments should ‘work together’ to reach a solution. Some might say that this is a little too optimistic, and it by no means fills the rural sector with confidence.

One of these areas is the impact of taxation. Although inheritance tax and capital gains tax will both be reserved matters to be dealt with by Westminster, there is a feeling from the Review Group that reliefs for agricultural and business property and for entrepreneurs

are structured in a way that favours landowning businesses actively using the land themselves, rather than letting it out – in turn discouraging the renting of land. The recommendation from the review group is therefore that in future, the Scottish and UK Governments should work together to consider whether these disincentives can be removed, as well as the potential for structuring reliefs in such a way as to incentivise the letting of land on larger estates by capping their availability for in-hand land.

It’s fair to say that the UK and Scottish Governments don’t have the best track record in working together. We shall need to wait and see how the recommendations move forward in the first instance, and thereafter how the two Governments get on with collaborating on the job in hand. Certainly though, the rural sector won’t relish, or benefit from, being caught in the middle.

There is little doubt that the estates sector in Scotland is on the brink of change. Change, though, is a constant in rural life. No matter what materialises, the fact remains that the sector is crucial to Scotland. The land is a major employer, not just retained by the few for their pleasure. Scottish land works hard – sustaining communities, creating jobs, and contributing to national environmental aspirations.

MOVINGMOUNTAINS

THE UK AND SCOTTISH GOVERNMENTS SHOULD ‘WORK TOGETHER’ TO REACH A SOLUTION

WE HAVE THREE QUAL IF IED LEAN

SPECIAL ISTS ; ONE MASTER BL ACK

BELT, ONE BL ACK BELT AND ONE

GREEN BELT

D ID YOU KNOW?

Morag Watson is a tax partner and Head of the Renewables, Land and Environment Group.E: morag.watson@scott-moncrieff.com

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GLASGOW’SCouncillor Gordon Mathieson CBE, Leader of Glasgow City Council reflects on more than seven years of planning and preparation to host the biggest sporting and cultural event

the country has ever seen, The Glasgow 2014 Commonwealth Games.

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MAINTAINING MOMENTUM There is no doubt that 2014 was the Year of Glasgow. But we are by no means complacent and always knew that following the eleven days of sporting competition there would still be a job to do to keep the momentum of the past few years going – a momentum that will leave a lasting legacy that will still be visible and talked about in years to come.

Our Glasgow 2014 Legacy Framework was created in 2009 with the aim of making the city a more prosperous, more active, more inclusive, more accessible and greener place, with a greater international profile and outlook.

As part of the council’s preparations for the Games, we delivered jobs and training places for thousands of people through a range of measures aimed at maximising community benefits.

MORE THAN £669 MILLION OF TIER 1 GAMES-RELATED CONTRACTS WERE AWARDED

ECONOMIC BENEFITS Adding community benefit clauses to contracts for regeneration initiatives in the city led to long-term unemployed people and school leavers winning places on high-profile construction projects across the city and created employment and business opportunities for local people and companies.

In fact earlier this year we announced, six months after the Opening Ceremony of the Games, the success of city-based businesses in winning contracts associated

with the staging of the most successful Games in the history of the event.

More than £669 million of Tier 1 Games-related contracts were awarded, with companies and organisations from Glasgow winning over £423 million of the value. Scottish firms won over £510 million of the total worth of these contracts.

It was enormously heartening to read these hugely impressive figures about the jobs, apprenticeships and contracts gained by Glasgow people and businesses as a result of our Games. From this we also retain the skills, facilities and enhanced international reputation that ensures we will continue to attract world-class events in the future.

These clauses for major Commonwealth Games-related projects created employment and business opportunities for local people and companies, and the council is now seen as a model in terms of the award of public sector contracts, with the £1.13 billion Glasgow and Clyde Valley City Deal viewed as another chance to deliver significant community benefit for our city and the surrounding areas.

COMMONWEALTH APPRENTICESHIP INITIATIVE At the same time as the community benefit clauses have benefited local people, businesses and organisations, our ambitious Commonwealth Apprenticeship Initiative has found Modern Apprenticeship places for almost 3,600 Glasgow school leavers over the past five years.

The initiative forms a key element of our £50 million Glasgow Guarantee, which aims to ensure every Glaswegian aged 16-24 has access to a job, training or an apprenticeship.

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In total, 784 graduates have gained employment through the council’s Commonwealth Graduate Fund, 917 previously unemployed people living in the city have secured jobs through the Commonwealth Jobs Fund, and 321 people found jobs through the Commonwealth Youth Fund.

Firms and organisations had to register on the Glasgow Business Portal to bid for a Games-related contract. More than 22,500 registrations were made on the portal, with over 4,400 from Glasgow.

To ensure the long term sustainable legacy of these outcomes, the Glasgow Business Portal merged with the Scottish Government’s Public Contract Scotland (PCS) during November 2014, with the merger providing a more efficient service for suppliers by ensuring all opportunities and sub-contracts for public bodies are advertised on one dedicated site.

CATALYST FOR DEVELOPMENT In the lead up to and during the Games, the council and its partners engaged with the city’s business community on how it could maximise the opportunities available through the Games. We also provided practical information about continuing to operate while the Games were being staged through the Get Ready Glasgow campaign. This new dimension to our existing relationships with businesses is something that we hope to continue in terms of

keeping businesses up-to-date with future events and developments taking place within the city.

The Games have undoubtedly been a catalyst for developments that will renew the landscape and the opportunities available in Glasgow. Thousands of Glaswegians, and many of the city’s businesses, have benefited directly as we prepared to host the biggest event ever to come here.

So Glasgow has already benefited from the Games, but – equally importantly – in future decades, the entire city will benefit from the achievement and investment of recent years. Anyone who has been away from Glasgow for the past five years and recently returned would be amazed by the changes in our skyline. We are confident that such ambition will attract investors and visitors who see a city moving in the right direction.

The Games presented us with a unique chance to move the city forward. We were determined that the city would make the most of this opportunity, and the latest figures show that the council’s legacy plans for before and after the Games have already delivered real change for Glasgow.

Councillor Gordon Matheson CBE, Leader of Glasgow City Council

THE GAMES HAVE UNDOUBTEDLY BEEN A CATALYST FOR DEVELOPMENTS THAT WILL RENEW THE LANDSCAPE AND THE OPPORTUNITIES AVAILABLE IN GLASGOW .

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WE DEL IVER AUDIT SERV ICES TO HALF OF THE FURTHER

EDUCAT ION COLLEGES IN

SCOTL AND

DID YOU KNOW?

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G illian Donald, who heads up Scott-Moncrieff’s charities division, says: “As we emerge from recession, Scottish charities have perhaps the best opportunity they have had for many years.

“Politicians are listening in Scotland as hard as they are in Westminster in the election period, the Smith Commission will give us greater control over our own destiny and tax incentives for social impact investment means we could see a step change this year in our ability to deliver real change. For the first time in many years, this year is one in which the opportunities may outweigh the challenges.”

So how can charities remain ahead of the game in this changing landscape? We take a sounding from a range of experts and ask: If you could give charities one piece of advice, what would it be?

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Kirsty Murray, tax expert“If additional funding is required to support trading activities within a charity, community interest company or community benefit society consider raising money which will qualify for social investment tax relief (SITR). SITR is helping charities and social enterprises attract debt and equity finance from individuals, by

allowing them to obtain tax relief of 30% of the amount they lend to a charity or social enterprise to further their trading activities.

“A charity or social enterprise can attract approx. £270,000 through investments qualifying for SITR, but by summer 2015 it is expected the limit will increase to £5m.”

Morag Watson, tax and gift aid partner “Firstly, it is vital that charities ensure that the paperwork is in place for all donations which qualify for gift aid – this should be revisited every few years.

“Secondly, check that Fundraising and Finance know exactly what is included in any package for friends and donors. There is often a tension between these two areas, as Fundraising doesn’t necessarily appreciate the consequences from a tax perspective of something that has been put together to bring in the money.”

THINK OUTSIDE THE BOX

CHARITY CHECKLISTSOUND ADVICE ACROSS THE BOARD

The past few years have been a rocky road for most, but the recession has hit some charities particularly hard. Tough times are never kind to the third sector, but as donations dip, society’s reliance on the services provided by charities increases significantly. So, how can charities make sure that they are as fit as can be?

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LOOK AFTER THE PENNIES

WE SENT 66 ,692 SECTOR-SPECIF IC E -BULLET INS WITH

T IMELY NEWS AND UPDATES

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JUST AS SOCIAL MEDIA CHANGED THE FACE OF FUNDRAISING, INNOVATION IS CHANGING FUNDING.

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3Gareth Magee, corporate partner“There’s now plenty of money out there, but not always in the traditional places – so it’s vital to keep pace with the latest developments.

“For example, Social Impact Bonds can reap benefits by tapping into new sources of funding and strategic partnerships – all with a vested interest in the success of the charity’s work.

“And, SITR has sparked new activity in terms of the creation of social investment syndicates, much like the commercial “angels”. Any move toward replicating this commercial model in the social investment space is hugely exciting and a tremendous opportunity for organisations with the right outlook.”

Scott Craig, VAT partner “Don’t forget about VAT – regularly monitor for changes that allow the cost of irrecoverable VAT to be reduced.

“Given that the third sector provides such vital services, the Government is beginning to extend to charities the VAT benefits afforded to public sector bodies. The VAT status of charities and their activities will continue to change – and to take advantage of these changes, organisations must review procedures on a regular basis.”

EMBRACE INNOVATION

REVIEW, REVIEW, REVIEW

7Robert Mackenzie, technology partnerIf you don’t know what data you have, you may not appreciate how valuable and important it is, nor look after it as you should.

Managing data is always a sound principle, but it becomes especially important when regulators are becoming more rigorous and punitive. The UK Information Commissioner already has the ability to levy large fines. However the proposed EU Data Protection Regulations are likely to add another major layer of stringent regulation – and they will come with more non-compliance fines. The good news is that implementing robust information security measures should future-proof against the next wave of regulation.

Fiona Watson, charity accountant “It’s not always about the money – charities are made successful by people. How long is it since you performed a skills audit of your board and looked at succession planning?

“Reviewing relationships with people that are involved with the charity, which can extend to business interests of family of trustees and employees, is a great idea. And, it’s far more effective to consider these matters when there is not an immediate need rather than when events dictate. While this action is not compulsory, it might be considered as good practice given OSCR’s increased focus on disclosure of related party transactions.”

UNDERSTAND THE DATA

LOOK BEYOND THE MONEY6

4Allison Gibson, audit director All charities will be familiar with SORPs (Statements of Recommended Practice), and those that prepare their accounts on an accruals basis will need to decide which SORP to follow – one for smaller charities based on the Financial Reporting Standard for Smaller Entities (FRSSE) or one for medium and large charities based on Financial Reporting Standard (FRS)102. Some charities can choose between the two, depending on their income (less than or equal to £6.5m), assets (less than or equal to £3.26m), or employee numbers (below 50).

The change in guidance is applicable for accounting periods starting on or after 1 January 2015, so the sooner the decision is made the better. Consideration can then be given to how the application of that SORP will impact on day-to-day accounting policies.

CHANGE IS COMING – BE PREPARED!

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TARGET IN SIGHT FOR SCOTLAND’S RENEWABLES

Scotland’s abundance of natural resources and ambition to set the bar for use of natural energy sources has seen renewable energy flourish. But, with developments reducing in scale, what help do community-based projects need to make their contribution to the end goal?

C opious supplies of wind and water in particular, have fuelled the growth of renewables as an energy source.

The last reported figures saw renewable energy account for a record 45% – on track towards a target whereby the sector will produce the lion’s share of the country’s electricity by 2020, and more importantly, an interim target of 50% by the end of 2015.

A SECTOR WITHIN A SECTORWhile the big projects, such as onshore and offshore windfarms, attract the headlines and much of the investment, a whole ‘sector within a sector’ has sprung up from communities delivering locally harnessed renewables. These projects are an important step in the journey towards 2020, and to achieve local ambitions, communities need

assistance from professionals, funders and local and national Government.

Community schemes incur minimal operating costs once constructed. Given this, cash flows once energy is fed into the grid are not only sufficient to cover operating costs and loan repayments but result in a healthy surplus, some of which can be re-invested into local communities for future benefit, with the rest providing investors a good financial return.

In driving forward their projects, community groups have had to be tenacious to say the least. Overcoming the barriers of planning and delivery, as well as attracting investment, has required grit and determination.

KEY BARRIERS TO OVERCOME• Significant skills gaps

• The requirement to fit local data into a one-size-fits-all set of finance tools

• Lack of resources and expertise to see the project through planning, construction, operation and connection

• Deciphering industry jargon

• Lack of experience in dealing with funders and investors

• The due diligence required to get projects off the ground

However, support networks are becoming more sophisticated and funding is on the up, including a £200m fund announced by the Green Investment Bank solely for community projects.

IN THE 12 MONTHS FR OM MAY 2014,

WE HAVE PR OMOTED OR H IRED

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RENEWABLE FUNDINGJust one of the initiatives set up to help is the Community and Renewable Energy Scheme (CARES) – operated for the Scottish Government by Local Energy Scotland, which is responsible for awarding grants and loan funds to individuals or groups wishing to undertake their own community renewables projects. Through CARES, community groups can access fully-funded assistance with financial matters – support which will provide a significant boost in driving the sector.

Community renewables, with this additional support, is a sector on the rise. As well as contributing to national ambition and the wellbeing of communities, it is also becoming more attractive to investors, in particular an expanding range of ‘green’ or social/ethical funds.

The result is a meaningful contribution to Scotland’s green economy, and that this is starting to be recognised should result in the sector contributing more to the 2020 target – which includes a target of 500MW of renewable energy to be locally or community owned.

ABUNDANT RESOURCESRenewable energy has a key role to play in addressing the key issues of climate change and security of supply. Schemes offer opportunities to contribute to national and local objectives while also establishing a commercial enterprise capable of delivering attractive returns for investors. Community renewables is the classic win-win, and the support available should see the sector telling a more sustainable, and therefore attractive,

investment story over the coming years. Of course one of the biggest attractions for future sustainability is the abundance of supply – plentiful wind and water is something that is guaranteed in Scotland for many years to come.

James Fennessey is a manager, and specialist in community renewables.

IT’S SAFE TO SAY THAT RENEWABLES ISN’T A BUZZWORD ANY LONGER.

IT’S A THRIVING, DOMINANT SOURCE OF OUR ELECTRICITY.

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TAX

‘Everyday’ businesses are the backbone of our economy – getting on with the job of keeping operations afloat, developing and turning out products or services, maintaining the staff base, and chasing new business. However, many SMEs don’t realise that they could qualify for Research and Development Tax Relief, if they put their business under scrutiny.

S cott-Moncrieff has saved clients up to £2 million in tax through the R&D tax relief scheme, many of whom thought

they wouldn’t qualify. With the average claim netting Scott-Moncrieff clients (some having multiple claims) around £25k in tax relief, it’s definitely worth looking into.

THE “SIX P” QUESTIONS Many companies that don’t apply for R&D relief would do well to ask themselves some simple questions:

PRODUCT: Are we developing a new or improved product?

PROCESS: Are we developing a new or improved process?

PROTOTYPES: Are we developing prototypes, bespoke equipment solutions or creating software/ IT developments?

PATENTS: Are we filing for patents?

PROFESSIONAL: Are we hiring professional engineers or hard science professionals?

PROBLEMS: Have we encountered any technical problems in developing products or processes?

RDP Associates is a specialist organisation that helps businesses in the UK, US and Canada to fund innovation. Their mission is “to connect clients’ innovation with their bottom line”. The firm works seamlessly alongside Scott-Moncrieff to identify potential savings for clients.

“If the answer to any of the ‘Six P’ questions is yes, there is a strong likelihood that you will qualify for the R&D tax relief programme.” says Brian Cookson, RDP’s managing director. “The key is to realise that most claims are submitted under the development or “D” side of R&D. This usually encompasses “shop floor“ developments or improvements instead of traditional basic or applied research activities involving flasks and beakers.”

Each case will succeed or fail upon its own merits – success is not guaranteed. For any business that innovates as part of day to day business – either in product, function or service – and that wants to investigate tax saving options, it could be time to take a closer look at R&D.

TAX RELIEF UNCOVERED

Iain Thomson is a senior manager and specialist in corporation tax working with owner-managed businesses.

CASE STUDY:Our client is involved in the manufacturing industry, and never considered that its activities involved research & development, never mind qualified for a tax relief because of it. Their projects were impressive to the outsider, but to them were ‘just what we do’. On drilling down with the company’s managers, it was clear that a lot of what this client considered day-to-day business, was actually innovative and problem solving.

With a detailed and accurate report on these activities, the eventual claim for tax relief on this part of their business was successful in netting a significant relief package – funds that were with the client inside two months.

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As one of the early adopters of angel funding, Scotland has been held up across the globe as a fine example of success. However, early adoption means Scotland will also be

one of the first markets to go through a full life-cycle.

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B usiness angels are usually cashed out entrepreneurs – with many considering their next steps. In some quarters this has sparked interest, as to the way forward. What shape might

a succession plan for the angel network take?

If today’s successes cash out and spend, the sector could struggle to attract new money. However, there are moves to foster a sense of community and a ‘pay-it-forward’ approach that will provide a career path for the tech entrepreneurs of today, and culturally bind in enough individuals to enrich the angel sector for many years. Scott-Moncrieff partner Gareth Magee speaks to some of today’s entrepreneurs, all at Edinburgh’s Codebase, about the momentum being fuelled by a ‘hub’ approach to business, and what the future might look like.

THE UK’S LARGEST TECH INCUBATOR Illuminating the way forward for the angel sector is Codebase, currently the UK’s (and soon to be Europe’s) largest tech incubator. However, according to Ian Marshall, CFO of CogBooks, it’s not just about being the biggest: “Codebase is a sum of its parts, which is why it works – it’s not just about scale, but an empathetic atmosphere. It’s a motivational space, organised yet contemporary, with an international flavour.”

With a stated aim to “build, nurture and grow the next generation of tech superstars”, Codebase isn’t skirting around the fact that the sector must move forward.

Housing a model incubator based entirely on private equity, the utilitarian former civil service block is now a hub that is driving investment into tech start-ups and improving digital skills for business. Ready-made space is attractive to the tech sector, which, as Ian points out, is ‘all about the idea, and rarely sets much store by surroundings’. The model is working, and growing.

LONG-TERM COLLABORATION Colin Hewitt, of cash flow software company Float, sought space where he could be with other entrepreneurs. Having been to see Techstars in Boston, he wanted long-term collaboration, as opposed to a short burst. Hoping for more than a shared office experience – he sums it up succinctly: “You can go to a grand hotel and be comfortable, but you wouldn’t expect to share experiences with the other guests.”

For Colin, the unexpected benefits are key: “Water cooler moments are vital to our business, and the time saved by having so many intangibles on site – such as hiring from the shared freelance space – is much better invested realising our business ideas.”

SHOPPING EXPERIENCE FOR INVESTORS CogBooks has secured two rounds of funding from DC Thomson and NESTA, and attracted grant funding from The Bill and Melinda Gates Foundation. The directors found that the merits of being equidistant from its locations in the US and India, made Scotland a no-brainer. However, they soon noticed another interesting phenomenon – a by-product of a ‘hub’ space. Ian explains: “The building has become a shopping ‘experience’ for investors. Visiting their partners in the building often yields more new investment opportunities – and this is something that hasn’t bypassed the tenants.”

For Colin this phenomenon is very real: “We met our first investor via someone else in the building. There was no sense of threat or competition – rather a sense of wanting to share success with others.”

CODEBASE IS A SUM OF ITS PARTS, WHICH IS WHY IT WORKS

Ian Marshall, CogBooks

WATER COOLER MOMENTS ARE VITAL TO OUR BUSINESS

Colin Hewitt, Float

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Alex Cole, CEO of Peekabu, agrees. His business, which has created cutting edge recognition software, is moving towards second round funding, and since moving in he’s met with potential investors who have happened to be in the building for other meetings.

UNRESTRICTED ENVIRONMENT Disenchanted by the tech scene in his native North America and Canada, Alex was attracted by the new communities being built here: “What we are all doing is weird and new. We are a collection of businesses that don’t follow a formula, and it was critical for us to be part of a community in which we could grow.” The unrestricted environment was vital to Peekabu – being able to collaborate with like-minds over day-to-day business, whilst ‘having the private space to be with your own tribe’ is a winning combination which fosters the ‘passive’ accumulation of experience in a city that hasn’t necessarily built a strong tech legacy. Yet.

Being part of an incubator space isn’t all about Friday beers and foosball. There’s a real feeling of sharing and mentoring, fostered by something as mundane as communal space.

NATURAL HABITAT James Varga, CEO of Miicard, has developed a digital passport that allows the user to pack up their financial credibility and take it across the internet. He’s a self-confessed start-up junkie, and has been through the loop a few more times than most of his peers, which is why he can be confident that the incubator approach is a good one. “In the beginning, you had to infiltrate the old boys’ network, where they set the rules. Discussions took place in dimly lit private member clubs – it wasn’t our natural habitat. Now that a tech culture is emerging and we have a critical mass of entrepreneurs, we’re doing it on our terms, with ambition, opportunism and passion.”

AND WHAT OF THE FUTURE? Is being part of an incubator such as Codebase part of the career path towards becoming a serial investor? Perhaps it’s no coincidence that two of the more seasoned entrepreneurs think so. Ian and James both have their eye to the future.

As Ian says: “My career path has the potential to go in so many different directions. Being involved in angel and private equity backed early-stage companies has provided me with the marketing, finance and operational tools I’d need to be a successful investor myself in the future.”

As for James, it’s hard to imagine the native Canadian not going down an ‘angel’ type route; however, he thinks his generation will do things a little differently after cashing out. “Being hands-on is the most important thing. The next generation of angels will be more honest with investor companies, more realistic and help start-ups to ‘man up’ for the road ahead – if by taking this approach we can light more fires in the sector, then all the better.”

IT WAS CRITICAL FOR US TO BE PART OF A COMMUNITY IN WHICH WE COULD GROW

Alex Cole, Peekabu

THE NEXT GENERATION OF ANGELS WILL BE MORE HONEST WITH INVESTOR COMPANIES

James Varga, Miicard

BEING PART OF AN INCUBATOR SPACE ISN’T ALL ABOUT FRIDAY BEERS AND FOOSBALL. THERE’S A REAL FEELING OF SHARING AND MENTORING, FOSTERED BY SOMETHING AS MUNDANE AS COMMUNAL SPACE.

100% OF OUR ICAS STUDENTS

PASSED THE IR TEST OF PR OFESS IONAL

COMPETENCE F IRST T IME

DID YOU KNOW?

EXCHANGE | 16

ATTRACTING INTERNATIONAL STUDENTSWith funding under ever-increasing pressure, our universities need to find new and innovative ways of raising the finances needed to remain competitive.

While Scottish student numbers are set by the Scottish Government, universities can take an entirely different approach in terms of attracting international students. For two of our clients – Edinburgh Napier University and University of Dundee – growing these international numbers is seen as a key part of the solution.

Working with the British Council and overseas agents, these universities are actively marketing to the Far East, India, North America, Latin America, Africa and the Middle East. And this is no longer just about attracting post-grads who are

here for a relatively short period – the balance has shifted to attracting more undergraduates who will be here for a minimum of four years.

ENRICHING THE STUDENT EXPERIENCE But it’s not just about bringing in fees. Doug Watters, Senior International Officer at University of Dundee, where just over 25% of the 18,000 students are international, says “the international student base enhances the experience for everyone at the university. Different social and academic backgrounds

and learning and studying styles enrich the student experience across the board. And of course, many of these international students go home as ambassadors for Scotland, helping boost our global reputation.”

Ultimately, we need some of these young people to stay, to make a positive contribution to our economy, skill base and society for years to come. This isn’t without its challenges, though, as Watters points out: “Countries that can guarantee work visas for international graduates tend to be more attractive. The UK’s current immigration policies mean that most international students have to head home after their studies, which is something we would like to see change.”

Funding cuts, reshuffles and the abolition of tuition fees have all taken their toll on Scotland’s education institutions in recent years. Despite all this, our lauded universities must continue to perform – developing the next generation of educated, confident and employable graduates.

MARKETING LESSONS FOR HIGHER EDUCATION

MANY OF THESE INTERNATIONAL STUDENTS GO HOME AS AMBASSADORS FOR SCOTLAND, HELPING BOOST OUR GLOBAL REPUTATION.

EXCHANGE | 17

EDU

CATI

ON

THE QUAL IT Y OF OUR PEOPLE OVERALL HAVE

BEEN RATED 9/10 BY OUR

CL IENTS

D ID YOU KNOW?

EXPORT OPPORTUNITIESMuch like other business sectors, our universities are actively pursuing export opportunities too. Edinburgh Napier, where 49% of the students come from outwith the UK, is delivering transnational courses throughout the Far East, France, Switzerland, India and Sri Lanka. The growth in online e-learning is also extending the university’s global reach.

Taking a global view of their market is one approach, but there are also attractive propositions closer to home which are helping universities to fund their students’ ambitions.

INNOVATION VOUCHERS SCHEME Projects such as the Innovation Vouchers scheme have seen almost 900 Scottish business-university partnership projects

funded since 2009. The scheme, established by the Scottish Funding Council and administered by Interface, matches businesses with higher education bodies. Undergraduates, post-graduate students and academics benefit from working with businesses on their commercial ventures, some of which may involve student placements in the business. Schemes such as this give the universities the opportunity to apply their research and teaching to the commercial market place providing an attractive proposition for students and academics alike.

STIMULATING R&D In turn, the scheme allows SMEs to tap into the expertise of specialists across Scotland, stimulating R&D and helping them to create and improve products, streamline services

and develop processes to increase their profits, maximise export potential and become more sustainable.

By the end of this academic year, funding through Innovation Vouchers will have reached £1 million.

So while universities have to work hard to fund their activities, the funding squeeze could be seen as a promising environment in which to uncover new income sources to benefit not just the universities and their students, but also local businesses and Scotland’s international standing. The successful initiatives underway now should put our higher education institutions on a firmer footing for the future.

THE FUNDING SQUEEZE COULD BE SEEN AS A PROMISING ENVIRONMENT IN WHICH TO UNCOVER NEW INCOME SOURCES TO BENEFIT NOT JUST THE UNIVERSITIES AND THEIR STUDENTS, BUT ALSO LOCAL BUSINESSES AND SCOTLAND’S INTERNATIONAL STANDING.

EXCHANGE | 18

F rom diversion and misuse of funds to petty theft and complex scams, all organisations need to be on top

of fraud issues if they are to enjoy the continued confidence of their stakeholders.

Opportunistic and grievance-related fraud aside, the majority of cases are impersonal, with an organisation randomly targeted by organised external fraudsters using state-of-the-art technology for their own ends.

There are key areas within the daily run of business that are more susceptible to fraud, with the most common being: cash handling, payroll and expenses, grant claims, purchasing and contracting, management of assets and handling of sensitive information, such as identity.

The ways in which these areas are exploited are different, but could include changing of supplier account details, misuse of electronic banking information, duplicating invoices, mispricing goods or services and inappropriate procurement.

THE BEST ANTI-FRAUD MEASURES ARE THOSE WHICH CREATE ‘LAYERS’, WHICH ARE HARDER FOR THE FRAUDSTER TO INFILTRATE.

Efficient internal processes are multi-layered so that criminal efforts to breach one layer will not progress any further.

Setting up a number of lines of defence that would outfox even the craftiest fraudster is a sensible precautionary measure, and is an indicator of a well-managed organisation. These lines of defence could include a series of internal and management controls, monitoring and reporting controls, key audit points, inspections and Board or senior management scrutiny.

Fraudsters are more likely to targetorganisations that they perceive to be less diligent or have ineffective controls. So, to be less of a target, create a strong circle of defence that any would-be swindler would think twice about trying to break.

Wendy Clydesdale is an assistant manager, supporting SME finance departments develop robust systems and processes.

£50 BILLION HEIST HITS THE UKIf an audacious heist took place in the UK that netted over £50 billion, it would be a high profile story. However, according to the Government’s Anti-Fraud Indicator, that’s just what happened in 2014 – but because the ‘heist’ involved thousands of individual incidents spread across the public, private and third sectors, it went largely unnoticed.

FRAUD

WE HAVE SO FAR HELPED CL IENTS SAVE UP TO £2M

IN R&D TA X REL IEFS

D ID YOU KNOW?

EXCHANGE | 19

Fresh Start helps people who have been homeless to become established in their new home. Volunteers lead all of the services - providing goods, support with decorating, cooking classes, allotment management and work experience placements. This all helps vulnerable people who are starting with nothing to settle comfortably into their home and community.

CHA

RITI

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Waverley Care is Scotland’s leading charity providing care and support to people living with HIV or Hepatitis C. They help people maximise physical and emotional health and live full and productive lives. As part of their work they also strive to raise awareness of HIV and Hepatitis C and prevent new infections.

HELPINGHANDS

If you are ever visiting Midlothian Community Hospital or Royal Edinburgh Hospital, make sure you drop by the community gardens. Managed by Edinburgh Cyrenians, the gardens support the recovery of patients and people living in local communities. Volunteers are always welcome.

Every year Bethany Christian Trust gives hope and a future to over 6,000 homeless and vulnerable people in Scotland. Anyone can become homeless and that’s why they address a wide range of issues that stretch far beyond housing needs alone. They support families, young people, rough sleepers and people recovering from addiction. They help people who are already homeless and stop homelessness before it happens.

Dean and Cauvin Trust provides residential childcare and parenting support to young people transitioning towards independent living from a care background. They work to ensure that all young people they work with have the practical and emotional skills to enter adult life with confidence. They operate a continuum of care with the support of a dedicated through care and aftercare service, providing support to young people on a one-to-one basis as well as group work and their own range of housing provisions.

Over the last year, Scott-Moncrieff staff have supported a range of local charities with fundraising, gifts and volunteer time.

E XC H A N G E P L AC E 3S E M P L E S T R E E TE D I N B U R G H E H 3 8 B LT: +44 ( 0 ) 131 473 3500

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10 A R D R O S S S T R E E TI N V E R N E S S I V 3 5 N ST: +44 ( 0 ) 1463 701940 W W W. S C O T T - M O N C R I E F F. C O M