Friday, 25 April 2008
This month we have received more calls than usual from firms who have recently had a QAD visit and all with the same enquiry. It appears the QAD are picking up that firms are not complying with ISAs, particularly in respect of audit planning, and they are recommending that staff may benefit from further training in this area. Pleasingly we seem to be your first port of call to see if we can help. For users of our audit manual our refresher courses will help you to comply with ISAs and a reminder of our open courses is included below. Alternatively we may be able to run an in-house course for you so if you have any concerns please contact Liz Coates to see if we can help.
QAD aren’t the only busy bodies (excuse the pun)! Since our last newswire the auditing and accounting standard setters seem to have been busy finalising a significant amount of guidance. Make sure you keep up to date with this by reading our technical round up under Audit and Accounting Issues below.
Staying with ‘busy’, we all know how busy HMRC have recently been and to help you stay on top of the detail we have organised a capital taxes conference for tax specialists. Details are included below.
Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk
Capital Taxes Conference for Tax Specialists
With dramatic changes to both capital gains tax and the regime for non domiciles and of course recent changes to inheritance tax, it is becoming increasingly difficult to keep abreast of the new rules. We are therefore running a Capital Taxes Conference on Thursday 19 June 2008 in London to help you get to grips with the changes.
Topics such as Entrepreneurs’ Relief, Will planning, lifetime trust planning and the new regime for non domiciles will be covered by experienced speakers such as Emma Chamberlain, Nick Hughes and Kevin Slevin.
Further details will be sent to you in the next week or so or you can book your place now by clicking here.
Audit Manual Refresher Courses - helping to comply with ISAs
This half-day course is ideal for participants who are coming to terms with ISAs and ethics in practice. The course focuses on the ISAs and ethics changes that were made to the manual. In addition to the open programme the course is also available on CD or can be held in-house. For further information click here.
Solicitors Conference 2008
If you specialise in Solicitor clients there is still time to book on our 2008 conference being held on Thursday 1 May in the Midlands and Wednesday 4 June in London. For details click here.
Audit and Accountancy Issues
Technical round up
As we mentioned in our introduction, standard setters have certainly been busy this month! There is too much to include in the main body of our newswire so please click here to review a brief summary of the key documents issued.
Finally following on from our comment in last month’s newswire, we are still eagerly awaiting practical guidance on auditor liability limitation agreements and procedures for allowing access to working papers for successor auditors. There has been some speculation that we may not see the FRC guidance on liability limitation agreements until next year, although the latest FRC Quarterly Strategic Progress and Planning Report (April 2008) says that "It is hoped that the final guidance will be issued in June 2008." We’ll keep you posted. At the time of writing we had also not seen any new guidance on access to working papers.
Tax Issues
Employers’ tax and NIC free payments to homeworkers: increase in guideline rate
From 6 April 2008, HMRC has increased the tax and NIC free guideline rate employers can pay home working employees without keeping records from £2 to £3 per week. For more information click here.
Extension of clearances HMRC provide to all business customers
In Pre-Budget Report 2007, HMRC announced that, from April 2008, they would provide business with their view of the tax consequences of significant commercial issues wherever there is uncertainty, regardless of when the legislation was enacted. They have also committed to responding to clearance applications within 28 days as the norm.
For all businesses, HMRC will ask them to demonstrate the commercial significance of the transaction where the clearance relates to direct tax legislation older than the last four Finance Acts. All business customers, other than those dealt with by LBS, should send their applications to: HMRC Clearances Team, Alexander House, 21 Victoria Avenue, Southend-on-Sea, Essex SS99 1BD. Further details can be found here.
General Tax Practitioners (GTP) project
HMRC are testing a GTP approach to intervention work in two separate trials. Their aim is to develop a fresh approach to audits and inspections, so that they are less burdensome for businesses, ensuring that customers:
- provide information only once;
- spend less time dealing with inspections;
- enjoy a single point of contact with HMRC.
There are two trial teams, the General Intervention team and the Hidden Economy team who will test a holistic approach to compliance checks within existing powers and enquiry regimes. HMRC officers will receive cross tax training to provide them with a broad range of knowledge. This will enable them to undertake a selected range of interventions across Employer Compliance (EC), Income Tax Self Assessment (ITSA), Corporation Tax Self Assessment (CTSA) and VAT with the additional support of technical specialists as required.
The Hidden Economy trial team involving 50 HMRC officers will be ensuring that previously unregistered businesses are VAT and EC registered, where appropriate, and have notified chargeability in respect of direct taxes. The pilot is running until May 2008 and has one team in each geographical area.
The General Intervention trial team involving 60 HMRC officers will test a holistic approach to compliance checks carried out on a business for which a common risk of understated profits has been identified. This pilot is expected to run for 12 months (started in February 2008) and there will be two teams in each geographical area and three teams in Wales, Scotland and Northern Ireland.
For more information click here.
Registering as self employed
New businesses can now register on line as self-employed for tax and NI by clicking here.
VAT windfall for animal charities
Animal refuge charities may be able to recover hundreds of thousands of pounds from the government following a recent VAT tribunal ruling that the sale of donated cats and dogs is zero-rated.
The sale by a charity of donated goods is currently zero-rated for VAT. However, prior to this decision, animals were considered donations only if they were directly handed over by their owners. This meant that the sale of strays and other abandoned animals handed over by the Police, RSPCA, wardens and general members of the public resulted in a charge of VAT at the standard rate of 17.5%.
Gables Farm Dogs’ and Cats’ Home were successful in their argument at the tribunal that all animals given to the charity qualified as donated and therefore zero-rated when sold. HMRC have confirmed that they will not be appealing against the decision.
Charities that have accounted for and paid VAT on sales of animals which are now considered to be zero-rated should submit claims for overpaid output tax.
This decision, coupled with the recent Fleming case, means that there is scope for recovering overpaid output tax as far back as 1973.
More VAT news
If you would like to read more about recent tax investigation and VAT developments, please click here for this month's IVC news round-up.
Office Gossip and Idle Chat!
New faces (or voices!)
If you have called us in the last couple of weeks you may have heard a new voice. Earlier this month Dawn Hollies joined our reception team. No one has left us and Sue is still answering your calls but Sarah has moved to enrolments.
There is also a new face in our design team as Dipa Mistry, who has been helping us out during the last four months, becomes a full time member of the team from 1 May 2008. We now employ five full time designers so if you need any help with logos, brochures and websites please give us a call.
New offices in London (see left)
Spotted by one of John Sharkey's daughters - our new offices in London perhaps!
Charitable acts
Kay Sanders has volunteered to abseil down the air traffic control tower at East Midlands Airport. A daring (or fool hardy?) feat but all for a good cause - East Midlands Air Ambulance. We'll see if we can get a photo of her before, during and after to share with you in the next newswire.
The answers to this months quiz are...
Apollo 11
Julian, Dick, Anne, George and Timmy the dog
Thin Lizzie
Greece
