Friday 30 April 2010
Although it was the worse kept political secret, the announcement confirming the date of the General Election caused us a few headaches. In particular the Finance Bill 2010 proposal to repeal the FHL legislation was dropped to ensure the Act was passed prior to dissolution of Parliament. An official Labour spokesperson has stated that if they form the next Government that this abolition will immediately be enacted with effect from 6 April 2010 but for now this last minute amendment meant changes to tax notes and some of our marketing support publications which kept us on our toes!
From conversations we have had over the last few months, it seems that succession issues remain at the top of many of your agendas so you may wish to pencil in Wednesday 30 June in your diaries. Succession is the topic of our 2010 Partners' conference and to help you to explore the realistic options available to you we have selected a panel of experts to share their experiences. We are still finalising the programme and details will be with you soon but if you would like know what we have planned so far, more details can be found on our website under specialist conferences.
Finally, you may have heard about the EU Services Directive and the requirements that have been introduced into UK law to ensure you provide certain information to your clients. We have been considering the requirements for our totalSOLUTION website and technical manual subscribers and have produced a factsheet and checklist. Whilst you may already be providing all the information required, if you want to double-check download a copy of our guidance in Audit & Accountancy Issues below.
Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk
Healthcare Conference 2010
Our one day healthcare conference has been specifically designed for partners or senior managers with responsibility for a number of clients in this sector. It is a specialist conference looking at a wide range of practical issues including Incorporation and Alternative Structures, Superannuation and Tax Relief, HMRC Investigations, Financial Planning and Funding Issues.
The conference will be held on Monday 21 June 2010 at Hilton Hotel, Castle Donington. For details visit http://www.mercia-group.co.uk/training/conferences.htm
PAYE Benefits and NIC Healthcheck
As the end of tax year form filling is well underway for employers with the P35 deadline looming, many will be turning their attention to the completion of forms P11d reporting expenses and benefits. Why not consider offering your clients a PAYE Healthcheck at this time to ensure that they are dealing with the issue of expenses and benefits correctly?
Our pack includes a checklist to complete with the client covering payroll issues payment of expenses and benefits together with two marketing letters an engagement letter and short power point presentation. Unlimited use of the Healthcheck costs just £195 (£175.50 for Mercia members) plus VAT. For further details visit http://www.mercia-group.co.uk/software/tax_ni_healthcheck.htm
Audit and Accountancy Issues
LLP SORP Issued
At the end of March 2010 the Consultative Committee of Accountancy Bodies (CCAB) published a revised LLP SORP. It is effective for accounting periods beginning on or after 1 January 2010; that is December 2010 year ends and onwards for most. Limited early adoption is also allowed.
The reason for the revision is to take account of the August 2008 amendment to FRS 25, Financial Instruments: Presentation - Puttable Financial Instruments and Obligations Arising on Liquidation. The objective of this limited scope amendment to FRS 25 was to improve the financial reporting of particular types of financial instruments that meet the definition of a financial liability but represent the residual interest in the net assets of the entity. For LLPs, this means that certain amounts that would have been presented as liabilities in the financial statements will now, in limited circumstances, have to be reclassified as equity.
It is fair to say that this amendment is unlikely to affect many LLPs. Unfortunately, the revision to the SORP is necessary because of a highly technical and complex amendment to FRS 25.
You'll find a copy of the revised SORP, which has also been updated to reflect the impact of the Companies Act 2006 and related regulations, on the CCAB's website.
If you subscribe to our LLP Specialist Assignment Manual we will be in touch with a more detailed summary of the revised SORP later in May.
The Audit Inspection Unit (AIU)
The Professional Oversight Board (POB) has published a description of those entities whose audits will be deemed to be 'major audits' for the purposes of AIU audit inspections in the year to 31 March 2011.
The definition of UK unquoted companies, limited liability partnerships and industrial and provident societies has been simplified to include all such entities having either:
- a group turnover greater than £500m or
- a group turnover in excess of £100m and external long term debt in excess of £250m.
The Board has also chosen to include all banks incorporated in the UK as a separate category.
As regards special issues, the Board has agreed that the AIU should have particular regard to audit issues relating to segmental reporting, revenue recognition and fraud and continue to focus on going concern, fair value accounting estimates, asset impairments and compliance with ethical standards.
You can find a copy of the full scope of AIU inspection on the FRC's website.
The Provision of Services Regulations 2009
These regulations were introduced into UK law at the end of 2009. They require a prescribed amount of information to be made available by those performing relevant services, which are all services unless specifically excluded by the regulations, to clients. Broadly, the categories of information required are:
- contact details which be must be made available to all service recipients so that they can send a complaint or request further information about the service (for example, your postal address and telephone number)
- other information which must be made available to a service recipient (for example, your legal status, details of any public registers that you are included in and the contact details of your professional indemnity insurer and the territorial coverage of the insurance)
- information which must be supplied at the request of a service recipient (for example, a reference to the professional rules with which you comply and how these can be accessed).
To comply with the regulations information can be made available in a number of ways, including via your engagement letters, website or by displaying a notice in your offices. There is no requirement that says that all of the prescribed information has to be made publicly available in one place.
If you would like to find out more about these new regulations we have put together a factsheet which provides an overview plus links to the regulations and the supplementary guidance available from the ICAEW, ACCA and ICAS. It also includes a checklist to help you assess what additional information you may need to make available going forward. To download a copy click here.
Tax Issues
64-8 Disgrace
Further to Mark Morton's article '64-8 Disgrace' that was contained in the last newswire, we have received the following information from a client:
- a client of ours who was recently widowed and, as a result of a disputed will, virtually bankrupt and who is convalescing after serious illness received an unannounced home visit from a tax inspector; and
- a client who has never had much income tax to pay via her tax return received a call in February on a Sunday at her home chasing her over-due tax return.
So, life is stranger than fiction. BIG BROTHER is here - be warned
Relief from Stamp Duty in respect of documents effecting intra-group transfers of stock or marketable securities
HMRC have issued a short guide on how to make a claim to relief from Stamp Duty in respect of instruments effecting certain transactions between companies in the same group. To read the guidance, please click here
National Minimum Wage rates
From October 2010, National Minimum Wage rates will increase from:
- £5.80 to £5.93 an hour for workers aged 21 and over
- £4.83 to £4.92 an hour for workers aged 18 to 20
- £3.57 to £3.64 an hour for workers aged 16 to 17.
The government has extended the adult minimum wage rate to 21 (22) year-olds from October 2010 and, for the first time, an apprentice minimum wage rate has been set at £2.50 an hour. The full rates can be found at http://www.direct.gov.uk/en/Nl1/Newsroom/DG_178175
Guidance on dealing with historic VAT claims
In 1996 and 1997 the government introduced a three year limitation period for repayment claims for overpaid VAT, the correction of errors and late claims to input tax. This guidance sets out how to deal with these claims. To read the guidance, please click here.
Late payment penalties guidance available
HMRC have provided guidance about the new penalties that may be charged on late payments for periods starting on or after 6 April 2010 of PAYE, student loan deductions, Construction Industry Scheme payments, Class 1 NICs, annual payments of employers' Class 1A NICs and annual PAYE Settlement Agreements payments. To read more, please click here.
VAT - If you use the Royal Mail you could be eligible for a VAT claim
HMRC have announced that certain postal services will be subject to VAT from 31 January 2011. However, HMRC are now considering VAT repayment claims from 1 April 2006 to date.
The types of services affected can include controlled mail such as Mailsort, Walksort. Access and also services they now consider are subject to VAT including Parcelforce services, special delivery and international services.
If you or your client uses the Royal Mail to deliver bulk mail, delivers goods using Parcelforce or has negotiated any special discounted rates with the Royal Mail then you may have a claim. Traders using business collections, same day and special delivery, international mail and large mail order returns may also have claims. To read more, please click on the link below.
To see whether one of your clients may be eligible for such a claim please call the VAT services team at IVC for a free initial consultation to consider your eligibility on 0870 264 0080.
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!
The cost of interacting with HMRC
A recent HMRC research paper 'Costing Customer Time' estimated that value of an individual's time in interacting with HMRC at £14.20 per hour. Considerations included time, direct costs and psychological costs (including stress finding the cash to pay the tax).
The paper acknowledged that psychological costs are the most difficult to measure and therefore these costs were not included in the £14.20!
Summer sabbaticals
Andrew Guntert, Andrew Paul and Shan Hughes are all working extremely hard as they are taking three months sabbaticals this summer. Just in case they haven't shared when you have seen them on courses, if you were thinking of contacting them please get in touch soon as you only have one month left to do so.
They all have exciting things planned to make the most of this fabulous opportunity (Andrew Paul isn't quite doing a round the World trip but he's trying hard) and no doubt they will have plenty of stories share on their return. They should also be well rested for our very busy autumn season!
Volcanic ash disruption
There was little sympathy in the office when Nicola Hurley and Julie Bowles endured extended overseas breaks due to the ash cloud but at least HMRC has a heart! Anyone who is unable to meet tax, NI, VAT or other payments as they become due can contact HMRC to see how they can help. However, there is a warning not to wait until payment is overdue.
