We have also been busy dissecting the Third Commencement Order of the Companies Act 2006 and the New Money Laundering Regulations that were issued at the end of July. Both are mentioned in our technical section below.
The news that the pre-Budget will be in October this year caused a bit of a stir in the office and kick-started
us into making preparations for how we will help you keep your clients informed of its content. It also made us think about the
2008 Budget!
Judging by the number of free sample requests and questions about our range of marketing support products we have recently received it appears that many of you have spent the summer looking at your marketing strategies. If you need help in this area, remember we are here to help.
Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk
Farming Conference 2007
Our one day farming conference has been specifically introduced for partners and managers acting for farming clients. It is a specialist conference looking at a wide range of practical issues affecting many farming businesses throughout the UK and will enable those attending to provide their clients with the best possible advice. It will in future be held on an annual basis. This year's conference will be held at:
- The Hilton Hotel, Castle Donington on Tuesday 2 October 2007
Vision - quarterly technical update
All staff need to be aware of important technical developments and the latest issues. Our monthly newswire covers some of the changes but there are always too many to mention. Were you aware we produced a concise summary of matters on a quarterly basis? To help you cut down on reading we summarise interesting articles and include a cross reference to where further information can be obtained. The newsletter acts as a checklist and excellent reference guide.
The annual fee is £100. You can either receive 10 printed copies or a PDF file per quarter. Alternatively you can subscribe to both formats for £120 per annum. Mercia members receive copies for all partners and senior members of staff as part of their membership fee.
To download a complimentary PDF copy of our autumn issue click here.
Accountancy Firms Begin to Embrace the Internet
Thank you to everyone who took part in our survey earlier this year. To view the results, download a copy of our press release.
Audit and Accountancy Issues
Companies Act 2006 - Third commencement order
In last month's newswire we alerted you to SI 2007/2194, The Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007 - the third commencement order under the new Companies Act. The SI introduces a raft of changes that take effect from 1 October 2007 including those relating to:
- resolutions and meetings;
- exercise of members' rights;
- company directors (in part);
- derivative claims and proceedings by members;
- the business review in the directors' report;
- appointment of auditors of private companies;
- fraudulent trading;
- protection of members against unfair prejudice; and
- company investigations.
A longer summary is also included in the autumn issue of Vision - our quarterly technical update. To download a PDF copy click here.
Practice Assurance Reviews
A practice assurance review is an excellent way to prepare for a QAD visit. Our experienced reviewers can visit your offices to report on your firm’s compliance with the practice assurance standards. Reviews begin with a discussion to agree upon the scope and focus of the review to suit your needs. A detailed review of the firm’s main departments or key income streams follows and a written report is provided. The report will highlight the areas of best practice at your firm as well as identify any areas that require improvement. For further details about this service click here.
Money Laundering Regulations 2007
New Money Laundering Regulations were issued at the end of July, which come into force on 15 December 2007. All firms that provide accountancy services, as well as audit, tax, company and other related services will then be monitored for compliance by either their professional body or HMRC.
We recently emailed our Money Laundering Compliance Manual subscribers with news of our update plans, which include training material and a copy of our latest money laundering update course. You can find out more about the manual here.
The ICAEW has welcomed the publication of the new Regulations and has commented that: "revised formal guidance for accountants and related professions is currently being prepared and will be published for consultation as soon as possible".
You can access a copy of the final Regulations here.
Tax Issues
Tax help for those affected by floods
The Chancellor of the Exchequer, Alistair Darling, has announced that HMRC will introduce a series of measures to help individuals and businesses affected by the recent severe flooding. The Government will bring forward legislation in next year's Finance Bill to allow HMRC to waive interest and surcharges on tax paid late due to the floods.
Financial Secretary to the Treasury and Minister for HMRC, Jane Kennedy, said, "I want to ensure that people affected by the flooding do not have to worry about tax or their tax credit award at this difficult time. Where individuals or businesses are affected by the flooding, I would ask them to get in touch with HMRC who will be able to offer practical help. I hope that, by offering this help now and the reassurance that HMRC will back-date their help, we can ease some of the anxiety that is affecting so many people and business."
HMRC will be able to:
- defer collection of taxes and duties, or agree instalment arrangements where customers are unable to pay as a result of severe hardship;
- waive interest, surcharges and penalties for the period during which collection of tax or duty is deferred;
- introduce practical arrangements where individuals and businesses have lost records in the flooding;
- suspend debt collection proceedings;
- defer compliance checks and investigations.
HMRC ask that people contact them if the flooding has made it difficult for them to send in their tax credit renewals on time or if they have a change of circumstances to notify. Similarly customers having difficulty paying their taxes or duties, or sending in tax returns or other information as a result of the flooding, should also get in touch as soon as possible.
The Government propose to make this legislation retrospective from 26th July. A new helpline has been set up to support those affected on 0845 300 157.
Arctic Systems - HMRC gives guidance
By now you will be aware that the taxpayers won in the infamous Artcic Systems case. The House of Lords found that, although the wife's share in the company was a settlement, the provisions of the anti-avoidance legislation did not apply because, broadly, the share had been an outright gift.
Following the decision, the government announced its intention to legislate to prevent the use of 'non-commercial arrangements' to divert income. HMRC have now issued guidance on how cases are to be dealt with following the House of Lords' decision and ahead of any change in the law.
Cases currently open - Any cases left open pending the outcome of the case will now be reviewed by HMRC and settled in line with the decision in Jones v Garnett where the facts indicate that that is the appropriate outcome. The guidance indicates that cases will fall within the exemption for outright gifts between spouses where the settled property consists of either ordinary shares in a company or of an ordinary unlimited interest in a partnership.
2005/06 - The guidance notes that these returns should have been submitted in line with the Court of Appeal decision, which was in favour of the taxpayer, so that no amendments should need to be made to these returns following the House of Lords' decision.
2006/07 - The deadline for submission of these returns is 31 January 2008 and the guidance states that they should be completed on the basis of the House of Lords' decision.
To assist you in keeping your clients up to date we recently produced a client letter. A detailed technical note is also included with the letter. For further information click here.
Mark Morton's perspective on the case, along with an abridged version of the technical note, is also included in the autumn issue of Vision - our quarterly technical update. To download a PDF copy click here.
Tax help for those affected by the foot and mouth outbreak
HMRC appreciate that some individuals and businesses will find it difficult to meet their tax obligations due to the recent foot and mouth outbreak. HMRC will:
- defer collection of taxes and duties or agree instalment arrangements where taxpayers are unable to pay as a result of severe difficulty;
- suspend debt collection proceedings;
- defer compliance checks and investigations;
- provide help and advice in dealing with other practical tax matters arising from the outbreak;
- where appropriate consider using the powers available to give up interest and surcharges on tax paid which is paid late due to the outbreak.
40% New CIS Failure!
Following the controversial introduction of new CIS there has never been more scrutiny placed on the Construction Industry arena. For example, while HMRC has indicated a six-month penalty bedding-in period it is continuing to increase automated processes for checking contractors' total compliance history.
With this HMRC compliance shift, contractors that are also subcontractors relying on CIS gross payment status need be acutely aware of the potentially serious threat to their cash flow.
In other words the new CIS is an ongoing total "Tax Treatment Qualification Test (TTQT)", which cuts across Self Assessment (SA), Company Tax (COTAX), and all other returns, including tax remittances and HMRC Debt Management.
The consequences to the Industry's supply chain is staggering as, following a TTQT exercise in May 2007, HMRC mail shot (on forms CIS372) all subcontractors emphasising that around 40% had at least one compliance failure that could have lost them the gross status!
As the cost of compliance failure is becoming a reality, now is the time for specialist advice in relation to restructuring Employment Status processes, CIS system health checks, negotiating time to pay arrangements with HMRC and so on to avoid any nasty surprises.
Tax Investigation and VAT Developments - news round-up
If you would like to read about recent tax investigation and VAT developments, please click here for this month's news round-up.
If you would like help with VAT problems or HMRC enquiries, look no further. Mercia has teamed up with IVC - VAT and tax investigation specialists - to offer preferential rates to Mercia clients for these specialist services. Please click here for more information.
Office Gossip and Idle Chat!
We welcome two new members for our technical team
Richard Page and Susannah French joined us a few weeks ago. Richard will be presenting on a wide range of courses whilst Susannah will present on accounting and audit professional update courses as well as provide technical support including peer review services. We are sure you will get to meet them soon as their diaries are filling up fast!
Baby news
Matt Green, one of our graphic designers, proudly brought his daughter Isla Mae to the office to show her off. Beautiful Isla was born on Saturday 28 July and Matt and his wife Ann are busy having their lives turned up side down by the arrival of their first child.
Michelle Hammond, one of our training group supervisors, is leaving us at the end of this month to get ready for the big day - the birth of her daughter Molly. We wish her all the best in her new role as a mummy.
The answer to this month's sports trivia question is 110m hurdles.
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Nicola Hurley
Mercia Group Ltd
Best House, Grange Business Park, Enderby Road, Whetstone, Leicester LE8 6EP.
Tel: 0116 2581200 Fax: 0116 2581250.
Email: nicola.hurley@mercia-group.co.uk Website: www.mercia-group.co.uk
Mercia Group Limited is a company registered in England and Wales with company number 1464141.
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