Friday 30 January 2009
January is a quiet time for us as far as presenting courses goes but the technical team are kept busy updating notes and products. It also presents us with an opportunity to hold a valuable team meeting and we have just returned from a two day conference in Peebles, Scotland. Whilst we were away we were lucky enough to enjoy a Burns night celebration. As part of the evening we were set the challenge to pen a poem and many of the team did just that. It would be true to say we have many a budding poet but Jeremy Williams came up with something we thought we would share. If a smile would help to relieve some of the January stress make sure you find the time to read office gossip below.
Earlier this month we were delighted to send out a major update to our audit manual. Not only does the update provide our subscribers with Companies Act 2006 versions of much of the documentation contained in the manual, it also includes some exciting new developments and additions. You can find out more under Audit and Accountancy Issues, also below.
Finally, there is no getting away from the difficult times facing many businesses and you can be rest assured that we will do everything we can to provide you with the support you need to address the many issues that lie ahead.
Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk
HMRC Penalties and CAs for Cars - two new client letters
New HMRC penalties - In response to the significant change in the approach which HMRC will be taking in dealing with tax returns relating to periods starting on or after 1 April 2008, where the return is submitted after 1 April 2009, we have drafted a letter that you can use to keep your clients up to date. The letter focuses on the new penalty structure and emphasises the need to keep good records to avoid problems in the future.
Changes to capital allowances for cars - Following the Pre Budget Report in November, the Treasury has now issued a Technical Note and draft legislation on the intended changes to the capital allowances system for business expenditure on cars. As these changes take effect in April 2009, we thought your clients would be interested in hearing what the changes will involve.
Each letter costs £34.95 (£30 for members) plus VAT for unlimited usage. To place an order either click here.
Introducing Webinars - live and interactive one hour CPD
Our new live and interactive one hour seminars, 'webinars', are streamed directly to your desktop via the internet, allowing you to obtain valuable training from the comfort of your own home or office, whilst maximising your working time.
The spring programme, all presented by our own speakers, includes:
- Limited Liability Partnerships
- Budget 2009
- Benefits and PAYE Problem Areas
- Money Laundering Key Issues
- Charity Trustees' Accountability
The webinars cost £75 per participant, 25% discount for National and Local Members. To view course outlines or to book online visit www.mercia-group.co.uk/webinars.
Audit and Accountancy Issues
Practice Note 11 - The Audit of Charities
If you act for any charity clients and attend our courses or subscribe to our charities Specialist Assignment Manual (SAM), you'll know that we have been eagerly awaiting the publication of the revision to Practice Note (PN) 11, The Audit of Charities in the United Kingdom. This was published towards the end of December and reflects changes to the:
- Charities Act 1993 as a result of the implementation of the Charities Act 2006;
- legal and regulatory arrangements for charities in Scotland, including the establishment of the Office of the Scottish Charity Regulator (OSCR) which apply to accounting periods commencing on or after 1 April 2006;
- guidance on the Charity Commission's interpretation of 'material significance' in the context of whistleblowing responsibilities; as well as
- the replacement of SASs by ISAs (UK and Ireland).
Previous versions of the PN, as well as the Consultation Draft included illustrative auditor's reports for charities, which are not included in the final published version. Instead, these will now be published in a supplementary Bulletin 'to be issued shortly'.
Click here if you would like to see a copy of the PN.
Facts and figures for the audit profession
The end of December saw the publication of the Professional Oversight Board's (POB) Report to the Secretary of State for Business, Enterprise & Regulatory Reform for the year to 31 March 2008 ©. The report contains the usual interesting facts and figures on the regulation of the profession. It covers a wide range of issues from the implementation of the Statutory Audit Directive, an overview of the AIU findings, to findings on signing audit reports without appropriate authority, CPD enforcement and audit monitoring.
The following selection of statistics has been reproduced from the report:
| ICAEW | ACCA | ICAI | ICAS | |
| Number of audit firms | ||||
| At 31/12/07 | 4,526* | 2,697 | 1,006 | 266 |
| At 31/12/06 | 4,817* | 2,741 | 1,028 | 300 |
| Number of principals at 31/12/07 | ||||
| 1 | 2,265* | 1,894 | 654 | 109 |
| 2-6 | 1,986* | 770 | 329 | 132 |
| 7-10 | 156* | 25 | 13 | 17 |
| 11-50 | 106* | 8 | 9 | 7 |
| 50+ | 13* | 0 | 1 | 1 |
| Number of firms monitored | ||||
| 2007 | 975 | 285 | 42 | 41 |
* ICAEW figures are for those firms that were to be registered as at 1 January the following year.
If you would like to find out more, you'll find a copy of the report here.
Technical manuals news
Audit manual
We recently issued a major update to our audit manual, which incorporated Companies Act 2006 versions of the example letters, reports, model accounts and disclosure checklists contained in the manual. The update also included:
IMPROVED
- Documentation - Following feedback from our subscribers, we have implemented improvements to the audit documentation, particularly in the planning section.
- Creator - We have improved Creator to help subscribers obtain the correct documentation as efficiently as possible, particularly date sensitive documentation such as disclosure checklists under the new Companies Act.
NEW
- Free-form planning memorandum - We have introduced a new optional approach to recording planning for use on more straightforward / lower risk assignments.
- Proforma working papers - To help with the recording of fieldwork both efficiently and accurately, a suite of spreadsheets has also been included.
- IAS proforma accounts - New proforma accounts have been included to supplement the accounts disclosure checklist that was introduced in 2006.
If you have not received your copy please contact Sarah Moore at sarah.moore@mercia-group.co.uk or on 0116 258 1200.
Details about the manual can be found here on our website, as can details of the introductory and refresher training courses available.
Audit exemption SAM
Our audit exemption SAM has also been updated, with Companies Act 2006 versions of the example letters, reports, model accounts and disclosure checklists added. Audit manual subscribers automatically receive a complimentary copy of the audit exemption SAM.
Tax Issues
The new HMRC powers and penalties regime
As you may be aware, the last two Finance Acts have contained major changes to the way in which HMRC will conduct enquiries and impose penalties in the future. Whilst much of the legislation is now in place, HMRC are in the process of finalising their guidance, which will be just as important in the day-to-day operation of these new powers.
Mercia will, of course, be running detailed courses on this topic when the practical effects become clear. The courses will be run by our own experts in this area, both ex-Inspectors, Mark Morton and Andrew Burgess.
We will keep you informed of developments and dates of the courses but, if you have any queries about these or any other courses, please contact Liz Coates on 0116 258 1200 or email liz.coates@mercia-group.co.uk.
Paying by Direct Debit
HMRC have announced that they are now able to offer more customers the option of paying by Direct Debit. If taxpayers are registered to use Self Assessment Online, PAYE Online for employers or Corporation Tax Online they can now set up Direct Debit payments online. Taxpayers can also make tax credit repayments by Direct Debit.
In addition, HMRC have also introduced online credit card payment as part of a modernised suite of payment methods.
VAT customers should continue to submit VAT Returns and pay by online VAT Direct Debit, by following the VAT Online link from the 'do it online' menu on the HMRC homepage.
www.hmrc.gov.uk/news/pay-dd.htm and www.hmrc.gov.uk/payinghmrc/credit-card.htm.
PAYE and benefits problems?
It will soon be time to start filling in the dreaded forms P9D and P11D. This area of tax is full of potential problem areas and HMRC view their PAYE compliance visits as a bit of a money spinner. If you would like some help in this area, you may wish to consider our PAYE Healthcheck. For more information, please click here.
Fleming update
You will be aware that the Fleming VAT deadline is 31 March 2009. In recent months the following areas have resulted in significant claims:
Golf Clubs - VAT over-declared on non-members fees following the Canterbury Hockey VAT decision. This decision can also affect other not for profit sports clubs.
Catering - Zero-rated catering supplies following the Compass VAT decision. This case is far reaching and we highly recommend that you review your clients in this trade sector, which can include cold food sold from mobile kiosks; for example, a doughnut seller's claim was in excess of £100,000.
Gaming machines - All claims are stood over pending the Rank decision. However, they are still worthy of a claim; for example, working men's clubs have claims of between £2,000 and £90,000.
Advisory costs - Large corporate clients who had rights share issues pre-1996 have a potential claim of VAT on advisory costs which has been previously disallowed.
If you have a client who you feel could benefit from Fleming but are not sure where to start please contact Sally Duke 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!
As mentioned in the introduction we have just returned from our technical conference which included a dinner to celebrate Burns Night. Jeremy Williams wrote a fitting poem for auditors and we thought we would share it with all the auditors who read our newswire. If you're not an auditor but know one, with Valentine's Day on the horizon, you may want to send a copy to your favourite auditor?
MY LOVE IS LIKE A RED RED ROSE
by ROBERT BURNS (if he'd been an auditor)
My love is like a red red rose
That's newly sprung in June:
Like a subsequent events review
That wasn't signed too soon.
I'm your senior, oh my lovely lass
Won't you be my sweet RI,
Chase me like a late bank letter
File me on your section I.
You are like a current file to me
Completed to perfection;
And if only you'll agree, my dear
I'll be your permanent section.
Our love will last these testing times
Until eternity,
When we'll get an A from Mercia
And from the QAD!
