Wednesday, 30 July 2008
At last the Finance Bill has received Royal Assent and we can all now breathe a sigh of relief. The tax team can finalise notes ready for the autumn tax courses and we can amend our tax cards to include the now confirmed rates and allowances for 2008/09.
Quite a few changes were made relating to HMRC powers and Residence and Domicile. Entrepreneurs’ Relief also continued to cause a stir with many MPs calling for further clarification and amendments. No real progress was made overall but one small, albeit important, change was made to the new ER regime which is revealed in Tax issues below.
Moving on to Audit and Accountancy Issues below you will find news of final regulations that set out how the audit and accounts provisions of the new Companies Act 2006 will apply to Limited Liability Partnerships.
Finally, over the last few months we have been actively recruiting and we are delighted to announce that next month there will be two new members joining our technical team of lecturers and consultants. We'll make sure we introduce them to you in office gossip in August.
Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk
Farming Conference 2008
This year’s farming conference will be held at The Hilton Hotel, Castle Donington on Tuesday 7 October 2008. The topics covered include:
- Where Next for Farm Profitability
- Succession Planning and Partnership Tax Issues
- Entrepreneurs’ Relief and How it Affects the Farm
- Funding Available for Agricultural Businesses
- Diversification - The Importance of Protecting Agricultural Tax Relief
- The Green Issues - Taking Advantage of the Opportunities
- Farmers: Enquiries and HMRC
For further details click here. To book online visit our website.
When was the last time you looked at your corporate brochure?
Our in house graphic design team can design a whole new look for your practice or create a brochure to sell your services designed to complement your existing in house style. Whatever your design requirments we can help. We also have access to a range of print options or can liaise with your printer on your behalf. To find out more email matt.green@mercia-group.co.uk or call him on 0116 258 1242.
Audit and Accountancy Issues
Companies Act 2006 update
The 7th Commencement Order of the new Companies Act was issued earlier in July (SI 2008/1886). It mainly brings about change from 1 October 2008 and deals with reductions in share capital. Three sets of regulations relating to the application of the new Companies Act to Limited Liability Partnerships (LLPs) have also been issued:
- SI 2008/1911 - The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008
- SI 2008/1912 - The Small Limited Liability Partnerships (Accounts) Regulations 2008
- SI 2008/1913 - The Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008
The regulations come into effect for LLPs in Great Britain and Northern Ireland on 1st October 2008, for financial years beginning on or after that date.
Amended Solicitors’ Accounts Rules (SAR)
The SAR were amended earlier this month to introduce specific obligations for the prompt return of surplus client funds and reporting to clients if funds are retained. The amendments also allow solicitors to deal with the withdrawal of smaller residual client balances themselves, without recourse to the Solicitors' Regulation Authority (SRA). You can find out more about the changes here.
Subscribers to our Solicitors' Accounts Rules Specialist Assignment Manual will receive an update incorporating these changes shortly.
And finally - the complexity project!
Members of our audit and accounts team were ‘delighted’ to receive an email earlier this month entitled "FRC launches Complexity Project". After all of the change that we've seen over recent years, could this be the final straw that finally pushes them over the edge? Fortunately not, the good news is that the project has been set up in order to review the complexity and relevance of current company reporting requirements, so should in fact make things simpler in the end. Let’s hope so!
Tax Issues
Finance Act 2008
This received royal assent on 21 July 2008 and extends to a massive 451 pages with 46 schedules! This is the greatest number of schedules in the last 30 years and will clearly provide our lecturing team with plenty to talk about in the Autumn Finance Act updates.
Entrepreneurs’ Relief
A number of representations were made during the course of the passage of the Finance Bill on certain aspects of the new Entrepreneurs’ relief (ER). Only one of these matters has been incorporated into the Finance Act.
It concerns the availability of ER on an associated disposal, where an individual also makes a material disposal of shares or partnership interest. An associated disposal refers to the common situation where the individual also owns the property used in the trade of the company or partnership and disposes of their interest in that property as part of their withdrawal from the business. It has been routinely the case in recent years that rental income has been charged to the business by the individual and under taper relief this did not affect the business asset status of the asset. Where a rent is charged under ER this will dilute the relief available and possibly deny it altogether where the rent is at full market rate. Under the draft legislation the whole period of ownership was to be considered in applying this rent restriction but a report stage. Amendment now means that only periods from 6 April 2008 will be considered, which gives individuals a fresh opportunity to reconsider such arrangements.
HMRC warns of more fraudulent emails
‘Customs Service’ email - 25 July 2008
Following the "tax rebate" email scam which hit the headlines last month HMRC are now warning of a further email scam which informs the recipient that a parcel has been received for them and is being held en-route from France, it then requests that the customer fills out a customs declaration. This is not an official HMRC email. There is an attachment to the email which may contain a virus. If you have received an email such as this, please forward the email to phishing@hmrc.gsi.gov.uk.
For more information visit HM Revenue & Customs: What’s New.
Extra Personal Allowances
HMRC have now issued further guidance on the increase in the personal tax allowance which is due to take effect from 7 September 2008.
The guidance is split into two parts, including specific guidance for employers as to how to implement the change and also guidance to employees as to the changes they should expect in their tax codes and the impact on their tax liabilities.
HMRC guidance Employee guidance and Employer guidance.
Professional subscriptions
HMRC have updated their list of qualifying professional bodies to include all those approved up to 30 May 2008. To see the list visit HMRC list.
VAT Returns - Correction of errors
From 1 July 2008, the £2,000 limit below which errors may be corrected on the VAT return for the period in which the errors are discovered will be increased to the greater of:-
- £10,000; or,
- 1 percent of turnover, subject to an upper limit of £50,000.
Similar rules will apply to corrections of returns of insurance premium tax (IPT), air passenger duty (APD), landfill tax (LT), climate change levy (CCL), and aggregates levy (AGL).
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 Mercia day out - Tuesday 12 August 2008
Every year we close the office to enjoy a day out with our colleagues. Previous days out have seen us at Alton Towers, York Races and lunch in Calais to name but a few. This year we are doing things a little differently and combining the day with a communications hour, to share results for 2007/08 and plans for 2008/09, followed by a couple of hours of team games. The afternoon will be spent doing a variety of activities in Stratford (boating, gliding, sightseeing etc) and we will all meet up again to enjoy a meal in the evening before heading off home.
If you need to contact us on that day there will be phone cover and we will return any urgent calls.
