Thursday, 26 June 2008
Who is Chloe Taylor? You may remember Jane Everingham sending an email after we found out fictitious 'Chloe' was calling clients requesting information on our behalf concerning training and the names of key personnel. Thank you to all the firms who contacted us about this and remembering the situation when similar calls were recently received from Howard Trigg. 'Howard' even went to the lengths of sending emails that included our email signature and registered company details. As this was a step too far we took legal advice and 'Howard' subsequently promised to refrain from further activity. I thought I would mention this again as we have even more reason to believe the calls were to obtain information for head hunting purposes.
On to more technical matters we have, at last, found out more information regarding the increase in personal allowances and the timescales involved. Obviously still all subject to confirmation in the Finance Act but we thought we would share so please look at Tax Issues below if you would like to find out more.
Earlier this month we issued our new look 'Estate Agents' Specialist Assignment Manual. We are pleased to announce the manual will now help you deal with a wider range of clients including those who are members of the Association of Residential Letting Agents and the National Approved Letting Scheme. If you have estate agent clients take a look under Audit and Accountancy Issues below to find out more about the full scope of this new manual.
Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk
Specialist Courses - Autumn Programme
The final details are just being made to our autumn programme of specialist courses. To name just a few of the 18 courses available, new for the autumn programme we have included
- Acting for Dentists: An Update
- Acting for Travel Agents under FSA
- Limited Liability Partnerships
- UK Tax Issues for Non Domiciled Individuals
Details will be sent to you early in July but if you would like to download a copy now please click here. If you have any comments, questions or suggestions please email Liz Coates at liz.coates@mercia-group.co.uk or call her on 0116 258 1200.
Special Offer - 50% Discount on Quorum Courses for all Training Group Members
We are delighted to announce that with immediate effect all firms who pay an annual subscription to belong to a training group will now be entitled to a 50% discount on courses offered by Quorum Training.
Quorum is part of the CLT Group and therefore a sister company to Mercia. Their courses are held in London and are aimed at both accountants in industry and commerce as well as the profession. Course programmes cover everything from accounting and taxation to corporate governance and internal audit, and with small group sizes there is plenty of opportunity for participation.
If you would like more information on the courses offered by Quorum please visit their website at www.quorumtraining.co.uk or contact us to request a course brochure by calling Liz Coates on 0116 2581200 or email her at liz.coates@mercia-group.co.uk.
Audit and Accountancy Issues
New FRSSE
We alerted you to the imminent arrival of an updated FRSSE in last month's newswire and earlier this month the Accounting Standards Board published the latest version, effective April 2008. The update reflects changes in company law arising from the Companies Act 2006 and the good news is that there are no changes to the requirements that are based upon UK GAAP.
As the changes stem from company law the updated FRSSE cannot be adopted early and only applies to accounting periods beginning on or after 6 April 2008, the date from which the accounting and reporting regime for smaller companies in the 2006 Act takes effect. You should therefore continue to use the FRSSE (effective January 2007) for earlier accounting periods. The next updates to our audit and audit exemption technical manuals will include new disclosure checklists in accordance with the 2006 Act and FRSSE - look out for these in the autumn. In the meantime you can find a copy of the April 2008 FRSSE here.
Companies Act 2006 - is the end in sight?
The government has now published drafts of the 7th and 8th Commencement Orders of the new Companies Act, with the 8th being referred to as the 'final' Commencement Order! This will introduce the remaining provisions of the new Act with effect from 1 October 2009. The 7th Commencement Order mainly brings about change from 1 October 2008 and deals with reductions in share capital. The restrictions under the Companies Act 1985 on financial assistance by private companies for the acquisition of their own shares will also be repealed with effect from 1 October 2008.
Draft regulations relating to the application of the Act to Limited Liability Partnerships (LLPs) have also been published and are due to come into effect for LLPs in Great Britain and Northern Ireland on 1st October 2008, for financial years beginning on or after that date.
New Estate Agents Specialist Assignment Manual (SAM)
Those of you with estate agent clients will no doubt recall the news from last year that the Royal Institution of Chartered Surveyors (RICS) would no longer be routinely requesting Members Accounts Certificates to be submitted by an external accountant. This change of approach, including new principles-based RICS Rules of Conduct, prompted us to revise the scope of our Estate Agents and RICS SAM.
The resulting manual now includes work programmes that cover accounting records, receipts and payments, balances, fees and disbursements and branch offices for each of the following:
- Estate Agents Act 1979 (EAA) and the Estate Agents (Accounts) Regulations 1981 (EAAR)
- Royal Institution of Chartered Surveyors (RICS) Rules of Conduct
- National Association of Estate Agents (NAEA) Rules of Conduct
- Association of Residential Letting Agents (ARLA) Byelaws
- National Approved Letting Scheme (NALS) Accounting Standards.
Guidance notes, engagement letters and associated reports are also included, therefore the manual provides you with the documentation you need to perform the necessary work to meet the statutory or various members' association requirements that govern estate agents conduct. The manual costs £195 (£145 for Mercia members) plus VAT and you can find full details about the contents on our website at http://www.mercia-group.co.uk/technical_manuals/specialist_assignments_estate_agents.htm.
Tax Issues
Advisory fuel rates
To reflect the increases in fuel prices, HMRC have issued new advisory fuel rates for employees driving employer provided cars. These take effect for all journeys undertaken from 1 July 2008 so employers wishing to use the new rates should advise affected employees and update any expense forms as soon as possible.
| Engine size | Petrol | Diesel | LPG |
| 1400cc or less | 12p (11p) | 13p (11p) | 7p (7p) |
| 1401cc - 2000cc | 15p (13p) | 13p (11p) | 9p (8p) |
| Over 2000cc | 21p (19p) | 17p (14p) | 13p (11p) |
HMRC are supposed to give employers a month's notice of changes to the Advisory Fuel Rates (AFR). However according to the HMRC guidance:
‘the recent fuel price increases which justify these AFR changes have happened very rapidly. In these unusual circumstances we are mindful that an implementation date of 1 July might mean that drivers will be incurring higher fuel prices before the new rates become effective. Consequently, where employers are able to do so, HMRC is content for the new rates to be implemented immediately ie from 1 June.’
http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm
National Minimum Wage and tips
An Employment Appeal Tribunal has ruled in HMRC’s favour in the case of Annabel's restaurant and nightclub. The case concerned the payment of tips through a ‘tronc’, which is an arrangement which sometimes operates in the restaurant industry. The ‘tronc’ which is a separate independent payroll, operated by a ‘troncmaster’ is used by some restaurants as a means of distributing tips or service charges paid by customers. HMRC have argued successfully that where the tips are paid in this way they do not count towards NMW entitlement.
However, it should be noted that where tips are paid "It is essential that all UK workers receive the pay they are entitled to and that everyone earns at least the National Minimum Wage. Equally, it’s important that tipping is fair and we are already examining what options are available to help ensure transparency."
Annabel’s restaurant may seek permission to appeal the Judgment.
Increase in personal allowances
The recent issue of ‘Notes for payroll software developers’ gives a bit more information on the timescale for the increase in the current year’s personal allowance from £5,435 to £6,035 and the reduction in the higher rate point from £36,000 to £34,800. The guidance notes state that the change is expected to take place from 7 September 2008 subject to Parliament and Royal Assent of the Finance Bill. A revised CD rom will be issued. All suffix L tax codes will need to be increased by 60 and a further raft of coding notices will need to be issued for other employees.
http://www.hmrc.gov.uk/comp/notes-11-5.pdf
Changes to the VAT option to tax
The VAT option to tax rules changed on 1 June 2008.
HMRC have issued a new public notice (Notice 742A) detailing the new changes as well as extending the VAT 1614 form (now VAT 1614 forms A-J) dependant upon the notification.
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!
Long service lunch
Every year all members of the team who have been at Mercia 10 years and more enjoy a lunch as a thank you for the loyalty they have shown to Mercia. Whilst planning this year’s lunch to make sure we invite everyone who is eligible we realised that next year we would have 9 members of the team joining us for the first time. This would result in 20% of the whole team - a remarkable achievement considering the team has grown so much in recent years!
Mark’s sabbatical
Mark Morton won’t be joining us for lunch as he is four weeks into his three month sabbatical. He hasn’t managed to send us a picture of him reading Taxation in exotic places yet but he has sent us an update to say he enjoyed his trips to battlefields in France and Holland and that he had managed to persuade his wife Marie to accompany him on a romantic night away to a war cemetery (bringing new meaning to the phrase ‘romance is dead’!). He concluded by saying Marie wasn’t keen to join him on another trip and to tell us he was really enjoying the cricket, football and tennis coverage on the TV!
