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Tuesday 31 March 2009

As well as producing a technical round up in our newswire we also aim to share information, common concerns or views we hear from our clients and contacts. Following requests from a few clients in January you may recall we issued a client letter covering the new HMRC powers. With the new regime now imminent this is an area many of you are beginning to turn your thoughts to and have asked us how we can help.

In response we have developed a new focussed two-hour course which will help you understand the new regime and its implications and we have written a briefing for your clients. The course will consider the effects of the changes and cover both the legislation and HMRC guidance. Further details on the course and briefing are included below.

We have also received a few queries with regard to QAD visits and the use of 'registered' wording on printed material - for example - "Registered to carry on audit work by the ..."

Whilst it isn't a requirement to include such wording on all of your publications, if you do include it, it should be correct. It appears that a few firms have not reviewed their wording for a while and following changes made to the Audit Regulations, there have been some small changes made to the recommended wording. To save you trawling through the Audit Regulations and Institute or Association guidance we have a prepared a factsheet that may help you. So before you produce any other printed (or digital) material it may be worth downloading a copy for future reference. You can find it on our website at http://www.mercia-group.co.uk/news/RegWordChecklist.pdf.

This month's newswire is a little longer than usual as there is so much technical news to share. With a Budget on its way, depending on what announcements the Chancellor makes, next month's newswire may be even longer!

Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk

HMRC Powers and Penalties - The New Regime

As you will be aware, there is a significant change taking place in the approach which HMRC will be taking in dealing with enquiries into tax returns from 1 April 2009. The changes involve potentially much higher penalties and also rights of access to your clients' business premises, amongst many others.

To help you understand the new regime and its implications we have written a focussed two-hour course. Presented by Mark Morton and Andrew Burgess, both ex-HM Inspectors of Taxes and with many years of practical experience, the course will consider the effects of the changes and cover both the legislation and HMRC guidance.

The course costs £99 plus VAT per place and will run in various locations from 23 June to 15 July 2009. Details will be in early April but you can find out more here or to book online go to http://bookings.mercia-group.co.uk/bookingIndex.php?courseid=0291295001238500760.If you have any questions or would like to run a course in house please contact Liz Coates on 0116 258 1200 or email liz.coates@mercia-group.co.uk.

For more information about the briefings for your clients click here.

CPD Courses for Tax Specialists

There are four courses left to run in our new programme of Tax Specialist Courses. Designed with the tax professional in mind they provide you with the opportunity to hear from speakers who are extremely knowledgeable in their chosen field.

For more information please click here or call us on 0116 258 1200 or to book online, please click here.

Audit and Accountancy Issues

Practice Note 11 - The Audit of Charities

You may recall that in our January 2009 newswire we alerted you to the issue of Practice Note (PN) 11, The Audit of Charities in the UK. At the time, the APB issued the PN without illustrative auditor's reports, instead stating that these would be published in a supplementary Bulletin "to be issued shortly".

Bulletin 2009/1 - Auditor's Reports - Supplementary Guidance for Auditors of Charities with 31 March 2009 year ends has now been issued. As you can guess from the title we are expecting a further Bulletin to follow, including auditor's reports for later periods.

The Bulletin issued includes reports for charities that are registered in England and Wales, in Scotland and in both jurisdictions.

The reports included for corporate charities are based on the Companies Act 1985 and are relevant for charities with 31 March 2009 year ends. For corporate charities with accounting periods beginning on or after 6 April 2008 the Companies Act 2006 will apply and APB plans to update the Bulletin to reflect this later in 2009.

You can access a copy of the Bulletin here.

'Clarity' ISAs - on their way!

The beginning of the month saw the APB announce its intention to update our UK and Irish auditing standards for the new, clarified, International Standards on Auditing issued by the International Auditing and Assurance Standards Board. The new UK and Irish auditing standards will be effective for periods ending on or after 15 December 2010.

A consultation draft of the proposed new standards is expected by the end of April and a three month consultation period will follow. We, of course, will be looking at the new standards to assess their impact over the summer, with a view to updating our audit manuals in 2009 in readiness for the implementation date.

You can find a copy of the APB's announcement here.

News on audit reports

The above APB announcement also included news on audit reports. STOP PRESS! The revised version of ISA (UK and Ireland) 700 has just landed on our desks, so we'll have news of this in next month's newswire.

News in brief

Technical manuals news

Compliance Manuals

Subscribers to our Money Laundering Compliance Manual should have received an update to their manual earlier this month.

If you have not received your copy please email sarah.moore@mercia-group.co.uk or call Sarah on 0116 258 1200.

An update to our Practice Assurance Compliance Manual has also been sent out this week.

Specialist Assignment Manuals (SAM)

Earlier this month we issued an interim update to our FSA (Designated Investment Firms) SAM. The update dealt with the removal from the FSA Handbook of the 'non-directive' chapters for custody and client assets in the Client Assets Sourcebook.

All subscribers to this manual were emailed with news of the update, which is available to download from our website. Please see the latest updates page of our website for details of this update.

Tax Issues

Revised form 64-8

HMRC have made some changes to the form 64-8. It can also be filled out on-screen, saving time and improving accuracy. Click here for more information.

Car averaging: new arrangements from 6 April 2009

The employer provided car benefit in kind rules apply in the same way to all employees. However, HMRC recognise that in certain situations these may pose an unfeasibly large administrative burden, particularly in respect of cars made available to employees in the motor industry.

HMRC published guidance for 2009/10 onwards last October on the application of the company car rules in three specific situations where problems can arise in applying the law strictly:

Further to that guidance and as a result of further discussions with trade bodies, HMRC have identified a significant simplification to those. This is incorporated in a revised version of the guidance. Click here to view.

EIS clearance

HMRC now provide a form on which companies may apply for an 'advance assurance' that shares they intend to issue will qualify for relief under EIS. Click here for more information.

A new Statement of Practice on the remittance basis

Statement of Practice 5/84 has been withdrawn with effect from 6 April 2009 and replaced by a new Statement of Practice 1/09. The new statement sets out how HMRC will treat transfers made from an offshore account holding only the income or gains relating to a single employment and the apportionment of earnings where an employee is taxed on the remittance basis. Click here to view.

Buying Class 3 NIC additional years

From 6 April 2009, legislation in the Pensions Act 2008 allows certain people to buy up to an additional six years of voluntary Class 3 NICs in order to enhance their basic State Pension entitlement. These years are over and above the permitted under current time limits. Click here for more information.

Changes to P46 (Car) reporting for employers

From 6 April 2009 employers will no longer be required to complete a form P46 (Car) when one car is replaced with another.

VAT on entertaining - be very quick!!!

HMRC have announced that the outcome of the joint Danfoss and AstraZeneca VAT decision by the European Court is under consideration and that a further announcement will follow.

However, claimants may wish to make a claim to recovery of input tax wrongly blocked so that the maximum claim is possible. Normal time limits affecting claims may apply but it is also possible that some claimants will have a back claim under the Fleming rule, which would allow them to go back further than the normal three year period.

HMRC's view is that the case may open a claim for the recovery of input tax on reasonable entertaining of foreign customers, not foreign suppliers, but does not believe that the case extends relief to UK customers. Potential claimants are invited to make protective claims so that the right to recover VAT is maximised. By making an early claim, businesses will prevent the claims becoming time-barred while HMRC consider the issue further.

It could be argued that reasonable UK business entertaining on client premises is recoverable.

Claims in respect of periods earlier than three years from the date of claim should be made by 31 March 2009. Please contact Sally Duke at IVC for further information.

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!

Search Engine Optimisation - a new buzz word (or phrase)?

Over the last few months we have received an increasing number of unsolicited emails asking us if we would 'like help improving our rankings in search engines'. I imagine you have too as you have contacted us to see if we can help in this area.

With regards to our website we have been working on SEO for the last three years. I'm pleased to report that the main key phrases we decided on are featuring very well, many of which are now on the first page of Google UK! As we are receiving regular enquiries and orders for products from new clients via our website, I know it is working!

As this worked so well for us, over the last few months we have dedicated time to develop the SEO function for our totalSOLUTION website subscribers too. They will soon start to benefit from the improved service which is also available if you don't have a website with us.

Whilst SEO doesn't offer a quick fix as it takes time to optimise a site and it's an ongoing process which can be costly. If this is an area you have been considering but aren't sure what to do next please contact me at nicola.hurley@mercia-group.co.uk or on 0116 258 1200 with any questions you have. I would be happy to explain how we decided on our key phrases and share the results of our own efforts.

Baby News

We are pleased to announce the safe arrival of Ellie Mae on Saturday 14 March, new Mum is Claire Cole who works in the Mercia Finance team, both are doing well.