Friday, 30 May 2008
There is always something to share with you on a monthly basis and this month is no exception so putting together our newswire is an easy task. What makes life a little harder is the ripple effect created by the seemingly endless stream of announcements, U-turns and legislative changes.
The announcement about the change of heart concerning the abolition of the 10% tax band illustrates this perfectly. It came just as we were finalising a variety of our marketing support products. It was all change as we amended all the relevant material and informed subscribers of the products about our plans to provide additional updates. The tax team also has to, yet again, amend course notes even though the detail behind the change has not been communicated yet. Will there be an impact on NI? Will the rates remain as announced or change in the Finance Act? If HMRC aren’t sure, where does that leave the rest of us? As usual you can be certain we will support you making sure our courses, technical and marketing products keep you and your clients in the picture.
I wonder what we will be sharing with you next month! In the meantime you’ll find our usual round up below.
Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk
Partners Conference - Continuing the IT Journey - Friday 27 June 2008 - Hilton East Midlands
Technology has already had a significant impact on the profession, driven by official bodies such as HMRC and by client expectations. Wherever you are on your IT journey, this comprehensive one-day conference will prove enlightening. All our speakers have extensive experience in their respective fields and include those who have proven success in making IT work for their practice. Learn from those at the cutting edge to help you benchmark your own practice and make informed decisions on what is the next step for you.
To download the details click here or to book online click here.
Entrepreneur’s Relief Workshop
This targeted workshop is running at six venues during June and July. The 90 minute workshop costs £99 plus VAT per place. It is an opportunity to focus solely on the technical matters and practical issues associated with the introduction of ER.
To download the details click here or to book online click here.
CLT Survey - business referral relationships
CLT, our sister company in the legal sector, is currently conducting research into the mechanics and scope of business referral relationships between accountancy firms and other professional service providers.
They are exploring the possibility of developing a new initiative to facilitate the sharing of business opportunities between different professional groups. They would like to find out what kind of informal referral relationships you currently have in place, how these have come about, how effective they are and how you think referral relationships could be made to work better. All responses are anonymous. If you would like to take part visit http://www.surveymonkey.com/s.aspx?sm=iU2KH6Osn_2bDX228PnSOwuw_3d_3d.
Audit and Accountancy Issues
Access to information by successor auditors
Regular readers of our monthly newswire will know that we have been eagerly awaiting guidance on this subject! As a reminder, the requirement for a predecessor auditor to allow a successor auditor access to relevant information applies in respect of appointments for the auditors of financial years beginning on or after 6 April 2008. It applies to all statutory audits as defined by and listed in Section 1210 of the Companies Act 2006.
The Audit and Assurance Faculty of the ICAEW has now published a draft technical release (AAF 01/08) which provides guidance, as well as example letters requesting access to working papers and a response to this request for access. The consultation period closes at the end of May, so we should see final guidance before too long. You can access a copy of the draft guidance here.
Auditor cessation statements
The subject of how the new Companies Act is changing procedures when an auditor ceases to hold office has certainly been a hot topic on our recent update courses. The Professional Oversight Board has this month provided guidance in this area on it’s website for both audit firms and companies, as has the ICAEW.
Updated FRSSE
In the technical update that was part of last month’s newswire we reported that a new FRSSE was coming soon. Well it’s not here yet, so we’ll hopefully have more on this in next month’s newswire!
As a brief reminder, the updated FRSSE will apply for accounting periods beginning on or after 6 April 2008, as it is being updated in line with the relevant changes in the Companies Act 2006. Early adoption is not permitted, therefore you should continue to use the FRSSE (effective January 2007) for earlier accounting periods.
Technical manuals update
Earlier this month we sent out a new FSA Specialist Assignment Manual (SAM) for Designated Investment Firms. This new manual replaced our existing FSA Personal Investment Firms (PIF) and Securities and Futures Firms (SFF) SAMs. The new manual not only caters for PIF and SFF clients; it is also suitable for other designated investment firms, for example, investment management firms. You can find out more about this manual here.
Updates to our Estate Agents, Clubs, Friendly and Industrial and Provident Societies and FSA Mortgage and General Insurance Intermediaries are also underway and will be sent out over the next month. Remember that you can keep up to date with news of the latest versions of our manuals on our website.
Finally, if you subscribe to our Practice Assurance Compliance Manual you can soon expect to see a copy of the first newsletter that supports your manual. The newsletter will be available to download and we’ll send you an email link to this, so please ensure that you do keep us up to date with any changes to the email address for the relevant contact for this manual. If you would like to make any changes please contact sarah.moore@mercia-group.co.uk.
Tax Issues
A climb down?
In an amazing turn around, the government has bowed to pressure from their backbenchers and addressed the problem caused by the ‘abolition’ of the 10% starting rate for low income families.
Previously, Chancellor Alistair Darling had stated that he could not rewrite the March 2008 Budget. However, that is exactly what he has now done, at a cost of £2.7bn. The proposals seem to be to increase the 2008/09 personal allowance by £600, whilst reducing the higher rate limit by a similar amount, so any basic rate taxpayer will now benefit by up to £120. The change will be neutral to higher rate taxpayers.
This change will not come into force until September and it remains to be seen what other knock-on changes, particularly to NI, will be made. To read the Chancellor’s full statement, click here.
Free VAT - Fleming % Condé Nast Claims
Have your clients submitted their VAT claim? These are two very high profile VAT decisions that potentially affect all businesses which might have valid claims for under-recovered input tax and over-paid output tax, with the potential to go back to 1973. To read more, please click here.
Change to the CIS regulations
Subcontractors wishing to be registered for gross payment must, in the previous year, have met all their tax obligations in full and on time. However, there are certain exclusions to these rules. In considering applicants’ compliance with their obligations, HMRC can now disregard a failure to pay any amount of less than £100 by the due date, whether it is unpaid or has been paid late. This allows applicants to pass the compliance test even though they have failed to meet an obligation to pay an amount, where that amount is small. To read more visit www.hmrc.gov.uk/si/2008-1282.pdf.
Residents and non-residents: Booklet IR20
HMRC have updated this booklet and it is temporarily available online only. This interim guidance is an update of a booklet published in December 1999.
www.hmrc.gov.uk/leaflets/c9.htm
Extension of clearances HMRC provide to business owners
HMRC have announced that the clearances service has been extended, for a trial period from 1 May 2008 to 31 October 2008, to business owners in relation to Business Property Relief.
www.hmrc.gov.uk/cap/clearanceiht.htm
Car-derived vans and combi-vans
HMRC has issued guidance which clarifies their interpretation of the definition of a motor car, as contained in the Value Added Tax (Cars) Order 1992. The clarification is necessary in light of recent developments in the car-derived van market, which have resulted in the manufacture of vehicles with a payload of less than one tonne that have blurred the distinction between cars and vans. This means that these vehicles are difficult to categorise in relation to the definition of motorcars in VAT legislation.
The guidance refers to a list of car-derived vans on which VAT may be deducted (subject to the normal rules) as they are not regarded as cars for VAT purposes. The list has been compiled by HMRC and is based on information supplied by manufacturers.
Please contact a member of the IVC team for confirmation of which combi-vans appear on this list.
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!
Life is stranger than fiction
Pat Nown, one of our tax lecturers, was amused by an article she read in a newspaper and shared it with the rest of the tax team.
It reported that tax inspectors are searching social networking sites for potential tax evaders, who may be exhibiting unaccounted wealth or otherwise hidden remuneration. Taxpayers are being warned to be careful about what personal information they post on social network websites as officials prepare to scour the likes of Facebook and Bebo for tax evaders. It claimed HMRC’s Irish counterpart has already started to browse social networking websites.
Andrew Burgess replied to say ‘Nothing changes except the medium. We were doing this 25 years ago when I was in the Revenue. We collected car numbers from expensive cars, read the papers and generally kept our eyes on things. It was less high tech but every bit as effective!’
Another sabbatical on the horizon
Mark Morton starts his three month sabbatical this Monday! Whilst his girls are still at school he has plans to indulge his passion for military history with a trip to the battle fields in France. Then there is a long family action packed holiday to Florida. We will keep you up to date with his progress in future newswires and share if he meets the challenge Liz Coates has set him to be photographed reading Taxation in a variety of unusual places!
Charitable acts - update
Kay Sanders successfully completed her abseil down the air traffic control tower at East Midlands Airport personally raising £526 for the Air Ambulance Service. We didn’t manage to get the photograph of her, neither could we get a still from video footage as she successfully avoided being filmed live on the local East Midlands news!
