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Friday, 28 May 2010

The new coalition government's first Budget will be held on Tuesday 22 June 2010. Whilst we know a little of what it will include, as some statements have already been issued, there are still plenty of rumours circulating about what is still to come. Whatever the outcome, we will be busy updating notes so we cover the latest position on courses. As we await the big day the tax lecturing team remain very busy but you can't help feeling this is the calm before the storm.

This feeling is also mirrored on the audit side too. As the December 2010 audit deadline gets nearer the number of clarified ISA related enquiries we get is growing. We did produce a summary of the key changes to expect in our November newswire and if it didn't catch your eye at the time, it is still available to view on our website. We have also added a new page to our website outlining the support we are able to provide you with in this area.

Turning back to tax, HMRC access to private bank accounts is always a talking point amongst tax professionals, especially when a client is being investigated. When Mark Morton was reviewing the HMRC's Compliance Handbook (as he tends to do!) he came across an interesting omission in their policy about rights of access to such accounts. If CH223430 means anything to you, you may be interested in reading his article under Tax Issues below.

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

Pensions Workshop - Computing the pain

In March 2009 the government announced its intention to restrict, to the basic rate of income tax, tax relief on pension savings with effect from 6 April 2011 for individuals with gross income of £150,000 or more resulting in complex provisions being introduced. Presented by Mark Morton, this 90 minutes workshop will be held at five locations around the country in July. For more detail, including a booking form, click here.

Succession - Exploring your options

Succession issues remain at the top of many of your agendas. Our Partners' Conference this year has been designed specifically to help you address these issues in your practice. Our panel of experts have been selected for their first-hand experience in dealing with succession issues either in their own practices or in helping firms with their succession plans. The conference will be held on 30 June 2010 at The Hilton Hotel, Castle Donington. For further details click here.

Audit and Accountancy Issues

POB review of your Institute's or Association's monitoring arrangements

The Professional Oversight Board (POB) has published its review of the UK professional accountancy bodies' monitoring of their members who provide non-regulated accountancy services. This covers the monitoring of services such accounts preparation, payroll, tax and bookkeeping, so would include for example POB's review of the ICAEW's Practice Assurance scheme or the ACCA's Quality Checked scheme. The press release that announced the publication of the report said:

'The Oversight Board considers improvements are necessary in order to enhance the effectiveness of the arrangements and public confidence in the profession. These include more detailed reviews of compliance with the Code of Ethics, better examination of complaints received and more comprehensive follow up work to ensure that concerns raised during the monitoring visit are adequately addressed.'

There are bound to be mixed views over the introduction of further regulation so time will tell how the findings of the report will influence future change.

The bodies covered by the review are:

Eight key recommendations have been made and the professional bodies have been asked to respond by 1 September 2010. If you would like to see a copy of the POB's report please click here.

The POB has also published its review of the first set of mandatory Transparency Reports produced by auditors of public interest entities. Click here to see a copy.

Looking ahead

While it has been a fairly quiet month for formal audit or accountancy technical developments, there are several consultations and other developments in the pipeline. Here's a summary of a select few:

Solicitors Regulation Authority: Outcomes-focused regulation - transforming the SRA's regulation of legal services

One aspect of this consultation involves a new Handbook of regulatory requirements. The intention is to bring all of the SRA's regulatory requirements (the Code of Conduct, Accounts Rules, Licensing Rules, special bodies etc.) into one online Handbook. There will still be 'rules' in the Handbook (such as the Accounts Rules), however, the aim is to remove as much of what is considered to be unnecessary detail and prescription as possible.

The new Code of Conduct will set out the key principles and outcomes which must be achieved and the objective is to remove or rationalise much of the detail contained in the current Code. In this respect, the core of the Accounts Rules is likely to remain much the same, reflecting the SRA's judgement of what is necessary to manage risks to client money. However, the rules are being re-drafted in a more outcomes-focused way and the guidance in the rules will not be mandatory. You can find out more at http://www.sra.gov.uk.

Service charge accounts

Those with an interest in this area have been waiting for new regulations that will govern service charge accounts and reports for some time now! The expected regulations have taken far longer than expected to develop and it is still not certain when they will be introduced. The ICAEW has provided an update for its members, which is available at http://www.icaew.com.

Registered Social Landlords (RSL) - updated SORP

Earlier this year, the National Housing Federation, the Scottish Federation of Housing Associations and Community Housing Cymru publish an invitation to comment (ITC) and exposure draft (ED) of an update to the RSL SORP.

It is currently proposed that the updated SORP should apply to accounting periods commencing on or after 1 April 2011, that is March 2012 year ends and onwards for most. You can find out more here.

Going forward in this area, you'll find us referring to 'registered providers of social housing' or 'just registered providers' rather than registered social landlords!

Tax Issues

Business by telephone

HMRC have released a new a new Statement of Practice SP1/10 for business by telephone. HMRC state that it will enable customers and their authorised agents to make a wider range of claims and notifications by telephone and also raises some of the financial limits for telephone transactions. To read more, please click here.

UK tax treatment of a US Limited Liability Company (LLC)

HMRC have laid out their current view on the UK tax treatment of US LLCs. To read more, please click here.

HMRC and access to private bank accounts?

Mark Morton our Head of Tax, has spotted that HMRC's guidance on access to private bank accounts has disappeared. To read his thoughts on the implications of this, please click here.

HMRC Toolkits

HMRC have issued a reminder about the various 'toolkits' that they have developed to assist agents when preparing returns. The toolkits highlight common errors and the steps that can be taken to reduce those errors. The first series of toolkits cover:

To view the toolkits please click here.

Advisory fuel rates

These rates apply to all journeys on or after 1 June 2010.

Engine size

Petrol

Diesel

LPG

1400cc or less

12p (11p)

11p (11p)

8p (7p)

1401cc – 2000cc

15p (14p)

11p (11p)

10p (8p)

Over 2000cc

21p (20p)

16p (14p)

14p (12p)

Nursing Homes & Kingscrest VAT claims

You may be aware that following the Kingscrest VAT decision in 2002 many care homes submitted VAT claims to HMRC.

If you have a client in this sector that has not submitted a claim it could now be worthwhile reviewing their circumstances. For example we are aware that nursing homes or residential homes that provided residential and medical care under a dual registration were under the impression that they were not eligible for a claim. We can consider your clients particular circumstances to quantify the claim on a contingent fee basis. Please contact IVC on 0870 264 0080 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!

It's a first for Mercia...

Delegates on Jane Everingham's 'Adding value to audit' course in Oxford earlier this month experienced the unexpected when the venue needed to be evacuated due to a gas leak. There was no smell of gas or any sign of 'gas man' but everyone was kept well away from the venue. Having waited for half an hour in glorious sunshine there was still no sign of either and the course unfortunately (or not?) had to be abandoned. A gas leak evacuation is a first but Shan Hughes still holds the prize for the most novel excuse for ending a course early due to the high pitched screams from the Ann Summers convention happening next door following the arrival of a man wearing nothing but a hand towel!

Lucky Marie

Earlier this month Marie, one of our marketing support team, took out an ISA with a local building society and she now has the proof that it pays to save. Having taken out the ISA she was entered in a prize draw and won an all expenses paid trip for two to South Africa to see England's first game against USA.