Thursday 31 May 2012
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Earlier this month we launched our first App - The Mercia TaxApp! Unlike when HMRC launched their Tax Calc App earlier this week, our website didn't crash but the office was buzzing with excitement. Thank you to everyone who downloaded the App and helped us to reach the dizzy heights of the eighth most downloaded App in the Finance section of the Apple store just a few hours after the release. The feedback so far has been great but if you do have any suggestions on what else we might include we would be delighted if you would share. For those of you who enquired and are waiting to download it, the Android version will be published next week.
With the new child benefit rules receiving such negative press with the public and some professional bodies is a U turn on the cards along the lines of pasties and caravan tax? Mark Morton agrees that this will be a hard tax to process and in Tax Issues below you will find a summary of the rules along with Mark's thoughts!
Away from tax, regulators and file reviewers continue to turn up the heat on firms' reliance on inadequate analytical procedures. This month we take a look at the key steps to follow when undertaking analytical procedures. You'll find the download in A&A Issues below and you may find it a good way to remind your team to apply common sense and to stop them overusing the word 'reasonable'! We've used the well-known mnemonic 'Every Corner Is Swept Clean', the analytical reviewer's equivalent to 'Every Good Boy Deserves Favours'!
Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk
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Success and Succession - 2012 Partners' Conference
Friday 29 June 2012: Marriott Hotel, M1 junction 21, Leicester
What continues to drive success in accountancy practices? How do firms strategically manage succession?
With an exciting agenda planned, this year's partners' conference is set to provide thought provoking and practical insight into what has worked for other practices. We have selected speakers who have first-hand experience of steering accountancy practices through the challenges of the current market and putting robust succession plans in place. Come and learn from those with a proven track record as to what works in driving success and learn how other firms strategically manage succession. For further details click here or contact Emily at emily.bailey@mercia-group.co.uk or on 0116 258 1200.
Successful Fee Negotiations - Tuesday 19 June 2012
In today's tough economic climate, the pressures on fee levels have never been greater. Firms are struggling to maintain fee levels, never mind increase them. This course will help you develop your fee negotiation skills such that you are able to maximise your practice's profits whilst maintaining excellent client relationships. It will help delegates to:
- Understand the principles of fee negotiation and its role in the selling process;
- Be fully aware of the huge importance of preparation when negotiating fees, what to prepare, and how to go about it
- Demonstrate confidence and capability in actually conducting any fee negotiation, particularly in a difficult economic climate
The course will be held in a Midlands venue and costs £295 plus VAT per place (25% discount for training group members). To download a brochure click here.
Audit and Accountancy Issues
Review findings from the regulators
The Quality Assurance Department of the ICAEW has issued a report on its monitoring activities in 2011 highlighting areas where some firms are having difficulty. To see a copy of Audit Monitoring 2011 click here.
The Professional Oversight Board has also published the findings of the Audit Inspection Unit's reviews of a number of major firms subject to full scope inspections.
The common findings in the above reports are consistent with those seen by our own audit quality reviewers. These include:
- a lack of consideration of fraud and management override risks;
- a lack of consideration and assessment of significant accounting estimates and related parties at the planning stage;
- consideration and documentation of ethical threats;
- professional scepticism; and
- over-reliance on insufficient analytical review.
To see our free download, Every Corner Is Swept Clean - key steps to effective substantive analytical procedures, click here.
Residential Management Companies (RMCs)
The UITF has issued Information Sheet 92 which sets out a proposed Abstract 'Residential Management Companies Financial Statements' (RMCs). The proposed Abstract aims to assist RMCs in determining whether they are acting as principal or agent when undertaking residential service transactions with third parties to determine which transactions should be recognised in their financial statements. The UITF invites comments on the proposed Abstract by 13 June 2012. To see the Information Sheet click here.
Technical Manuals News
In the last month we have issued updates to the following Mercia Technical Manuals:
- Registered Social Housing Providers (RSHP) Specialist Assignment Manual (SAM)
- Solicitors' Accounts Rules SAM
- Practice Assurance Compliance Manual
If you are a subscriber and have any administrative questions about the updates please email Karina Johnston at karina@mercia-group.co.uk or call her on 0116 258 1200. Remember, you can keep up to date with the latest version numbers of our manuals on our website at www.mercia-group.co.uk/technical_manuals/updates.htm.
Tax Issues
Changes to the advisory fuel rates from 1 June 2012
The advisory fuel rates have been changed with effect for all journeys undertaken on or after 1 June 2012.
| Engine size |
Petrol |
Diesel |
LPG |
| 1400cc or less |
15p (15p) |
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11p (10p) |
| 1401cc - 2000cc |
18p (18p) |
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13p (12p) |
| Over 2000cc |
26p (26p) |
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19p (18p) |
| 1600cc or less |
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12p (13p) |
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| 1601cc - 2000cc |
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15p (15p) |
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| Over 2000cc |
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18p (19p) |
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www.hmrc.gov.uk/cars/advisory_fuel_current.htm
Childs Play - Reform of the Child Benefit Rules
In all of the furore about the 'granny tax' and offshore companies owning property, the 'reform' of Child Benefit seems to have sneaked under the radar. The Government initially raised this issue at the Conservative Party conference in 2011 and there was an outcry. It was unfair, complex and just not on! Mark Morton was inclined to agree. Click here to read his summary of the rules and his thoughts.
HMRC issue guidance on CIS repayments for companies
HMRC have issued guidance on CIS repayments for companies. To read more, please click here.
IR35 - HMRC issue guidance
HMRC have issued guidance on IR35. To read more, please click here. We have also prepared a summary of the guidance which you can read here.
HMRC issue guidance on Scottish income tax rate
HMRC have issued guidance on the Scottish income tax rate. To read more, please click here. We have also prepared a summary of the guidance which you can read here.
Office Gossip and Idle Chat!
Love is in the air at Mercia!
There is always the first time for everything and after 30 years (Mercia is 30 next month) we have just had the first Mercia wedding. Earlier this month, whilst on holiday in Las Vegas, John Johnston (who works in our print room) popped the question and Karina Johnston (a member of our admin support team) said yes! They married before flying home and returning to work.
'Blogs' you may have missed?
Talking to your clients: Impact of the Accounting Directive (part 3)
Faced with continuous change in accounting and auditing standards and guidance, it can be hard for practitioners to remember and make time to explain these to clients. Taking extracts from our Audit and Accounting Update 2012 course notes, we have prepared a series of tips to assist you when 'Talking to your clients' to provide proactive, responsible and timely advice thereby saving you time. Read more...
PPR perils
In a salutary warning, a recent case (TC01951: Michael J Harte and related appeal April 2012 First tier Tribunal) illustrates the perils of attempting to manipulate principal private residence relief (PPR). Read more...
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