Friday, 28 November 2008
The Chancellor delivered his long awaited Pre-Budget Report on Monday but only time will tell if the measures announced will be enough to stimulate the economy.
The predicted reduction in the standard rate of VAT to 15% from 1 December 2008 will no doubt have caused a lot of businesses additional work this week as they update their accounting and point of sale systems to cope with the change. Already our technical team have been responding to a number of queries on the impact of this change and to help you and your clients they have prepared a summary of the answers to the most frequently asked questions. The summary is in the format of a client letter, which we are offering with our compliments, and can be found under Tax Issues below.
You may remember we mentioned in an earlier edition of our newswire that we would be looking to offer courses on the implications of auditing in a recessionary environment. Two courses have now been planned, one for those who are relatively new to auditing and another for the more experienced auditor. Full details can be found in our spring 2009 specialist courses brochure below.
Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk
The Complete Budget Service for 2009
We have an excellent range of printed and digital products to help you keep your clients informed and market your practice. Written by our in house team of renowned tax lecturers and technical consultants, our content is concise and easy to understand. If you would like to provide your clients with a summary of any announcements on your website, by email or post we can help.
If you would like to receive any samples of our printed products, simply email your request to Marketing Support or visit our website to order samples on line.
For further details visit http://www.mercia-group.co.uk/budget or call the marketing support team on 0116 258 1242.
CPD Specialist Courses, Spring 2009
Our specialist course programmes are organised twice yearly in the spring and autumn. The programmes are planned in response to what is happening in the professional environment and are designed to provide you with a selection of highly topical and specialist courses, which are not usually found in our local CPD course programmes.
The topics covered in our Spring 2009 programme include Acting for Housing Associations, Insolvency Awareness and Auditing in a Recessionary Environment. Details of the full programme will be sent to our clients early in December but if you would like to download a copy now, please click here.
Audit and Accountancy Issues
APB Bulletin 2008/9 - Miscellaneous Report by Auditors Required by the UK Companies Act 2006
If you have ceased to act as auditor for a client and are looking for examples of the statements that need to be made under section 519 of the new Companies Act (previously section 394 under the Companies Act 1985) you will find the latest versions in this Bulletin. Guidance on the procedures to follow is also included, as are other example reports such as the statement on a company's ability to make a distribution where the auditor's report was qualified. You can access a copy of the Bulletin here.
On a related matter, the ICAEW has also updated its guidance on auditor cessation statements. The fourth version of this guidance now includes details about LLPs, including the later application of the cessation of office rules for LLPs (of on or after 1 October 2008) and also includes reference to the APB Bulletin mentioned above. You can access a copy of the guidance here.
Companies Act 2006 - the 8th Commencement Order
SI 2008/2860 - The Companies Act 2006 (Commencement No. 8, Transitional Provisions and Savings) Order 2008 has been issued. This essentially brings the remaining sections of the new Act into force on 1 October 2009. A copy of the SI can be accessed here.
Financial Instruments - further amendments to standards
In last month's newswire we alerted you to the news that the ASB had approved amendments to FRS 26, Financial Instruments: Recognition and Measurement and FRS 29, Financial Instruments: Disclosures that would permit the reclassification of certain financial instruments. These amendments have now been issued in final form. Further amendments have also now been made to FRS 26 in respect of eligible hedged items, details of which can be found here.
Anti-money laundering news
Finally, the FSA's website includes details of a fine for a regulated firm and its MLRO for not having adequate anti-money laundering systems and controls in place for verifying and recording clients' identities. This is the first time that the FSA has fined a money laundering reporting officer. A number of failings were found, including:
- the firm failed to implement adequate procedures for verifying the identity of its clients;
- it failed to verify adequately the identity of a significant number of its clients;
- it failed to keep adequate records with regard to the verification of the identity of its clients; and
- the MLRO failed to take reasonable steps to implement adequate procedures for controlling money laundering risk.
You can read the full story on the FSA's website.
Tax Issues
Pre-Budget changes to VAT rates
To access our FREE client letter summarising the impact of the reduction in the standard rate of VAT click here.
The motor industry and company cars
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 have published guidance for 2009/10 onwards on the application of the company car rules in three specific situations where problems can arise in applying the law strictly:
- test and experimental cars;
- demonstrator and courtesy cars; and
- employees with frequent changes of car ('averaging').
Further details can be found at www.hmrc.gov.uk/cars/averaging.pdf
Company tax return forms available
The following company tax return forms for accounting periods ending on/after 1 April 2008 are now available on the HMRC website:
- CT600 (2008) Version 2;
- CT600 (Short) (2008) Version 2;
- company tax return form Guide (2008) to form CT600 Version 2; and
- changes affecting company tax return forms CT600.
New postal address for VAT registration/deregistration
The following announcement has appeared on HMRC's website:
'From 7 November 2008, all postal correspondence to change VAT registration details or to deregister from VAT is to be sent to Grimsby National Registration Service, HM Revenue & Customs, Imperial House, 77 Victoria Street, Grimsby, DN31 1DB.'
Canterbury Hockey Club - sporting services exemption
The European Court of Justice (ECJ) has ruled in favour of the Canterbury Hockey club in its argument that affiliation fees it paid to England Hockey (a non profit making body) could be exempt under EU law because the term 'persons' was not limited to natural persons. HMRC had argued that these fees were not consideration for supplies to the participants taking part in the sport but were supplies to the club.
The ECJ concluded that the sporting services exemption can include services supplied to corporate bodies and non incorporated associations, provided that the services are essentially for sport and the persons taking part in such sport. The supplier must also be a non profit making body.
This ruling indicates that that HMRC's approach of limiting the exemption to supplies to individuals is incorrect and overly restrictive.
An opportunity exists to make reclaims for VAT overpaid on green fees and other charges made to non-members of golf and other sports clubs. IVC are now preparing claims on behalf of several clients on the basis that the Fleming ruling will also apply. If you or your clients would like assistance in preparing claims please contact any member of the VAT Services team for assistance.
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!
Not a well kept secret...
As well our newswire, we also circulate an Internal News Bulletin to the whole Mercia team. This keeps everyone informed of financial matters, team news, general updates and also includes any 'funnies'.
Mark Morton spotted this road sign whilst trying to avoid a motorway closure on the M25, he sent it in for the Internal News Bulletin and we thought you'd like it too!
The solutions to this month's wordsearch are
