Friday 30th September 2011
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September is always a busy month and often referred to here as 'silly season'. This year has been even busier, as we have now acquired
even more events to run. You may have already heard but if not, from 1 September 2011 we became responsible for running the CCH professional
development face to face events for accountants in practice. We know many of you already attend some CCH PD events as well as use Mercia
and if you attended one this month you'll know it remains business as usual.
Something else that remains business as usual is making sure our newswire helps you to keep up to date on various matters. From the
number of recent technical queries received in relation to IFRS for SMEs and the FRSME, it is clear that many of you would find further
information on the proposed changes helpful. More information is included A&A issues below.
Furthermore, feedback from our lecturers on recent courses, suggest many of you remain unaware of the new Agency Workers Regulations
that come into effect on 1 October 2011. These new Regulations have received very little publicity yet they introduce important changes
that will have an effect on those who make use of agency workers. If you would like to find out more about the new Regulations see our
blog
on the subject. To help you communicate this to clients we have also prepared a client letter, see below for details.
Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk
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Autumn conferences
Property Conference - 10 November 2011, East Midlands
This one day conference has been designed for Accountants in Practice who advise clients on property related accounting issues. Topics covered include:
UK Commercial Property Market Overview; Maximising Capital Allowances; Property Valuations; Stamp Duty Land Tax; VAT and Property; VAT - The Lifetime of
Lease and Accounting for Property - UK GAAP, IFRS or FRSME. For the full course outline please click
here.
Employment Tax - Conference for tax specialists - 15 November 2011, London
The Employment Tax conference has been designed for tax specialists who require an in depth knowledge of current topical issues, the topics covered
include: Termination Payments; NIC Update; NEST; Disguised Remuneration Rules; Salary Sacrifice and Share Schemes Update. For the full course outline
please click here.
If you have any questions about either of the conferences, or need further information, email
emily.bailey@mercia-group.co.uk
Two new client letters
The new Agency Workers Regulations
Are you aware of the new Agency Workers Regulations that come into effect on 1 October 2011? If you're not, you're not alone! These new Regulations
have received very little publicity yet they introduce important changes that will have an effect on those who make use of agency workers. To help you
make your clients aware of these new Regulations we have produced a client letter, including a summary.
UK Tax residence - important changes ahead
A consultation process is underway which will lead to the introduction of a 'Statutory Residence Test' (SRT) to determine residence from 6 April 2012.
The legislation is likely to be in next year's Finance Bill but since it could affect plans being made now, we have compiled three client letters to target
different client perspectives covering the basic changes from the following perspectives: Changes affecting individuals planning to come to the UK, Changes
affecting individuals planning to leave the UK and The SRT and its implications for employers.
For further information and to order please click here.
Audit and Accountancy Issues
IFRS for SMEs and the FRSME
From the number of recent technical queries received in relation to IFRS for SMEs and the FRSME, specifically regarding what they are and what do they
mean in relation to the UK financial reporting system, it is clear that further information on the proposed changes would be helpful. To assist your
understanding we have taken an extract on IFRS for SMEs and the FRSME from our 'Introduction to IFRS' course notes. Click here
to download your copy.
The Solicitors Accounts Rules 2011
You may recall from our April 2011 newswire the launch of the new Solicitors Regulation Authority (SRA) Handbook, which included draft, new Solicitors'
Accounts Rules. The new rules are due to come into effect on 6 October 2011 and whilst they are overwhelmingly the same as the current Solicitors' Accounts
Rules (1998), there are some changes which will have an impact on the work carried out by Reporting Accountants.
We are currently finalising an update to our
Solicitors' Accounts Rules Specialist Assignment Manual (SAM)
and have recently clarified certain matters with the SRA, including:
- Any Accountant's Report Form (AR1) submitted after 5 October 2011 must be the new AR1 form. A copy can be found in appendix 5 of the 2011 Rules
on the SRA's website.
- At the top of the new AR1 form you will see that it is necessary to state which period relates to the SRA Accounts Rules 1998. Therefore, only
one AR1 form should be submitted for any accounting period.
- The 1998 Accounts Rules should be complied with up to, and including, 5 October 2011 and the 2011 Accounts Rules thereafter.
- Where an Accountant's Report relates solely to the 1998 Accounts Rules but is submitted after 5 October, the new AR1 form must be used.
Therefore, if you are currently part way through completing an existing version of the AR1 form you may
wish to ensure that this is submitted before 5 October. Remember - any forms submitted after 5 October must be the new version.
If you would like to find out more about the new rules Mercia has both
specialist courses and a
webinar being held later this year.
New accounting guidance for Academies
Those of you with academy clients will no doubt have been waiting for an updated academies financial statements template as the previously available
version was in need of an update. At the end of August the Young People's Learning Agency (YPLA) published the 'Academies: Accounts Direction 2010/11',
which supersedes chapter 5 (Annual Accounts) of the Academies Financial Handbook. The new Direction applies to 31 August 2011 period ends and includes new
example financial statements. The Direction also provides further guidance on certain hot topic issues such as the treatment of fixed assets, including
leasehold property. You can access a copy of the Direction on the
YPLA's website.
We are working on an October 2011 update to our
Academies SAM which will include an
updated disclosure checklist and example financial statements.
The Future of UK GAAP - Re-exposed
At its September 2011 meeting, the Accounting Standards Board decided that it would issue a revised financial reporting exposure draft (FRED) on the
Future of Financial Reporting in the UK & Republic of Ireland (RoI). The Board considered re-exposure was appropriate in view of its decision to remove
the definition of public accountability and to amend the draft FRSME to include accounting options currently permitted in UK and RoI financial reporting
standards.
We can probably expect to see the revised FRED in October or November but in the meantime you can keep up to date with the ASB's deliberations on
this subject here.
Reports published in September
There have been a number of reports published which you may find interesting, including:
You may also be interested in the new Department for Business Innovation & Skills (BIS) consultation on
the future of narrative reporting. Will this be the end of the Directors' Report as we know it? We will also be looking
out for news due from BIS soon in respect of its proposals for increases and changes to audit exemption qualification. We hope to have something to
report on in next month's newswire.
Tax Issues
Changes to the advisory fuel rates from 1 September 2011
The advisory fuel rates have been changed with effect for all journeys undertaken on or after 1 September 2011. To read more, please click
here.
Agreement with Switzerland to secure billions in unpaid tax
The Government has ratified in principle an agreement with Switzerland to tackle offshore tax evasion. Under the terms of the agreement, existing funds
held by UK taxpayers in Switzerland will be subject to a significant one-off deduction of between 19% and 34% to settle past tax liabilities.
From 2013, a new withholding tax of 48% on investment income and 27% on gains will ensure the effective future taxation of UK residents with funds in
Swiss bank accounts. This will be accompanied by new information-sharing rules which will make it easier for HMRC to find out about Swiss accounts held by
UK taxpayers. The new charges will not apply if the taxpayer authorises a full disclosure of their affairs to HMRC. To read more, please click
here.
School Charities - Gift Aid and Payroll Giving guide
HMRC have published a Gift Aid and Payroll Giving guide for School Charities, which contains information and simple examples specifically related to
funds received by school charities to help make the most of these donations. To read more, please click
here.
Faster pay
One of our clients pays his VAT return on the day that it is due (i.e. the 7th of the month following) by a service called faster pay. The bank has
confirmed that the payment is instant. However, HMRC say he is always late. We have checked HMRC's website and they have confirmed that they do not accept
faster pay payments and so the payment takes 3 days to clear in the normal way. You may wish to check that your clients are not using this service.
Click here for more VAT news.
Office Gossip and Idle Chat!
A first for Phil Frost!
Whilst Phil was delivering a course in Guernsey, a delegate's mobile phone bleeped at about 10:15 and they promptly put their papers in a neat pile
on the desk and quietly got up and left. When a delegate leaves it's usually during tea break or just before the end. It was quite unusual for a delegate
to leave mid-lecture and even more unusual for them to leave belongings. Therefore, Phil thought a comfort break was urgently needed until the delegate
didn't reappear.
The delegate did eventually return and explained that the bleep on their phone was to summon him to the help man the lifeboat and he had helped to
rescue someone whose boat had lost power and was drifting on to rocks.
Phil told us "I thought that over the years I had come across all possible reasons - including another appointment; being caught short; wife in labour;
family illness; etc etc. but this is a first!"
We thought it was rather amusing but David Gallagher amused us further when he responded to Phil to say "Don't tell me you fell for the old "I'm manning
a lifeboat" yarn. Oldest trick in the Channel Islands book."
Social Media update
After our recent launch into social media, we thought you might appreciate an update.
We have been blogging and recent posts included 'Any Relief for Farmers still feeling the Pressure' and 'I have a dream...' contributed by
Andrew Guntert which has received some very interesting comments.
Twitter has also proved to be popular, we now have quite a few people 'following us' and we've made a number of tweets. Also very positively we have
had some good feedback on one of our courses too; a client recommended a recent Finance Act 2011 course she attended.
We'll keep you posted on any other developments; your feedback also would be very welcome.
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