Another successful partnership for Mercia over many years has been with Caseware who developed our first paperless audit system based on
the Mercia methodology. We have always believed in providing our audit manual users with a choice and are very proud to announce this
month sees the launch of versions of the Mercia methodology in the CCH paperless audit system which includes our audit exemption,
pensions and charities manuals. Further details will be included on our website soon.
Continue to watch this space for further developments as Mercia never stands still!
Nicola Hurley
Director
nicola.hurley@mercia-group.co.uk
Delivering Quality Client Service and Client Care for Support Staff - November courses
In November we are running two half day courses to help your technical and support staff deliver a consistently high quality service to your clients. The courses are being held in the East Midlands on Thursday 1 November but can also be delivered in-house and tailored to specific needs. For further information on these and other courses in our practice and management development course programme click here.
If you would like to further details on any of our management courses and in-house programme call John Sharkey on 0116 258 1200 or email him at john.sharkey@mercia-group.co.uk
Pre-Budget Report - What will you be telling your clients?
No date has been announced at the time of writing but we still expect the Pre-Budget Report to be in October. We have a range of printed and digital products available to help you keep your clients informed. To find out more click here
Audit and Accountancy Issues
ICAEW simplifies annual return for member firms
Following feedback from member firms, the Quality Assurance Directorate (QAD) of the ICAEW has reviewed the annual return and issued a revised format. The new format comes into effect for those members due to file their return from September 2007 onwards. For further information click here.
A sample return in the new format is available from http://www.icaew.co.uk/practice
Revised guidance on bank reports for audit purposes
Draft Practice Note 16, Bank reports for audit purposes (Revised) was published for consultation by the APB in July 2007. The guidance places requests for bank reports in the context of a risk based approach as required by ISAs (UK and Ireland). Under this methodology, decisions on whether to obtain a bank report and, if so, what information should be covered by it will be based on the audit risk assessment and knowledge of the business information at the planning stage of the assignment.
Specifically, information on trade finance and derivative and commodity trading should only be sought where the auditor has a reasonable expectation that the client uses such facilities. (Custodian arrangements have been removed from the categories of additional information listed in the Standard Request.) In making the assessment, auditors are also encouraged to refer to the annual facilities letter sent by the banks to many of their clients. The guidance suggests that the auditor will usually need a bank report and only in rare circumstances will they deem that one is unnecessary. If justified by the risk assessment, auditors will be expected to provide the main account sort code and account number for the account of each entity listed in their request for bank information.
Three new bank report templates will also be introduced for standard, fast track and incomplete information requests respectively.
Following the consultation period, the revised Practice Note is intended to be introduced for accounting periods ending on or after 26 December 2008; earlier adoption will be encouraged. Further details of the guidance can be obtained from http://www.frc.org.uk/apb/press/pub1368.html
APB invites comments on new IAASB Clarity Exposure Drafts
The International Auditing and Assurance Standards Board (IAASB) has recently issued a number of "clarity" exposure drafts as part of an ongoing clarification project. Further details are available at http://www.frc.org.uk/apb/press/pub1394.html
Consultation Draft Practice Note 21
The APB has announced the publication of a consultation draft of a second revision of Practice Note 21 "The Audit of Investment Businesses in the United Kingdom". This version includes additional guidance on FSA reporting matters and reflects changes to the law and FSA rules that are effective before 1 November 2007.
http://www.frc.org.uk/apb/press/pub1385.html
Tax Issues
New capital allowances consultation
The maximisation of capital allowances requires a blend of specialist skills in tax law, surveying and accounting. Our specialist consultants, The Capital Allowances Partnership LLP, have many years’ experience in this field, and write most of the published works on the subject. The service covers not only the most common allowances, on plant and buildings, but also those that are more rarely met, such as relief for research and development, and land remediation.
In the 2007 Budget, proposals were announced to radically change the capital allowances regime. HMRC have now issued a consultation paper on the proposals. If you would like to read our summary of the changes, please click here.
‘Trap’ Capital Allowances before April 2008
Many clients will face higher tax bills as a result of these major changes to the capital allowances system. Time is therefore of the essence in ensuring clients’ claims are maximised without delay. In only six months time, from April 2008, capital allowances on plant will fall from 25% pa to 20%, some fixtures will only qualify at 10%, while industrial buildings allowances (affecting not only ‘industrial’ concerns but also hotels) and agricultural buildings allowances will be phased out by April 2011.
Allowances can be maximised if claims are made now. Not only will expenditure qualify initially for the 25% allowance but any expenditure already claimed will continue to attract allowances at 20% pa, even if the assets concerned are of the type that will in future only attract relief at 10%. So, in essence, you can ‘trap’ allowances at the higher rate by making a claim before April 2008. Furthermore, with IBAs going, plant claims will be even more essential, as they will in future represent the only way to obtain tax relief for expenditure on property.
For more information, please contact Steve Perry, The Capital Allowances Partnership LLP, on 07974 173134 or 0121 704 0701 or email him on steve.perry@cap-allow.com
New CIS: help for contractors
HMRC have issued a new guide to help contractors complete and submit their monthly return. To view a copy click here.
HMRC’s six month so-called ‘light touch’ on the monthly penalties under the new CIS will soon be up and HMRC seemed concerned about the current level of compliance - or lack of it! As the cost of compliance failure is becoming a reality, now is the time for specialist advice in relation to restructuring Employment Status processes, CIS system health checks, negotiating time to pay arrangements with HMRC and so on to avoid any nasty surprises.
If you would like specially designed software, approved by HMRC, to help you administer the new CIS, please click here.
HMRC interest rates
New rates of interest on direct and indirect taxes and national insurance contributions paid late and overpaid took effect from 6 August 2007. To view the rates in detail please click here.
Changes to Capital Gains Manual: Private residence occupied by dependent relative before 6 April 1988
HMRC have changed their guidance where a private residence was occupied by a dependent relative before 6 April 1988 and the residence has also been let as residential accommodation.
Guidance on the relief can be found in the Capital Gains manual at CG64200 onwards and also by clicking here.
Pension scheme returns
With effect from 16 October 2007, HMRC will require pension scheme administrators and their advisors to file the following information online:
- ‘accounting for tax’ returns;
- notifications of winding up;
- event reports;
- scheme administrator’s declarations;
- applications to register a pension scheme;
- registered pensions scheme returns;
- notification of a scheme administrator terminating their appointment.
Partially Exempt Businesses - VAT Saving & Tips
A recent tribunal case won by IVC has confirmed that goods leased into the UK from outside the EC can, in certain circumstances, be free from VAT. This is likely to be of interest to exempt or partially exempt businesses.
If you act for partially exempt businesses and last reviewed their PE method more than two years ago, it may not reflect the current activity of the business and it may be beneficial to review and amend it.
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!
Who is Ann Steer?
Earlier this month the marketing support team sent an email to tell you about our Pre-Budget offering. Many of you who received the email are probably wondering who Ann Steer is as her name appeared in the subject title. Our apologies to everyone who received it twice due to a ‘bug’ in our systems that corrupted the information and apologies to Ann, our marketing support admin supervisor, for calling her a bug!
Team news...
...there’s lots of it!
Welcome back to David Gallagher who is enjoying(?) his first month back at work following his three-month sabbatical. We also need to welcome several new members to our admin team. David Burman (that makes just five David’s working at Mercia) and Mary Forryan who are looking after our database. Elizabeth Taylor (she’s heard all the jokes!) who joined our marketing support team and Karina Mikolajczyk who is covering Michelle Hammond’s maternity leave and helping the training admin team.
The answer to this month’s sports trivia question is Brendan Foster.
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Nicola Hurley
Mercia Group Ltd
Best House, Grange Business Park, Enderby Road, Whetstone, Leicester LE8 6EP.
Tel: 0116 2581200 Fax: 0116 2581250.
Email: nicola.hurley@mercia-group.co.uk Website: www.mercia-group.co.uk
Mercia Group Limited is a company registered in England and Wales with company number 1464141.
Registered Office: Paulton House, 8 Shepherdess Walk, London N1 7LB
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