Tag Archive | "acca"

Fancy a top job with HMRC? It’s on the lookout for experts!

Senior tax specialists are escaping HMRC at an alarming rate and by the end of the summer, 80% of its top team will have left.

Three out of the five commissioners are due to retire shortly and the director-general for benefits and credit, Steve Lamey, is moving to the private sector. The Revenue also needs to find a new chairman to replace Mike Clasper. Lin Homer, the chief executive at the Revenue, is a relative newcomer to the department having only taken up her position a few months ago.

Simon Bowles, the chief finance officer, currently appears to be the only commissioner who is not about to jump ship.

The ACCA’s head of taxation, Chas Roy-Chowdhury, said it was unfortunate that all the commissioners were departing at the same time, but this could be a good opportunity to bring in fresh ideas from people in the lower echelons. He said he had spoken to Homer and was confident that she could beef up a new team and deliver the department’s goals.

A spokesperson for the Revenue said it’s vital for HMRC to get the right people in the right roles. Internal and external candidates are welcome to apply and the recruitment process will be fair and open. Applicants for these senior roles will need a wide range of experience and tax will be a key element.

The exodus could turn out to be good for HMRC; a new broom sweeps clean and all that. But will the department be able to get the right people in place quickly enough to prevent chaos?

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HMRC gives out wrong information claims ACCA’s Roy-Chowdhury

Chas Roy-Chowdhury, the head of taxation at ACCA, claims that HMRC is giving out incorrect advice about the possibility of a refund of VAT in cases of personal insolvency.

Earlier this year, the Revenue lost a case against Paymex, a debt advice business, and as a result the supervisory role of practitioners in personal insolvency cases is now VAT exempt.

However, last month HMRC published guidance on reclaiming VAT and it contained what Roy-Chowdhury says is a “veiled threat” warning practitioners that they should not dig too deeply into the past. If an independent practitioner does not want to disturb the past, the Revenue will not do so either and it is totally up to the IP whether or not to claim a VAT refund.

Mr Roy-Chowdhury said HMRC needs to set the record straight so that IPs understand their position regarding tax. He believes the latest guidance goes against that issued by recognised professional licensing bodies in the summer.

He said the licensing forces, including CIMA, ICAEW and IPA, should unite and seek discussions to clarify the problem with the Revenue. Furthermore, he estimates that HMRC could owe hundreds of millions of pounds to insolvency practitioners in VAT refunds.

The Paymex case centred around an Individual Voluntary Arrangement and Roy-Chowdhury believes the VAT exemption could apply to insolvency procedures that work in a similar way – such as a Company Voluntary Arrangement. But, HMRC is not proactive when it comes to clarifying whether IPs with a supervisory role in corporate administrations are also exempt.

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Will contractor accountants sit new qualification?

The AAT, ICAEW and Manchester Metropolitan University have got together and launched a low cost accountancy qualification which it hopes will enable more people to take up the profession.

The new programme starts in January next year and will be delivered through MMU’s business school. Students will be required to attend two three-hour weekly sessions. The programme is flexible, there are multiple entry points and students will gain a recognised qualification once they have completed each stage. The entire course costs £15,000 but this is based on current fee levels.

Students will be able to obtain an AAT qualification, as well as a BA (Hons) in professional accountancy after three years nine months. A further two years of study will complete the ACA qualification from the ICAEW and a masters degree in professional accountancy.

AAT president, Hilary Lindsay, said that making accountancy an affordable career choice will lead to a larger pool of talent to support future economic growth.

PwC has applauded the decision to launch the part-time course, saying the combination of higher education and professional skills development will ensure its graduates receive favourable treatment from the firm.

Meanwhile, the Professional Oversight Board has said that audit qualifying bodies should improve the way they award exemptions from some professional examinations. Furthermore, all supervisory bodies must strengthen the process for approving people who are allowed to sign audit opinions.

In particular, the report singled out the ACCA as an organisation that needs to ensure applicants are competent to do their job when initial audit experience was obtained some years ago. The board also said that the ACCA has already implemented some significant changes into its final audit examination and these will be reviewed to establish whether the exam is now sufficiently challenging.

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Dishonest contractor accountants beware: HMRC plans to clamp down hard

Last Thursday, HMRC published new proposals to clamp down on tax agents who act dishonestly.

“Working with Tax Agents; Dishonest Conduct” lays down the Revenue’s latest proposals along with draft legislation.

Dishonest tax advisers will be subject to a civil penalty and HMRC will have the right to publish details of advisors who do not make full disclosures on its website. The Revenue will also be allowed to issue “dishonest conduct notices”, which the advisor will be able to appeal.

HMRC has admitted that the way it interpreted draft legislation early last year was different to the way most tax professionals saw it. However, it has now made substantial alterations to the original proposals to make sure that penalties would only be imposed when there was an illegitimate loss of tax.

The permanent secretary for tax, Dave Hartnett, said the Revenue has worked closely with interested bodies to draw up the new draft legislation.

Anthony Thomas, the CIoT’s president, said HMRC should receive praise for listening to the views of interested parties and returning to the drawing board to start again from scratch.

However, he does question whether this legislation is necessary and whether it is coming at the right time. He went on to say that the CIoT shares the Revenue’s desire to track down rogue advisors.

The head of tax at the ACCA, Chas Roy-Chowdhury, pointed out that HMRC has taken on board the concerns his organisation had and a man talking about tax in his local pub will not be penalized. The focus of the new legislation is on agents making mass claims for tax repayment.

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It’s one step forward and two back on tax simplification

The Association of Chartered Certified Accountants claims the government is not succeeding in its efforts to simplify the taxation system in the UK. The organisation says the coalition is taking one step forward and two steps back.

Since coming into office last year, the government has made 200 tax code changes, even though they promised to give us an easier, more streamlined tax environment.

ACCA’s head of taxation, Chas-Roy-Chowdhury, said the number of alterations that have been made means the coalition takes one step forward followed by two back in its efforts to simplify the UK’s complex tax system.

UK contractors have been affected by a number of these changes but the one change that is most sought after still remains. IR35 is still with us, although the government has pledged to overhaul it and improve its administration.

David Gauke, the Exchequer secretary, recently reiterated his commitment to improving IR35 after acknowledging that contractors in the UK are significant and important people in the business community.

Gauke explained that HMRC is going to completely overhaul the way it administers IR35. This issue has to be got right if we are to provide a fair tax system that enables professional contractors to provide their services in the best possible way.

Chris Bryce, the chairman of the PCG, said he was pleased the Minister had made this personal commitment and that he recognised the major difficulties that have faced freelancers for the past 11 years.

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Vince Cable to exempt many SMEs from audit filing

Last Friday, Vince Cable announced that the audit system is to be overhauled; a move that could save SMEs and accountants for contractors £440 million each year.

The reforms will make it easier for new and expanding businesses to negotiate the auditing system, giving them more scope to concentrate on growth and expansion. The EU has less stringent auditing requirements and Cable’s reforms will bring the UK’s SMEs more into line with their European counterparts.

Furthermore, micro businesses and limited company contractors will only need to produce one simplified set of accounts. This amendment could benefit two million companies and save around £400 million annually.

After the announcement, Cable said small firms have to be allowed to grow and the audit reforms will ensure that small businesses can concentrate on growth and hiring, rather than paperwork.

Reaction from the major accountancy bodies was mixed. The assistant director of business policy at the ICAS, Paul Probin, said it was not in the public interest to remove the audit requirement from medium sized businesses.

The ACCA’s head of technical pointed out that the proposals were still at the consultation stage but clearly a lot of firms will be conducting fewer audits and he said he was disappointed that accounting and auditing rules had been labelled as red tape.

The ICAEW, on the other hand, broadly supports measures that ease the regulatory burden on small businesses. The audit threshold is currently £6.5 million turnover and he believes that if it is raised larger companies will carry on having audits voluntarily.

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New tax amnesty announced, this time for plumbers

Contractor accountants may see a surge in enquiries after HMRC announced a new tax amnesty on Tuesday.

The agreement encourages plumbers or those in associated trades, such as heating engineers and gas fitters, to settle their past five year’s undisclosed tax in return for a 10% penalty. Experts however are confused as to who exactly it applies to saying it has very similar to the terms offered to anybody wanting to make full disclosures.

A tax investigation partner at PKF, John Cassidy, pointed out that specific tax amnesties have been offered in the past but the wording of this one seems to cover a broad spectrum. This seems close to offering a back door general amnesty, he added.

HMRC hit back saying the Plumber Tax Safe Plan is specific and the forms are designed so that only plumbers and associated tradesmen can complete them.

The Revenue wants to encourage other people to make disclosures and they will receive preferential treatment for doing so but HMRC does not guarantee that they will receive the 10% penalty rate promised to plumbers.

Plumbers wanting to take advantage of this amnesty have until the 31st May to register intent and then settle their outstanding liability by August 31st.

Chas Roy-Chowdhury from the ACCA believes this time frame is not generous enough. Plumbers may only see their accountant once a year, he pointed out. The professional tax and accountant bodies had asked for the deadline to be extended until the 31st January 2012. For tradesmen who see their accountant once a year, this would seem sensible as it coincides with the self-assessment deadline.

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Implementation of Bribery Act to be delayed until mid-Summer

Accountants for contractors might want to tell their clients that Kenneth Clarke, the Justice Secretary, has confirmed that the government intends to review the new Bribery Act legislation and will therefore be delaying its implementation.

Originally the Act was due to be implemented in April, but this delay in publishing the official compliance guidance means the target date is now mid-Summer.

The head of the OECD’s anti-corruption efforts, Professor Mark Pieth, was not pleased with the decision saying it hurts the competitiveness of industry in the UK if companies are still allowed to secure contracts through bribery.

The CBI, on the other hand, has backed the Ministry’s decision as it will give companies more time to prepare for implementation. It warned that in its current form, the legislation was unworkable. The CBI’s director of employment policy, Katja Hall, said the Confederation backed the principle of a comprehensive, strong anti-bribery law but the delay is essential if the government is to protect the competitiveness of the UK. The delay will ensure that the guidance is correct and the legislation workable.

The ACCA also believes the delay will be good news for businesses. The head of ACCA UK, Andrew Leck, said that businesses must understand how the Act will affect them and have time to prepare. Of particular concern to the ACCA, is the impact the new legislation will have on SMEs. The Association is calling on the government to make sure the guidelines are relevant to the small business sector as SMEs are the ones in most need of clarity and support.

In related news, construction companies have complained that British embassies do not help them when they are faced with bribery demands overseas. The Serious Fraud Office advises companies to report overseas bribes in order to be in compliance with the Bribery Act.

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Plea to delay compulsory online filing as solutions aren’t ready

The CIoT and the other main professional accountancy and tax bodies have sent a letter to the Exchequer Secretary asking the government to reconsider the timing of compulsory iXBRL online filing. However, it seems unlikely that HRMC will bow to the request.

The ACCA last week flagged up the lack of software capable of handling iXBRL. Chas Roy-Chowdhury, head of tax at ACCA, said they had been trying to negotiate a deferral with HMRC for some time but the furthest they’ve got is a promise of a light touch on compliance when the system is first implemented.

Accounting software provider Sage has admitted that its new iXBRL product will not be ready in time for the corporation tax filing deadline of April 1st. The company says it will have an interim product available, but the release of the full version will be delayed. CCH has not yet delivered its integrated package but has indicated it will be ready in time.

It will be possible for people using Sage accounts production software to file UK GAAP and IFRS tax returns. They will receive a temporary product, ONESOURCE, from Thomson Reuters, which includes the minimum requirements for iXBRL filing.

Contractor accountants will be able to compile tax returns as usual within Sage software and then transfer the data into ONESOURCE. The majority of this process is automated but some IT experts believe this could add a lot of extra time onto the filing process.

In addition to understanding the mechanics of iXBRL, accountants using Sage now need to learn how to transfer data into ONESOURCE and there’s just 3 months left to do it. They will then need to learn Sage’s iXBRL product when it is released later this year.

Will this workaround cause accountants to lose faith in Sage and switch to another software provider? Only time will tell…

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Audit Commission to go, but is that a sensible move?

The Audit Commission is to be scrapped, Eric Pickles, the communities minister, announced last Friday.

The commission employs about 2,000 people to monitor the performance and accounts of public sector bodies. The government claims that shutting it down will save around £50m a year.

This move is likely to benefit the private sector as councils and other public sector bodies will be able to tap into the open market and appoint their own external auditors. By outsourcing audit expertise, the government hopes to cut back on the centrally imposed bureaucracy and costly auditing, thus saving money for council tax payers.

The National Audit Office is to set up a new auditing framework to ensure public sector bodies are still subjected to robust auditing.

Pickles said that the Audit Commission is no longer a watchdog looking after the interests of the taxpayer; rather it has become a creature of Whitehall. This new plan goes together with proposals to create an army of local people who will hold local bodies to account when it comes to spending tax and delivering value for money services.

The Audit Commission, probably understandably, is less than optimistic that this new approach will work. Michael O’Higgins, the Commission’s chairman said the department had more than fulfilled its aims since it was set up by Michael Heseltine and the Tory government in 1983.

The ACCA believes the move will prove costly and lead to inconsistencies in local government reporting. The head of public sector at the ACCA, Gillian Fawcett, pointed out that although a lot of the Audit Commission’s work is currently contracted out; the commission ensures that reporting is consistent.

Whilst this move will undoubtedly benefit some private sector accountants and contractor accountants, the general feeling on the street is that the work will go to the larger accounting firms rather than smaller local businesses.

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Online accountants should prove their qualifications

UK200 wants the government and accountancy industry bodies to do more to highlight the differences between qualified and unqualified accountants.

Anybody can set themselves up as an accountant and a lot of clients don’t appreciate that firms who are not regulated are offering substandard advice, albeit at a cheaper price than a regulated practice.

The MD of a firm of accountants in Chesterfield pointed out that at first glance there seems to be very little difference between a qualified or unqualified accountant. However, there are some things that an unqualified accountant cannot do.

Software packages now make it easier for limited company contractors to do their own accounts and coupled with the coalition’s proposals to reduce red tape, unqualified accountants could start to find life even easier.

The UK200 Group wants the ICAEW and the ACCA to promote the brand so that people won’t use an unregulated accountant. They would also like to see the government take action to regulate or close down operators who are unqualified.

The vice-president of UK200, Jonathan Russell said that some small accountancy firms are seriously thinking about whether the burden of regulation is now too onerous to bother with. Russell thinks that there are three possible options going forward. Either regulation has to be compulsory for all accountants, or accountants who are not qualified are barred from practising, or the regulation on those who are qualified is reduced so that they can compete on a level playing field.

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