15 Apr 1998
Regarding Penelope Feeney's letter (19 March), since when has the meticulous recording and analysis of figures been at the heart of accountancy? I would have thought common sense and the ability to see the wood for the trees was a lot more useful.
I told my daughter (a dyslexic) that good results in her GCSEs at history and geography would be an advantage in joining us as a student. Having obtained an A and B she is now in her first year training to become a chartered accountant.
Do not turn dyslexic students away; they work hard and, unlike other students, know and understand their shortcomings.
Also, Penelope, don't blame your husband, I think you will find dyslexia comes via the mother's genes.
G Foxwell, FCA, Ebbw Vale
Oppose this retrospection
There is proposed retrospective tax legislation in the recent Budget, and I ask for all accountants' active opposition to it on principle.
I refer to the proposed changes to the Capital Gains Tax: Temporary Non-Residence rules.
Before the Budget, if you were out of the UK for one tax year (working), or three tax years (not working), you were judged to be non-resident and therefore not liable for CGT on assets disposed of during your absence.
The Budget changed this period to five years, whether or not you are working. So far so good. But read on.
The Inland Revenue press release contains a sinister contradiction within it. It states: 'The new rules apply to individuals who leave the UK for tax residence abroad on or after 17 March 1998.' But this is contradicted, and overridden, in the final paragraph of the revised extra statutory concession which would enact the change. This states: 'This revised concession applies to any individual who ceases to be resident or ordinarily resident in the UK on or after 17 March 1998, or who becomes resident or ordinarily resident in the UK on or after 6 April 1998.'
The wording would have retrospective effect on people working abroad currently who wish to return home, as it would retrospectively tax capital gains, which would not have fallen to tax at the time those people realised them.
Even if you agree with the change for the future, it must be right to oppose the retrospective aspects of this change.
Duncan Heenan, FCA, Isle of Man
It is interesting that a second Big Six firm has withdrawn from the public-sector marketplace (26 March). The inter-related factors of fees and quality are the pretext. The fees have often been so low that I have wondered how a sole practitioner, let alone an audit team from a large firm, would wish to take on such work.
The prerequisites are obviously no longer there. Years ago, the press office let it be known that medium-sized firms were to be considered, but this was then denied. Maybe their moment will now come by default, or alternatively we will revert to the District Audit and relive history from the 18th century onwards.
Professor Gerald Vinten, associate dean and professor of management, Southampton Business School, Southampton Institute
NI changes 'as good as it gets'
Anita Monteith ('The rise and fall of NI rates', 2 April) reminds us that, from April 1999, employers NICs (at a new unified rate of 12.3%) will apply only to earnings above a threshold equivalent to the personal allowance for income tax (currently #4,195 per annum).
As from the same date, the 2% rate of employees' NICs currently payable on the first #3,328 per annum earnings will be abolished, with employee NICs payable at, normally, a rate of 10 per cent on earnings between #3,328 and the upper earnings limit of #25,220 per annum.
Lack of space prevented Anita addressing the question - do the April 1999 changes amount to the integration of income tax and NICs?
The answer is - no, they don't. Employer NICs, which raise about #27bn per annum, are completely de-coupled from income tax anyway. Meanwhile 'individuals' NICs' (employees' NICs together with self-employed NICs), which raise around #26.5bn per annum, continue to be charged on a completely different tax base to that on which income tax is levied. This in turn raises a further question - will 'individuals' NICs' and income tax ever be integrated?
The Chantrey Vellacott 'NIC and income tax integration model' assumes individual NICs are abolished, with the equivalent revenue being raised by a hike in the basic rate of income tax of 14p in the pound (each penny on the basic rate of income tax raises #1.8bn per annum). Of the 26 million UK income taxpayers, about 24 million would be affected by this change: perhaps 10 million would lose and 14 million would gain.
No political party will ever have the courage to integrate tax and NICs.
To borrow the title from the recent Oscar-winning film, the April 1999 changes are probably 'as good as it gets'.
MC Fitzpatrick, head of economics, Chantrey Vellacott, London WC1
Wyman's got it all wrong
Peter Wyman, chairman of the English ICA Education & Training Directorate, is quoted as saying the current syllabus is 'demotivating, irrelevant and wasteful', providing 'huge amounts of learning without much understanding.' If he were a professional football manager, the Football Association would reprimand him for bringing the profession into disrepute.
Imagine the feelings of those taking the examinations when they read his comments. And what are potential graduate recruits going to think?
This is not the image that we should be putting forward.
The truth is that the quality of our student intake is better than ever, better than that of our competitors and the numbers are increasing. We should be trumpeting these facts. The special meeting called by John Cook in 1996 made it quite clear the members do not want pre-qualification streaming. Nothing has changed since then that will make the member's change their minds.
The institute should accept that members do not like mergers nor pre-qualification streaming. We also question the need to call special meetings as Mr Wyman intends; why the degree of urgency? We understand the cost is around #100,000 and would prefer a reduction in our annual fees. We call upon all members to write, ring, fax or e-mail Mr Wyman so that he is in no doubt about your feelings on this matter.
Dr Jeff Wooller, Ginger Group, London, WC1B
We're not all rugby fanatics
I refer to the scurrilous article concerning the conduct of national executive committee meetings within our firm, (26 March, 'Taking Stock') which disgraced the back page. I am a member of the executive committee and Scottish. It must therefore be obvious that I would not wish to talk about rugby at committee meetings (at least not since 1990!).
Nick Robinson, Northern Region Managing Partner, Kidsons Impey
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