Friends that last forever
I assume Sir David Tweedie is adopting a straight-line depreciation method on his pool of friends, in order to arrive at a nil balance after 10 FRSs at 10%?
I wonder whether FRS 10 could save him?
If his friends are intangible they might last 20 years – or even forever – if the appropriate impairment reviews are carried out.
Craig Robinson, Princes Risborough, Bucks
Not stockpiling, just busy filing
So Doug Smith at the Inland Revenue thinks accountants have nothing better to do than to stockpile tax returns. Just where does he obtain his information?
Mythical beliefs regarding late-filing ‘advantages’ are no more than media hype.
Tax returns may dominate Doug Smith’s life, but to most taxpayers they play an insignificant part. Accountants must somehow marry the two extremes.
Doug Smith may like a few facts of life from a sole practitioner’s office.
Since April, tax-return completion has dominated the office routines to the exclusion of accounts completions, unless they were urgent or necessary for the tax returns. We look forward to February and March when we can do the remaining 80% of our work.
The submission slowdown is due to the fact that if accounts are required it can take several days to complete just one return – and we have other work to catch up on.
Self-assessment has necessitated our bringing up-to-date all clients’ pre 5/4/97 annual accounts – not something that would otherwise have received this degree of priority, although we started this process 18 months ago. This in addition to new deadlines and a far more time-consuming completion process.
There has been an extensive on-going and expensive learning curve which, believe it or not, takes a lot of time (let’s say it has cost #5,000 this year). No tax returns are completed while this process is operative. Judging by the Revenue’s ability to answer technical queries, accountants are well ahead of Revenue staff in this respect.
We are given just nine months to put all clients’ tax affairs and annual accounts into order, and complete tax returns with great care. We do not have the Revenue’s luxury of processing now and taking another year to check them. Please can we have Doug Smith on our side next time?
Does he know there are other tax office commitments to comply with – PAYE returns, P11Ds, even company accounts and returns? Oh, and don’t forget VAT, NIC, payroll audits and VAT control visits, all of which are also time critical.
No, Mr Smith, the real reason for the delays is that we are stockpiling tax returns to send them by parcel post to save the extra postage burden that you have imposed upon us. There can’t be any other reason, can there?
David A Hope FCA, Ross-on-Wye, Herefordshire
Playing the waiting game
If, as is suggested, some agents have stockpiled 1997 tax returns, those of us who have submitted returns throughout the summer and autumn will then suffer delays because the Revenue is processing these instead of dealing with general correspondence. It is difficult enough getting adjustments made to 1995/96 assessments. I do not see why our clients should wait for often long overdue adjustments.
We will all, no doubt, have our quota of enquiries – and the sooner the better. It is much easier to deal with recent events than to wait for a year and then have to ask clients to remember.
Mrs M Thornton, sole practitioner, Kendal, Cumbria
Why can’t they keep it simple?
It has occurred to me that the self-assessment statements of account must be one of the most confusing documents ever issued by the Inland Revenue.
I have a self-employed client who made a payment on 31 January which represented 50% of the agreed liability for 1995/96. Her final liability for 1996/97 was agreed by the end of May and consequently she was able to make a payment on 31 July, which represented the balance of the liability for 1996/97, which proved to be less than the liability for 1995/96.
Because this effectively means that her tax was overpaid on 31 January, she has received a statement showing that she is entitled to a supplement of #1.13 which is being held in her credit. I have no problem with this aspect of the matter – except that the statement of account for some extraordinary reason requires 14 separate entries to record the above transactions.
Six of the entries are referred to as ‘adjustments’ and in no case is any explanation given, and neither do those figures seem to have any relevance.
Therefore, the chances of an unrepresented taxpayer understanding these statements of account are very low indeed.
Why can’t the Inland Revenue design a simple form which shows the total liability for the year, the payments actually made and the balance?
I suggest that every tax practitioner write to the Revenue’s self-assessment unit to ask that these statements of account be totally redesigned so that they are intelligible.
David Turner, FCA, Enfield
Millennium bomb victim
I haven’t seen a prize listed in your publication for the first reported ‘real life’ effect of the millennium timebomb problem, but I’m sure such a prize exists and I’d like to claim it, please.
My Barclay Connect card has just been refused at a petrol station as the expiry date is 10/00 and their systems can’t cope with that. I didn’t get the fuel for free though – the garage merely processed the transaction through the manual, multipart, self carbonising paper system.
Is this the simple solution to the millennium problem, and should I be purchasing shares in Kalamazoo, etc?
Chris Taylor, Duncan Boxwell & Co chartered accountants, Neston, South Wirral Regulator will be solvent
The funding of a regulator for the insolvency profession should not pose a problem.
The DTI raises millions of pounds each year by taxing the creditors of bankrupts and companies through that iniquitous anachronism, the Insolvency Services Account.
Alan R Price, MIPA, MSPI, managing partner, Haines Watts Corporate Advisory Services London All letters should be sent to: The Editor, Accountancy Age, VNU House, 32-34 Broadwick Street, London W1A 2HG
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