News in Brief - 12 November
Legion saved from VAT
The Remembrance Day poppy charity has been saved from a VAT increase which could have cost the British Legion #500,000. Chancellor Gordon Brown blocked plans to bring the appeal into the VAT net after receiving a letter from former disability minister -turned-Labour peer, Lord Morris. Brown said Customs & Excise would have to reconsider moves to ‘simplify’ VAT-exemption rules to ensure they would not disadvantage charities such as the British Legion.
NHS funds to rise by #2bn Health Authority funding allocations are set to rise by #2bn next year, with all 100 authorities receiving an average 6.6% cash increase, 4% in real terms. During the announcement of the #31bn allocations for 1999/2000, health secretary Frank Dobson said: ‘The money will be spent on things that really matter to local people – modernising the NHS, improving local services and cutting waiting lists.’ Dobson also announced details of the first year of the NHS modernisation fund which emerged from the outcome of the government’s comprehensive spending review.
Councillors go to court Five Blaenau Gwent councillors will appear before Gwent magistrates on 21 December to answer charges of false accounting following an investigation by fraud squad officers. A former council leader is understood to be among the five. A council spokesperson said: ‘The council is concerned to learn charges have been laid against members of the authority, but hopes the investigation, which has been continuing for over a year, is coming to a close.’
Tax relief for charities Economic secretary Patricia Hewitt has promised charities that they will soon get tax relief for a wider range of services, such as cooking and cleaning. Speaking at the Charities Aid Foundation conference, Hewitt said a number of welfare services were provided on a charitable basis and are eligible for VAT exemption. She also said the review of charities’ taxation was progressing well, with more than 3,000 responses to the consultation submitted to date.
SMEs losing interest Britain’s small business sector is losing out on around #3.3bn a year in unearned interest on its savings, according to research of 7,500 smaller companies. The research, conducted by Standard Life Bank, shows that businesses in the SME sector have an average of #33,000 on deposit at any one time. Most traditional banks and building societies offer interest rates of an average of 4.5% on balances of up to #50,000. On a balance of #33,000 these business savers would earn about #1,500 interest in a year.
APB guide on pro formas The Auditing Practices Board has issued new guidance to help accountants gauge whether pro forma information issued to support acquisitions and other transactions has been properly prepared. Aside from vetting whether the pro forma has been compiled on the basis stated, the accountant should establish whether the pro forma is consistent with the issuer’s accounting policies and the Stock Exchange’s Listing Rules. Reporting accountants should not make any report if they believe the pro forma information is misleading, concludes APB Bulletin 1998/8.
ICA calls for LLP for all The English ICA last week welcomed draft limited liability partnership legislation. It said it would allow a degree of limited liability but allow the organisational flexibility of partners to be maintained. In a response to the Department of Trade and Industry, however, the English ICA also calls for LLP status to be available to all organisations, whether or not they are members of a professional body.