Letters – 22 January

Cheque facts

In its advertisement in Accountancy Age (4 December), Advance Payroll Services (APS) shows a cheque made out to Judas Iscariot by Pontius Pilate.

It was the chief priests of the temple, not Pontius Pilate, who paid Judas Iscariot, which was precisely why Pilate could wash his hands of the whole affair!

One trusts the research which goes into APS’s payrolls is rather more thorough than that behind their advertising.

Duncan Heenan BSc (Econ) FCA, Isle of Man

Some already doing it

Malcolm Howard (Letters, 13 November) longs for the day when he can travel in Europe without paying his bank a ‘huge’ commission for the privilege.

Those who have not been turned down by credit card companies have been doing this for some years. When the good ‘lecturer in financial management’ makes it to professor he will be able to flash his VISA card at foreign restaurants along with the rest of us.

That happy prospect seems unlikely, however, since he apparently regards with equanimity the prospect of prices increasing by 100% within three weeks as a result of currency change. Perhaps the students trained by this Mr Howard should come with a warning to their future employers.

Is that the inference he intends us to draw from his conversion of 2/2d into 22p?

John Downes, Doncaster

Going for the record

After a certain amount of correspondence and five statements of account issued by the Inland Revenue, the inspector of taxes, dealing with the affairs of a client, wrote to us on 8 October 1997 confirming that the extra amount of tax to pay for 1996/97 was #52.40, a conclusion which we detailed in our letter to the inspector on 22 September 1997.

This was based on a calculated liability of #5,647.60 which would be reduced by #2,144 in respect of relief in connection with a pension premium paid after 5 April 1997 but carried back to 1996/97 thereby reducing the liability to #3,503.60. Two payments on account of #1,725.60 each had been made in January and July this year bringing the total payments to #3,451.20 and leaving a balance of #52.40 payable.

Our client has now received a statement of account showing four payments.

However, what I find amazing is that these four sections contain no less than 33 adjustments on 28 October 1997 quite apart from a couple on 30 September 1997 and adjustments in respect of a return logged in error.

Now that repayments to tax payers of 1p are becoming commonplace, I would be interested to know whether anyone else has managed to have 33 adjustments made in a single day.

James Walsh, Wigan

Irrelevant argument

In arguing against economic and monetary union, Christopher Bright states that ‘petrol now rises by over 4p a gallon whenever a penny per litre is added to the price’. Absolutely true, but absolutely irrelevant to any debate on the single currency.

Since a gallon is 4.54 litres, a penny per litre will always be 4.54p per gallon.

Mr Bright may be opposed to the EU and the single currency but he cannot blame arithmetic on them.

Let us have a sensible and informed debate on economic and monetary union, but please, let us not cloud it with arguments that have little or nothing to do with EMU.

Paul Benny, group accountant, Akcros Chemicals, Manchester

Christmas bonus

At this time of year it is refreshing to find the Inland Revenue making unsecured and interest-free loans!

In several cases where a repayment is due to a client who has income subject to PAYE, a figure has been coded into 1998/99 as ‘underpayment’ and this figure has been used to increase the repayment for 1996/97. The result is an inflated repayment which is clawed back over a 12-month period starting in April.

Can all of us who are caught by the PAYE system ask for an imaginary under-payment figure to be coded into 1998/99 so that we can have a bonus to help us with the Christmas outgoings?

Are there any other wonderful ideas coming out of the Inland Revenue

Leonard A. Moore FCA, Derbyshire We’ve been here before Malcolm Howard (Letters, 13 November) comments on my letter (30 October) in which I set out the four hurdles which have to be overcome before the UK can join EMU in (say) 2004. These are:

EMU has to work;

Labour has to win the next general election;

Gordon Brown’s economic criteria for entry have to be met;

A ‘yes’ vote to EMU has to be secured in the referendum.

Mr Howard implied that I am perhaps overdoing these obstacles, suggesting that we have been here before during the 1960s debate regarding decimalisation.

It is important to realise that the hurdles I set out in my letter are not of my creation – they have been created by others. The first hurdle is created by circumstances, the second by a combination of Labour and Conservative party policies, and the third and fourth by Gordon Brown himself.

I could add a fifth hurdle – namely that the EMU countries may ultimately refuse to let us in. It is likely that the UK’s main motivation to join EMU some time after 2002 will be that we are suffering from being outside it – for example, inward investment may be being diverted from here to the Continent, while the City may be losing out at the hands of Frankfurt.

In these circumstances, the other EMU countries may feel that their economic interests are best served by ensuring that the UK – widely feared on the Continent as a dynamic competitor – continues to suffer the actual or potential economic disadvantages of being outside EMU.

As with decimalisation, there is a 1960s precedent for this – his name was de Gaulle and the word, ‘non’. We have indeed been here before.

Maurice Fitzpatrick, head of economics, Chantrey Vellacott, London

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