Irrelevant? Not us
I read with interest your article (25 March): ‘FDs: Institutes are irrelevant’.
Surely on balance the institutes will only be irrelevant if their members don’t choose to use them.
My institute, the ICAEW, provides a powerful force for discussing issues that concern finance directors, and provides an enormously helpful focus for dealing with company law, business and financial reporting issues at a legislative or consultative stage.
Away from these rarefied matters, the ICAEW offers more than 40 services of value to FDs and others in the finance field. I cannot see how the faculties of finance and management, corporate finance, tax and audit and information technology can be anything other than directly helpful to FDs who participate.
The problem is we are burdened with so much paper we find it difficult to keep abreast of what is going on, even in our own institutes. I am sure the ICAEW would be the first to agree it can do more to help its members in business, but it has been heading in the right direction for some time, and recent moves by Moorgate Place to reform relations between its members are bound to lead to further improvements.
RC Close, director of finance, the Post Office, and former ICAEW council member
Time to fight the Euro Your readers may remember our successful fight against compulsory current cost accounting in 1977 and 1982. Today we are concerned Britain is drifting into joining the single currency.
We are considering forming an action group within the institute to retain the pound and to campaign against joining EMU. Many people do not realise that joining the single currency is not just an economic decision. To join EMU would result in a total loss of sovereignty, and a complete subjugation of ourselves and all our historic past to a federal Europe. There is no evidence in history of any nation state that has lost control of its own currency and survived.
Martin Haslam FCA and David Keymer FCA,FTII, Sussex
Bring on the ethical VAT men The VAT survey carried out by Cooper Lancaster Brewers (reported 1 April) correctly draws attention to the problems arising from application of a business tax to charities. In theory, VAT is a tax only on the final consumer, all VAT paid before that stage being recovered by the next person in the chain, with no VAT being retained by Customs & Excise until a product (including services) reaches this point.
Customs, however, incorrectly identifies the final consumer as the one who does not make a further onward charge for the product, and makes no attempt to consider the unusual (in Europe) strength of the not-for-profit sector in the UK. Charities are not, in fact, the final consumer because they provide products to their beneficiaries.
The charity sector’s income has been estimated at #18bn per annum, money that would have to be found elsewhere – much of it by government – if charities did not exist. Because they do not charge for all their ‘products’, Customs effectively defines them as final consumers and restricts recovery of their input VAT.
The failure to think about who the final consumer really is links with the view of the intellectually under-powered Thatcher government that ‘if you can’t bank it, it has no value’. Even so, Customs does not restrict the recovery of input VAT by businesses which give away some of their products, or make losses – in effect subsidising all their products. So why penalise those that choose to subsidise their products by up to 100%?
Of course, the real reason why Customs & Excise refuses to accept the illogicality of refusing to allow charities to recover all the VAT they pay is, once again, the money. When #460m per annum is at stake, ‘sod the ethics, gissa money’.
Alex Sandison, FCCA, Herts
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