The Tax Faculty of the Institute of Chartered Accountants in England and Wales (ICAEW) has published a series of Frequently Asked Questions on the tax implications of changes in the way providers of services are required to recognise revenue in their accounts.
The changes arise from 'Urgent Issues Task Force Abstract 40', issued recently by the Accounting Standards Board.
The faculty confirmed that talks are to be held with HM Revenue and Customs in an effort to soften the blow for firms facing an increase in their taxable profits for 2005/06 as a result of the changes, with additional tax payable on 31 January 2007.
A ten-year "spreading relief" applied on the withdrawal of the cash basis for professional firms in 1998. But the faculty said Ministers will need to be convinced that a relief i...