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AccountingWEB Quotes of the Year 2007

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20th Dec 2007
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"Personally I find that the mechanical problems of agent authorisation, online filing and deadline compliance are a lesser issue compared with the lack of certainty in tax law to enable a taxpayer to self assess an accurate liability without exposure to negligence and at the same time without voluntarily paying more tax than the law requires."
Clint Westwood responds in late January to our Question of the Week, "Is the self assessment system working?" So, we can take that as a no, then?

"Given the amount of clients that have been issued penalties despite having online submission confirmations I wonder if the Revenue have considered the costs sufferred by practices in dealing with their poor administration services? In addition we have also received late filing penalties for SA Returns despite having online confirmation dating back as far as October 2006. Given their haste to issue penalties to clients perhaps they should consider paying practices' fees for dealing with their administrative inefficiencies."
The dispatch of 154,000 PAYE penalty determinations of £900 and more just before Easter incensed Gareth Vale and many other AccountingWEB members.

"We are sorry for the delay and errors, especially at this busy time of year for everyone involved with payroll work... We wanted to ensure that we had taken account of any returns we are still working. We took the decision not to issue 2005-06 reminders for the same reason. That work required extensive analysis of our various systems. The delay and this analysis has enabled us to avoid issuing a penalty notice for any unprocessed returns. We want to use employers' experiences to understand the reasons for this and avoid a repeat in future."
Responding to widespread complaints - including more than 100 comments from irate AccountingWEB members - HMRC stepped in to defuse the 2005-06 late penalty situation by deciding not apply penalties to those who filed test returns thinking that they had made a valid submission.

"We would like to apologise again for any inconvenience or embarrassment caused to employers, their agents or payroll bureaux as a result of our mistake."
Seems like we've been here before. Having managed to deal with the 2005-06 backlog, HMRC's PAYE Online system went haywire and started dispatching penalty notices to many employers who had filed their 2006-07 returns online on 17 May this year. AccountingWEB member Stephen Tucker spotted this new apology on the HMRC, which announced that those who were incorrectly sent penalty notices would not now have to appeal against them.

"Linux comes from the world of servers and specialised applications - and the range of software tends to reflect that background. If you're an enthusiast, a web-designer, a general-office typist, or even a home-user wanting to do letters, emails, photo-managment, etc then there's no reason NOT to go to Linux. But if you want specialised business applications, you're going to encounter problems."
MYOB's Charles Verrier offers his thoughts on the big debate in August - which is better, Windows or Linux?

"Given that this extraordinary case has baffled every court which has had the task of attempting to dissect it, the House of Lords have reached the only conclusion that is workable... It would nice if small business taxation could now just be left alone for a while, we have had 10 years of tinkering with tax rates. The knock-on cost to SMEs of this test case must be truly staggering; hundreds of thousands of pounds have been wasted by anxious business owners on tax advice over its duration, and this over and above the cost of the legal proceedings, and of course, it was us, the taxpayers, who paid HMRC's legal costs."
After dedicating a large part of her life during the past year to attending hearings in the Arctic Systems case, tax editor Nichola Ross Martin offers her view of the Law Lords' verdict.

"The Inland Revenue, or should I say HMRC (Since the regulator-like IR is now merged with the policeman-like C&E), has managed to create a lovely spin by inventing this new buzz-word 'income splitting'. It suggests a shady and seedy group of individuals in backrooms concocting blatant tax schemes to cheat the Treasury of money that is rightfully theirs. The reality is that it is normally a husband and wife involved in a small business exercising their rights as taxpayers to arrange affairs so as to mitigate their tax. 'Income splitting' is yet another example of the cherry picking approach to substance over form that HMRC seem to be so good at."
John Goh demonstrates a keen ear for official buzz-phrases in his reaction to the Arctic Systems verdict.

"The government acknowledges the judgment given by the House of Lords in the Jones v Garnett (Arctic Systems) case. The government is committed to maintaining fairness in the tax system. The case has brought to light the need for the government to ensure that there is greater clarity in the law regarding its position on the tax treatment of 'income splitting'.

"Some individuals use non commercial arrangements (arrangements that they would not reasonably enter into with an arms-length third party) to divert income (which would, in the absence of those arrangements have flowed to them) to others. That minimises their tax liability, and results in an unfair outcome, increasing the tax burden on other tax payers and putting businesses that compete with these individuals at a competitive disadvantage.

"It is the government’s view that individuals involved in these arrangements should pay tax on what is, in substance, their own income and that the legislation should clearly provide for this. The Government will therefore bring forward proposals for changes to legislation to ensure this is the case."
Unhappy with the outcome of Arctic Systems, Treasury secretary Angela Eagle issued a written Ministerial statement announcing the department's intention to change the settlements legislation.

"Some people say that to be a successful software developer you've got to have 3,000 people on support and dozens of developers in Indonesia. We proved that you don't."
Richard Pierce, from software firm PS Financials, commenting on winning an the Enterprise Accounting award at the Businesses Software Satisfaction Awards in October.

"That’s why we like AccountingWEB because it stands up for the little guy. To miss out on the award gives us ample focus for redoubling our efforts. We must continue to challenge the consolidators who are constantly trying to stifle innovation and openness within the industry."
Despite narrowly missing out on the tax and practice category, Digita CEO Jerry Rhill sportingly explained that he was pleased to see less well-known firms squaring up to the industry's more established giants.

"Excel actually calculates the correct answer, and you can see that if you use VBA to check the value for A1 - it will be 65535. But in the function that takes that value and formats it to be displayed on the screen, for the values described above, there is a bug. Any calculations based off that cell will be accurate too."
Microsoft's Excel team leader David Gainer tried to explain a mathematical bug that means Excel 2007 displays 100,000, for certain calculations where the result should be 65,535.

"Hooray! I thought I'd spent my Google AdWords budget for the month, but I've actually got $34,465 left!"
Chris Dillaborough looks on the bright side in a comment on the Microsoft Excel team blog.

"The best way to encourage entrepreneurship... is to get the hell out of the way of entrepreneurs and let them do what they do best. The sooner government realises that it can do nothing to encourage enterprise the better. It can close down its initiatives and use the money saved to reduce the real problem cost in the economy - secondary class 1 NIC and employment regulations both of which stop jobs being created... In an increasing service economy capital investment incentives are misplaced. We just need something fair, reasonable and easy to understand."
Neil Wilson is unimpressed by Chancellor Alistair Darling's Pre-Budget Report proposals to reform Capital Gains Tax taper relief.

"This should give suppliers something to think about. M$ have the money to be disruptive if they are really interested in attacking the SME accounting market. If they wrap up accounting, BI [business intelligence] and Office in an easily digestible package, then it will be interesting times."
In November, Alastair Harris welcomed the arrival of Office Accounting, Microsoft's entry to the UK accountancy software marketplace.

"This is not the way I would have planned to organise my departure. I had hoped to be around a while longer, and to have had the continuing privilege of leading HMRC towards the vision we have been developing. But I am extremely proud of what all of you in the organisation have achieved during my time as deputy chairman and chairman."
HMRC chairman Paul Gray reflects on his resignation over the "substantial operational failure" that allowed disks containing personal data on 25 million individuals to go missing.

"This is an extremely serious matter. HMRC has a responsibility towards the general public who entrust it with highly sensitive personal information. It has failed to meet the high standards that should be expected of it. I deeply regret this and apologise for the anxiety that will undoubtedly be caused. Banks and building societies will continue to monitor their accounts and no one will suffer any loss if they are an innocent victim of fraud."
Chancellor Alistair Darling apologises for the HMRC data loss in the House of Commons on 20 November.

"The fact that a junior official would dispatch a pair of disks on the basis of a telephone call and not comply with departmental rules is a serious indictment of HMRC's information security policies. I suspect that Mr Gray will not be the only one in the firing line for this. I guess this is a timely reminder that something as mundane as some computer records stored on a couple of CDs has the potential to bring down a government department."
AccountingWEB's security adviser Stewart Twynham suggests that the HMRC data loss is the "tip of the iceberg".

"I applaud the appointment of 'Dave' (sic) Hairnet as the new chairman. A highly able and dangerous opponent has been sidelined into a job where he can do little harm."
News of Dave Hartnett's elevation to acting HMRC chairman first reached AccountingWEB in a snide aside from Jack Harper

"The proposed income shifting rules are very widely drafted. They will catch many owner-managed businesses involving husbands and wives and other family members. The difficulty will be working out whether they are caught by the definition or not. Many spouses do not have formal meetings to discuss their business arrangements, they just have their own way of working together."
Francesca Lagerberg, chairman of the technical committee at the ICAEW Tax Faculty, expresses disappointment with the government's new consultation document on income-shifting, released in December.

"Having just read the guidance issued by the Tax Faculty, I cannot believe that our professional bodies appear to resign themselves that this proposed income shifting legislation is going to be introduced with possibly a few changes. Their apparent solution is to prepare ourselves for the onslaught. My reaction is HANG ON A MINUTE this is not law yet and why should all the professional advisers not get together and refuse point blank to implement this ridiculous, outrageous and discriminating, ill thought out proposed law? Because let's face it, it won't be the clients who decide if their situation is caught but their advisers who will make the decision for them and put their professional integrity and future on the line. What is wrong with our professional bodies? They seem to forget that members pay for them to exist and that they represent us and not the government or HMRC..."
Provoked by the income-shifting proposals, "Disgruntled", an AccountingWEB member, has a pop at the Tax Faculty.

"Where complaints are justified - fine. But let's stick to facts rather than prejudices that are evidently based on supposition and assumptions. I don't always agree with the approach adopted by the Tax Faculty - why should I? But in general the range of people involved ensures that 'outputs' reflect good business and commercial sense and the political nous that is necessary to retain influence and secure positive changes.

"I'd be the first to admit that I too would sometimes prefer a more robust response was made. Equally I think there are plenty of examples of where the government, Treasury or HMRC have evidently wasted our time and yanked our chains. The current debacle is a case in point."
In the same epic thread, former ICAEW Tax Faculty chairman Mark Lee speaks up for his institute colleagues, whose efforts to try and moderate post-Arctic reforms of small business tax appear to have come to nought. If the Tax Faculty stopped playing ball, they would have even less opportunity to influence developments, he warned.

"It is entirely unacceptable that hundreds of thousands of businesses should be forced to live in this continued environment of uncertainty purely because the Government bungled its original proposals. By failing to properly consult business in the first instance over these reforms, the chancellor showed total ineptitude. Alistair Darling's continued dithering is just making a bad situation worse."
Shadow chancellor and acting Lib Dem leader Vince Cable lambasts the Chancellor for going back on his promise to reveal his decision on the capital gains tax reform proposals before Christmas.

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By carnmores
03rd Jan 2008 16:01

Ahem
was it something i said !

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