Member Since: 10th Aug 2004
4th May 2020
I have also spent most of my working life as a tax accountant so it may be that the answer to this is way outside my expertise, but one thing that occurred to me over the last few weeks is a related point. In this time of uncertainty how can large groups value goodwill being carried on the consolidated balance sheet?
17th Jan 2020
One I have thought of recently is the ability to disclaim all or part of the personal allowance.
I came across a couple of people who were living off savings for a year or two before retirement and whose income was below the personal allowance. At the same time they had existing gift aid donations made by direct debit. Result was they had to pay the tax on the gift aid that the charity had reclaimed.
18th Nov 2019
I am a tax consultant and let's say I provide compliance services to a company which is one of a number of clients. Ultimately the responsibility for tax compliance is with the client but I can choose when to do the work in agreement with the finance department, as long as deadlines are met. I am professionally qualified, with my home as a base and I have PII. I don't imagine anyone at HMRC would think that IR35 is an issue.
My friend is in IT and provides services to the same company. He used to be an employee but they made him redundant one Friday then re-engaged him as a consultant the following Monday but would only do so if he formed a company. This he did, and he raises invoices every month. Otherwise the terms of his engagement are almost identical to when he was employed, reporting to the same line manager and his hours of work and holidays are determined by the company. The only other difference is that he gets no sick pay and though there is a theoretical right of substitution, in practice it will never be called on. This situation is pretty much what IR35 was intended to catch.
The problem is, and it is endless in practical application, where to draw the line. The reported cases suggest that the line HMRC draw is well away from the interpretation of the courts but there are grey areas whichever way you look.
As an adviser it is almost impossible to determine whether IR35 will apply other than in obvious cases, so you end up using a specialist firm for the contract which is really taking a sledgehammer to crack a nut.
More sensible would be for the government to perform a proper analysis, identify what the problem really is and come up with a solution that does not rely on drawing conclusions from a theoretical contract.
6th Nov 2019
I came across this same problem earlier in the year and raised it with my MP.
The case I had was someone living off savings as they were only a couple of years away from retirement when they would receive an occupational pension. In fact their savings were quite large but the income was all tax free as they were held in ISAs.
It seems that it will also affect pensioners who might well live on less than £12,500 per year.
It could be resolved if personal allowances could be disclaimed in part or in full. My MP was quite receptive but HM Treasury were not so that's as far as I got.
21st Jun 2019
The first sentence of the letter states that KPMG's report is preliminary and subject to further work. And no more was done apparently.
I have always been suspicious of, unusually senior, people who say that they only look at the "big picture". Sometimes you need to understand the detail in depth in order to see a wider view.
In this case for example there is very little DD on tax as KPMG were not allowed access to the company's external advisers. At the very least you would want to know why as there might be a host of problems when you raise the bonnet, which in turn could affect other areas of the business.
Due diligence reports are by their nature, not easy to read and dull as ditchwater. But you're the client, if it's really impenetrable, ask for clarification or an executive summary. If you think that's expensive, see what it costs if you don't do proper due diligence.
15th May 2019
I did this for a client a couple of years ago. Ceased trading, tax up to date and they sent in DS01. HMRC objected so we submitted a final tax return (nil) and company was struck off.
Since then I have done as Jennifer suggests and submitted final tax return then written to HMRC to say that the company is applying to be struck off but there were no transactions since the tax return that was submitted and no tax due. It's worked so far.
5th Apr 2019
I joined the accountancy profession in August 1980 taking articles with a firm which has since been merged with another.
Thirty nine years ago there was a discussion about whether auditors could be independent if they were appointed by the board of a client.
At the same time there were internal discussions in the accountancy works about the "expectation gap".
Amazingly nothing has changed.
21st Jan 2019
This is going back a bit but I can remember a Scottish player, Donald Ford who played for Hearts in the 1960s and 70s in the old Scottish First division, and also played for Scotland, who was a CA.
Before that another Scottish player for Liverpool in the 1950s, Billy Liddell was a CA.
Before Rugby Union turned professional, I think there were loads of players who had another career, playing at the top level, including internationals.
7th Jan 2019
It's a long time since I worked in a large firm but from recollection time sheets never recorded time accurately. Aside from the time spent making coffee etc there was also the unrecorded overtime that was done.
Despite regular instructions from partners to record all time, it was easier to work overtime but not record it rather than be faced with a WIP balance that couldn't be recovered and you would then need to explain the write off.
19th Nov 2018
I joined a firm in 1980 as a new graduate and this question has been raised ever since then, and presumably before as well. More accurately the firms question is "how do we retain the staff we want?"
Evidently there is no easy answer if it has been asked for well over 38 years.
One problem is the nature of the firms themselves. Newly qualified accountants, particularly in audit, are faced a thankless task which is now under increasing scrutiny by the public at large. They see unrealistic budgets to be controlled by managers who have to work all hours to get the reward of a partnership and even that is not certain. When you get closer, it becomes apparent that junior partners don't earn the megabucks you might imagine, and there's another slog through the ranks of partner.
Hardly surprising that many foresee a different and more exciting career path.