Technical and Insight
FRS 102 simplifications will help small companies
The triennial review of FRS 102 has taken place and the FRC is proposing a number of changes.

The triennial review of FRS 102 has taken place and the FRC is proposing a number of changes.

 

This review takes into account stakeholder feedback on the implementation of FRS 102. Of particular interest are the proposed simplifications to accounting for directors’ loans for small companies.

 

Current accounting treatment

Many small companies benefit from loans from the director/shareholder which are:

 

  • not repayable on demand
  • have either no interest/ very low rates of interest of interest charged.

 

The various versions of FRSSE which were traditionally used would simply account for these loans at the year-end balance at cost. So they might be treated as due within/after 12 months but the interest issue could be ignored.

 

FRS 102 had a requirement that, despite no interest being charged, the company still had to discount the loan from the director unless it was repayable on demand.  The complicated instructions were included in the FRC staff education note 16 and included the suggestion that the difference created by the discounting would be an ‘additional investment’ in the company. This treatment has caused many problems for small entities who see it as wholly inappropriate. Consequently this has resulted in a number of calls to the ACCA Technical Advisory helpline.

 

Proposed accounting treatment

The review has resulted in proposed changes to this contentious treatment and these are included in Financial Reporting Exposure Draft 67 (FRED 67) issued by the FRC.

 

The relevant changes in FRED 67 mean, for small entities, a more proportionate accounting solution for a loan from a director who is a natural person and a shareholder in the small entity (or a close member of the family of that person), which will permit the loan to be initially measured at transaction price rather than present value. Thus FRS 102 will no longer require an estimate to be made of a market rate of interest in order to discount the loan to present value.

 

Responses to FRED 67 should be provided to ukfrs@frc.org.uk by 30 June 2017.

 

The FRC aims to finalise the amendments in December 2017, with an effective date of accounting periods beginning on or after 1 January 2019. Early application will be permitted provided that all amendments are applied at the same time.

 

The proposed changes offer a sensible solution to small entities that receive non-interest-bearing loans from directors. However, the only disappointing element is the timeframe of the proposed changes which will leave small entities currently preparing accounts having to potentially account for the directors’ loans in a manner which is very likely to be changed in the near future.

Hear from the FRC
On 21 June over 1,100 practitioners dialled in to hear Jenny Carter, Director of UK Accounting Standards at FRC, highlight the changes to FRS 102. You can join others who have subsequently taken the opportunity to hear about the changes by listening in to the recording of the webinar. You will need to register here.

 

 

Article 50 negotiations get under way

Talks to be framed by principles on single financial settlement and protection of citizens’ rights


Talks to be framed by principles on single financial settlement and protection of citizens’ rights

The negotiations on the UK’s withdrawal from the European Union (EU) started on Monday. Prior to this, the EU set out the principles that it will negotiate from.
These include that:
  • There should be a single financial settlement related to:
    • the EU budget
    • the termination of the membership of the UK of all bodies or institutions established by the treaties
    • the participation of the UK in specific funds and facilities related to the EU policies.
    • The withdrawal agreement should protect the rights of EU27 citizens and UK nationals and their family members who, at the date of entry into force of the withdrawal agreement, have enjoyed rights relating to free movement under EU law, as well as rights that are in the process of being obtained and the enjoyment of which will intervene at a later date (for example, pension rights).

 

You can follow the European Commission commentary.

 

The government site on Brexit contains details of the latest announcements as well as proposals on UK frameworks such as the Public consultation on the United Kingdom’s future legal framework for imposing and implementing sanctionsand the latest guidance, for example Status of EU nationals in the UK: what you need to know.

 

Auto-enrolment: ignore at your peril!
Pensions Regulator fines Johnsons Shoes Company £42,000 for failing to meet enrolment deadline

Pensions Regulator fines Johnsons Shoes Company £42,000 for failing to meet enrolment deadline

 

The Johnsons Shoes Company fine shows how ignoring auto-enrolment duties is ill-advised. Ignoring The Pensions Regulator ended up costing the company £42,400!

In its case summary The Pensions Regulator stated that the company had a ‘staging date of 1 May 2014, which was the date their automatic enrolment duties started to apply. They were due to complete their declaration of compliance – where an employer confirms to us that they’ve met their duties – by 30 September 2014, but failed to meet the deadline. As a result, we couldn’t be satisfied they had met their automatic enrolment duties by enrolling all eligible staff into a pension scheme from the staging date, paying contributions into it, and writing to staff explaining how automatic enrolment affected them.

'We had regularly attempted to communicate with Johnsons to educate and enable them to meet their duties, but their lack of action led us to use a number of our enforcement powers.’

These enforcement powers included a fixed penalty notice, a daily fine (escalating penalty notice) and county court action to recover the debt which, including costs, totalled £42,400. The case highlights the importance of engagement with the regulator.

You can read more about the case.

The Pensions Regulator also publishes details of employers who have received an escalating penalty notice for breaches relating to automatic enrolment under the Pensions Act 2008.

 

Auto-enrolment for new employers
Existing businesses that previously had no employees are also affected

Existing businesses that previously had no employees are also affected

 

From October, new employers, which will include all new limited companies, will have instant pension duties and obligations. These businesses will need to put pension plans in place. Advisers should update new company checklists for the requirements and consider using the new online suite of information and tools made available by The Pensions Regulator.

The extension also includes companies that take on an employee where previously the directors have not been classified as workers and the company has been exempt from duties under automatic enrolment. There is a risk that these businesses may inadvertently miss this obligation.

The Pensions Regulator has said: ‘If you are employing staff for the first time after 1 October 2017, your legal duties for automatic enrolment begin on the day your first member of staff starts work. You should start preparing early for this to work out what you’ll need to do.

'If you’ve employed someone since 2 April 2017 or you’re going to employ someone before 30 September 2017, find out when your duties will start.’

It is important to remember that even those businesses with no employees in a pension scheme will still have a legal requirement to complete a declaration of compliance online within five months of their duties’ start date.

You can find the guidance at thepensionsregulator.gov.uk/en/employers/employing-staff-for-the-first-time.aspx#howwilliknow and thepensionsregulator.gov.uk/business-advisers.

The Regulator is hosting a free webinar for business advisers at 2.30 pm on 6 July. The webinar will focus on the legislation changes that come into effect during 2017/18, and include the duties that new employers have from 1 October 2017. You’ll also have a chance to get your automatic enrolment questions answered live on the day. Register for the webinar now.

 

 

Business-splitting to avoid VAT: HMRC loses the latest round
Husband and wife’s appeal for hairdressing companies to be treated separately is allowed

Husband and wife’s appeal for hairdressing companies to be treated separately is allowed

Background

Couples can often run similar businesses separately. HMRC can and has viewed these as artificial separations and looks to combine the businesses. In many cases the combined turnover can result in registration – and, obviously for B2C businesses, a considerable drop in profitability where they are unable to increase their prices. Accountants are often asked to advise on these types of family-run businesses.

HMRC’s view is understandable; it sees artificial splits as unfair. As explained in Statement of Practice 4 (1983), legislation was required because:

  • Firstly, unfair competition results from artificial separation because the split businesses, trading below the threshold, do not have to charge VAT on their supplies and may therefore be able to charge lower prices than their registered competitors.
  • Secondly, tax loss accrues to the Exchequer because, in the absence of separation, the whole business would be trading above the registration threshold and liable to register.

HMRC stresses that the purpose is to counter artificial separation, which results in an avoidance of VAT. HMRC will therefore not aggregate businesses unless they are satisfied that the separation is artificial.

HMRC will therefore only make a direction when:

  • the separation is artificial
  • the separation results in an avoidance of VAT
  • the parties involved are closely bound by financial, economic and organisational links
  • the other legal requirements are satisfied.

The statement of practice then goes on to list various ‘circumstances’ which, in HMRC’s view, imply a contrived device set up to circumvent the normal VAT registration rules.

What has happened recently?

In a recent judgement, released on 17 May, the first-tier tribunal (FTT) allowed an appeal against HMRC’s ruling that artificial separation had taken place. The matter was listed as being whether the appellants, Mr and Mrs Belcher, carried on one business in partnership or two separate businesses independently; it was held that on the facts they carried on two separate businesses independently and therefore the appeal against compulsory registration for VAT was allowed, as was the appeal against a belated notification penalty.

Facts of the case

As with all tax cases there were a number of issues (and the full judgement makes very interesting reading) but the basic facts were:

  • The appellants (husband and wife) both ran hairdressing shops from their home. The house had been converted so that the husband had a shop within the house and the wife had a shop in the garage.
  • The husband did not get involved in his business (a barber’s shop) but employed other people to provide the service. The wife had formal training and was involved in her ladies’ salon.
  • The wife handled the accounts of both the barber’s shop and the ladies’ salon.
  • The net takings from the barber’s shop and the ladies’ salon were banked in a bank account held jointly by the couple (either a private or business account) and were effectively shared by them on a 50/50 basis.
  • Both businesses were included as one in a partnership return, with both spouses named as partners.

HMRC’s viewpoint

HMRC’s opinion was that the two businesses were in reality one. The self-assessment (SA) returns for the tax years 2004/05 to 2013/14 were used by an HMRC ‘hidden economy’ officer to calculate an estimated VAT liability of £136,691.26. The stated reasons behind HMRC’s viewpoint were:

  • The partnership SA return is for one business: Crewe Cuts (the overall business name).
  • The partnership annual accounts are for Crewe Cuts.
  • Both businesses share business rates and utilities.
  • Crewe Cuts has one telephone number for customers.
  • Monies from both businesses are pooled at night and placed into one business account.
  • Purchases for both businesses have one supplier’s account.
  • The partnership (husband and wife) split profits 50/50 on the SA returns.

Interesting points

The notes on the judgement are detailed but some points can be picked out as particularly interesting: 

 

1.     HMRC’s offices agreed (under cross-examination from the appellants’ representative) that in two instances they had not followed the instructions from their own internal staff manual. 

2.     The issues were noted as being very fact-sensitive and therefore other tribunal decisions, which had been cited during the case, were not found to be of determinative significance. 

3.     The fact that partnership SA returns were filed for a number of years was noted as an indication that in fact the appellants were carrying on a single business as a single taxable person. However, the judgement went on to state: ‘having seen Mr and Mrs Belcher, and heard their evidence, we accept on the balance of probabilities that they did not know or understand the import of their submission of self-assessment income tax returns on the basis that they were carrying on a single business in partnership.’ 

4.     The judgement accepted the evidence of Mr and Mrs Belcher that they did not divide the profits of a single business between themselves on a 50/50 basis, but pooled, as a family matter between husband and wife, the net profits of two businesses into one or more joint bank accounts.

Conclusion

This very interesting case highlights the difficulties in deciding on the facts of artificial separation. It does show that the tribunal maintains an independent viewpoint and will look at the facts of each case.

Members should always refer to HMRC’s internal manual and the Statement of Practice 4 (1983) when talking to their clients on this issue so that they are clear on the current position of what may or may not be accepted.

Note that HMRC has the right to apply for permission to appeal against the judgement and has 56 days to do this. Watch this space for further developments!

 

 

Charity audits under review

FRC asks for comments on proposed changes that reflect developments in legislation and regulation


FRC asks for comments on proposed changes that reflect developments in legislation and regulation

The Financial Reporting Council (FRC) has asked for comments on its proposed revisions to Practice Note 11: The audit of charities in the United Kingdom, by 25 August. It has stated that a final version will be issued in 2017, with the revised PN stating that it would apply to financial statements for periods commencing on or after 17 June 2016.

Practice Note 11 was last updated in 2012 and the FRC states that the update is required to incorporate ‘changes to the legislative and regulatory framework and developments in accounting and audit framework, including the issuance of a new Charities SORP’. It also highlights that charities have been under scrutiny, with the FRC stating that they ‘have also been the subject of extensive press, public and Parliamentary interest of late, and this revision of the Practice Note seeks to incorporate lessons learned.’ 

The Charity Commission for England and Wales in its latest Accounts Monitoring Review highlights that both auditors and independent examiners need to consider actions by trustees. The commission states that:

    • ‘the trustees of charities that are late in filing may need additional help and support in meeting their legal obligations
    • late filing is often indicative of wider governance problems in a charity
    • it is the responsibility of an independent examiner to check that their charity client is eligible for independent examination.’

The revised PN11 will be of use to many auditors as it contains charity-specific guidance on the ISAs that were updated in June 2016, as well as legislative changes such as the Charities Act 1992 Section 59 (as amended by the Charities (Protection and Social Investment) Act 2016) requirement that there is an agreement in a prescribed form between the charity and a fundraising organisation.

The practice note has been halved in length and is now 71 pages. Many sections have been removed, including appendices 2 to 7, with some of the material being incorporated into the main text. For example, reporting matters of material significance to charity regulators, previously included in ISA (UK) 250 Section B and Appendix 5, now has its own section.

The appendix on charity accounting and audit regulations has been retained. There is a new appendix, ‘Conditions and events that may indicate risks of material misstatement’, which sets out conditions and events that may give rise to a risk of material misstatement specific to charities. There is also additional guidance regarding materiality, going concern and other information.

The section ‘Conditions and events that may indicate risks of material misstatement’ also contains examples of ‘conditions and events that may indicate the existence of risks of material misstatement in the financial statements’ specific to charitable organisations. It includes general areas such as failure to act in accordance with the trust documentation through to specific tax areas that may cause issues. Caveats are in place highlighting that it is not a comprehensive list and may not apply to all charitable organisations. However, it would be useful for it to be highlighted as part of the audit briefing.

The section ‘Responsibility for the prevention and detection of fraud’ is an area that auditors will need to consider. It’s highlighted that ‘the trustees of a charity are responsible for the prevention and detection of fraud in relation to the charity, even if they have delegated some of their executive functions to senior staff. The trustees are expected to safeguard charity assets and reserves through the implementation of appropriate systems of control.’  The section states that the ‘auditor of a charity is responsible for forming an opinion as to whether financial statements show a true and fair view and to this end the auditor plans, performs and evaluates the audit in order to have a reasonable expectation of detecting material misstatements in the financial statements arising from error or fraud.’ Specific mention is also made that in ‘planning, performing and evaluating the audit work the auditor considers the risk of material misstatement arising from breaches of trust.’ The section ‘Evaluation of fraud risk factors’ highlights charity-specific factors that need to be considered in addition to those in ISA 240. Key risks include:

  • the limited involvement of trustees in key decision-making or monitoring transactions, and limited engagement with charity staff
  • widespread branches or operations, such as those established in response to emergency appeals in countries where there is no effective system of law and order
  • reliance on volunteers and staff with limited management or supervision and a lack of segregation and rotation of duties
  • transactions (income and expenditure) often undertaken in cash
  • unpredictable patterns of giving (in cash, by cheque and through donations in kind) by members of the public, both in terms of timing and point of donation.

The guidance retains the note that charitable companies that do not exceed the Companies Act 2006 audit threshold may elect to take advantage of the audit exemption conferred by section 477 of the Companies Act 2006. However, charitable companies that are eligible for audit exemption under the Companies Act 2006, but are above the lower threshold for audit contained within charity law, must receive an audit under charity law if they elect not to be audited under the Companies Act 2006.

It also explains that care needs to be taken to understand the interaction between Companies Act 2006 and the relevant Charities Acts: ‘For charitable companies claiming audit exemption under the Companies Act 2006, the legal requirements for audit are provided in the relevant Charities Acts. A small charitable company that is eligible for audit exemption under Companies Act 2006 but does not claim this exemption continues to be audited under Companies Act 2006 and in England and Wales no additional audit requirement arises under the 2011 Act (E&W). For charitable companies that do claim audit exemption and comply with Section 475(2) to (4) of the Companies Act 2006, which requires a statement on the face of the balance sheet confirming that the company is entitled to audit exemption, the audit arrangements referred to in the auditor’s reports are the 2011 Act (E&W) and the 2005 Act (Scotland).’

The FRC states that ‘For charitable companies below the Companies Act 2006 audit threshold and claiming exemption but above the thresholds of the relevant Charities Acts, this could be achieved by a statement such as:

For the year ended [date] the company was entitled to exemption from audit under Section 477 of the Companies Act 2006 relating to small companies but as this company is a charity, it is subject to audit under the [Charities Act 2011/Charities and Trustee Investment (Scotland) Act 2005/Charities Act (Northern Ireland) 2008].

  1. The members have not required the company to obtain an audit of its accounts for the year in question in accordance with Section 476 of the Companies Act 2006.
  2. The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of accounts.

These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies’ regime.’

The revised suggested statement is, with the exception of the Charities Act 2011 and inclusion of the Charities Act (Northern Ireland) 2008, unchanged from the practice note updated in 2012.

Read the PN11 invitation to comment. You can also let ACCA know your view on the changes and questions by contacting advisory@accaglobal.com

 

New UK GAAP is here

Revised Companies House guidance aims to address filing confusion


Revised Companies House guidance aims to address filing confusion

For accounting periods commencing 1 January 2016, all company accounts have to be prepared and filed under the ‘new’ UK GAAP regime. This means that there is a number of options available, particularly for small companies and micro-entities. Inevitably, the number of options, and the new regime generally, has caused confusion, particularly in terms of which format of the accounts needs to be prepared and how these are modified before being filed at Companies House.

Companies House has now revised guidance relating to the filing of accounts, which covers the new regime. The guidance covers all sizes of company and includes specific issues relating to abridged accounts, ‘filleted accounts’ (where the directors’ report and profit & loss account are omitted) and micro-entity accounts.

The revised guidance is available here. ACCA has also produced model accounts covering FRS 102, FRS 102 for LLPs, FRS 102 for small companies (abridged) and FRS 105. These are available from ACCA by emailing advisory@accaglobal.com, quoting name and ACCA membership number.

Demystifying interest-free and below-market-rate loans

Terms vary depending on the nature of the finance and the recipient


Terms vary depending on the nature of the finance and the recipient

 

The accounting recognition for interest-free and below-market-rate loans is an area that has caused difficulty for many advisers and businesses.

 

Most loans are basic financial instruments accounted for under section 11 of FRS 102. If loans are granted on commercial terms between unconnected parties, market rate of interest is usually charged. The initial recognition of such loans is at transaction value (the amount of cash loaned or borrowed). Subsequently, the loan is recognised at amortised cost, with the interest increasing the loan balance and charged to PL and any repayment of the interest or interest and capital reducing the carried-forward balance of the loan at each year end to the end of the loan term.

 

When loans are granted between connected parties they are often granted at non-commercial rates: no interest or below market rate of interest. The terms of such loans, especially between companies and their directors or their relatives, often remain fluid, with repayment conditions agreed informally or not addressed at all at the time of the loan.

 

The application of FRS 102 section 11.13 requires that loans at non-market rates are recognised initially at ‘present value of the future payments discounted at a market rate of interest for a similar debt instrument’. 

 

For accounting periods starting on or after 1 January 2016, small companies can take advantage of an exemption from discounting and recognition of the loan at present value (Financial Reporting Council in FRED 67, Draft Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland). The exemption applies to loans between companies and connected individuals, and does not extend to corporate lenders and the borrowers – for example, to group loans.

 

Companies that are not small remain to be bound by s11.13. This means that:

  • For loans with terms exceeding 12 months, non-small companies need to identify the loan terms and an effective interest rate at which to discount the loan to its present value.
  • The accounting for the difference between the amount of cash loaned/ borrowed and the liability or debtor shown at the discounted amount depends on who the parties to the loan agreement are.

 

DISCLOSURES

 

FRS 102

 

Accounting policies

Non-small entities applying FRS 102 and small entities applying FRS 102 1A and not taking advantage of the recent FRED 67 exemption can, and perhaps should, make a reference to the policy of recognising loans from connected individuals at present value.

 

Related parties

For small entities applying FRS 102 1A, whether taking advantage of the exemption from the recognition of directors’ or shareholders’ loans at present value or not, the existence of interest-free or below-market-rate loans between directors or shareholders and their companies is a transaction under non-market conditions. FRS 102 1A requires the disclosure of such transactions in a related-party note, which should specify:

(a)  the amount of such transactions

(b)  the nature of the related-party relationship

(c)   other information about the transactions necessary for an understanding of the financial position of the small entity.

All such transactions between the various groups of connected parties can be aggregated and disclosed. References to specific amounts loaned by or to various individuals and the company are not required.

 

Medium and large entities applying full FRS 102 should make relevant disclosures of all transactions between directors and shareholders and other connected parties irrespective of their terms (market or non-market).

 

Creditors’/debtors’ disclosure
Relevant balances relating to interest-free/below-market-rate loans will be disclosed in the note, alongside various other creditors’ or debtors’ balances included in the balance sheet.

 

Transitional adjustments

If an interest-free/below-market-rate loan was granted under the old GAAP and a transitional adjustment was required on the adoption of the new UK GAAP, a prior-year adjustment should be made. A relevant transitional adjustment disclosure note specifying the transitional journals posted should be included in the disclosure.

 
If no transitional adjustment as a result of adopting the new accounting regime arose in relation to interest-free or below-market-rate loans, this should be stated in the note.

 

FRS 105

The requirement to show interest-free or below-market-rate loans at present value is not referred to in FRS 105. Companies applying FRS105 should record such loans at transaction amount loaned or borrowed and not present value.

In the case of an interest-free loan, interest will not be recognised in the financial statements, with the carrying amount of the loan adjusted only by the amount of repayments made during the year, if applicable, and any write-offs.

 

In the context of an interest-free loan (or indeed any loan) from a company applying FRS 105 to its director(s), the standard requires that the following is disclosed (FRS 105 6A.1), irrespective of whether the directors’ loan account is in debit or credit at the end of the year:

  • amount
  • interest rate – in this case, 0%
  • main conditions
  • amounts repaid
  • amounts written off
  • amounts waived.

Other possible disclosures in relation to interest-free loans under FRS 105 relate to any security granted by the company and any guarantees given by the company to the director.

 

In case any security was given to the lender-director by the micro-entity benefiting from the loan, a disclosure of the nature and form of such security is required (FRS 105, 9.29).

 

If any guarantee was given by the company to its director or shareholder lender in connection with the granting of the loan, this fact should be disclosed (Companies Act s413 and FRS 105 6.2(a)).

 

 

60-second update: capital gains tax relief for let property

Gathering information in advance is advisable


Gathering information in advance is advisable

Let property relief can reduce capital gains tax and is an important consideration when clients have let out residential property. The information needed can be difficult to find out and it is often easier to collect in advance.

Conditions

The following conditions need to be met for the relief to be available:

  • The property must  have been used (wholly or partly) as the private residence of the owner(s).
  • The dwelling house  in question (or any part of it) must have been let out by the owner(s) as residential property.

Relief

The let property relief reduces the chargeable gain by the lower of the following three figures:

  1. the main residence relief
  2. the gain attributable to residential letting
  3. the statutory limit of £40,000.

The relief applies to gains arising both from a residential letting of the entire residence while the owner is not occupying the property and to a partial residential letting while the owner is in residence.

Where a property, although part of the same building, forms a dwelling house separate from that which is, or has been, the owner’s dwelling house, relief will not be available. For example, if a fully self-contained flat with its own access from the road forms part of the property and the owner lives in another part of the property, then relief will not be available just because that self-contained flat is let out.

Husband and wife

Where husband and wife are joint owners, relief of up to £80,000 is potentially available to the couple as each person may be entitled to the relief of up to £40,000.

Trustees

Let property relief extends to gains accruing to trustees and qualifying for the main residence exemption (TCGA 1992 s 225) (HMRC manual CG64716).

Dependent relatives

The residential lettings exemption may be available where the property qualifies for the main private residence exemption due only to its having been occupied by a dependent relative on or before 5 April 1988. (HMRC manual CG64716)

Worked example

 

Mr A sold a house in London on 1 June 2017 for £800,000, having purchased it on 31 May 1995 for £200,000. Mr A has been resident in the UK for all this time.

Mr A lived in the house from 31 May 1995 to 31 May 2002 as his principal private residence. He then moved out and let the property as residential accommodation from 1 June 2002 to 31 May 2015. The property was then empty from 1 June 2015 until it was sold and Mr A did not reoccupy the property after 31 May 2002.

Sale proceeds                                                                   800,000

Cost                                                                                   200,000

Gain                                                                                   600,000

Less private residence relief

                    (7 years + 1.5 years)/22 years x £600,000    231,818

                                                                                           368,182

Less let property relief, lower of:

          Main residence relief                             231,818

          Gain attributable to letting                     368,182

          Statutory limit                                          40,000

                                                                                             40,000

Net chargeable gain in 2017/18                                         328,182

 

Late payment by insurers under attack

Powers of Enterprise Act 2016 mean that providers must become more proactive


 Powers of Enterprise Act 2016 mean that providers must become more proactive

 

The Enterprise Act 2016 came into force on 4 May. While it covers a variety of matters, one item that is noteworthy for the insurance industry is the provisions relating to the late payment of insurance claims.

 

Part 5 of the Enterprise Act amends the Insurance Act 2015 by inserting a new clause, 13A. This provides that every contract of insurance entered into on or after 4 May 2017 will contain an implied term that if a claim is made under the contract of insurance the insurer must pay any settlement within a reasonable time. If the settlement is not paid within a reasonable time then the insured may claim damages against the insurer for such late payment.

 

What is a reasonable time?

A reasonable time will include time for the insurer to assess and investigate the claim and will take account of: 

  • the type of insurance
  • the size and complexity of the claim
  • compliance with any relevant statutory or regulatory rules or guidance
  • factors outside the insurer’s control.

 

The insurer will not be in breach of the new requirements merely by failing to pay the part of the claim disputed if they can show that there were reasonable grounds for disputing the amount payable or whether anything is payable. However, the conduct of the insurer in handling the claim may impact on the test of reasonableness. Insurers will have to be more proactive in dealing with matters – exercising control over appointed loss adjusters, for example – and proposing or accepting offers of alternative dispute resolution.

 

Application and contracting out

As the effect of the provisions of the Enterprise Act is to insert additional clauses into the Insurance Act 2015, the new provisions will only apply to insurance contracts governed by the laws of the UK (England and Wales, Scotland and Northern Ireland). The provisions will apply to both consumer and non-consumer contracts but there will be the ability to contract out of the provisions for non-consumer contracts only. Where an insurer wishes to contract out of the new provisions in a non-consumer contract, this has to be dealt with in the same way as contracting out under the Insurance Act.

 

Any clause that attempts to put the non-consumer in a worse position than would be provided by the new provisions in respect of deliberate or reckless breaches of the provisions by the insurer will have no effect.

 

When can a claim for damages for late payment be brought?

If the insured wishes to bring a claim for damages as a result of late payment of a claim, this must be done within 12 months of the settlement of the claim being made.

 

If you have any queries please contact your Lockton account servicing team.

 

Lockton Companies LLP is ACCA’s recommended broker for professional indemnity insurance. For more information, please contact Lockton on 0117 906 5057.

 

Lockton Companies LLP

Authorised and regulated by the Financial Conduct Authority. A Lloyd’s broker. www.lockton.com

P11D deadline is approaching: are you up to date?

Use our guide, including helpful Q&As, to understand the new rules


Use our guide, including helpful Q&As, to understand the new rules

Since 6 April 2016 new rules for P11Ds have been in place. This is the first year when P11Ds are going to be submitted after the change.

Here’s a recap of the main changes:

1            Dispensations are abolished.

2            The £8,500 threshold and P9D form are abolished with certain exceptions.

3            Trivial benefits-in-kind exemption is £50 (capped at £300 pa for directors).

4            Exemptions from reporting have been introduced.

5            Employers are able to register themselves if they are payrolling expenses (except provision of living accommodation and interest-free/low-interest loans).

From 6 April 2016 P11D dispensations are no longer valid and have been replaced by a more general exemption. This exemption should cover expenses previously covered under a dispensation. If employers are paying HMRC’s benchmark rates for allowable expenses, they do not have to apply for exemption; they only need to apply for an exemption if they want to pay bespoke rates to their employees.

Employers will no longer need to report business expenses on form P11D where they meet the following criteria:

•       the employer operates a checking system to ensure that employees are incurring costs equal to the amount they claim through receipts and payment proofs

•       the employer checks that a ‘fully matched’ deduction is available under the current legislation.

Unless the employers meet the conditions for reporting exemptions, all employers are required to prepare form P11D for any employee to whom it has:

•       reimbursed, or paid expenses, on their behalf; and/or

•       provided non-cash benefits in kind or services.

As a reminder, employers are required to report the total of all taxable benefits in kind and expenses subject to class 1A national insurance contributions (NIC) on the form P11D(b).

The due date for filing both forms P11D and P11D(b) is 6 July following the end of the tax year. Payment of the liability is due by 19 July (22 July where payment is made electronically).

Typical questions that arise in relation to P11D reporting and benefits are:

Q 1:  Which expenses are allowable expenses?

A:     Business expenses are allowable if they are ‘wholly, exclusively and necessarily’ incurred in the performance of the employment, such as business travel and associated subsistence and accommodation costs. A relevant and proportionate business entertainment is allowable to the circumstances of the meeting.

HMRC has stated that expenses covered by the exemption that you don’t have to report are business travel, phone bills, business entertainment expenses, uniforms for work and tools for work.

Q 2:  What should be the value of the benefit when goods are transferred to an employee?

A:     When any assets/goods are transferred to employees, which could be sold for cash otherwise, the benefit will be the market value of that asset.

Q 3:  How should payments made on behalf of employees be treated?

A:     If contracts for the supply of goods or services are held in the names of employees but the supplier is paid directly by the employer, it gives rise to taxable benefits in kind. However, if the supplier is paid by the employee but the employer reimburses the employee, the amount is deemed to be earnings and subject to tax and class 1 NIC at the time of payment.

Q 4:  Do all employees have to pay tax on living accommodation provided by the employer?

A:     It depends. They will pay tax on their living accommodation regardless of the amount of income that they receive, unless they qualify for an exception. Full HMRC guidance explains the exceptions.

Q 5:  How could an employee reduce their fuel benefit when provided by the employer for private motoring?

A:     The only way to reduce the fuel benefit for benefits in kind is make good the full cost of the fuel for private use. An employee has until 90 days (ie 6 July) of the end of the tax year to pay it back.

Q 6:  How should subscriptions and professional fees be dealt with?

A:     Subscriptions and professional fees covered by the employer will be exempt from tax and NIC where the organisation is listed on HMRC’s ‘List 3‘. The employee must have membership to do their job or because it’s helpful for their work. If the fees paid to organisations are not listed on HMRC’s List 3, they will be taxable and liable to class 1A NIC.

Q 7: What are the conditions for a trivial benefit

HMRC states that businesses ‘don’t have to pay tax on a benefit for your employee if all of the following apply:

  • it cost you £50 or less to provide
  • it isn’t cash or a cash voucher
  • it isn’t a reward for their work or performance
  • it isn’t in the terms of their contract’.

HMRC also states that directors of a ‘close’ company (five or fewer shareholders) ‘can’t receive trivial benefits worth more than £300 in a tax year’.

Q 8:  Are there any exemptions available on staff entertainment?

A:     The provision of tea and coffee and staff gifts and celebrations are considered trivial and are exempt, and therefore not reportable on a form P11D.

A staff party or an annual function qualifies as a tax-free benefit for employees subject to the following conditions:

  • The total cost must not exceed £150 (including VAT) per head, per year.
  • The £150 is a limit and not an allowance; if the cost exceeds £150, the whole benefit is taxable.
  • The entertainment event must be open to all staff.

Q 9:  How should expenses be treated if there are director/employee loans on which no interest is charged during the year?

A:     This is a common area where HMRC finds anomalies when dealing with PAYE enquiries, where accountants failed to disclose this on P11Ds. If the withdrawals by a company director are not processed through the payroll, they will be treated as a loan by the company to the director. The cash equivalent of the benefit is calculated using HMRC’s official rate of interest of 3% for 2016/17 (2.5% for 2017/18). Any interest paid by the employee during the tax year will reduce the loan benefit.   
         

However, it is important to remember that there will be no taxable benefit if the aggregate of all loans outstanding throughout the tax year is £10,000 or less.

Additionally, HMRC released a directors’ loans account toolkit  on 9 May, which addresses many related matters with the director’s loan account.

Full HMRC guidance on payrolling of expenses is available.

If you wish to discuss any specific issue for P11D and filing returns, please contact ACCA’s Technical Advisory team at advisory@accaglobal.com or call 020 7059 5920.

A garden by any other name

The ‘permitted area’ around a residential property qualifies for private residence relief from capital gains tax


The ‘permitted area’ around a residential property qualifies for private residence relief from capital gains tax

The area of garden and grounds of a person’s residence that qualifies for capital gains tax relief is referred to in the legislation as the ‘permitted area’. HMRC does state that ‘you will not get Private Residence Relief if you dispose of all or part of your garden after you have disposed of your home’.

The Taxation of Chargeable Gains Act 1992 section 222(2) defines ‘the permitted area’ as ‘an area (inclusive of the site of the dwelling-house) of 0.5 of a hectare’ subject to subsections (3) and (4) of section 222.

Sections 222(3) and (4) state:

‘(3) In any particular case the permitted area shall be such area, larger than 0.5 of a hectare, as the Commissioners concerned may determine if satisfied that, regard being had to the size and character of the dwelling house, that larger area is required for the reasonable enjoyment of it (or of the part in question) as a residence.

(4) Where part of the land occupied with a residence is and part is not within subsection (1) above, then (up to the permitted area) that part shall be taken to be within subsection (1) above which, if the remainder were separately occupied, would be the most suitable for occupation and enjoyment with the residence.’

If the garden and grounds of the residence, including the site of the dwelling house, do not exceed 0.5 of a hectare (5,000sq m), then relief is automatically due for that whole area.

If the garden and grounds of the residence exceed 0.5 of a hectare then relief may be available for a larger area if that larger area can fulfil various tests. These tests are explained in Capital Gains Tax Manual CG64818 and below.

Interpretation of section 222(3)

This section was considered in Longson v Baker (73TC415). Dr Longson claimed that land additional to the permitted 0.5 of a hectare, which was used to house and graze his horses, was required for the reasonable enjoyment of his dwelling house. He contended that all of the land purchased with the property (7.56 hectares) was required, by virtue of the ‘equestrian character’ of the property.

Evans-Lombe J commented in the High Court:

‘It is clear from the words “required for the reasonable enjoyment” in subs(3), that the test to be applied as to what any larger permitted area can consist of over the 0.5 hectares allowed by the section, is an objective test. In my judgment it is not objectively required, ie necessary, to keep horses at a house in order to enjoy it as a residence. An individual taxpayer may subjectively wish to do so but that is not the same thing.’

It was decided that 1.054 hectares was reasonably required for the enjoyment of the house and this larger permitted area was allowed, but not the entire area of 7.56 hectares.

Read more about the case here.

Interpretation of section 222(4)

This section sets out that where the garden and grounds occupied and enjoyed with a dwelling house are in excess of the permitted area, the part to be determined as the permitted area is the part ‘most suitable for occupation and enjoyment with the residence’.

If the grounds of a residence are not all of equal value – for example, if part of the grounds has development value – it may be just as important to determine the location of the permitted area as it is to determine its size.

This is a matter for the Valuation Office Agency to determine, although the taxpayer can appeal against this in the same way as the decision on the extent of the permitted area.

Procedure to be followed by HMRC where permitted area is at issue

If there is a disagreement about the extent and location of the permitted area, it is the responsibility of the Valuation Office Agency to decide the extent and location of the permitted area.

Valuation Office Agency

The Valuation Office Agency’s role is to determine the extent of the permitted area of the garden and grounds in cases where it is claimed that the permitted area is an area greater than 0.5 of a hectare. In these circumstances, the HMRC inspector should seek the assistance of the agency.

Capital Gains Technical Group

If agreement cannot be reached in respect of either the extent or the location of the permitted area, then the HMRC inspector should make a report to the Capital Gains Technical Group.

The process will then proceed as explained in the link above and below. 

 

Sale of garden or grounds separately from the dwelling house

If the garden or grounds is disposed of before the disposal of the dwelling house, relief will be available as long as it was garden or grounds at the date of disposal and it was part of the permitted area.

Land disposed of separately after the disposal of the dwelling house will not qualify for relief in line with the decision in the case of Varty v Lynes (51TC419).

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64377

There is no automatic entitlement to relief on the full area of land if that land is not the garden and grounds of the residence at the date of disposal. For example, if a person has a house and two hectares of land but of that land only 0.2 hectares are garden and grounds, with the remainder being used for the purposes of a trade, relief only extends to the dwelling house and 0.2 hectares. https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64815

If some or all of the garden and grounds of a dwelling house are sold under a separate contract between the date of exchange of contracts and the date of conveyance of the dwelling house, then provided that the other tests of TCGA 1992 s222 are met, relief may be due. However, if the contract for the disposal of the land is dated after the date of conveyance of the dwelling house, then relief will not be due.

For example, Miss A owns a dwelling house that has been her only or main residence, together with garden and grounds of 0.5 of a hectare. In May 2017 she contracts to sell the house together with 0.1 of a hectare of land as a residence. The house and land are conveyed to the new owner in July 2017. In June 2017 she contracts to sell the remaining 0.4 of a hectare of land to a developer. If the other conditions for relief are fulfilled, relief will be available on the disposal of the 0.4 of a hectare of land.https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64385

One hectare is 10,000sq m (approximately 2.47 acres).

TCGA 1992 can be found here.

 

Are your clients using their £7,500 rent-a-room allowance?

Airbnb, bed-and-breakfast and guest accommodation could qualify  


Airbnb, bed-and-breakfast and guest accommodation could qualify
 

The Summer Budget 2015 introduced, with effect from 6 April 2016, an increase in the level of rent-a-room relief from £4,250 to £7,500 per year. This provides for tax-free income that can be received from renting out a room or rooms in an individual’s only or main residential property.

How does the scheme work?

The rent-a-room scheme is a relief that provides that the rent received by an individual from a lodger (up to a prescribed limit) can be exempt from income tax.

This limit is halved if another person is also entitled to the income. For example, where a husband and wife own the property jointly, the limit is reduced to £3,750 (£2,125 prior to 2016/17) each.

What are the options?

If gross receipts from letting are more than the rent-a-room limit of £7,500 (or £3,750), the individual has the following two options:

First option
Pay tax on the actual profit (rental income less expenses).

Second option
Pay tax on gross receipts over the rent-a-room limit: that is, your gross receipts minus £7,500 (or £3,750). If this method is used, you are not allowed to deduct any expenses.

HMRC will automatically use the first option but if you want to pay tax using the second option, you need to tell HMRC by 31 January following the end of the tax year.

If you pay tax using the second option, this automatically stops if your rental income drops below the £7,500 (or £3,750) limit.

Gross receipts include rental income (before expenses) and any amounts received for meals, goods and services (such as cleaning or laundry).

Qualifying conditions

Rent-a-room is aimed at individuals who let furnished residential accommodation in their own homes. For example, it applies where an individual rents out rooms in a guest house, bed-and-breakfast or similar, provided that it is their main residence. The scheme cannot be applied to rooms let as an office or otherwise for business purposes.

1.          Separate residence

The question that is likely to arise is whether some part of a house – for example, a basement flat – is part of the taxpayer’s residence or is a separate residence.

Where an individual lets furnished accommodation in a self-contained flat in the individual’s only or main residence, they are eligible for rent-a-room relief provided that the division of the residence into a self-contained unit is only temporary.

Whether such a division is temporary is a question of fact. Factors that will need to be considered are:

  • Would structural alterations be necessary to undo the division?
  • How long has the residence been divided?
  • How long is the division intended to continue?
  • Could possession of the flat be obtained separate from the property as a whole?
  • Is the flat separately supplied and metered for mains services?
  • Does the flat have its own unique postal address?
  • Does it have its own separate entry?
  • Would a mortgage lender be prepared to lend on the security of the separate flat?

The decision will be made on a case-by-case basis. Photographs and personal inspection of the premises might be necessary.

2.          Taxpayer moves home during the year

The rent-a-room rules apply to the total gross furnished letting receipts for the tax year from the taxpayer’s own home.

If the taxpayer moves home, and lettings in both their old and new home qualify for rent-a-room relief during the same year, the taxpayer must add together the rents from both to find the total receipts.

If a taxpayer lets their home in the UK while they live abroad, they will not normally be within rent-a-room. This is because the let property will not usually be a residence of the taxpayer at any time during the basis period for the letting.

3.          Taxpayer moves leaving lodger

If the taxpayer with a lodger moves to a new home leaving the old home unsold and the lodger in occupation, rent from the letting may continue to qualify for rent-a-room relief until the end of the basis period during which the qualifying individual moved.

Losses

If you use the rent-a-room scheme because your gross receipts are exempt from tax (under £7,500, or £3,750) or you pay tax using second option, you cannot create a loss.

If you want to create a loss, you must tell HMRC that you want to pay tax on your income less expenses (first option).

Rent-a-room relief and principal private residence (PPR) relief

When the owner comes to sell their property, the amount of PPR relief will not be affected by taking a lodger.

 

Farewell, stamp duty land tax – in Wales, at least

SDLT to be replaced by land transaction tax from April 2018


SDLT to be replaced by land transaction tax from April 2018

On 24 May the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act received Royal Assent.

The main effect of this act is that stamp duty land tax (SDLT) will cease to apply in Wales from April 2018. Instead, a land transaction tax (LTT) will apply.

The Welsh Government’s proposed rates and bands will be announced by October 2017.

The higher rates of SDLT on purchases of additional residential properties (including second homes), which came into effect on 1 April 2016, will continue.

The legislation can be found here.

 

 

Dealing with HMRC: the trials and tribulations for the modern-day accountant

Just because you are paranoid does not mean that they are not out to get you!, writes the Secret Accountant


 Just because you are paranoid does not mean that they are not out to get you!, writes the Secret Accountant

 

Do you ever have the feeling that HMRC is trying to bypass us and get direct to our clients, the taxpayers? (Sorry, I should have said ‘customers’. I love that phrase; it implies a choice about whether to engage or not with HMRC. I must have missed something along the way – I thought it was compulsory?). Is that because they think they will obtain more tax from our poor, unsuspecting clients?

 

Don’t get me wrong. I believe that everyone should pay the correct amount of tax and I am not in the habit of encouraging shady dealing. However, I am all for ensuring that clients do not pay more tax than they legally need to.

 

Perhaps that is precisely why I and my colleagues have this feeling that we may be being marginalised. But before we even reach that point, dealing with HMRC on a regular basis may easily result in the men in white coats coming to take us away:

 

  1. The dividend tax allowance changes introduced in 2016 are too complicated for HMRC’s systems to calculate the correct amount of personal tax payable for all permutations of income. HMRC has told the software houses about this issue and advised that those clients who will be affected, or their agents, will have to submit paper tax returns between now and 31 January 2018. (ACCA note: further announcements are expected soon, and online submissions should be the norm.)
  2. From 31 May 2017 employers and pension providers alike could receive an increased number of tax codes as a result of HMRC’s modifications to the PAYE system. The net effect of these changes is that tax agents and employers will receive more frequent coding changes, although we have been promised no more than one code change per month for a taxpayer!             
  3. HMRC is no longer giving out PAYE information to agents direct, to assist with the completion of self-assessment returns. 
  4. When trying to send a final real-time information (RTI) submission for 2016/17 before the deadline I was greeted with the message: ‘HMRC are experiencing technical difficulties. Try later to ensure successful submission.’ 
  5. After months of trying to sort out the discrepancy between a PAYE account shown by HMRC and the RTIs submitted, I resorted to using the Agent Account Manager service. It was agreed that there was a problem but the department that needed to provide the required information was ‘experiencing an unusually high volume of work’. 
  6. Two tax codes were issued for the same employee on the same day. The officer at the end of the agent support line could not advise which one should be used (apart from believing that P45s were still supposed to be submitted to HMRC whenever an employee left).

 

But hey, Making Tax Digital is just around the corner: what can possibly go wrong?

Conclusion: HMRC needs us more than we need them!

Understanding the dangers of trading while insolvent

Inattentive directors are putting their companies at risk


Inattentive directors are putting their companies at risk

When a company – for whatever reason – encounters financial difficulties it is vitally important that the directors act quickly. If the company is seen as trading insolvently it may lead to accusations of wrongful trading, or the more serious charge of fraudulent trading, where it is thought that the directors have deliberately attempted to deny creditors what they are owed.

Many of our members and their clients have seen companies go into liquidation and then simply disappear, owing them money which is never recovered. The use of ‘pre-pack’ administration has also increased the feeling that creditors can rarely do anything about their debts.

However, a recent case, which was subject to an updated press release in June 2017 by The Insolvency Service, emphasised that the agency does investigate companies that have been subject to a compulsory liquidation. This article seeks to recap on the implications for directors and the company accountants.

The case involved a garage owner who was disqualified for trading while insolvent. The director was disqualified from acting as a director on 23 June 2015 for seven years for trading to the detriment of creditors between 25 January 2013 and 14 August 2013 while his garage repairer and MOT specialist group of businesses was insolvent, incurring further liabilities of £106,097, including £89,134 to the Crown for PAYE/NIC and VAT. The director also personally benefited by causing £107,200 in transactions to the detriment of creditors from 25 January 2013 to June 2013.

The company was incorporated on 16 October 2012. It traded from three separate locations in and around Cardiff. The company was subject to a creditors’ voluntary liquidation on 14 August 2014 and had an estimated deficiency of £373,803. The disqualification followed an investigation by The Insolvency Service and culminated in the director giving an undertaking to the Secretary of State for Business, Innovation and Skills, which prevents him from becoming involved in the promotion, formation or management of a company until 2022.

The Chief Investigator of the Insolvency Service commented: ‘In investigating insolvent companies, the Insolvency Service always looks very closely at individuals who demonstrate a disregard for creditors and appropriate action is taken where wrongdoing is uncovered.’

Although the original case was from 2015, the fact that an updated press release was issued in June 2017 appears to show that the service wants to make it clear that its investigations are effective.

What does The Insolvency Service do?

The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the official receiver to establish why they became insolvent. It may also use powers under the Companies Act 2006 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK.

In addition, the agency authorises and regulates the insolvency profession; deals with the disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

Further information about the agency’s work is available.

Directors’ disqualification

It is important that directors understand the full implications of being disqualified. In addition to the insolvency situation, anyone can report a company director’s conduct as being ‘unfit’.

‘Unfit conduct’ includes:

  • allowing a company to continue trading when it can’t pay its debts
  • not keeping proper company accounting records
  • not sending accounts and returns to Companies House
  • not paying tax owed by the company
  • using company money or assets for personal benefit.

The details of the director will be published online:

  • in the Companies House database of disqualified directors
  • In The Insolvency Service’s register of directors if they got disqualified in the last three months, including details of why they were banned.

Also remember that there are other implications from the disqualification of a Director. Among other things, they cannot:

  • sit on the board of a charity, school or police authority
  • be a pension trustee
  • be a registered social landlord.

It is also worth noting that a person can be prosecuted and become personally liable for the company’s debts if they carry out company business on the instructions of someone who’s disqualified. It is therefore important for other directors – or indeed ACCA members – not to get involved in seemingly straightforward transactions where they are acting on instructions from others who are disqualified.

Advice for members

When a member first becomes aware of a client company’s financial difficulties, it is essential that they remind the directors of their legal responsibilities and the implications for them personally if they do not act quickly to protect themselves and the company creditors.

The most important advice to give is that the directors need to see a licensed insolvency practitioner as soon as possible. They can help assess the position to help avoid the company trading while insolvent. In addition to disqualification, directors may face the prospect of being held personally liable for the debts of the company; what they cannot do is simply assume that there will be no implications to them or the company if it fails and therefore take no advice or action.

There can often be issues that directly involve the accountants of an insolvent company. Under sections 235 and 236 of the Insolvency Act the liquidator of a company can require a variety of people connected with the company to provide information to them. Normally the accountant would not be an officer of the company, but under the Act they may be classified as such depending on what services they performed.

For instance, if the accountant did the bookkeeping/preparation of the accounts then they may be required to provide detailed explanations of transactions and entries in the accounting records, which may be problematic. If a member gets such a request it is important that they contact the ACCA members’ Technical Advisory team on 020 7059 5920 to discuss their response.

Further information

Please follow the links below for more information:

Options when a company is insolvent

Guide to liquidation procedures

 

 

 

NEWS
Late payment roadshows
ACCA is hosting seven roadshows across the UK which will provide insights into the effect of late payments on businesses.

Is late payment an issue for you? ACCA is hosting seven roadshows across the UK which will provide insights into the effect of late payments on businesses, together with practical advice on how to deal with late payments and how to speed up collection. 

The main speaker at each roadshow – Ashley Smith FCCA, FD of CADA Design Group – will also participate in a local running race in each location; you are welcome to join him, or just cheer him along the route! Full details below.

Locations and how to book
Click on the location below to secure your place online now. Each event begins at 18:00 and closes at 20:30, is free to attend and provides two CPD units.

Glasgow – Friday 28 July
Fort William Marathon

Southampton – Friday 8 September
New Forest Marathon, Half, 10k or 5k

Hull – Friday 29 September
Mablethorpe Marathon

Swansea – Monday 13 November
Endurance Life Gower, Ultra, Marathon, Half & 10k

Limited places are available on a first come, first served basis; follow the links above to secure your place now!

Shaping your ACCA - you speak, we listen
Results of major member consultation exercise to be revealed.

ACCA is running a series of sector-specific focus groups across the UK for members working in public practice, the corporate sector, financial services and internal audit.

Nearly 200 members will be attending 24 meetings in 12 different locations providing insight into their working lives and what their ACCA membership means to them.

In a webinar on 11 July, John Williams, Head of ACCA UK and Kevin Reed, former editor of Accountancy Age, will provide an overview of the findings of those meetings. A further webinar in October will examine what ACCA can do in response to this valuable member feedback to better support all members.

Register for both of these webinars now

CPD
Saturday CPD Conferences
Limited places available for these popular CPD courses across the UK.

SATURDAY CPD CONFERENCES FOR PRACTITIONERS 2017

These conferences are the ideal way to keep your professional knowledge up-to-date and get your CPD without disrupting your working week. The conferences consist of four sessions which makes it a cost-effective way of staying informed about the latest technical issues. 

These events are always in demand from practitioners; click on the conference title to find the location closest to you and book your next conference(s) now.
     

Saturday CPD Conference Two

  • 3 June - Glasgow
  • 17 June - Birmingham
  • 24 June - Sheffield
  • 1 July - London


Saturday CPD Conference Three

  • 30 September - Glasgow
  • 14 October - Bristol
  • 21 October - Birmingham
  • 28 October - Swansea
  • 4 November - Manchester
  • 25 November - Sheffield
  • 2 December - London.
Autumn Update for Practitioners
Book now for sessions on accounting, auditing and tax.

Autumn Update for Practitioners: Accounting and Auditing Conference

4 November, London
       

Autumn Update for Practitioners: Taxation Conference

9 December, London

CPD units: 7 CPD units per conference 

Fees:
1 conference                 £155
2 conferences               £143 per conference/delegate
3 or more conferences   £129 per conference/delegate

Discounts apply to any number of delegates from one firm. To qualify the bookings must be made together. Please note the prices quoted are per person, per conference. For flexibility, delegates booking two or more conferences can mix and match from the Saturday CPD Conferences and the Autumn Update Conferences.

Residential Conference for Practitioners
Early-bird booking period now open for flagship event.

Dates16-18 November
Location: Queens Hotel, Leeds
CPD units: 21

Fees: £739 per person
Early bird: book by 16 August 2017 and pay just £696 per person 

Book online and secure your place now! 

ACCA UK’s Residential Conference for Practitioners provides an excellent opportunity to refresh your technical knowledge and discuss common issues with like-minded accountants. 

Across all three days sessions will include: 

  • Property Taxes
  • Employment Taxes
  • Trusts, Wills and Inheritance Taxes
  • Spreadsheet Skills (Saving You Time and Increasing Safety)
  • Employment Law Update
  • Hallmarks of an Effective Practice
  • Reach New Customers Online
  • Life After the FRSSE and Abbreviated Accounts
  • Planning for Brexit Uncertainties
  • General Tax Update

 
View conference brochure for full details of all sessions.

CAREERS
British Accountancy Awards 2017
Will your firm be recognised as one of the best in the country?
Hurry - with a deadline of 7 July there are just two weeks left to submit your entry to the British Accountancy Awards 2017!

We have worked closely with our judging panel to produce a bespoke guide to delivering the best possible entry.

Widely-recognised as celebrating the best of the accountancy sector in the UK, ACCA members and their firms have a strong track record of success at the awards in recent years. Last year Norwich-based Farnell Clarke - lead by partner Will Farnell FCCA - took home three awards, namely Most Innovative Practice, Independent Firm of the Year and Independent Firm of the Year East England.

Defining innovation
In selecting Farnell Clarke as the most innovative practice, the judges commented: 'Really interesting entry and great to see some of the innovation taking place. The transfer of Kashflow to Xero is impressive and the change of culture to attract younger, more tech savvy staff shows innovation.' 

Benefits of winning
We asked Farnell Clarke what winning the Most Innovative Practice meant to them: 'It’s great to be able to tell our customers, colleagues and partners that they’re working with – officially – the Best Independent Firm in the East of England and the Most Innovative Practice in the UK. But more than just the prestige, winning the awards has given us a renewed sense of purpose and confidence. Attracting talented, professional and ambitious staff is always a challenge, especially in a relatively small and rural county such as Norfolk. But being able to tempt people with our award-winning status is definitely a plus."

The deadline for entries is Friday 7 July. A strong entry takes time to create. Start the process towards being recognised as one of the best accounting practices in the UK now. Download an entry pack and full details of how to enter on the dedicated website. The 2017 categories include:

INDIVIDUAL EXCELLENCE

  • Rising Star of the Year
  • Partner of the Year

PRACTICE EXCELLENCE
  • International Firm of the Year
  • National Firm of the Year
  • Mid-Tier Firm of the Year
  • New Practice of the Year


REGIONAL PRACTICE EXCELLENCE

  • Independent Firm of the Year (Scotland & North, England)
  • Independent Firm of the Year (Wales & Midlands, England)
  • Independent Firm of the Year (South, England)
  • Independent Firm of the Year (East, England)
  • Independent Firm of the Year (Greater London, England)


EXCELLENCE IN ACCOUNTING AND FINANCE

  • Accounting Innovation Project of the Year
  • Graduate and Non-Graduate Programme of the Year
  • Best Client Project of the Year
  • Outstanding Community Engagement and Contribution


TEAM OF THE YEAR

  • Tax Team of the Year
  • Audit Team of the Year


PRODUCT EXCELLENCE

  • Excellence in Accounting/Finance Technology
  • Practice Software Product of the Year.
Queen’s Awards for Enterprise – enter your or your client’s business
Invest now for five years of recognition and other benefits.

Invest now for five years of recognition and other benefits. 

Nominations for The Queen’s Awards for Enterprise 2018 are now open! Entries are encouraged from businesses of all sizes, especially SMEs. The Queen’s Awards for Enterprise awards are valid for five years with materials being available to use during the period. The awards are for outstanding achievement by UK businesses in the categories of:

  • innovation
  • international trade
  • sustainable development
  • promoting opportunity through social mobility.


Many previous winners also report increased sales. The government states that ‘according to research by the University of Strathclyde, 73% of International Trade winners between 2012 and 2015 directly attributed increased international sales to winning a Queen's Award for Enterprise'.

The basic requirements:
To apply for the Queen’s Award for Enterprise your organisation – which can be business or non-profit – must: 

  • be based in the UK (including the Channel Islands and the Isle of Man)
  • file its Company Tax Returns with HM Revenue and Customs (HMRC)
  • be a self-contained enterprise that markets its own products or services and is under its own management
  • have at least two full-time UK employees or part-time equivalents
  • demonstrate strong corporate social responsibility.


For more information – or to apply before entries close on 1 September 2017 – visit the dedicated website

Learn the secrets of success

ACCA and AccountingWEB create video mini-series featuring top tips to celebrate Practice Excellence Week 2017


ACCA and AccountingWEB create video mini-series featuring top tips to celebrate Practice Excellence Week 2017

 

We are excited to announce that ACCA is partnering up with AccountingWEB to support Practice Excellence week 2017. 

 

To kickstart our partnership, we’ve created ‘Secrets of Practice Excellence’, a video mini-series featuring John Stokdyk, AccountingWEB’s global editor, and Glenn Collins, head of technical advisory at ACCA. We’ll uncover where and how leading practices recognised through Practice Excellence awards are devoting their development efforts, developing specialist niches and collaborating with clients in the cloud. 

 

Each video is around 10 minutes long and will cover how you can make a difference, grow your practice and learn the secrets to becoming a practice excellence firm: 

 

Part 1: The Secrets of Practice Excellence: Building your niche

Part 2: The Secrets of Practice Excellence: The digital marketing surge

Part 3: The Secrets of Practice Excellence: Cloud goes mainstream

 

If you think your practice  should be recognised, entries for the 2017 Practice Excellence awards are open until 30 June: click here for more information.

 

Look out for more great insight from the partnership over the coming weeks!

 

 

 

Awards: creating a worthy entry
Why and how to enter awards
Watch and hear from Mark Lee, Alex Falconer Huerta, Alan Woods and Glenn Collins on why you should enter awards and how to create a worthy entry. You can view this here.