Brexit – the impact on investment– September 11, 2016

The aftermath of the referendum saw headlines of significant falls for the FTSE 100 and 30-year lows for the pound against the dollar. However, a few months down the line the repercussions for investment in particular have not lived up to the bleak picture anticipated.

We think the impact of Brexit does not considerably change the outlook for current or potential investors, providing the investment options concerned are not heavily concentrated in any just one-asset class. However, this is not to say the global market is unchanged.

Many things still to be determined by UK Government regarding Brexit, will there be another referendum? Will UK actually be divorced from European Union (EU)?

Small businesses may face new punitive penalty regime – September 12, 2016

New rules introduced as part of the government’s Making Tax Digital proposals could see fines for late tax payments triple.

Currently small businesses face a fine worth five per cent of their outstanding tax bill if they pay late. This is charged at 30 days, six months and then again at 12 months, slowly accumulating at a slow rate if the tax remains unpaid.

However, buried within the Making Tax Digital consultation papers is a new penalty system that will see HM Revenue & Customs introduce a sliding scale that could see the initial penalty charge quickly increase to 15 per cent – a 200 per cent rise when compared to the current fine regime.

The new fines would affect failure to pay income tax, national insurance, corporation tax and VAT. The document makes it clear that the 15 per cent figure is purely ‘indicative’ and may not in the end be the level of the final fine.

As part of the shake-up of penalties, the rules for late filing of tax returns and information will also change to reflect the changing nature of reporting tax on a quarterly basis.

At the moment businesses receive an automatic flat-rate fine of £100 for missing the deadline, even if this is just by a day. This is followed by additional fines the later the tax return is submitted.

The new proposal is for a ‘penalty point’ scheme where only repeat offenders receive a fine. Under the plans, the points will be ‘reset to zero’ only after two years in which all information has been submitted on time.

Anita Monteith, a tax policy adviser at the Institute for Chartered Accountants in England and Wales, said the new system, which comes into force in 2019, would amount to treating small businesses as a ‘cash cow’.

She said: “Not only are the record keeping obligations going to be much more onerous but making mistakes will become much more expensive. It is a draconian measure and you will end up with many more people being punished.”

Fraud warning: HMRC – September 21, 2016

HMRC have issued a warning about a new scam, which is targeting taxpayers and seems to be aimed at the elderly in particular (how brave!). It is a telephone scam where a recorded message is left, allegedly from HMRC, stating that HMRC are bringing a lawsuit against the individual and is going to sue them.

Needless to say, please do not engage with this scam.

Accounting standards and related pronouncements

Please read accounting standards and other pronouncements of IFRS foundation.

www.ifrs.org

Please read big-4 accountancy practices interpretation of accounting standards and other pronouncements:

Deloitte

www.iasplus.com

PWC

http://www.pwc.co.uk/services/audit-assurance/uk-gaap.html

EY

http://www.ey.com/UK/en/Issues/IFRS/Issues_GL_IFRS_NAV_Publications

KPMG

https://home.kpmg.com/uk/en/home/services/audit/international-financial-reporting-standards/new-uk-gaap.html