Accountancy Blog

Regulator slams poor standards of charity accounts audits

Most auditors and independent examiners in England and Wales failed to identify failings in charity accounts in 2017/18.

The claim comes from the Charity Commission, which scrutinised 296 charity accounts with various annual incomes.

The Commission found that accounts reviewed by auditors met its benchmark more regularly than independent examiners.

How its benchmark is applied depends on a charity’s size and legal form, with closer scrutiny applied to accruals accounts.

Up to 15 criteria apply, nine of which are compulsory for all charity accounts under review. The other six only apply to the scrutiny of charities with accruals accounts. More…

Self-employed owe £1.6bn to HMRC in late tax payments for 2017/18

New figures show self-assessment taxpayers owe HMRC more than £1.6 billion in late payments on 2017/18 tax bills.

The deadline for 2017/18 submissions came and went on 31 January 2019, with more than 11.5 million taxpayers beating the midnight cut-off – a new high.

Despite a record number of tax returns submitted early this year, not all taxpayers have paid their liabilities to the Revenue.

The £1.6bn currently estimated to be owed for 2017/18 is expected to surpass the final total of £1.83bn paid late in 2016/17.

That would continue a trend – the amount of tax owed by those who missed the payment deadline has increased every year for the last three years. More…

Small employers risk losing the employment allowance in 2020

Plans to remove the employment allowance for large employers from April 2020 could impact on smaller firms.

This allowance provides employers with a reduction to their national insurance contributions (NICs) bill of up to £3,000.

Employers that claim the allowance can carry it forward from one tax year to the next, but that will stop from April 2020.

From that point, employers will only be eligible for the allowance if their total secondary class 1 NICs liability for the previous year is less than £100,000, while the allowance has also been reclassified as state aid.

Smaller employers may face issues due to the maximum amount of de minimis state aid they can receive in any three-year period. More…

Making Tax Digital – Most VAT-registered businesses are signed up for Making Tax Digital

Almost three quarters (74%) of VAT-registered firms signed up for Making Tax Digital (MTD) before the second stagger deadline last month.

HMRC’s figures showed that over 230,000 mandated businesses joined the scheme before the 7 September 2019 deadline.

Most (94%) signed-up businesses submitted VAT returns before both the first and second stagger deadlines.

Around 80,000 firms missed the stagger-two deadline, and HMRC will write to those to remind them of their obligations. More…

Property investment – good idea?

With low interest rates, property remains attractive.

As the global financial crisis began to bite in 2008, central banks in several nations took action, attempting to shock the world economy back to life by slashing base interest rates.

The idea behind this kind of stimulus is to make saving less attractive, hopefully prompting people to spend instead – to buy that new car, extend the loft or, indeed, to purchase a completely new home.

In the UK, the Bank of England reduced interest rates to 2% in late 2008 and to 0.5% in early 2009, where they sat until 2016 when they dipped yet further, to an astonishing 0.25%.

A decade on from the recession, they’ve yet to recover in any meaningful way, sitting today at a meagre 0.75% – a far cry from 14.88% of 30 years ago this month. More…

IR35 in the private sector

Key considerations for contractors before April 2020.

Large and medium-sized organisations have just six months left to prepare for changes to off-payroll working rules, which are due to extend to the private sector next spring. 

From 6 April 2020, firms that engage private-sector contractors will be responsible for deciding if the rules should apply and deducting income tax and national insurance.

At present, contractors who operate through their own personal service company (PSC) have these responsibilities, but the extension of the off-payroll working rules will soon make it the responsibility of the organisation engaging them. More…