March 26, 2010Budget 2010: VAT rise 'on hold until after election'

VAT rise to 20% expected within a few months
Despite chancellor Alistair Darling saying he had "no further announcements about VAT" in this week's Budget, there are many in the accountancy profession who expect such an announcement to be made in just a few short weeks.

They expect that an increase in VAT to 20% has been merely delayed for political purposes until after the general election, which is almost certain to be held in early May.

Story from:
Accountancy Age

March 24, 2010Former FD takes over Football Association

Alex Horne the former FD of the Football Association has been crowned as the governing body’s acting chief executive.
Horne. who won the Accountancy Age Personality of the Year 2007 award has been brought in after the resignation of Ian Watmore.
Horne was finance director at the FA before being made managing director of Wembley Stadium where he resolved the crisis surrounding the project’s funding.

Story from:

Accountancy Age

March 18, 2010'I'll read the TV news in the nude': BBC presenter fights for tax relief on her clothes bill

As every woman knows, keeping up appearances can be taxing.
For those in the public eye, finding the right style can be particularly time-consuming - and expensive.
But one BBC presenter is threatening to confront breakfast television viewers with a rather more natural look after being told she can't claim tax relief on the clothes she buys for work.

Dressed for success: Newsreader Sian Williams in a red wrap-style dress at the TRIC Awards in London
Sian Williams says she would be happy to 'read the news naked' - and insists she shells out £4,500 a year on her appearance only because it is necessary for her job.
The BBC Breakfast host is locked in a five-year battle with HM Revenue and Customs, which argues that she cannot claim a £1,800 tax rebate on her shopping because 'it is impossible to divide the business and private benefit of such expenditure'.
Miss Williams, 45, insists wearing the same clothes repeatedly could cause her to lose her job, and therefore her personal maintenance bill - which includes £975 on haircare, £3,200 on clothing and £325 on laundry - should qualify for tax relief.
Her representative told the tax tribunal it was an 'implied term' of Miss Williams' contract that 'she must not wear the same clothes more than twice or three times a month'.
Story from:
Daily Mail

March 4, 2010Employment status

It is often difficult to determine the employment status of workers who work from
home and operate independently of the engaging company. There may be a
tradition of treating such workers as self-employed, which is not questioned when
new people are taken on or the worker’s role changes.

This was the case with the group leaders engaged by Weight Watchers (UK) Ltd
to organise and lead weekly meetings for members. The group leaders had always been treated as self-employed but HMRC believed the correct relationship for tax purposes was employee and employer.

HMRC issued determinations both to Weight Watchers (UK) Ltd and to a number
of the group leaders personally for the unpaid class 1 NICs due as if the group
leaders were employees, for periods dating back to 2001/02. The company and
the group leaders appealed against the determinations.

Although there was no written contract of employment between the group leaders
and the company, there were extensive instructions that governed how the
leaders should behave at the meetings, what goods they were allowed to sell, and
even the topics for discussion. Each group leader also reported to an area service
manager.

The tax tribunal found that there was a considerable degree of control by the
company over the group leaders, and those leaders had to provide a personal
service. Although each group leader could find a substitute to run a meeting on
their behalf, that substitute had to be another fully trained group leader and the
payment for that substitute was made directly by the company. The tax tribunal
concluded that the group leaders were employees of Weight Watchers (UK) Ltd,
so both the company and the group leaders became liable for unpaid NICs.

This arrangement of having independent workers lead diet or exercise classes is
not unusual. Weight Watchers (UK) Ltd had over 1000 group leaders, and other
companies may engage similar numbers. Are any of these workers your clients?
Do they understand the financial risk they could be taking by agreeing to be ’self-
employed’, for their group-leading activities, when in reality they are employees?

Story from: Weight Watchers

March 4, 2010Personal Liability Notice

Where a company has not paid over the national insurance contributions it is due
to pay, the directors of that company can be made personally liable to pay the
amounts owing. To do this HMRC will issue a personal liability notice (PLN) to the
directors or other officers of the company under the Social Security
Administration Act 1992, section 121C.

Story from: Tax Bulletin guidance on use of PLNs

March 3, 2010Bankers’ Bonuses rewards for simple mechanical tasks

I stumbled across this really interesting and entertaining video of Dan Pink discussing the social science behind motivation and rewards. In the speech, he quotes some 2005 research where economists, D. Ariely et al, set a group of MIT students various tasks with varying levels of bonuses for success.

Their results were intriguing:

As long as the task involved only mechanical skill, bonuses worked as they would be expected: the higher the pay, the better the performance.





But once the task called for “even rudimentary cognitive skill,” a larger reward “led to poorer performance.”

These results have been borne out in many other studies too.

The logical conclusion of this research, if the bankers are right in that they need to be paid their huge bonuses, is that investment banking does not require even rudimentary cognitive skill. An interesting thought.

I’d recommend watching the whole video. It explains why, for most types of work, bonuses reduce performance rather than improve it and gives us all food for thought when it comes to rewarding our own employees.

Story from: notjustnumbers.co.uk