Resources | Weekly Bulletins

- 9th May 2008

Weekly Technical Bulletin

FINANCIAL REPORTING

1. Businesses with defined benefit (DB) pension schemes need to remember that for accounting periods beginning on or after 6 April 2007 (e.g. year ends 30 April 2008) they will need to adopt the ASB's Amendment to FRS 17 “Retirement Benefits”. Early adoption is encouraged. At the same time businesses might also consider the ASB's Reporting Statement "Retirement Benefits - Disclosures", which is designed to promote greater transparency in financial reporting for DB pension schemes. As a best practice guide, the Reporting Statement is intended to have persuasive rather than mandatory force. Its recommendations aim to assist the users of financial statements in understanding the risks and rewards, and funding obligations arising from DB pension schemes.

DIRECT TAXES

1. TAX

The IR20 booklet has been updated but is currently available online only. The HMRC note about this updating refers to the new version as interim guidance and says it is temporarily available on an online basis only. This suggests that revised guidance will be issued after the changes proposed are enacted in Finance Act 2008.

INDIRECT TAXES

1. VAT

1. Practice tip: in cases where an opted property is part of the assets transferring under a TOGC, the purchaser must also opt to tax in order to make the transfer VAT-free. But note that the option must be notified to HMRC no later than the date of transfer. If a deposit has been released to the vendor at an earlier date, the option must be notified to HMRC no later than that date. Notifying HMRC means that the written notification (preferably form VAT 1614) must literally be in HMRC's hands at the critical date – submitting the notification later, even if the effective date of the option is backdated, is no good.

OTHER

1. OTHER

1. The Bank of England's monetary policy committee left interest rates unchanged at 5% on Thursday, suggesting it does not yet think the UK economy has slowed enough to bring inflation back to target in the medium term. Markets had priced in only a small chance of a cut, although investors are betting on a strong probability of rates coming down in June.

2. There is a press report indicating that almost 40 estate agents are going out of business every week owing to a slowdown in the housing market, mainly single-shop independent operators. Some are remerging as letting agents as more households look to rent rather than buy at the present time.

3. Norfolk businesses will face a heavy tax burden if they don't do more to reduce the amount of waste they send to landfill. Since April 2008 landfill tax has increased by 33% from £24 per tonne to £32 per tonne as part of the government's 'landfill tax escalator' to encourage businesses to reduce, reuse or recycle their rubbish rather than using landfills. This tax is charged on top of the normal disposal fee paid to the landfill operators by businesses that dispose of waste to landfill. In some circumstances, businesses could now pay as much as £100 per tonne for certain waste types. Landfill tax will continue to escalate by £8 per year until 2010 when it hits £48 per tonne.

Whilst every effort is made to ensure accuracy, information contained in this publication may not be comprehensive and recipients should not act solely on the basis of this information.