Access Accounting - Blog

To verify or not verify – that is the question

I was talking to a contractor the other day who asked a very valid question – ‘I have so many sub-contractors on my books; do I need to verify every one of them?’

That’s a very good point as it is only sub-contractors that have been recently recruited that need to be verified. You don’t need to verify if a sub-contractor has been paid since 6th April 2005 AND they provided you with either a CIS4(T), CIS4(P) or a tax certificate (CIS5 or CIS6). Apart from the CIS4(P) – the registration card – the other forms of evidence need to have an expiry date of at least April 2007. These sub-contractors should appear on the CD that HMRC sent out to you and it's worth checking that the details you hold do match, and that you have the correct tax status held against each sub-contractor's record.

As my friend commented, ‘This is going to be a time consuming process.’ There seems no doubt about that….

Kevin Misselbrook, customer services director

The importance of matching

HMRC will be sending contractors an additional CD of sub-contractors in March – they will also be mailing sub-contractors to confirm the details that are currently held on HMRC’s files.

Hopefully many businesses will be well underway with the matching process, following the first batch of records that HMRC sent out in November. However, this process could be quite time consuming in the first instance.

For the contractor, one of the chief problems in matching the data on their system to that of HMRC’s is likely to be the trading name or even something as simple as a space in a field – double-barrelled names will need a hyphen! Incorrect data could mean an error in the deductions made from a sub-contractor’s payments. Not good for relationships between the contractor and sub-contractor. (in fact there are three items which must match HMRC’s database – the Unique Taxpayer Reference, the sub-contractor name and NINO/CRN).

If there are any discrepancies, the contractor needs to talk to the sub-contractor not HMRC. In fact we’d be very interested to hear your personal experiences of matching the data – any feedback for others who are still going through the process I am sure would be greatly received!

For more information on Access CIS software please visit their website.

CIS deadline looms

Those working in the construction industry may need reminding further that the new construction industry scheme (CIS) will be implemented next month.

Last month, HM Revenue & Customs (HMRC) launched a campaign to remind contractors of the changes in the law which will allow contractors to pay sub-contractors and assist with taxes.

Following concern from recruiters about whether HMRC's systems would be able to handle the changes, a spokesman told Recruiter magazine: "Our IT systems have been designed to cope with the changes arising from new CIS. We can confirm that we are ready to go live on April 6th."

He added that HMRC's systems has been exhaustively tested but would continue to be examined before the scheme comes into place. Changes to the scheme, announced by the chancellor in his 2003 Budget, were initially supposed to come into force in April 2005; however, the industry voiced concern that setting the date so early would not leave enough time for companies to prepare for the scheme.

As a contractor, what are your thoughts on the changes to the CIS rules? Are you ready for April 2007 - what impact will it have on your business? Let us have your comments.

Time is ticking but it’s not too late

We’ve been pushing for businesses that will be affected by the changes to the Construction Industry Scheme (CIS) to update their software since last year and we've continued to push ever since then. There’s also been much publicity in the press recently - Pay Magazine covered the topic in its January and February editions and Accountingweb has been covering the topic for a while with Accountancy Age recently reporting on the lack of readiness for the changes according to a survey undertaken by KMPG.

There are of course, many questions still being asked so I thought it might be worthwhile to recap on what the CIS changes mean for the industry:

• Vouchers will no longer be required – this refers to the monthly CIS23, CIS24 and CIS25

• The subcontractor cards and certificates are also no longer required (CIS4, CIS5, and CIS6)

• You’ll need to keep detailed records of all subcontractors for payments and deductions. There will be no annual returns but instead there will be a monthly return to HM Revenue & Customs (you’ll have the choice of electronic or paper format) including the new monthly Subcontractor Payment & Deduction Statement

• Any subcontractor verification will be done by phone or online

• TTQT - or Tax Treatment Qualification Test as it is known - will determine if a subcontractor may be paid gross or have tax deducted at either the standard or higher tax rate before they’re paid.

For more information on Access CIS or a copy of the BASDA guide visit: www.access-accounts.com/cis

Kevin Misselbrook, customer services director

Business vision! What’s that all about?

One of the greatest truths of life is that pro-active people are far more effective than re-active ones. Pro-active people make things happen because they take action; re-active people see things happen around them because others have taken action. The same is true for any business or organisation.

It’s common for some companies to feel like they are forced to spend money on business and IT solutions. The driving force behind the spending is generally a negative push away from an undesired state or pain. In business this pain can take on many forms. For example:

- Realisation that a critical leadership tool like reports is totally unreliable and inaccurate

- The high cost of maintaining an outdated and inadequate system

- Constant interruptions because of speed issues and system failures

Ignoring these vital signs of a failing system will end in disaster. Staff will leave, sales will drop, costs will sky rocket and the end will be in sight.

Changing your system because of these failings is necessary and unavoidable, if the business is to survive in today’s market. However, the issue here is that the implementation of the new system is re-active rather than pro-active based on design and planning.

Having a clear company vision with goals and aspirations set out from day one is vital and will align every action and spend. The business has to act every day with the end result in mind. Investment in human resources, IT, new capital equipment and research will all make sense if it can be mentally validated against the vision of the business.

Having a vision becomes ultimately beneficial when the leaders of the business plan investment accurately to achieve their goals. Information and the technology that stores and presents this information is a crucial aspect of any business. When the future of the business is planned, investment in the accuracy and reliability of the information which the business needs should be considered carefully.

Pro-active organisations will consider their business system needs for the future, validated against a clear vision. I propose a new phrase for the proactive business: “If it isn’t broke, that’s great! However, will this system provide us with what we need to achieve our goals?”

Mark Fermor, Sales Manager

Sustainable businesses 'should receive tax cuts'

Firms which use sustainable practices in business should be rewarded by the chancellor with cuts in corporation tax, an accountancy company has said.

The Guildford branch of PFK is calling for the cuts as an incentive for other companies to become more eco-friendly, with a proposal of reducing tax to 25 per cent for businesses which are carbon neutral, the Surrey Advertiser reports.

"Business is tired of being harangued over its environmental performance by a government that has increased its tax burden and the level of red tape but given no financial incentive to improve," said Peter Jun Tai, PKF's tax partner.

He added that the government should provide more incentives for companies to make green investments and give them a target to aim for.

Gordon Brown sent a message to homeowners through the announcement of a stamp duty exemption for carbon-neutral houses; it is now time for him to do the same for businesses, Mr Jun Tai concluded.

Earlier this month, head of PC building company Dell told the Consumer Electronics Show in Las Vegas that IT should take the lead in environmental issues.

Do you agree that a cut in corporation tax goes far enough? Are there any other incentives that you'd also like to see implemented? Post your comments.

IT for Profit

There’s no doubt in my mind that the most profitable companies are always those that make the very best use of modern IT.

However, this comment always seems to create debate. Which came first, the chicken or the egg? Cynics are always keen to point out that it is only the most profitable companies that can actually afford to make the best use of modern IT.

"UK software groups face takeover" article - Accountancy Age

How intriguing to read the article in Accountancy Age, “UK Software groups face takeover” (4th Jan, Page 3). It was a real reminder of the year 2000 when the infamous IT ‘slowdown’ started to tighten its grip and when the pace of consolidation in the UK accounting software market really picked up.

Environmental Accounting Issues Outlined

The accountancy profession has to recognise the time has come for a shift in attitudes towards the environment, an expert has claimed.

Accusations of complicity in the failure of markets to combat the problems posed by climate change and other factors have meant accountants need to confront the problems of the environment, according to Roger Adams from the Association of Chartered Certified Accountants (Acca).

Writing in Accountancy Age, the executive director noted that the profession must make its contribution to tackling climate change through its work on the Prince of Wales's Accounting for Sustainability (Acc4S) project.

"The Acc4S initiative has a projected life of about one year and lifted off on a groundswell of goodwill," said Mr Adams.

He added: "The profession has a lot to contribute but must be ready to acknowledge that, belatedly in Stern's view, the time for a major paradigm shift may have arrived."

Represented on the steering group alongside Acca are the Chartered Institute of Public Finance and Accountancy and the Institute of Chartered Accountants in England and Wales.

In other recent news at Acca, the body recently signed a mutual recognition agreement with its counterpart in Canada.

Is this initiative too little too late? As part of the accountancy profession, are you already being proactive in 'doing your bit' for the environment? Could the industry as a whole be doing more? Let us have your comments.

Outlook 2007

In this blog I am going to cover two of the new features available in Outlook 2007; RSS Feeds and the To Do bar. Both of these have real merit for personal and business users of Outlook, and allows users to access more information quickly.

RSS Feeds

RSS Feeds are updated ‘real time’ with the information that users want to know about.

Fig 1. The RSS Feeds information page – this gives users extensive information on how RSS feeds work and how to set them up, along with links to RSS Feeds to subscribe to.

RSS feeds can be set up to appear directly within Outlook. These Feeds can be used for many different reasons, such as by people needing to see updated News and Sports stories, to check their stocks and shares etc.

There are many RSS feeds are available, and in Outlook the RSS feeds can be matched to those set in IE (which are then in turn available as gadgets in Vista).

It is easy to set up an RSS feed and free (at least at the moment!).

The Feeds appear in the Navigation pane under the RSS Feeds heading (as can be seen in Fig 1).

The detail of the feed can be previewed, and users can link to the internet to read the entire article (as can be seen in Fig 2).

Fig 2. This shows the MSNBC.com feed, which has many articles. Selecting an article displays the detail on the right, with a link to view the full article in IE.

Feeds can also be marked for follow up and categorised.

For more information on RSS see http://www.xml.com/pub/a/2002/12/18/dive-into-xml.html and http://news.bbc.co.uk/2/hi/help/3223484.stm and http://msdn.microsoft.com/windowsvista/reference/rss/

To Do Bar

This bar appears down the right hand side of the Outlook window. It displays calendar and task items, and can be expanded to view the detail (see Fig. 3).

Fig 3. On the left the To-Do bar minimised, showing a summary of information, and on the right it is shown expanded.

If the To-Do bar is expanded, users can see more information about the calendar and task items.

Whilst expanded clicking on a date in the calendar view, opens the Calendar for that day to allow edits/inserts etc.

Users can also insert new tasks from the To-Do bar; these are inserted with today’s date.

Tasks can also be arranged by several different options such as Due Date, Categories, Start Date and Importance.

They can also be categorised and flagged for follow up.

Kirsty Lowe