Grumpy Accountant

Who, or rather what, are these people?

“The prime minister’s adviser on enterprise, Lord Young, has told the cabinet that the economic downturn is an excellent time for new businesses to boost profits and grow because labour is cheap, the Observer can reveal.”

It doesn’t need me to point out that our democracy is under constant threat from unelected individuals but this first paragraph of an article in today’s Observer really stuck in my throat.

Sure we need healthy businesses as part of any economic revival but surely we also need a population that can afford to buy from those businesses, the other side of the equation?  How on God’s earth does actively promoting the benefits of low wages – and ignoring the needs of the electorate at large – achieve both these needs?

You might think it but I couldn’t possibly comment on whether this is just another rung in the ladder towards the impoverishment of 99% of our population so that business can make more profit.  

Pure, unadulterated greed on top of economic illiteracy would be my take.



12/05/2013 Posted by | Uncategorized | Leave a comment

HMRC tackling the tax gap? Don’t make me laugh…or cry

I share Richard Murphy’s view of professional responsibilities as being that of keeping my clients as free of grief from HMRC and Companies House as I possibly can. In turn, that often entails telling clients what they can’t legally do.

I have recently had to tell a client who was forced into a service company by their employer that IR35, with all its expensive consequences, most definitely applied. Ultimately, because another 20+ of this person’s colleagues are handled by an unqualified accountant who chooses to ignore IR35, my now former client decided to join that group.

I don’t like IR35 because it lets employers do pretty much what they want with their employees (oh, these burdensome employment rights!), leaving the employees to subsidise the previous employer’s NIC. But IR35 remains the law of the land so my clients need to know, and are told, the implications of ignoring this law.

My problem is that HMRC shows no visible sign of giving a toss whether or not this law is complied with, thereby casting me, and those who share my view of this situation, in the role of a Jeremiah prepared to tell clients that they need to pay more tax for fear of the potential consequences.

Of itself, I’m not overly concerned about the situation I’ve described in terms of its impact on me. What does concern me though is that, if HMRC does not or cannot enforce tax law generally, there is very little incentive, beyond professional ethics, for the accounting profession to enforce it for them if it is going to risk its client base by so doing.

Indeed, this is perhaps the reason why the Big 4 became so heavily, and in my view unprofessionally, involved in aggressive tax avoidance, ie they decided long ago that tax law was ripe for attack precisely because it has been, and can only continue to be given the continual decline in HMRC’s personnel, so inadequately defended by HMRC.

08/05/2013 Posted by | Uncategorized | Leave a comment