Archive for October 2011

Moving Street Art- Raleigh


pacman on the bumper.  Painted up Volvo . . . 

Raleigh Sketch Artist




These weren't paint, but you I can smell markers too.  The second one is fuzzy (I was in a sketchy place), but was a piece worth posting.

Bouncing Ball Stencils- Raleigh 2011





This dude was prolific.  There was a larger piece that I saw while riding a bus that I didn't get a chance to take a photo of.

Elements of an Effective Business Planning and Budgeting Process

In my last posting I discussed the importance of having a Planning and Budgeting Process for your business.   Every business has this process some more formalized than others.  The following is a list of the universally accepted elements to an effective business planning and budgeting process.


Develop or revisit the mission statement for the organization and each department.  Define or revise the reasons for existence.

Develop or revisit the company vision statement.  Articulate your vision for the company and what you want to be.  An analysis of the company's strengths, weakness, opportunities and threats (SWOT) can be an effective tool for developing the company vision.

Review and update the company business model. Changes in the market place or for example new opportunities may require one to updates how you create or deliver the value that your customers want.

Update or develop a long-range or strategic plan.  Capitalize on your brand, experience, etc. to develop your strategic advantage to increase sales, margins, market share, etc.

Update or develop the overall product/service plan.  Look at your product and or service offerings and update them according to the strategic plan.

Develop the current year's operating plan.  Write-out the general budget targets that will be met during the next twelve months.

Assign specific goals and objectives with individual action plans.  Define who's responsible for each detailed and measurable action plan.

Develop the detailed operating and capital budgets.  Amount of expense and capital expenditures are detailed by cost and profit centers.

A timely and accurate reporting system should be in place to monitor the results.  An evaluation and assessment of the process should periodically be made.

The payoffs from a well-structured planning process can be significant.  Planning can insure that one has a profitable and successful business with a viable future.  It can also help with providing a clearer direction and purpose, communication, dealing with rapid change and unknowns, accountability and control.  Good luck.  I would be pleased to get input from businesses on how they implement their planning process.  Feel free to comment or contact me. Thanks.

Andrew Jordan, CPA

HMRC launch the Tax Catch Up Plan

HMRC have launched a campaign to target private tutors and coaches who have undeclared tax liabilities.

The Tax Catch Up Plan (TCUP) is aimed at individuals who provide private lessons, or who profit from tuition and coaching, as a main or secondary income where the correct tax has not been paid. The types of tuition, instruction or coaching covered by the TCUP include tuition of traditional academic subjects, fitness and dance instruction, musical instrument tuition, art, services provided by life coaches and others.

Under the TCUP, tutors and coaches have until 31 March 2012 to advise HMRC about their outstanding tax for the years up to 5 April 2010, and pay what they owe. HMRC have confirmed that those who come forward by the deadline are likely to receive the best possible terms for paying the tax owed. If they have to pay a penalty, it is unlikely to be more than 20%.

Those who wait for HMRC to come to them will find that they have to pay much higher penalties (as much as 100% and may even face criminal prosecution). After 31 March 2012, using information pulled together from different sources, HMRC will investigate those who have chosen not to come forward.

Marian Wilson, Head of HMRC Campaigns, said:

‘Our campaigns are designed to ensure tax is paid so that the money is available to spend on public services used by everyone. We are making it as easy as possible for people offering tuition and coaching to use this unique opportunity to put their tax affairs in order by making a full disclosure, and benefit from the best possible terms.

We are using various intelligence sources to identify and then target those who do not take advantage of this opportunity to declare their full income. The message is clear: contact us before we contact you.’

The Tax Catch Up Plan has two stages:

  • From 10 October 2011 to 6 January 2012, tutors/coaches/instructors must register with HMRC to ‘notify’ that they plan to make a voluntary tax disclosure.

  • By 31 March 2012 those who have registered to notify must tell HMRC what they owe and pay the tax, interest and penalties due.

People can register online by completing a notification form which can be accessed using the link below or by calling HMRC on 0845 601 8817.

Please do get in touch if you have any concerns in this area.

Just messing around









I really enjoy just being able to get down and paint.  No pressure, no deadline, just mess around and see what occurs.  After spending the last couple of months painting really large works I have found switching back to these tiny little paintings really refreshing.  What waits around the corner?? 

halloween beer


again, work is taking me out of town so I am posting [far too] early! 
but when I get back tonight, I just may pick up a six pack of this Hobgoblin and amuse or frighten myself visiting your signs

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Limbu Language Rights: Interview with Dr. Tumbahang


During my last few weeks in Kathmandu, I sought out people that I thought had interesting opinions on language rights and language education in Nepal, and sat down with them for informal interviews. Here is the first of these interviews, with Dr. Govinda Bahadur Tumbahang, Associate Professor in Linguistics at the Centre for Nepal and Asian Studies at Tribhuvan University. In this blog post I mentioned Process of Democratization and Linguistic (Human) Rights in Nepal, which was written by Dr. Tumbahang.

Here is my interview:

I enjoyed your article about Linguistic Human Rights.

I left some interesting things out of that. It began with the annexation of the Limbu Kingdom by Prithvi Narayan Shah. He and his heirs gradually put barriers on Limbu language and culture. Limbus used to sacrifice cows, but they were prohibited to do this by the regime. They were forced to lie to God, to say "We sacrifice this cow unto You" when in fact it was a buffalo or a he-goat that they were sacrificing. This is the Hinduization of culture. At the beginning, Limbu was the language of business dealings and notes, but this was restricted under Prime Minister Chandra Shumsher especially. Then there was the Panchayat policy of one nation, one language, one culture.

Why did the Ranas oppress language?

A ruler wants his own language to prosper. If you put yourself into their shoes, you see that using many languages in official capacity can be very expensive. Also, with many languages come many secret things that the Ranas have difficulty finding out about. The Ranas must bring many nationalities into the mainstream and unify them. 

Which was most targeted by the regime - ethnic languages, religions, or cultures?

First they attacked culture, then language later. The Limbus were forced to celebrate Dashain, and were compelled to sacrifice goats. They had to put their fingertips in goat blood and smear it on the walls of their house. Then spies of the government, disguised as yogis [ascetic holy men], would go around the villages to make sure that this was done. The Athpahariya Rai of Dhankuta refused to celebrate Dashain, even after two of the protesters were hanged. Later on, they began to require that Nepali be used in office places and schools. 

What has been the situation since the People's Revolution of 1990?

Many people have started seeking their identity through speaking out about their language and culture. The situation is congenial. 

The constitution provides the right for people to learn in their mother tongue. In Kathmandu people tried to use Newari in an official capacity, as people in a few other districts did with Maithili, but then this was quashed by the Supreme Court of Nepal. This raised suspicions about the government's dedication to linguistic rights. 

Has the situation changed since the Second People's Revolution?

So far only tall talks untranslated into action. The government has made 15 mother tongue education textbooks, but at the primary level mother tongue language is only taught as a separate subject and not a medium of instruction. There are also not enough mother language teachers.

What is the role of different entities like activists, bureaucrats, and schools in language preservation?

Ethnic organizations are trying to mobilize people to contribute to the cause, to use politics to preserve language and culture. Also some other individuals are doing work.

For example, some organizations like Kumar Lingden's Sanghiya Loktantrik and the Kirat Yaktung Chumlung are fighting for an autonomous Limbu land with the right to self determination. If this happens, Limbu will be the official language and our culture will be preserved. Limbuwan is an issue of identity. I support the Limbuwan state.

What is your research background?

I study the Kiranti languages. I did my PHD on Chhatthare Limbu, and I have written on Athpahariya Rai and Standard Limbu, which is Panthare Limbu.

How did Panthare become the standard? 

This is a very good question. The Limbu Panthare were rulers and scholars, and they wrote literature in Panthare. When radio stations started to broadcast in other languages after 1990, Panthares became radio newscasters. So Panthare has come to occupy a central role whether we like it or not. 

This shows how language and dialect is always a matter of power. The Gorkha rulers had to appease the Limbus in Nepal because there were many Limbus across the Nepalese border in Sikkim that might band against them. So they gave some Rai and Limbu the title of hereditary ruler. They had their own law code for their villages, and they could officiate in all but 5 of the worst crimes.

There are four Limbu dialects, which are all very similar except for Chhatthare, which is my dialect. Chhatthare is quite different, but it is not accepted as a different language because there is strong pressure to keep all Limbus unified. I even did PHD research to show that Chhatthare should be considered a separate language, and when I gave a talk at Arjun's Yaktung Chumlung I was nearly chased out the door. That office is dominated by Panthare speakers, and there is pressure to keep Panthare as a standard.

This actually creates a big problem for mother tongue education, because Limbu classes are all taught in Panthare dialect, which is very difficult for Chhatthare children to understand. This is a major difficulty of mother language education. Although by adulthood most Limbus understand Panthare because it is used as a lingua franca in Limbu communities, it is very difficult for children, who say in the classroom, "this is not our language."

The Rai communities are a very different situation. When they start to talk about a Rai state, they break down on the issues of language and culture. They are in fact many different languages and cultures and tribes - like Bantawa - that are lumped together into the single caste name Rai.

Agreement with Switzerland to secure billions in unpaid tax

The government has agreed measures with Switzerland to tackle offshore tax evasion. Under the terms of an agreement, existing funds held by UK taxpayers in Switzerland will be subject to a significant one-off deduction of between 19% and 34% to settle past tax liabilities.

From 2013, a new withholding tax of 48% on investment income and 27% on gains will ensure the effective future taxation of UK residents with funds in Swiss bank accounts. This will be accompanied by new information-sharing rules which will make it easier for HMRC to find out about Swiss accounts held by UK taxpayers. The new charges will not apply if the taxpayer authorises a full disclosure of their affairs to HMRC.

Internet link: Press release


local culture

I will be away for a couple of days so will visit you all later in the week,
but post your signs and discover each other's local culture
Mister Linky's Magical Widgets is sleeping for another week

May your hands always be busy......








Celebrating Bargana 

The goanna totem of the Budawang People, traditional custodians of the beautiful lands on which we live, have provided inspiration for the 'Celebrating Bargana' project.  Initiated by local artist Meagan Jacobs, the project was a collaboration between three separate groups at Ulladulla High School - the Student Representative Council, the Gunyah Students and the Special Education Students - building a totem style sculpture which will be exhibited at RIPE Sculpture at Cupitt's Winery as well as painting banners and canvas murals,  block printing bunting and other Bargana focused activites during the festival.  (Escape Artfest Programe 2011)

Advisory Fuel rates for Company Cars

New company car advisory fuel rates have been published to take effect from 1 September 2011. HMRC’s website states:

‘These rates apply to all journeys on or after 1 September 2011 until further notice. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either.’

The advisory fuel rates for journeys undertaken on or after 1 September 2011 are:

Engine size
Petrol
LPG
1400cc or less
15p (15p)
11p (11p)
1401cc – 2000cc
18p (18p)
12p (13p)
Over 2000cc
26p (26p)
18p (18p)


Engine size
Diesel
1600 cc or less
12p (12p)
1601cc – 2000cc
15p (15p)
Over 2000cc
18p (18p)


Please note that only one rate has changed and that has been reduced and care must be taken to apply the correct rate after the one month period of grace.   

Other points to be aware of about the advisory fuel rates:

  • Employers do not need a dispensation to use these rates.

  • Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.

  • The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.

Preparing a Loan Application

Obtaining a business loan has become more difficult as the economy, regulations, and lendig policies become more stringent.  I took the following notes during a recent staff training presentation and hope they will help you to understadn what lenders need to see in a business loan appllication. 


I. Understanding the Lender

It is much easier to find a business lender if you understand what a lender needs in order to process your loan application. I recommend starting with the lender you are already doing business with but check for the most recent bank policies and procedures. Government regulation and bank policies are frequently updated. To prepare you application it is helpful if you know the following:

Bank Policies –
Loan portfolio mix, number of and type of loans they like to make.
Loan Programs they use? (SBA or USDA programs?)
Loan requirements – Minimum Credit score, Loan to Value, Collateral, Equity, Lending Ratios -- Liquidity, Debt Coverage, others
Risk tolerance – some banks are more liberal, others more conservative.
Lender’s experience with customers in your industry?
Recent changes in the bank’s corporate structure that effect lending policies.
Banking regulations that affect the bank’s lending policies.
Average time to close a loan.

• Loan Underwriting – The lender will only know what you provide, incomplete applications get denied. Your loan officer will need to justify a loan approval based on due diligence review of you and your business. Information they are looking for includes:

Is the loan purpose consistent with the type of loan?

Credit Standing (score and credit report)

Cash Flow, is the business be profitable?
.... Are losses explained?
.... How were losses funded?

Collateral
.... Quality and value
.... Collateral value covers loan?

Equity/Net Worth
.... Has equity increased or decrease over last three years?
.... Amount of contributed equity and earned equity (retained earnings)

Financial ratios
.... Exceed lenders minimum target?
.... Ratio trends over last three years

Business condition – Strengths, Weaknesses, Issues

Other
.... Other business owned
.... Other sources of income
.... Personal Financial history

II. Preparing a loan package
Presenting the lender with a complete package is critical. Your package must demonstrate your capacity to manage the business, your capacity to produce stated outcomes, and the market place capacity to buy your service/product. Incomplete packages slow review and errors or misstated information will result in a denied application. Lenders will be examining:

1. Financial Statements – History
• Profit Loss Statements- YTD  Revenue, margins, profit
 • Cash Flow: EBITDA and Working Capital needs, Owner draws, distributions, When you spent cash, when you received cash

• Last three years of Tax records, Explain differences between tax records and Profit & Loss Statements. Explain any expenses made for tax purposes

• Balance Sheets – current liquidity, asset quality, leverage, capital structure, retained earnings, Aging of A/R and A/P

• Budget Projections with assumptions

• Break Even analysis

• Ratio analysis - Liquidity, leverage, performance over time has been consistent and is sustainable Sales to Assets, ROI, ROA, A/R Turnover, Average Collection period A/P turnover, average payment period Inventory Turnover, Inventory on hand

2. Management
Character of top management, resume of management experience, experience as management in this business/industry. Team depth, who does the tasks of CEO, CFO, A/R and A/P. Succession (who runs the business if you can’t be there?) Performance as compared to industry standards and trends

3. Business Plans
• Supports and explains how you will accomplish what you claim in your budget. How you meet the five C’s of credit. (Character, Capacity, Capital, Conditions, Collateral)
• Explains market opportunity
• Provides budget assumptions.
• Describe the business, how you make money
• Describe the service/product, provide pictures, marketing materials, samples
• Associated documents, Articles of Incorporation (Partnership), Leases, Contracts, firm estimates on major purchases, Collateral

III. Presentation Tips
• Be enthusiastic
• Be professional
• Be prepared
• Make an appointment, be early and ready
• Be organized and bring copies of all the document to leave with the lender

IV. Deal Breakers
Some issues in your history can be deal killers, there must be extenuating circumstances before a lender can consider proceeding with an application. Other problems could result in a loan application being considered as a higher risk. If a loan were to be approved, these issues could result in higher interest rates and more conditions and restrictions.

Preparing a quality loan application package will help identify potential deal breakers and provide you the opportunity to explain what happened and what you have done to correct the situation. Remember, it is safer for the lender to say no if there is any doubt or perception that your loan is a higher risk than the lender wants to accept.

New National Minimum Wage

The adult rate of the National Minimum Wage (NMW) increases to £6.08 (£5.93) an hour from 1 October 2011. This is payable to those age 21 and over.

The rate for those aged 18 to 20 increases to £4.98 (£4.92) and for 16 and 17 year olds to £3.68 (£3.64) an hour.

The apprentice rate, for apprentices under 19 or 19 or over and in the first year of their apprenticeship, increases to £2.60 (£2.50) and hour.

Updated guidance available on the Business Link website includes specific situations such as those engaged on work experience or internships and their entitlement to the NMW. The guidance also includes a new worker checklist for employers and case study examples.

The press release confirms:

Entitlement to the NMW does not depend on a job title but on whether the arrangement they have with an organisation makes them a worker for NMW purposes. Where an individual is a worker - and no exemption applies – then they must be paid at least the NMW.’

Employment Relations Minister Edward Davey said:

Internships and work experience of all forms offer an excellent opportunity in helping to bridge the gap between education and the workplace. And for businesses it allows them access to a wide talent pool of some of our best and brightest who didn’t take the traditional route into a job.

Fairness though is absolutely paramount with all placements. When a worker is entitled to the minimum wage, they should be paid it and we will continue to enforce the law. Today’s publication will help clarify this for employers and will also make sure that all interns and those on work experience placements have a better understanding of their entitlement to the minimum wage.’

HMRC are able to charge penalties to those employers found to be in breach of the NMW rules.

If you have any queries on the NMW please do get in touch.


035 Crew in TA


TLV_1.10.11_049, originally uploaded by millikatz.

15% of self assessment tax returns are late

http://www.accountingweb.co.uk/article/sa-penalties-hit-15m-more-come/519767

Changes to audit exemption thresholds

This is a message on the proposed changes from the President of the ICAEW (at http://www.icaew.com/)

Today the Department for Business, Innovation and Skills has announced a formal consultation on increasing audit exemptions, removing some of the gold plating that previous governments have applied to EU directives in this area. In a nutshell, the proposals are:-
  • To extend audit exemptions for SMEs by aligning the mandatory audit thresholds with EU small company thresholds. Currently in the UK, SMEs have to meet both turnover and balance sheet thresholds to be exempt from audit. In future, to be classified as small for accounting purposes, businesses will have to meet two out of three criteria (turnover, balance sheet and headcount).
  • To exempt subsidiary companies from the statutory audit where they fulfil a rigorous set of conditions including a commitment from the parent company to guarantee its debts.
In considering these proposals, what is important to me is that we continue to reinforce the message that effective financial management is crucial for any business. Strong financial controls and appropriate management oversight are important components for any company seeking to grow and build their business, no matter what their size. That’s what chartered accountants tell their clients and that’s the message I continue to press home to ministers.
Audit is critical in this. It plays a vital role in the oversight and governance of companies. This is as true for many smaller businesses as it is for larger multi-nationals. It provides investors, shareholders and management with trusted independent verification of an organisation’s financial statements and gives some insight into how well it is being run.
In my view, many SMEs and subsidiaries will continue to choose to have an audit, even though they may qualify for exemption, because it provides confidence and peace of mind. It can be important to have audited accounts when pitching for contracts or seeking finance.  For those who choose not to have an audit, we should absolutely continue to encourage them to seek third party assurance on their financial statements. This is a service an ICAEW Chartered Accountant can provide.
We need to look carefully at the detail of the proposals and ICAEW’s Audit and Assurance Faculty will be responding to the consultation in due course. To help us shape our response, we will be consulting members and would like to know what you think. If you’re in business and as a result of these proposals are now eligible for audit exemption, will you take it? If you’re in practice and have clients who may now be exempt from audit, how do you think this will impact on you and your business?
I look forward to hearing your thoughts.

Nature He'Art'work - Birch Bark Heart


Title: Birch Bark Heart
Size: ACEO/ATC - 2-1/2" x 3-1/2"

Notes: Made with birch tree bark and a found feather

More Notes: I'm sorry I haven't posted here in a while. Heart health issues stole a part of me that I didn't even know was missing!!! But I'm back now - healthy and SO ready to return to my art!!! Thank you all for sticking with me during the crisis.

To see hearts from around the world, visit "Random Hearts" - and share YOUR heart on Guest Heart Thursday!

And be sure to visit "Beth's Artworx" for FATuesday Artists Spotlight!
Beth's weekly meme introduces us to amazing artists from around the world ... and gives us a place to share our own art. Be sure to link up - to encourage and be encouraged ... to inspire and be inspired!!!

ice cream

sadly, many of these ice cream shops will now be closed for the season.
but signs, signs, will never close.

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Mandatory new pension scheme rules for employees

Great guidance from Peninsula

Auto enrolment 12 month reminder

As part of the government’s plans for pension reform, employers must automatically enrol their workers into a pension scheme. The largest employers, in terms of the number of workers they have, and in some cases, by PAYE reference, will have to comply first, with a ‘staging date’ of 1st October 2012. The ‘staging date’ is the date from which an employer must start to auto enrol their workers into a scheme. To find out when your staging date is, click  here.

From the relevant staging date, all workers must be auto enrolled into a qualifying pension scheme by their employer. Employers can choose which scheme they use but it must meet minimum standards in respect of the benefits it provides or the amount of contributions paid to it.

Employers must therefore:

• make a minimum 3% contribution is made towards a defined contribution scheme (based on qualifying pensionable earnings) such as NEST (see below); or
• offer membership of a defined benefit scheme or certain hybrid scheme which either has a contracting out statement or meets the test scheme standard

One qualifying scheme that has been set up specifically for an employer to use so that he meets his new obligations is called NEST (National Employment Savings Trust) and is available to any employer who wants to use it. However, use of this is not compulsory, as long as the pension scheme used counts as a ‘qualifying’ one.

Employers who currently use a pension scheme should therefore check that it counts as a qualifying scheme. If it does, then they can continue to use it under the pension reform. If it isn’t, then they should check how the existing scheme can be amended, or set up a new scheme.

Not all workers must be auto enrolled – only ‘eligible’ workers must be. ‘Eligible’ workers are those who:

• are 22 years old and over
• are under state pension age
• earn more than the minimum earnings threshold (likely to be £7475 per year); and
• work or ordinarily work in the UK

However, other individuals will have the right to be enrolled into their employer’s pension scheme if they ask to be. These are:

• jobholders aged between 16 and 22, or between State Pension Age and 75 with earnings of more than £7,475 a year.  If these individuals ask to be enrolled their employer will have to make a minimum contribution.
• workers aged at least 16 but who are under 75 and who do not have earnings of more than £7,475.  If these individuals ask to be enrolled their employer will not have to make a minimum contribution, but it can if it chooses.

Once a worker has been automatically enrolled, they can choose to opt out in which case they will no longer be a member of the scheme and any payments made into the pension pot will be refunded. Opting out can only be done within a month of being auto enrolled. Opted out workers may re-join at a later date.

After the opt-out period, workers can choose to leave the pension scheme at any time. Payments already made in this circumstance will not be refunded and will remain in their pension pot.

Workers who have opted out or left the scheme must be auto enrolled again ever three years as long as they continue to be an ‘eligible’ worker.

Who should be automatically enrolled?
Fiona
Fiona is aged 27 and earns £37,000 per year.

Fiona’s employer is required to automatically enrol her because of her age and her earnings level. Her employer must make at least the minimum contribution.

Raj
Raj is 20 and earns £17,000 per year.

His employer is not required to auto enrol him because he is not old enough. However, Raj can ask his employer to put him into the workplace pension scheme and will have to make a contribution to his pension.

Peter
Peter is 42 and earns £25 a week.

Peter’s employer is not required to automatically enrol him because he doesn’t earn enough.
However, Peter can ask to be enrolled but his employer does not have to make contributions, but can do so if they wish

Employees and the internet

This is good advice for what can be a difficult area.

http://www.peninsula-uk.com/bottomlineexpress/457/Directors-Cut:.html

New employment tribunal rules

http://www.peninsula-uk.com/blog/blogentries/43/Are-Proposed-New-Employment-Tribunal-Reforms-Going-To-Be-Good-For-Business?.html

These are some thought provoking comments on the new employment tribunal rules

IR35 CASES

Interesting update on IR35

http://www.ion.icaew.com/TaxFaculty/23116

Watch out if you are dissolving a company!

From the ICAEW:

The Treasury Solicitor removes its concession so you must sort out the Share Capital before applying for a company to be struck off under C16

Technically speaking if a company is struck off under Extra Statutory Concession (ESC) C16 any share capital distributed as part of the ‘pay-out’ is treated as an unauthorised distribution under company law and this element of the payout can be recovered from the shareholders by the Crown as bona vacantia.

The Treasury Solicitor has in recent times exercised a concession under which they will not seek to recover share capital paid out during a company strike off if the amount of share capital involved is less than £4,000.

This concession is being withdrawn by the Treasury Solicitor with effect from 14 October 2011.

In future if you use ESC C16 to have a company struck off then if any of the money paid out represents share capital that amount can be recovered by the Treasury under the bona vacantia procedure.

The new arrangement is set out in a Notice published on the Treasury Solicitor website.

Unfortunately the explanation given in the Notice is not as clear as it might be and is likely to cause confusion.

Paragraph 2 states

In practical terms, can I now distribute share capital of any amount prior to dissolution without approval from TSol?

Yes. The TSC has been removed so there is no need to contact the Bona Vacantia Division regarding distributions of any amount. However, as noted above, depending on the circumstances, you will still need to comply with HMRC‘s ESC C16, or any successor legislation, and any other applicable rule in relation to share capital distribution.

But the key provisions you have always had to comply with in relation to share capital are the company law provisions and if you fail to comply with those provisions as to when share capital can, or cannot, be reduced or repaid then any money paid out is an unauthorised distribution and can be covered by the Crown. That covers any share capital paid out under the ESC C16 route as this has no standing as far as company law is concerned.

Before the Treasury Solicitor revoked their concession the company law position could be ignored as long as the amount of share capital that was distributed was less than £4,000.

The Treasury Solicitor has changed its mind, and revoked their Concession, on the grounds that the new provisions in Companies Act 2006 make it easier to reduce or pay back share capital and so the £4,000 de minimis concession is no longer necessary.

In future if you are going to take advantage of ESC C16 you can pay out any amount of distributable reserves, subject to capital gains tax, but you should reduce the share capital of the company to a nominal £1 if you want to avoid any problem with bona vacantia.

In the background to all this is the consultation on the potential statutory enactment of ESC C16. The proposal in the HMRC consultation document is that if the concession is enacted the amount that you will be able to distribute under the new statutory provision will be limited to an absolute maximum of £4,000 even if the distributable reserves are much greater than that.

Over half of all VAT fines wrong

According to figures obtained by Hacker Young, during the 18 months to 31 October 2010 the VAT Internal Review Team considered almost 29,000 appeals against penalties imposed by HMRC for incorrect returns and late payments. In just over 50% of these appeals, the penalties were cancelled because they had been wrongly imposed. In most cases the penalties were cancelled because the mistakes made by businesses were not as a result of carelessness but rather a genuine mistake.

If that weren't bad enough, the penalties were overturned by HMRC's review team who are hardly likely to be independent!

Update on the economy

Courtesy of RBS Group Economic Research

The Governor of the Bank of England is hoping that increasing monetary stimulus will help steer the economy into calmer waters. By injecting more funds into the UK economy, and quickly, Mr King aims to counteract some of the drags on growth coming from weaker global activity and worries about banking and sovereign debt conditions in the Eurozone. Meanwhile, his European Central Bank (ECB) counterpart, Jean Claude Trichet, also took action to increase liquidity in the Eurozone banking system in an attempt to promote some stability. But overall, there is little prospect of a strong recovery. Choppy times lie ahead.

Fukt: Sydney laneway street art

 (Images found at Victory Lane, Camperdown)

I was browsing the web on my iPhone while walking alone through Sydney's laneways last Friday. I would call myself a flaneur, but I was too busy stalking the one I love on Facebook.

If I could translate profile page loads into roses, dates and confidence she would love me too.

I was about to trip over a gutter so I looked up from my phone, because I was forced to, and onto the footpath/sidewalk/concrete.

I saw two stencils, the one above by Fukt. It depicts a bum resting at home -beside a supermarket trolley in the street.

The phrase 'Best We Forget' is a play on the ANZAC phrase 'Lest We Forget', i.e. it's how we remember the Australian and NZ men and women who fought in the wars.

Fukt is Australia's equivalent of Banksy in terms of style. I would go so far as to say he is Banksy's equivalent of Banksy.


And I saw this too. I'm still unsure who did this or what it means. I see a boy, a boy looking up at me (you're such a bad father) with a firecracker/Red Bull/light saber.

I'm not immediately alarmed, possibly because homeless people are a more visible pollution, but I know this kid is in trouble.

Wait - is this kid me?

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Fukt: Iwo Jima McDonald's Stencil



Audit exemption savings

The Department of Business, Innovation and Skills (BIS) have today published proposals which could help 100 thousand UK businesses save in excess of £600 million in accountancy and administration costs every year.
The consultation on Audit Exemptions and Change of Accounting Framework sets out plans to allow more small companies and subsidiaries to decide whether or not to have an audit.
Current EU rules mean that to classify as ‘small’ for accounting purposes, a company must comply with two out of three criteria relating to their turnover, balance sheet total and number of employees. However, to obtain an audit exemption in the UK, small companies must fulfil both the balance sheet and turnover criteria. Under the new proposals, UK SMEs would be eligible for audit exemption by meeting any two of the three criteria, saving them an estimated £206m per year.
The Government is also proposing to introduce legislation in 2012 to exempt most subsidiary companies from mandatory audit, provided their parent is prepared to guarantee their debts. Savings are estimated at £406m per year.
Furthermore, following the consultation by the UK Accounting Standards Board on changes to UK Generally Accepted Accounting Principles (UK GAAP), the Government is also seeking views on whether to allow companies which currently prepare accounts under International Financial Reporting Standards (IFRS) more flexibility to change their accounting framework to UK GAAP.
The consultation is open for comments and responses until the 29 December 2011.
The consultation documents are available from BIS.

The Squirrels are Exhausted

Taken by my uncle in Dallas.

I arrived in the United States exactly 365 days after I left. I spent a great week with friends in Washington DC, and then flew back to Austin, Texas. This summer has been a brutally hot one in Texas, with strings of 110+ degree days and wildfires destroying large tracts of land and homes around Austin. These days the grass and trees are still dead and brown, but it has started to get a little bit cooler. Like the heat exhaustion-inflicted squirrels, for the past couple weeks I have been lying around listlessly for much of the day. Reverse culture shock took me by surprise - maybe I should call it familiarity shock; it is the uncomfortable feeling that time is out of place, that I have suddenly woken up and all of the last year has been a dream. But my friends have slowly been drawing me out of that feeling.

all visitors

Found in an old school being used as a polling station
It was a bit blurry ... and one cannot really take pictures at a polling station,
so I used Pencil Sketch to highlight the FONT.

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Red Tape day

From Accounting Web

1 October is often called "Red Tape Day" because of the new regulations that come into effect on that day. Here is a roundup of relevant changes for businesses and their advisers.
Company annual returns
Companies House will adopt the 2007 version of the UK SIC codes. The latest version will introduce five-digit codes to classify company business activities, rather than the existing four digits. All companies filing an annual return on or after 1 October will need to use the new codes, which will be asked of you when filing in your annual return via WebFiling. If you use the new codes prior to 1 October, Companies House will automatically convert the code, but this is not encouraged. Further details: Companies House filing errors: Check and check again
Aside from the Annual Return, other forms that will be using the SIC 2007 version after 1 October are: SE FM01, SE FM02, SE FM03, SE FM04, SE FM05, SE TR02, and SE TR03. The new regulations also contain changes to shareholder details required on the annual return. Unlisted companies must 'provide a full list of all shareholders on the first annual return following incorporation and on every third annual return thereafter. Any details of transfers of shares that have taken place during the year will be required for intervening annual returns. Listed companies must provide name and address details of shareholders who hold 5% or more of the company’s share capital. Those companies subject to the FSA's DTR5 Vote Holder and Issuer Notification Rules (whose share register is available online on the National Storage Mechanismdo not have to provide Companies House with the same details.
Agency worker rights
After some last minute posturing, agency workers will indeed see their benefit rights extended from 1 October. Once agency staff have completed 12 continuous weeks of service, they will gain similar rights to permanent staff including pay, overtime, shift allowances, maternity rights, holiday pay and individual performance-bonuses. However, agency workers will still not be able to enjoy benefits such as occupational sick pay, redundancy pay and health insurance.  It was the talks between the TUC and the government that led to the benefit extension. The Agency Workers Regulations apply to hirers and companies involved in the supply of temporary agency workers, either directly or indirectly in England, Wales and Scotland.
National Minimum Wage
Adding to the employment regulation changes will be a change in the National Minimum Wage, applicable to all in the UK. The following rates will be effective from October 1:
  • £6.08 an hour for workers aged 21 and over
  • £4.98 an hour for workers aged 18-20
  • £3.68 an hour for workers aged below 18 who are no longer of compulsory school age
For apprentices, £2.60 per hour must be paid to apprentices who are under the age of 19, or for those over 19 or over and in the first 12 months of their apprenticeship.
Abolition of default retirement age
With effect from 1 October, the default retirement age (DPA) of 65 was repealed by the Employment Equality (Age) Regulations that prohibit age discrimination in the workplace. Further guidance can be found on the BIS website and in the ACAS guide, Retirement Process and the removal of the Default Retirement Age.
Carrier Bag levy
A 5p charge is being introduced by the Welsh Assembly on single-use carrier bags for customers in Wales. The charge is compulsory and is also applicable to retailers outside Wales who deliver to customers in Wales when using single carrier bags. BusinessZone reported that business groups have reacted angrily to the new regulations. Non Rhys, Wales Policy Manager at FSB, told the BBC: “Not all retail businesses will have had the packs from the Welsh Government because there's not a list of all the retailers in Wales, so we have been trying to contact as many businesses as possible. But there will be some small businesses that do not know."
The new regulations will be published on the legislation.gov.uk website on October 1. 

Floating Villages of Tonle Sap Lake



The most interesting places I visited in Cambodia were the floating villages of Kompong Luong and Kompong Phluk, two of several such villages located on the Tonle Sap lake. Floating Villages of Tonle Sap Lake is a short youtube video I shot from boats and the guest house where I stayed. Kompong Luong is a village of several thousand people that live together on pontoons and boats. I found it fascinating that the whole town was organized with a main water road through the town. During the wet season much of the town moves to a different location on the lake. 


I hired a boat driver for a tour from the shore. I was told that many of the residents of Kompong Luong were Vietnamese immigrants, but the entire time I was there I never encountered anyway who could speak English, so I was able to find out very little about how the village developed.







From a distance I saw this church moving to a different location in the village one morning.





A floating gas pontoon.


A party hall where there was a all-day wedding celebration. As I slept in my guesthouse, the sounds of such traditional songs as 'Play that Funky Music White Boy' came drifting into my bedroom from the party pontoon. Enigmatically almost every raft had a sign that labelled it as a 'Mobile Phone Shop.' By the signs, there must have been several dozen of these mobile phone shops.



Pool tables at the guesthouse. The guesthouse/homestay consisted of two immense pontoons and contained six rooms, pool tables, a restaurant and a general store. There was light and electricity, although the plumbing emptied into the lake. At the guesthouse I met the only two tourists that I saw for the whole day, and a lovely family that operated the guest house, restaurant, and store. I found it a very comfortable place to stay. There was a slight rocking from the water, but it was not enough to disturb a pool game. I slept very well, in spite of my driver's warnings that I would be seasick the whole night.


In the morning I saw the villagers fishing in the lake, people cooking and beginning their work. Above, a device that cuts up coconut flesh. Below, village life. I saw people on boats selling breakfast soup, vegetables ice, batteries, and boats full of schoolchildren in uniform. 







Humans were not the only raft dwellers: there were geckos on the rafters, and pets everywhere: the guesthouse had five dogs, and elsewhere I saw a pet monkey.






Later on, I visited another village on the Tonle Sap. This one had more regulated tours because it was close to Siem Reap. There was a constant flow of goggling tourists like myself. Most of the dwellings in this village were not floating. They were on stilts over the water, and presumably the water level is very low during the dry season.









The village bordered upon a sunken forest. In this village I saw many floating wooden cages that I was told were miniature fish farms.


There was also an island temple.