S R Lynn & Co Accountants - Cash Flow Forecasting, Budgeting, Management Reporting, Management Accounts, Payroll, Personal Tax, Corporation Tax, Company Nursing, Turnaround management, Milton Keynes, UK.

S R Lynn & Co

For Professional Service Businesses

For some time, there has been concern about the effects of UITF40 on the tax liabilities of professional service businesses – accountants, solicitors, barristers, architects, surveyors etc.

It is now clear that, unless work is being carried out on a contingency basis only, the valuation of work in progress at full saleable value will be required at the end of all accounting periods ending after 22 June 2005.

The Chancellor's Pre-Budget Report of December 2005 indicated that there will be degrees of relief in cases of more stable profits over the course of 6 years, but, by the end of that 6 years, the work in progress will have to be accounted for as income in full.

For those of our professional service clients that have not valued work in progress previously, some planning is needed before the end of the financial year following 22 June 2005. Be aware that this requirement is highly likely to accelerate your tax liabilities, and a conversation with Stephen would be advisable.

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