Those of you who have read ACCA's recent Insolvency Newsletter will have seen that a couple of old chestnuts have risen their ugly head again - mileage and VAT on bonds - and they merit comment.
Mileage:
Our understanding of the position is that the treatment of mileage being charged at approved Inland Revenue rates will be considered as part of the current review of SIP 9. We are aware that at least one regulator will not be changing their approach until the review of SIP 9 has been completed, and will continue to treat mileage charged at such rates as a category 1 disbursement.
SIP 9 will have to be changed given the changes to the remuneration regime being made by the rule changes in April 2010.
VAT on bonds:
Earlier this year Dear IP contained advice on the treatment of VAT on bonds, indicating that it should be charged as it is a disbursement being recharged to the case by an IP even though the IP themselves do not suffer VAT on the bond they pay. Given that this approach was based on advice from HM Revenue and Customs, and it is they who would check for the correct treatment of VAT during a compliance visit to your practice we recommend that you continue to follow that advice.
