Published on: 29 Jan 2010
Well it only seems like yesterday that we posted about the 31 October deadline for submitting the hard copy paper income tax returns. Today is 29 January and perhaps more importantly if you’re a UK tax payer who has yet to submit your Income Tax Return, Sunday is 31 January.
The deadline for submitting your UK tax return electronically is 31 January following the tax year in question. So for example, the deadline for submitting your tax return electronically for tax year 2008/09 (6 April 2008 to 5 April 2009) is 31 January 2010 – i.e. this Sunday! If you haven’t submitted your tax return yet then you’ve probably got a busy weekend ahead of you.
If you’re in the UK then there really is no excuse for forgetting the deadline. Moira Stewart, who worked for the BBC for over 30 years, has been fronting a campaign by HMRC to remind tax payers about the deadline. TV, radio and press adverts have been bombarding us in the UK for the last month or so.
What surprises a lot of people though is that when a tax payer registers for the online service they are sent details of their user name and password through the post. HMRC take up to 7 working days to register site users so if you were planning on spending this weekend doing your electronic tax return but have yet to register on the HMRC site then unfortunately you will receive the £100 fine for late submission as you won’t be registered before the 31 January deadline and hence won’t be able to submit the return before the deadline.
What is also important to remember is that 31 January 2010 is also the deadline for paying any outstanding amounts of tax for 2008/09. Payment of any outstanding tax after this date will be liable to interest.
Published on: 27 Jan 2010
The science fiction film Avatar which was written and directed by James Cameron has been in the press a lot recently and has had some good write ups by some of the critics. It is an incredibly successful film and today it was announced that it has overtaken Titanic to become the highest grossing movie of all time with worldwide takings of nearly USD2 billion since its premier in London in mid December last year.
Last night I decided to go and see it to see what all the fuss was about. I must admit that I was impressed. The special effects were excellent and with the film being shown in 3D it certainly did create an impact.
3D films have been around for a number of years now and started back in the 1950s with early prototypes of 3D movies including such classics as the 1950s monster movie the “Creature from the Black Lagoon”! Technology has progressed a lot since then though and at last month’s Consumer Electronics Show in Las Vegas there were a number of firms presenting their latest 3D televisions.
This is a useful example of what we would find in the product lifecycle. If you go back over the history of televisions you will find a series of lifecycles. The timeline of televisions has gone from Black & White, through “traditional” colour, to plasma and LCD.
Although the product lifecycle will vary on a geographic region by region basis, in a lot of countries the lifecycle of the “traditional style colour TV” is in decline whilst the lifecycle of the LCD TV is in the growth or maturity stages. What about the new 3D TVs that are being launched this year? It’s safe to say that these are in the introduction stage. As a result the marketing mix of these TVs will be different from the other stages. “Place” for example will be at a limited number of locations and as for “Price” then it’s not rocket science to guess that they will be priced at a premium above the other types of TV that are at different stages of their lifecycles!
Published on: 25 Jan 2010
Agency theory (included in papers such as ACCA F9) occurs when one party (the principal), employs another party (the agent), to perform a task or tasks on their behalf. Within this theory there is always a danger that the objectives of the two parties may not coincide and there may be problems with what is known as goal congruence.
Typically agency theory would apply to the relationship between shareholders and management. However, there is an argument that a form of agency theory could apply between management as the principal and an employee as the agent.
I’m a keen follower of football (soccer) and the contracts of professional players are becoming ever more complicated. In the “old days” the contracts would be very simple affairs with a monthly salary, a time limit to the contracts and maybe a team bonus if the team won a competition.
Nowadays football is big business. For example, Cristiano Ronaldo’s move last year from Manchester United to Real Madrid was for a new world record in terms of transfer fees (£80m) and his annual remuneration from Real Madrid alone will be in the region of £11m per year.
I’ve no idea what Ronaldo’s contract is like but my guess is that most professional football contracts have various measures built in to ensure that there is goal congruence.
Ideas for items that could be included within football contracts to help goal congruence include:
– Bonuses based on number of games played (i.e. the player will only get these if he is performing well and is in the team),
– Bonuses based on international appearances (this is independent confirmation that he is performing well)
– Penalty provisions for undertaking activities that could cause injuries (e.g. bungee jumping or extreme sports).
All of the above would help in ensuring goal congruence.
Always keep an eye open in real life for any situations where goal congruence is present. If you can link real life situations you come across with the exam syllabus it will help you retain the knowledge needed for exam success.
Published on: 22 Jan 2010
First of all congratulations to all CIMA students that received their exam results yesterday and were successful. Your hard work paid off so very well done! We’ve heard from a number of you that were successful and those are always the best type of emails to receive from students!
If your results weren’t as expected though and you didn’t pass then better luck next time.
Various papers have performance management within the syllabus. A rather unusual method of managing performance was recently reported by the press.
Employees have to look into a camera every day and have their smiles scored by a computer that analyses their facial features and gives feedback. The quality of the smile is reportedly rated on a scale ranging from 100 to zero.
Is it effective? Can the scanner distinguish between an artificial and a genuine smile? The jury is still out.
While we at ExP love technology, we’re not sure we would submit to such assessment, at least not before our morning coffee!
Published on: 20 Jan 2010
I bumped into an old friend of mine that I haven’t seen for nearly a year the other day. He’s a really good guy and I’ve known him a long time. We were chatting over a coffee and the subject of Grand Prix motor racing came up. He’s a keen follower of the sport and was excited by the prospect of Jenson Button joining Lewis Hamilton on the McLaren team. He was even more excited in that he was planning a trip to the Monaco Grand Prix this coming May with a group of friends. It was a lifelong ambition of his to make the trip to Monaco to see the Grand Prix and he’s been lucky enough to secure some tickets for the Grand Prix in May.
I was excited for him and, if I’m honest, slightly jealous! Having said that, May is always a busy month for us tutors so I’m not sure I’d be able to get the time off to join him. In fact, the closest I’ll get to Monaco in May is the Monte Carlo simulation model which as every good P4 student knows is a model that uses probability distribution analysis to analyze the possible outcomes of a project. It is built on the simultaneous changes of many variables, the relationships between these variables being defined in advance, e.g. if price is reduced, how much demand may go up. (Monte Carlo is also a district within Monaco!).
Now, I love teaching P4 and explaining the mechanics of the Monte Carlo simulation is good fun but I must admit that if a spare ticket does comes up then the joys of teaching the Monte Carlo model may have to take a back seat to the joys of watching the Grand Prix!
Published on: 18 Jan 2010
One item that people should be aware of is that management accounting and financial management are similar to the extent that they are both concerned with resource usage. But there are differences.
I was lucky enough to have recently flown on the new Airbus A380 super jumbo and that got me thinking about some of the financial management issues that Airbus face. Designing and producing the A380 must have been a phenomenal exercise and a real testament to man’s engineering skills. It’s capable of carrying over 800 passengers and has a range of nearly 15,000 km. It’s a fantastic machine.
But what has this all got to do with the difference between management accounting and financial management? One difference is that management accounting tends to deal in short-term timescales whereas financial management is generally more concerned with the longer term. Whilst the longer term is generally considered to be more than one year be aware that certain industries and companies have a distinctly longer “long-term”.
From inception to delivery the A380 took nearly 10 years and the long term view taken by Airbus is certainly longer than some businesses in for example the IT or fashion industries. Some of the businesses in these industries have distinctly shorter “long-terms”.
Anyway, despite the millions spent on design and development of the A380 there was one disappointing thing about my flight and that was I fell asleep during the film and missed the ending…
Published on: 11 Jan 2010
Students studying law topics often worry about the need to quote cases in their exam answers, but their can be little doubt that the ability to do so can only enhance the quality of your answers and the impression that you create with the marker.
UN Case 48
In this case, a German buyer of cucumbers (from a Turkish seller) sought to obtain a price reduction on the grounds that the cucumbers supplied were not of the specified quality under the terms of the contract.
The buyer’s application was dismissed on the grounds that they had waited too long in notifying the seller as to the non-conformity of the goods. This was because they were inspected by the buyer’s representative in Turkey, but the notification was not given until the cucumbers actually physically arrived in Germany seven days later.
UN Case 84
This was a truly international contract for sale of goods, in that it involved the sale of New Zealand mussels, by a Swiss seller to a German buyer.
On delivery to Germany, the Mussels were impounded by the German authorities, as they did not comply with German regulations in that they had too high a cadmium content, and so the buyer refused to pay for the goods.
It was held that the buyer had to pay for the mussels, as they would have been classed as fit for human consumption under Swiss law and there was no way in which the Swiss seller could have been aware of the stricter German regulations, in the absence of notification of this to them by the buyer.
Published on: 08 Jan 2010
It’s a common theme in discussions with my friends that we all seem to be getting busier and busier at work. Spare time is at a premium.
One of my hobbies when I do have some spare time is trying to keep fit. Six years ago I signed up for the 2004 London triathlon and since then I have been hooked on the sport. Triathlon is an event where you swim, cycle and then run. I’m very much an amateur and look up in awe at the elite athletes that seem to literally sprint around the course. For me it’s the training, competing and comradeship that is the fun behind the event.
At last year’s London Triathlon I was hoping to beat my personal best but unfortunately picked up an injury to one of my knees in the run up to the event. I was in two minds whether to start the race and then try to struggle through and finish it. After all, I had spent money on entering and had trained hard for the event.
It took a friend of mine who happens to be an accountant to make me see sense. He mentioned that the money I had spent on entering and the time I had spent on training was simply a sunk cost. (Students will remember from our free ExPress notes that sunk costs are not relevant. They have already taken place and cannot be reversed.)
What I needed to do now was to focus on the situation as it stood at that time rather than review any costs that had been incurred already. A very sensible piece of advice by my friend and probably saved me from injuring my knee any further.
In the end though I went for the middle ground by completing the swim but not the bike or run. As my friend pointed out, I didn’t sink in the swim and ignored the sunk costs in the bike and run!
Published on: 06 Jan 2010
As we start the new year people who are not students of UK tax maybe mistakenly assume that we have just finished a fiscal year on 31 December and have started a new fiscal year on 1 January.
As good tax students we know however that this is not true! The fiscal year (tax year) for individuals in the UK ends on 5 April and starts on 6 April. For companies the financial year start on 1 April and end on 31 March although remember that companies are free to choose their accounting period end.
Other countries have an assortment of fiscal year ends. Individuals in Japan and UAE for example have a fiscal year ending on 31 December. In the US the fiscal year ends on 30 September and in Australia it’s 30 June. This is all very interesting but don’t worry it won’t be examined.
However, what is important with regard to the start of the year is that all of us here at ExP would like to wish you all a very Happy New Year and all the very best in your exams, professional and personal lives for 2010.