I was really pleased to see the introduction of fresh content in this new edition; in particular Chapter 15 (VAT and costs) which deals with one of the most technically challenging subjects for those working in financial compliance. There are also two new chapters (12 and 14) which provide practical advice and support for the COFA. Andrew Allen and Janet Taylor are both extremely experienced reporting accountants, so it should come as no surprise that there is a comprehensive guidance on what you should expect from your reporting accountant.
Whilst this edition doesn’t profess to have all the answers, it does offer you sensible guidance on some of the ‘grey’ areas such as negative interest. Nor does it shy away from more recent dilemmas, such as commercial rent deposits and the UK VAT position following our exit from the EU. Furthermore, it brings together the scattering of financial compliance information into one central place: Law Society VAT guide, a client account reconciliation statement, warning notices and lots of signposting to SRA accounts rules guidance notes as well as frequently asked questions.
This fourth edition continues to retain the practical ‘grass roots’ guidance it has been known for in previous editions. This is further complimented by the inclusion of some of the key challenges from the introduction of the 2019 Accounts Rules such as:
the operating of a client’s own account
the delivery of a bill or written notification prior to transferring client funds, and
the risks around billing in advance (especially relevant to those firms not operating a client account).
There is also the inclusion of topical issues such as the impact of the Brabner’s case for VAT and billing that is extremely useful. This is an extremely complex area of practice, which is further evidenced by Andrew Allen and Janet Taylor drawing on the expertise of not one, but a number of VAT experts, to provide what can only be described as an insightful and engaging read on VAT and costs. The writers guide you through the key points of the Brabner’s case as well as the widely publicised Barratt, Geoff & Tomlinson case whilst making reference to a number of sections in HM Revenue & Customs (HMRC) VAT Manual.
The authors cover, at a very high level, some of the more niche areas of financial compliance such as payments from the Legal Aid Agency and Third Party Managed Accounts (TPMA). However, the examples provided throughout do lean heavily towards what I would refer to as a basic traditional law firm; private client, property, litigation and family. Areas such as personal injury, immigration, crime and so forth are less prevalent within the worked examples and illustrations.
It has always been a concern of mine, following the introduction of the scaled down 2019 accounts rules that it would be easy to misinterpret the omission of a rule to suggest it has moved from prohibited to permissible. It was extremely refreshing to see Andrew Allen and Janet Taylor addressing this point well; an omission of a previous rule doesn’t go hand in hand that it is now permissible, it could merely be a case that the regulation/requirement sits elsewhere within the overall professional compliance framework or indeed legislation.
As previously mentioned, this edition has been updated by two reporting accountants who are experienced and well-placed to provide end-to-end guidance on what good financial compliance looks like. The coverage here is much wider than the Accounts Rules themselves and is complemented by a more holistic view. The authors achieve this through supporting illustrations to guide you through the application of the information that you have been provided with. Appendix E also provides you with example ledgers which are well laid out and easy to follow.
In conclusion, this is an ideal read for anyone working in legal finance, from your most junior legal cashier all the way through to a managing partner who holds the COFA role.