MANY of the region's professional firms could be sitting on a tax timebomb, it was claimed today.

Mr Mark Sheen, President of the Bolton Society of Chartered Accountants, was commenting on an Inland Revenue announcement that professional firms will no longer be able to calculate their profits based purely on the amounts they have received from clients.

Instead, they will need to take into account debtors and work in progress - as other businesses do.

According to the Inland Revenue, the change is being introduced to remove an unfair benefit for professional firms.

But Mr Sheen said: "For an established business, the calculation of the annual profits will not normally be much different whether the old or the new base is used, so it appears to be a case of change for the sake of change."

But he said it was pleasing to note that the government appeared to have been listening to representatives from the profession because the original proposals were made more palatable in the budget statement last month.

He added: "A special catching up charge has been spread over 10 years, beginning in the year 1999/2000 and, in case of partnership, the charge will be allocated to partners by referring to their profit shares for each of those years.

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