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ICAEW technical round-up: February 2020

28 February 2020: with a newly elected government now in full swing, all eyes are on the 11 March Budget and the audit reform consultations due out shortly afterwards. However, there has been plenty of other activity in the technical world of tax and accountancy. Here are the 10 most-read items of technical content on ICAEW Insights.

ICAEW CEO Michael Izza has laid out five clear goals against which the audit reform programme can be measured. These goals include establishing the new regulatory body ARGA, increasing inclusiveness in the audit profession, achieving a more reliable core audit, providing on-demand audit extras and requesting the government carefully consider the impact of any new measures on the industry.

From 6 April 2020, changes to the off-payroll working rules, often referred to as IR35, may increase the tax charge on contracts for work with large and medium-sized businesses. ICAEW has put together resources to help chartered accountants get to grips with the new rules, Whether you are working for a big firm or supporting your clients through the process.

Changes to reporting and paying tax on residential property sales by UK residents are coming into effect this year. This means there is now a 30-day window to report and pay capital gains tax on property. Practitioners and taxpayers should be aware of the new regime for the residential sector.

ICAEW’s Tax Faculty has set out the key themes it believes the government should pursue in the Spring 2020 Budget to make the UK the leading destination for jobs and investment. The recommendations include aligning the tax system with policy objectives, reviewing the costs and benefits of Making Tax Digital, and seizing the opportunity to reform VAT.

Understanding the source of clients’ wealth can be a key component of due diligence for certain high-risk clients. Sophie Wales, Director of Technical Strategy at ICAEW, explains what chartered accountants need to do to establish and verify a client’s source of wealth.

ICAEW has recently updated its guidance on providing mortgage references. The basic tenet of the advice remains the same: chartered accountants should stick to the facts when processing such requests.

The Treasury has published its consultation on the extension of the Trust Registration Service as required under the Fifth Money Laundering Directive. The new rules will extend the registration obligation to all express trusts – other than those excluded from scope – and not just those trusts with a tax consequence.

ICAEW has updated its guidance on what accountancy practices should include in engagement letters for clients, together with sample wordings. The latest changes are particularly relevant to providers of tax services and include new sample wording in relation to off-payroll working. 

The Solicitors Regulation Authority (SRA)’s Accounts Rules provide critical protections for clients of UK solicitors, setting principles on how their money should be safeguarded while held on their behalf. Chartered accountants play an important role in reporting to the SRA, and ICAEW has published a new technical release providing guidance to reporting accountants on the 2019 changes to the SRA’s Accounts Rules. 

Air Travel Organisers’ Licence protection acts as a crucial safeguard for UK holidaymakers booking air package holidays. Chartered accountants play an important role in reporting to the Civil Aviation Authority, which administers the protection scheme, and ICAEW has released technical guidance to provide good practice for those involved in such tasks.