ICAEW technical round-up: July 2020
31 July 2020: the most-read items of technical content on ICAEW Insights during the month of July include information on the MTD roadmap, the Chancellor’s Summer Statement measures and Big Four audit separation plans.
Need to know
Making Tax Digital for VAT will be extended to all VAT-registered businesses from April 2022, with income tax quarterly reporting applying from April 2023. Corporation tax will be consulted on later this year. ICAEW’s Tax Faculty looks at the government’s digital tax roadmap in this article.
The government has unveiled new laws to ensure furloughed employees who are made redundant receive redundancy pay based on their normal wage rather than a reduced furlough rate. Read the story here.
A scheme providing funding to help with completing the customs declarations has been extended by HMRC. Grants will be available for the recruitment and salary costs of new employees, where the new employee starts on or after 12 June 2020. For each recruited or redeployed employee, £3,000 will be provided for recruitment and £12,000 for salary costs. For more details click here.
No SDLT on houses up to £500,000 in England and Northern Ireland, VAT cut to 5% to support hospitality and a £1,000 bonus for retaining furloughed employees were the headline tax changes in the Chancellor’s Summer Statement.
ICAEW has welcomed the FRC’s plans for the separation of Big Four audit practices from the rest of their operations but warned that in isolation it will do little to improve audit quality. Read more here.
Other technical news
Legislation day 2020: read the ICAEW’s reaction and analysis of all the government’s announcements on 21 July 2020 here.
Auditor’s reports: can auditors use an electronic signature? ICAEW’s Audit and Assurance Faculty and Business Law Department have teamed up to provide a brief guide to the main factors that auditors need to consider. Find out more here.
ICAEW’s Audit and Assurance Faculty has designed a guide to help users better understand the role of auditors in relation to interim reports. For more information click here.
The Financial Reporting Council has proposed changes to FRS 102 and FRS 105 which would specify the accounting treatment for changes in operating lease payments arising from certain COVID-19-related rent concessions. ICAEW’s Financial Reporting Faculty explains the proposals in more detail.
HMRC has issued guidance on the temporary reduced rate of VAT for hospitality, holiday accommodation and attractions. ICAEW’s Tax Faculty provides an overview and highlights updated VAT notices.
As a consequence of the temporary reduction in the VAT rate in the hospitality sector, the flat rate percentages used for catering (including restaurants and takeaways), accommodation and pubs have also been reduced from 15 July to 12 January 2021. Read more here.
Fewer trusts will be within the scope of the expansion of the Trust Registration Service than originally proposed, but the 30-day deadline for new trust registrations and rules granting third-party access to data remain unchanged. For more details click here.
The Chancellor has asked the Office of Tax Simplification (OTS) to carry out a review of CGT to identify simplification opportunities. ICAEW’s Tax Faculty is seeking the views of members. Find out how to get involved here.
From 1 January 2021 VAT on imported goods with a value of up to £135 will be collected at the point of sale not the point of importation, HMRC has confirmed. For more details click here.
DAC 6: Disclosable arrangements. ICAEW’s Tax Faculty explains why all ICAEW members need to be alert to their potential reporting obligations. This article highlights common misconceptions and answering frequently asked questions about the regime.
A recent webinar from ICAEW’s Financial Reporting and Audit and Assurance faculties explained how international accounting standards apply to climate change and other emerging risks, despite those risks not being mentioned explicitly in the standards. Find out more here.
In its response to the European Commission’s consultation on its renewed sustainable finance strategy, ICAEW has called on financial actors to play a leading role in accelerating sustainability across the broader economy.
The amended IFRS 17 standard is now effective for annual periods beginning on or after 1 January 2023 with earlier application permitted. ICAEW Financial Services Faculty has the latest.
Business finance
Action on recapitalising business after COVID-19. Responding to far-reaching UK Recovery Corporation plans to recapitalise businesses post-COVID, ICAEW has raised a number of open questions to help inform and clarify policymakers’ decisions.