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ICAEW technical round-up: August 2021

Author: ICAEW Insights

Published: 25 Aug 2021

This month’s top technical stories feature warnings about the proposed basis period reforms, the future direction of FRS 102 and guidance on understanding accountants’ reports.

Need to know

Speed of basis period reform risks integrity of tax system, warn professional bodies: ICAEW has joined other finance and tax professional bodies in warning the Financial Secretary of the Treasury that the proposed timetable for reforming basis periods will place “enormous pressure” on business, advisers and HMRC, and risks undermining trust in the UK tax system.

ICAEW supports CH powers extension to block firm address abuse: The Institute firmly backs calls for a boost to the powers of Companies House to quickly correct any false business registrations at a professional firm’s address, amid a government consultation on powers to soon be published.

The future direction of FRS 102 - have your say: Earlier this year the Financial Reporting Council initiated the next periodic review of FRS 102 The Financial Reporting Standard for the UK and Republic of Ireland. As a first step, the FRC has asked stakeholders to provide comments on areas that might be considered as part of this review.

HMRC enquiry is valid if taxpayer’s agent acts upon it: In deciding the Tinkler case, the Supreme Court has ruled that despite HMRC sending an enquiry notice to the wrong address, the taxpayer could not claim the enquiry was invalid as his tax advisers acknowledged the enquiry.

Grant payments - understanding accountants’ reports: Accountants’ reports offer assurance on how grant recipients are using their funding. Here are the common types of report and their pros and cons. 

Influencing the strategic direction of the IASB: ICAEW’s Financial Reporting Faculty is currently developing ICAEW views on the IASB’s key consultation about its future agenda - a great opportunity for members to shape the IASB’s plan for 2022-26.

Other technical news and updates

ICAEW hails new international charity finance standards: Proposals to bring standardised accounting and greater transparency to the reporting of international charity finances have been welcomed by the ICAEW.

FRC corporate governance research tackles priority areas: The Financial Reporting Council’s revisions to its Corporate Governance Code are starting to make a difference, according to academic research.

Scrap exemptions to simplify VAT rules, urges ICAEW: ICAEW has reiterated its call for all VAT exemptions to be abolished in its response to HMRC’s consultation on how to simplify VAT rules related to land and property. It has also recommended the removal of all VAT options.

EU to overhaul AML framework with new supervisory authority: A recent package of legislative proposals paves the way towards more harmonised anti-money laundering and countering terrorism financing rules across the EU, with a new authority to be set up by 2024. Rules are to be also extended to the crypto sector. 

The end of the furlough - what it could mean for banks: By November 1st the UK government’s furlough scheme will end, spelling fresh challenges and opportunities for the banking sector.

Imminent shortfall for millions nearing retirement: Are pensions in crisis, asks former Pensions World editor Stephanie Hawthorne, and if so what needs to be done to fix them?

From the American Accounting Association annual meeting

Does more auditor reporting mean better reporting? The extended audit report was put under the spotlight at a panel discussion at the American Accounting Association’s annual meeting – which took place in August 2021. 

AAA asks: what do users require of financial reporting? As part of the annual meeting of the American Accounting Association, an esteemed panel of commentators asked what users really require of financial reporting.

One standard will not solve the climate crisis: A panel of sustainability experts at the American Accounting Association’s annual meeting discussed if there is a single standard solution to sustainability reporting.

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