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ICAEW technical round-up: February 2021

24 February 2021: This month’s top technical stories on ICAEW Insights include updates on self assessment penalties, IR35 changes and a major change to the government’s Kickstart Scheme.

SA late payment penalties waived until 1 April: Self assessment taxpayers have an additional four weeks to pay tax or set up a payment plan without being charged a 5% late payment penalty, HMRC has confirmed.

IR35 and employment status - no silver bullet: With less than two months until new IR35 legislation comes in effect in the private sector, employment law expert Mark Hammerton explains end-user options for the off-payroll working rules implementation.

HMRC outlines support for those affected by IR35 changes: HMRC has reaffirmed there will be no penalties for inaccuracies in the first year of the expanded off-payroll working rules in a document pledging to support taxpayers who are trying to comply.

Vaccinations - employer obligations and employee rights: As the nationwide COVID-19 vaccination programme gathers pace, employers are beginning to assess the dilemmas and responsibilities facing them if an employee refuses to be vaccinated.

Kickstart Scheme axes 30-job minimum requirement: Employers no longer need a minimum of 30 job placements to access the government’s Kickstart Scheme, enabling SMEs to apply directly. But businesses can still use gateways to simplify the process, with ICAEW developing its own member portal.

FRC 2020/21 plan - transition to ARGA up for consultation: The Financial Reporting Council’s draft strategy, plan and budget for 2021/22 outlines its direction of travel as the regulator transforms into ARGA. But this comes with increased costs for funders.

A reminder of changes to audit report wording: As auditors turn their attention to 31 December 2020 year end audits, ICAEW’s Audit and Assurance Faculty reminds auditors of two key audit report changes affecting audits of financial statements of periods commencing on or after 15 December 2019.

Companies House filing reforms should not burden business: ICAEW members across practice and business look set to be affected by reforms to the filing regime operated by Companies House, after the government published proposals that include a shortening of filing deadlines and other changes to the nature and format of the information companies are obliged to provide.

Getting to grips with AML - tax advice: instalment five IFAC and ICAEW’s ‘Anti-money Laundering: The Basics’ series focuses on tax advice – how an accountant can stay alert to the multiple ways tax services can be vulnerable to money laundering.

IFRS Foundation announces next steps for global sustainability standard: Responding to growing demand for a global set of sustainability standards, IFRS Foundation Trustees have agreed several steps to take in the run-up to November’s crucial COP26 Summit.

New look for agent services account: HMRC is updating the look and feel of the agent services account homepage in a bid to improve navigation around the online portal. ICAEW’s Tax Faculty highlights the changes.

Brexit news and guidance

European Commission deems UK’s data laws ‘adequate’: The UK government has welcomed the European Commission’s recent draft data adequacy decision, which paves the way for the continued free flow of data between the EU and the UK.

Brexit and COVID drive audit process rethink: The double whammy of Brexit and COVID has prompted an important focus on approaches to audit that could prove beneficial to auditors and clients alike.

How UPS is tackling post-Brexit teething problems: UPS’s Walter Van Der Meiren, who spoke at an ICAEW webinar last week, explains the main issues post-Brexit and how the EU and UK governments could ease them.

Other technical news and updates

Tax administration proposals to come after Budget: HM Treasury has confirmed that consultations on changes to the tax system will be published on 23 March, rather than on Budget day as is traditional. An interim report into the government’s review of business rates will also be released.

Audit and fraud - all stakeholders must up their game: ICAEW’s response to a discussion paper from IAASB urges the international auditing standard-setter to engage with investors and companies as it considers how the International Standards on Auditing (ISAs) related to fraud and going concern should be updated.

European audit market battles concentration and quality issues: The European Commission’s second audit market monitoring report highlights persistently high levels of market concentration and several ongoing issues with audit quality.

COVID-related rent concessions beyond 30 June 2021: As lockdown continues, the issue of commercial rent concessions is certainly topical. Now the IASB is proposing an extension to the availability of the practical expedient issued last year that allows entities to account for rent concessions due to COVID-19 in a simpler way.

IFRS Foundation releases going concern guidance: The IFRS Foundation has published a document designed to help preparers of IFRS accounts through the intricacies of applying going concern requirements, in response to the current volatile economic conditions.

HMRC raising awareness of the benefits of modified NIC arrangements: HMRC is to contact around 500 large and 156 medium-sized businesses about the availability of Appendix 7b arrangements for managing NIC reporting obligations for employees assigned from the UK work overseas.

ICAEW calls for greater clarity on taxation of COVID test costs: ICAEW’s Tax Faculty has urged HMRC to confirm whether coronavirus antigen tests paid for by employers will continue to be exempt from income tax and national insurance after 5 April, and to clarify guidance on the difference between antigen tests and antibody tests which are not exempt.

HMRC charts its performance in 2020/21: HMRC’s quarterly performance statistics for October to December 2020 show that it continues to struggle to provide an adequate level of customer service. Alongside the data HMRC has published a commentary as it did in the last quarter.

IFRS vs IPSAS - an overview of grant accounting: ICAEW’s public sector team examines the differences between International Financial Reporting Standards and International Public Sector Accounting Standards and the suitability of each in public sector financial reporting.

Guidance for employers on NIC holiday for veterans: HMRC has outlined how organisations employing former UK military personnel can claim relief on secondary national insurance contributions from April.

Technical content exclusive for ICAEW members

What is an ‘other entity of public interest’ (OEPI)? Help for ICAEW members to understand what an ‘other entity of public interest (OEPI)’ is and from when restrictions on providing non-audit/additional services to OEPIs apply.

The ICAEW Fraud Advisory Helpline: A new helpsheet introduces the ICAEW Fraud Advisory Helpline - an anonymous telephone service offering supportive practical advice to ICAEW members who have been a victim of fraud or are advising clients who have been victim to fraud.

Working with vulnerable clients | Ethics helpsheets: Providing guidance to ICAEW members in acting in the best interests of vulnerable clients.