Restoring trust in audit and corporate governance
Audit and corporate governance reform: why now? The BEIS consultation on audit and corporate governance reform proposes sweeping changes that will have a profound impact on the way corporate Britain operates. Why is this necessary now? What will it mean in practical terms? And is the timing right?
Disclosure of distributable reserves - a welcome but complex challenge: The government’s reform of the UK’s corporate governance regime includes potential new requirements for large companies to disclose information on distributable reserves - a proposal that comes with a unique set of challenges.
Sarbanes-Oxley - like learning a new language: The Internal Controls over Financial Reporting assessment and attestation requirements of the Sarbanes-Oxley Act are not just a US construct for US companies: they are relevant for any company with securities listed in the US, including many large UK companies.
Will government-owned companies be caught up by audit reform? Reforms to restore trust in audit and corporate governance are primarily aimed at the private sector, but there is a potential that some public sector organisations might come within the scope of the proposals.
COVID: technical news and updates
HMRC publishes guidance on the fifth SEISS grant: Full details of the fifth SEISS grant, including a new turnover test that determines the level of the grant, are now available. ICAEW’s Tax Faculty explains what has changed.
Updated templates to make CJRS claims easier: HMRC has published new templates for making claims under the Coronavirus Job Retention Scheme to simplify the process. It is now possible to submit claims using a template within the system which can include staff without national insurance numbers even when grants cover fewer than 100 members of staff.
CJRS - is an employee receiving fixed or variable pay? Whether an employee has fixed or variable pay is a key concept for calculating amounts that can be claimed under the Coronavirus Job Retention Scheme. ICAEW’s Tax Faculty explain that the classification of some employees is essentially the employer’s choice.
COVID-related rent concessions under FRS 102 and FRS 105: The accounting treatment for rent concessions granted directly as a result of COVID-19 now applies to reductions in lease payments originally due on or before 30 June 2022
Need to know
ICAEW Insights Podcast - Tax year end, Bounce Back Loans and cryptocurrency: ICAEW’s Philippa Kelly and Lindsey Wicks and PwC’s Mike Jervis join host Tom Herbert to discuss the potential moving of tax year end, Bounce Back Loan repayment options, business restructuring and cryptocurrency.
OTS to look at impact of moving tax year end: The Office for Tax Simplification has confirmed it is reviewing the benefits, costs and implications of moving the UK’s tax year end from 5 April. While the review will focus on a move to 31 March, it will also consider 31 December.
OECD - 130 countries back international tax reform: A global corporate tax rate of at least 15% was agreed upon by 130 countries, the Organisation for Economic Co-operation and Development has announced.
Making Tax Digital - the current state of play: As work continues behind the scenes on the complex rollout of Making Tax Digital, ICAEW’s Tax Faculty has the latest details on where things stand with MTD for VAT and income tax.
ICAEW urges members to be aware of mini-umbrella companies: HMRC has issued new guidance on the fraudulent activities of so-called ‘mini-umbrella companies’ sometimes created to avoid paying tax and national insurance. ICAEW’s Tax Faculty calls on members to ensure they are informed.
Powers to ban unfit dissolved company directors extended: The Insolvency Service is set to gain new powers for cracking down on directors who dissolve companies to avoid repaying government support monies.
HMRC relaunches the agent dedicated line: The UK’s tax authority has restored priority access to the ADL and committed to call waiting times of less than 10 minutes. However, the ADL will not handle certain types of calls where digital alternatives are available.
EU grants UK data protection adequacy decision: The EU has agreed an adequacy decision for the UK. This means the free flow of personal data from the EU and EEA to the UK can continue as before, although there are some caveats.
ICAEW supports aim of mandating PII for tax advisers, but more work is needed: Government plans to mandate professional indemnity insurance for tax advisers could offer important consumer protection, says ICAEW, but further discussions are needed with the insurance industry to identify a viable solution which does not have a disproportionate impact on professionally qualified advisers.
Other technical news and updates
Credit scoring in the current environment - what businesses should know: The economic and business challenges associated with COVID-19 have many businesses looking nervously at their credit scores. With this in mind and given the exceptional set of circumstances facing businesses at present, ICAEW’s Philippa Kelly and Louise Sharp have been speaking to some of the credit reference agencies and other relevant stakeholders about the impact of COVID-19 on SME credit referencing.
FRC - why revise the standard on interim reviews now? The Financial Reporting Council has revised its review standard for interim financial statements, ‘International Standard for Review Engagement (UK) 2410 (ISRE (UK) 2410) Review of Interim Financial Information Performed by the Independent Auditor of the Entity’. Why and why now?
Offsetting overpaid CGT against income tax: HMRC has acknowledged its error in not allowing overpaid CGT on UK residential property to be offset against income tax. ICAEW’s Tax Faculty explains the solution that has been put in place for 2020/21 self assessment returns.
Group loss carry-back allocation statements - regulations published: The procedures required to appoint a nominated company to a corporate group and for that company to submit a loss carry-back allocation statement to HMRC under the extended corporation tax loss carry-back provisions have been set out in regulations. ICAEW’s Tax Faculty explains the details.
HMRC continues ‘risk-based’ approach to late filed RTI: In its latest Employer Bulletin, HMRC confirms that late filing and late payment penalties under PAYE Real Time Information will remain ‘risk-assessed’ for 2021/22. ICAEW’s Tax Faculty outlines the update and other key reminders from the Bulletin.
Trust registration service - change to process: HMRC has upgraded the trust registration service so that trustees no longer need to claim a trust prior to authorising an agent, removing one step from the process.
VAT liability on the cost of charging electric vehicles: Whether a business can recover the VAT on the cost of electricity to charge cars used for business purposes is complex. ICAEW’s Tax Faculty outlines the latest guidance from HMRC and highlights where ICAEW is asking for further clarity.
Government SME support scheme opens for registrations: Small businesses in the UK can now register their interest in joining ‘Help to Grow’, the government’s new scheme to help SMEs prosper post-pandemic.
UK manufacturers operating within freeports could face tariffs: The UK government admits that post-Brexit trade deals include clauses that could prevent companies benefitting from freeport tax breaks, affecting business worth up to £35bn annually.
FCA - fintech firms must clarify non-bank status: E-money accounts can be a convenient and accessible way to use banking services, but the financial services watchdog has warned providers they need to make clear they are not a bank.
Additional security added to HMRC online services: Multifactor authentication is already in place for most HMRC online services and will now be extended to all government gateway accounts other than those used by agents. ICAEW’s Tax Faculty explains what is changing.
Nudges could reduce offshore non-compliance and international tax debt: Better communication on taxpayer obligations coupled with prompts from HMRC could help to prevent offshore non-compliance and international tax debt, says ICAEW. There are also opportunities to improve existing systems and processes to make compliance easier.
Rethinking EU business tax - Commission sets out new agenda: A new paper adopted by the European Commission sets out plans to promote a robust, efficient and fair business tax system in the EU, supporting post-pandemic recovery and boosting public revenues in the future.
New tools for planning shared parental leave: HMRC has launched new online tools to help parents understand their eligibility for shared parental leave and plan how to use it. ICAEW’s Tax Faculty explains how mums and adopters can opt in even if not sharing with a partner.
Refinement still needed on proposals on uncertain tax treatment: Further development and clarity are needed if HMRC proposals for large businesses to report uncertain tax positions are to succeed, according to ICAEW’s Tax Faculty. Better results might be achieved by reducing uncertainty in legislation and encouraging greater communication.
IIRC + SASB = the Value Reporting Foundation: The coming together of the IIRC and SASB to create the Value Reporting Foundation is aimed at providing a suite of tools to assess, manage and communicate value.
Sustainability: technical news and updates
Net-zero - can you tell your LCA from your carbon footprint? Reducing and measuring climate impacts involves getting to grips with new terms and methodology. We look at common, related terms and what they actually mean.
The complex road towards embracing natural capital: As the government formally responds to the Dasgupta Review, one of its architects and a leading economist discuss how to turn it into impactful policy.
IFRS Foundation ramps up climate commitment: A concerted build-up of sustainability-related activity by the IFRS Foundation is underlining the standard-setter’s commitment to using its clout to address climate change.
Bank of England climate stress test targets financial sector: New stress tests to reveal the level of exposure and resilience of the UK’s largest financial institutions to climate change have been announced by the Bank of England, as it looks to beef up the sector’s ‘relatively immature’ experience and expertise in modelling climate-related risks.