Newswire February 2026

Welcome to our February Newswire. 
 
After a long, wet winter, the first signs of spring are starting to appear – a timely reminder of the opportunities that come with change and growth.  
 
Now is an ideal time to invest in your career through new skills and personal development. Mercia’s training programme is designed around what works best for you, whether you enjoy attending in person, prefer the flexibility of on demand, or want to join a live streamed event. Our training events are already proving popular this year, so we’d encourage you to book early to avoid missing out.  
 
Attention is also turning to what Chancellor Rachel Reeves will set out in the Spring Forecast Statement, with business groups keen to see momentum behind the government’s economic growth agenda. As always, our experts will analyse and summarise all the key announcements and provide clear, practical summaries for you and your clients.  
 
In February’s Newswire, we look at HMRC’s coding notices for the 2026/27 tax year, along with a briefing on the tax authority’s operational activity following the independent review into the Loan Charge. Please see the tax section for details. On the audit side, the FRC has updated its Strategic Report guidance and Companies House has confirmed there will be delays to reforms of accounts filing.  
 
We’re looking forward to updating you on the latest developments in tax, accounting and audit. 

AUDIT & ACCOUNTANCY

FRC publishes updated Strategic Report guidance 

The Financial Reporting Council (FRC) has issued a revised edition of its Guidance on the Strategic Report, aimed at improving reporting quality and making disclosures more decision useful for shareholders and other primary users. The updates reflect changes in the broader corporate reporting framework, including the UK Corporate Governance Code 2024, legislative updates to directors’ report disclosure requirements, and growing practice in sustainability related reporting.  

The update introduces structural improvements to the guidance, enhances usability, emphasises proportionality, and includes revised Scoping Tables to help companies navigate disclosure requirements under the Companies Act 2006. The FRC has also signalled that further updates may follow as government work on ‘Modernising Corporate Reporting’ progresses.  

Accounts filing reforms delayed beyond April 2027 

Companies House has confirmed that proposed reforms to accounts filing - largely focused on mandatory software only filing, abolition of abridged accounts and expanded disclosures for small and micro entities - will not proceed in April 2027 as previously expected. The reforms are now ‘under review’ and companies will receive at least 21 months’ notice before any new implementation date is set.  

This reprieve follows concerns about the operational and financial impact on small businesses, particularly around software readiness and the potential loss of privacy relating to profit and loss information. Many professional bodies have welcomed the delay, though some warn it represents a setback to transparency objectives.  

Companies House postpones presenter verification requirements to November 2026 

As part of the transition to the Economic Crime and Corporate Transparency Act, Companies House has delayed the introduction of identity verification requirements for individuals and agents filing documents (presenters). Originally slated for Spring 2026, the measures will now not take effect before November 2026, allowing more time to complete the identity verification rollout for directors and persons of significant control (PSCs).  

The delay is partly in response to stakeholder feedback, with Companies House noting the need to balance transparency and administrative burden. Once implemented, presenters will need to be identity verified or registered as Authorised Corporate Service Providers (ACSPs), significantly changing the filing process for accountants, solicitors and corporate agents.  

IAASB publishes insights on technology and quality management 

The IAASB has released a global summary of roundtable findings on how emerging technologies, including AI, are influencing audit quality and the application of quality management standards. The report highlights both opportunities (enhanced analytics, greater workflow efficiency) and challenges (explainability, data governance, and auditor skill gaps). These insights will inform future standard setting activity, particularly around technology assisted audit evidence. 

ICAEW 

ICAEW updates multiple helpsheets for 2026 FRS 102 changes 

ICAEW has refreshed a significant suite of financial reporting helpsheets to reflect the revised FRS 102 standard, effective for accounting periods beginning on or after 1 January 2026. The updates cover several topical and high impact areas, including changes in depreciation methods, amortised cost calculations, capitalisation of website development costs, intangible asset revaluations, cryptocurrency accounting, and recognition of redundancy costs.  

These updates are part of the broader periodic review of UK GAAP completed by the FRC in March 2024. Among the most notable changes are the new IFRS aligned revenue recognition model, expanding disclosure requirements and introducing a five-step framework similar to IFRS 15, and a revised leasing model aligned more closely to IFRS 16, bringing most leases onto the balance sheet.  

Further amendments also address cashflow disclosure requirements - including new reporting obligations for supplier finance arrangements - updates to fair value measurement guidance and expanded related party disclosures for small entities under Section 1A. Preparers are encouraged to assess transition implications early, as the cumulative impact across multiple areas may require system changes, restatement planning, and stakeholder communication.  

ETHICS 

New PCRT guidance on the ethical use of AI in tax work 

The seven Professional Conduct in Relation to Taxation (PCRT) bodies have jointly issued topical guidance to help tax professionals apply the PCRT fundamental principles when using AI tools. The guidance emphasises integrity, professional competence, confidentiality, and due care, setting out ethical risks and recommended safeguards.  

It reinforces that members remain responsible for all work produced, even where AI tools are used, and highlights the importance of reviewing outputs critically, managing client data securely and recognising the limitations of automated tools.  

DATA PROTECTION 

Data (Use and Access) Act 2025 – commencement update 

The UK continues to roll out the Data (Use and Access) Act 2025 in phases through a series of commencement regulations. The latest set of regulations came into force in early February 2026, bringing into effect most major data protection related changes, including reforms to automated decision making, international transfers, research related processing, and expanded ICO enforcement powers.  

These measures represent a significant evolution of UK GDPR and PECR, with further ICO guidance expected across 2026 to help organisations interpret the new requirements.  

ANTI MONEY LAUNDERING 

Updated government guidance on registering overseas entities 

The government has refreshed its guidance for overseas entities registering beneficial owners or managing officers in the UK. The update reiterates annual update requirements, clarifies verification timelines, and highlights new obligations introduced under the Economic Crime and Corporate Transparency Act, particularly around disclosing trust related information for structures involved in UK land ownership.  

SUSTAINABILITY 

Government to introduce a voluntary sustainability assurance oversight regime 

Following a public consultation with 99 responses, the UK government has confirmed it will proceed with creating a voluntary oversight regime for sustainability assurance providers, to be operated by the FRC. The aim is to boost trust and consistency in assurance of sustainability related financial disclosures, ahead of future mandatory requirements. An interim voluntary register is expected by mid-2026.  

The regime will be profession agnostic and will apply to assurance over UK Sustainability Reporting Standards (UK SRS), the EU’s CSRD requirements, and other ISSB aligned frameworks.  

FCA consults on aligning listed issuer disclosures with UK SRS  

The Financial Conduct Authority (FCA) has launched CP26/5, proposing to replace TCFD aligned rules with reporting aligned to the UK Sustainability Reporting Standards (UK SRS), effective for accounting periods beginning on or after 1 January 2027. Mandatory climate disclosures would be made under UK SRS S2, with Scope 3 emissions and wider sustainability disclosures under S1 required on a ‘comply or explain’ basis, supported by transitional relief.  

Companies would also need to disclose whether they have published a transition plan and whether their sustainability disclosures have been assured. The consultation runs until 20 March 2026. 

TAX

Coding notices

HMRC has advised the Chartered Institute of Taxation that the 2026/27 annual coding notice process will include the removal of employment expenses and higher rate relief for Gift Aid donations from some taxpayers.

HMRC issue briefing: operational activity following the new independent review of the Loan Charge

This briefing explains HMRC's operational activity following the new independent review of the Loan Charge.

HMRC continues to update its MTD guidance

With less than two months to go, HMRC continues to update its MTD guidance.

Help with sharing group structure information

HMRC have published best practice for sharing group structure information with HMRC to avoid misunderstandings.