Newswire May 2024

As the nation gears up for the General Election, the Finance (No.2) Bill has made the final stages of its journey through Parliament and our Finance Act course looks at the practicalities for you and your clients.

At Mercia, we have been as busy as always. We were recently able to announce a partnership with cloud-based, digital audit platform Inflo. Our partnership offers accountants an opportunity to embrace modern technologies, while significantly reducing the challenges of changing core software.

Audit experts in both companies have integrated Mercia’s trusted methodology and templates into the Inflo platform. There is now no easier way to modernise your accounting firm, find out more here.

The government has extended the deadline for voluntary National Insurance contributions (NICs) until April 2025. This gives taxpayers nearly two more years to fill gaps in their NIC record from April 2006. Read Mark Morton’s blog to find out more of the details.

The collapse of London Capital & Finance (LCF) was one of the biggest financial scandals in recent years with bondholders left hundreds of millions out of pocket. The spotlight has now fallen on the business’s auditors with three firms receiving sanctions from the FRC. Take a look at Chris Turner’s blog as he analysis the audit failings and asks what lessons can be learned from the collapse of LCF.

In our Newswire, we look at the latest on the pilot of Making Tax Digital for Income Tax and the new online system for voluntary National Insurance payments, please see the tax section for details. On the audit side, we look at the new standard, IFRS 19 issued by the IASB and proposed amendments for renewable energy contracts.

AUDIT & ACCOUNTING

IASB issues a new standard, IFRS 19 

The IASB has issued a new IFRS Accounting Standard for subsidiaries, IFRS 19 Subsidiaries without Public Accountability: Disclosures, which permits eligible subsidiaries to use IFRS Accounting Standards with reduced disclosures. The IASB state that applying IFRS 19 will reduce the costs of preparing subsidiaries’ financial statements while maintaining the usefulness of the information for users of their financial statements. 

Subsidiaries are eligible to apply IFRS 19 if they do not have public accountability and their parent company applies IFRS Accounting Standards in their consolidated financial statements. IFRS 19 is available to use immediately, subject to jurisdictional endorsement. 

IASB proposes amendments for renewable electricity contracts 

The IASB has published an Exposure Draft proposing narrow-scope amendments to ensure that financial statements more faithfully reflect the effects that renewable electricity contracts have on a company. The proposals amend IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures. 

The IASB is inviting feedback on the proposed amendments until 7 August 2024. 

IASB launches comprehensive review of accounting for intangibles 

ISSB to commence research projects about risks and opportunities related to nature and human capital 

Informed by its recent consultation on future priorities, the ISSB will commence projects to research disclosure about risks and opportunities associated with biodiversity, ecosystems and ecosystem services and human capital. The research projects will focus on the common information needs of investors in assessing whether and how these risks and opportunities could reasonably be expected to affect a company’s prospects. 

The ISSB expects to publish a summary of the feedback on its agenda consultation in June, together with its response to the feedback and its work plan for the next two years. 

IFAC propose revisions to IES 2, 3 and 4 to embed sustainability 

The IFAC has proposed changes to the international Education Standards to embed sustainability, from analysis to reporting to assurance, across aspiring professional accountants’ training. 

Key proposals include: 

• Emphasising working with experts and in multi-disciplinary teams; 
• Introducing key sustainability reporting concepts, such as systems thinking, value chains and scenario analysis; 
• Referencing relevant sustainability reporting and assurance standards; and 
• Creating a new assurance competence area and learning outcomes. 

The deadline for comments is 24 July 2024. 

CHARITIES 

Changes to charity law in Scotland 

The first changes arising from the Charities (Regulation and Administration) (Scotland) Act 2023 came into force on 1 April 2024. These increase the range of powers available to the OSCR as the charity regulator in Scotland. Further changes are expected to come into force later this year and during Summer 2025. 

ICAEW 

Legal Services Compensation Scheme review and consultation 

The ICAEW is consulting on its proposal to continue with the current Legal Services Compensation Scheme including the regulations, claim limits and levy. 

The consultation closes on 24 May 2024. 

TAXATION

IT consultant given 13-year directorship ban after concealing Covid loan

A businessman who applied for two Bounce Back Loans and failed to disclose existence of first loan to liquidators has been given a 13-year directorship ban after concealing Covid loan. To read more, please click here.

Use Making Tax Digital for Income Tax

HMRC has released guidance for sole traders, landlords and agents who want to volunteer to use and test HMRC's new way of reporting income and expenses for 2024/25. To read more, please click here.

Online voluntary National Insurance payments service launches

The Government is making it easier for customers to check for and fill any gaps in their National Insurance records to help increase their State Pension by launching a new online service. To read more, please click here.

Help to avoid errors in claims for plant and machinery allowances

HMRC has published guidance about common areas of error when claiming capital allowances on plant or machinery. To read more, please click here.