Newswire October 2025

We recently launched your 2026 Training Programme, combining enhanced technical training with bold new content on technology, sustainability and professional skills. Paired with the Mercia Learning Hub, our Training Programme helps your team to efficiently learn and thrive in an ever-changing world. Mercia remains focused on helping you grow your business, develop your people and stay ahead in a changing profession.

Mercia's 2026 Training Membership offering now includes the Professional Skills for Experienced Individuals programme in addition to our interactive UK GAAP Training Library, meaning you have the tools required to stay compliant and ahead of the curve.

With the 2025 Autumn Budget creeping ever closer, Chancellor Rachel Reeves recently confirmed that taxes will rise, with increases primarily set to affect those with ‘the broadest shoulders’.

Speaking at a recent International Monetary Fund (IMF) meeting in Washington DC, Ms Reeves ruled out the implementation of a so-called ‘wealth tax’, highlighting that measures announced in the 2024 Budget largely applied to wealthier individuals. Our latest Budget blog analyses these issues and considers ways in which the Chancellor can avoid breaking Labour’s manifesto promises.

In this month’s Newswire, we look at the opening of the Covid repayment window - please see the tax section for details. On the audit side, the Centre for Public Interest Audit (CPIA) has highlighted the need for clearer guidance to help firms navigate the regulatory maze, and the Financial Reporting Council (FRC) has issued updates to the UK suite of International Standards on Auditing, incorporating amendments from recent revisions.

AUDIT & ACCOUNTANCY

UK Audit Regulation: Navigating Regulatory Complexity Beyond PIE Requirements

Companies are facing increasing scrutiny from multiple regulatory bodies, creating a fragmented landscape of overlapping audit, governance, and reporting requirements. This complexity poses challenges for organisations seeking to maintain accountability while managing compliance burdens. The Centre for Public Interest Audit (CPIA) highlights the need for coordinated reform and clearer guidance to help firms navigate the regulatory maze and uphold public trust.

Audit Market Cap Plans Dropped as PIE Definition Set to Broaden

Government plans to impose a cap on audit market share may have been shelved, while the scope of Public Interest Entities (PIEs) could expand to include organisations with over 1,000 employees and £1 billion in turnover, according to a former DBT minister. In early September, Justin Madders—then Parliamentary Under-Secretary of State at the Department for Business and Trade—wrote to Business and Trade Committee Chair Liam Byrne. The letter, published on 16 September, offers new insight into the government’s evolving stance on audit and corporate governance reform.

FRC Publishes Latest KFAT Report on UK Audit and Accountancy Sector

The Financial Reporting Council has released the 23rd edition of its Key Facts and Trends (KFAT) report, offering a detailed snapshot of the UK’s audit and accountancy profession. This year’s edition includes data from 31 of the 34 firms auditing Public Interest Entities (PIEs), covering a wide spectrum—from firms with fewer than 200 staff to those with over 2,000. It also explores demographic trends across the profession, highlighting age, gender, and ethnic diversity by seniority and firm size, and drawing attention to both areas of progress and ongoing disparities.

FRC publishes conforming amendments to International Standards on Auditing

The Financial Reporting Council has issued updates to the UK suite of International Standards on Auditing, incorporating amendments from recent revisions. Changes affect ISQM (UK) 1 and 2, ISA (UK) 220, and ISA (UK) 600, with effective dates ranging from December 2022 to December 2023. These updates aim to enhance audit quality and consistency, following extensive public consultation and FRC Board approval.

FRC publishes Annual Review of Corporate Reporting

The Financial Reporting Council’s latest review shows sustained quality in corporate reporting across FTSE 350 companies. Fewer reviews led to queries or restatements compared to previous years, with a notable decline in profit-affecting restatements. The findings reflect continued efforts to uphold investor confidence and support capital access, while encouraging companies to maintain high standards in financial disclosures.

FRC issues October consultations

The Financial Reporting Council has issued four consultations covering updates to its Audit Enforcement Procedure, revisions to audit standards[JG1] [DR2]  (ISA (UK) 240 and 570 and the ISA (UK) 700 series), and a proposal to retain FRS 101 unchanged following its annual review. Stakeholders are invited to provide feedback on the proposed changes, which aim to streamline regulatory processes and maintain audit quality.

For further information on the proposed revisions to audit standards, please see our blogs on the FRC’s proposed revisions to ISA (UK) 240 and 570 and the ISA (UK) 700 series.

ACCA release latest Audit Monitoring Report 

ACCA’s latest report focuses on ethical considerations in audit engagements. It highlights principles of integrity, objectivity, and independence as outlined in the FRC’s Revised Ethical Standard 2024 and IAASA’s 2020 standard for auditors in Ireland. The report underscores the importance of ethical compliance in maintaining audit credibility and public confidence.

AUDIT & ACCOUNTANCY: CHARITIES

Challenges to financial resilience among serious risks facing charities, regulator finds The Charity Commission has analysed data from annual returns, incident reports, and casework to produce its first annual Charity Sector Risk Assessment. The report identifies systemic risks that could undermine charities’ ability to deliver services or maintain public confidence. Financial resilience, governance weaknesses, and operational vulnerabilities are among the key concerns. Trustees are urged to assess their organisations’ exposure and take proactive steps to strengthen oversight and risk management.

UK Charity Sector Reports

Recent reports from the Office of the Scottish Charity Regulator (OSCR) and the Charity Commission for Northern Ireland (CCNI) offer a detailed snapshot of the charity sector across the UK. OSCR’s Sector Overview Report, covering July to September 2025, highlights trends in income, expenditure, activities, and beneficiary reach among Scottish charities. In Northern Ireland, the Commission analysed data from 7,258 registered charities, revealing that between April 2016 and March 2025, the sector generated £18.9 billion in income and spent £18.08 billion. The report also provides insights into trustee demographics, volunteer engagement, charitable purposes, and governance structures. Together, these publications underscore the scale and complexity of the UK charity landscape, while highlighting the importance of transparency, financial resilience, and effective governance in maintaining public trust.

AUDIT & ACCOUNTANCY: ACADEMIES

 
Common issues identified from DfE's assurance work: 2024 to 2025

The Department for Education has identified recurring issues in academy trust financial statements, governance reviews, funding audits, and resource management checklists. These findings, drawn from its 2024–2025 assurance programme, highlight areas where academy trusts can improve financial oversight and compliance. The report is intended to support better governance and accountability across the education sector, with practical guidance for finance teams, trustees, and auditors.

AUDIT & ACCOUNTANCY: PENSIONS

FRC to develop technical guidance for pension scheme actuaries to respond to forthcoming legislation
The Financial Reporting Council plans to develop technical guidance for actuaries in response to upcoming legislation stemming from the Virgin Media Ltd v NTL Pension Trustees case. The guidance will support retrospective confirmation of pension scheme amendments and will be developed in collaboration with industry bodies. This initiative aims to ensure clarity and compliance in pension scheme governance.

ANTI-MONEY LAUNDERING

Consultation outcome: reforming anti-money laundering and counter terrorism financing supervision

The government has concluded its response to the 2023 consultation on reform of the anti-money laundering/counter-terrorist financing (AML/CTF) supervision regime and has announced its decision to consolidate responsibility for AML/CTF supervision of legal, accountancy and trust and company service providers in a single body – the Financial Conduct Authority (FCA) – taking away responsibility for supervision from other professional bodies, including accountancy regulators such as the ICAEW and ACCA. The exact impact of this on audit and accountancy practitioners will become clear over time, though it is expected that the FCA may take a different regulatory approach, requiring practitioners to ensure they remain up to date with developments to remain compliant.

For further information, resources and support on related topics, please see our AML hub. 

TAXATION

Covid repayment window opens

Those who still owe Covid scheme money to the public purse have been given a time-limited opportunity to pay it back before tougher sanctions apply. To read more, please click here.

PAYE rules for labour supply chains that include umbrella companies from 6 April 2026

HMRC has issued guidance on the PAYE rules for labour supply chains that include umbrella companies from 6 April 2026. To read more, please click here.

Update on Winter Fuel Payments recovery through the tax system

HMRC have provided an update on Winter Fuel Payments recovery through the tax system. To read more, please click here.

High Income Child Benefit Charge: Pay the tax charge through PAYE

HMRC have introduced a new service for taxpayers with a liability to the HICBC to pay the charge via PAYE without completing a return if they are not required to file a return for another reason. To read more, please click here.