Pay VAT deferred due to coronavirus (COVID-19)
HMRC have issued updated guidance on paying VAT payments deferred between 20 March and 30 June 2020. To read more, please click here.
The loan charge
HMRC have amended their guidance on the loan charge to allow for late elections. To read more, please click here.
HMRC and ASA launch new action to disrupt promoters of tax avoidance schemes
HMRC and the Advertising Standards Authority have launched new action to cut out misleading marketing by promoters of tax avoidance schemes. To read more, please click here.
UK government announces pay rise for millions of people
Millions of UK workers to receive increase in pay from April 2021 following rise in the National Minimum Wage and National Living Wage. To read more, please click here.
Changes to the advisory fuel rates from 1 December 2020
The advisory fuel rates have been issued with effect for all journeys undertaken on or after 1 December 2020.. To read more, please click here.
AUDIT AND ACCOUNTING
Consultations on Companies House and register reformThe government has launched three consultations relating to Companies House and the register of companies. The first addresses the quality of information on the register and proposals related to the filing of accounts; the second asks about the registrar's powers and the final consultation is about implementing the ban on corporate directors. The consultations are linked to wider plans about register reform and having them as separate discussions allows those interested only in certain aspects to respond in a focussed way. For anyone wishing to comment on the proposals the closing date for doing so is 3 February 2021.
ICAEW risk flowchartICAEW has produced a business risks flowchart to help companies with year ends coming up as they assess the effects of the Covid-19 pandemic on their financial reporting. The flowchart highlights likely areas of concern and how the business's response might be reflected in the accounts.
Proposed changes to IFRSThe IASB has released an exposure draft of changes to IFRS 16 Leases to improve accounting for sale and leaseback transactions. It gives more detail on the initial measurement of the right of use asset and lease liability, and on the subsequent measurement of the liability. The closing date to comment on the exposure draft is 29 March 2021.
The IASB is also calling for feedback on a series of standards related to group accounting as part of a post implementation review of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities. Feedback, which should be made by 10 May 2021, will be used to determine whether any changes to these standards are required. Separately a public consultation has also been launched on possible new accounting requirements for mergers and acquisitions involving companies within the same group, an area where the guidance provided by IFRS is notably lacking. The deadline for comments on this consultation is 1 September 2021.
Areas of focus for 2020/21The FRC has announced the focus for its coming thematic and other reviews in the coming year. In financial reports it will be looking at going concern and viability, provisions, energy and carbon reporting, alternative performance measures and interim reports. The review of the work of audit firms will focus in particular on their work on the impact of Covid-19, audit of estimates, climate-related risks, and fraud. The priority sectors will be travel, hospitality and leisure, retail, property and financial services, though the FRC has emphasised that its reviews will not be limited to companies in those sectors.
The ICAEW has also published its own practical guide for the 2020/21 reporting season, which although aimed at larger private and smaller listed companies will also be of interest to others. As might be expected there are areas of overlap with the FRC but it also highlights new or revised accounting standards that have come into force and the implications of Brexit as being areas to focus upon.
Consultation on revised standard for interim review engagementsThe FRC has opened a consultation on the revised UK version of ISRE2410 for interim financial statements. The proposed limited changes mainly relate to the changes recently made to ISA (UK) 570 on going concern, to ensure that interim reviews are taking account of risks in a similar way. The consultation runs until 19 February 2021.
ICAEW audit manifesto
A year ago audit reform was rarely out of the news, following major reviews into the sector undertaken by Sir John Kingman, Sir Donald Brydon and the Competitions and Markets Authority. At the time of writing though we are still waiting for the government’s legislative proposals for change, partly due no doubt due to the need to focus on more urgent matters in recent months.
In the meantime the ICAEW has launched its new audit manifesto, proposing five principles for the future of audit, and explaining how these principles would be applied in developing changes to the markets and future audit regulation.
OFFICE GOSSIP & IDLE CHAT
Christmas and New Year Opening Hours
Mercia will be closed from Wednesday 23 December to Sunday 3 January (inclusive). However please rest assured that any emails you send will still reach us and, if needed, we will acknowledge your email on our return.