So Chancellor Philip Hammond presented his first Autumn Budget on Wednesday 22 November 2017, even managing a couple of jokes. His report set out a number of actions the government will take including support for more house building. The major attention-grabber, whilst not business related, was aimed at first time buyers who will not have to pay Stamp Duty Land Tax on homes costing up to £300,000. It will be interesting to see if the Scottish Parliament mirror this change in the Land and Buildings Transaction Tax rules in the Scottish Budget on 14 December.

The Autumn Budget announcements did however include some interesting measures for businesses which we have summarised in our blog post Highlights from Autumn Budget 2017. We will be covering the changes in our Finance Act courses in May 2018. Please note the new timing, it will be odd not to run these courses in their regular September slot due to the change in timing of the Budget and subsequent legislation.

This month has also seen a number of important updates for charities, including guidance on reporting to UK charity regulators and new legislation passed to allow charitable companies to convert to a charitable incorporated organisations. We share more in the A&A section below. 

Nicola Hurley Managing Director

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Updated auditor Practice Notes

The FRC have issued revised versions of Practice Note 11: The Audit of Charities in the UK and Practice Note 15: The Audit of Occupational Pension schemes in the United Kingdom.

The revised practice notes are intended to assist auditors in complying with International Standards on Auditing (UK). Revisions reflect requirements applicable to audits of financial statements for periods commencing on or after 17 June 2016, recent legislative changes and changes to financial reporting standards.

The FRC have also withdrawn Practice Note 21: The Audit of Investment Businesses in the United Kingdom and Practice Note 22: The Auditor’s Consideration of FRS 17 Retirement Benefits - Defined Benefit Schemes.

Guidance on reporting to UK charity regulators

The Charity Commission for England and Wales, Office of the Scottish Charity Regulator and Charity Commission for Northern Ireland have issued a guide for auditors and independent examiners on the Reporting of Relevant Matters of Interest to UK Charity Regulators. See our blog post for more detail.

Guidance published earlier this year on Reporting Matters of Material Significance has also been updated to clarify that the reporting duty still exists where trustees have already reported a matter and that reporting is not expected in instances arising from accounting regulations not having been updated to refer to a new SORP.

Conversion from a charitable company to a CIO

Legislation has been passed to allow charitable companies to convert to a charitable incorporated organisation in England and Wales. The Charity Commission for England and Wales intend to apply a phased implementation to applications from charitable companies. Those with annual income of less than £12,500 will be permitted to apply from 1 January 2018, with staggered dates eventually permitting applications from charitable companies with annual income of greater than £500,000 from 1 August 2018. Further information is available here. Also see our blog post on this change.

Technical manual news

We have issued an update to our Charities Specialist Assignment Manual (SAM) that reflects changes to auditing standards effective for audits of annual reports with periods commencing on or after 17 June 2016, as well as updated guidance referred to earlier in the A&A section of this Newswire. This manual also reflects the updated independent examination regime applicable to reports signed and dated on or after 1 December 2017 in England and Wales.

We have also published an update to our Limited Liability Partnerships SAM for changes to auditor standards.

If you are a subscriber and have any administrative questions about this update, please email Karina Johnston or call us on 0116 258 1200.


Government delays abolition of Class 2 NIC

The Government has announced that it will introduce the National Insurance Contributions (NIC) Bill in 2018. The measures it will implement will now take effect one year later, from April 2019. This includes the abolition of Class 2 NIC, reforms to the NIC treatment of termination payments, and changes to the NICs treatment of sporting testimonials. More information available here.

Trusts Registration Service registration deadline for new trusts extended

Following feedback from agents HMRC have announced that the Trust Registration Service deadline for new trusts has been extended further from 5 October 2017 to 5 January 2018. Read more here.

Tax-Free Childcare to open to children under 6

On 24 November 2017 HMRC will open the service to parents whose youngest child is under six or who has their sixth birthday on that day. More information available here.

Mortgage providers and lenders who accept a SA302 tax calculation and a tax year overview

HMRC have provided details of lenders which will accept either a copy of an SA302 printed from HMRC’s online account or a tax calculation printed from commercial software used to submit returns. Updated guidance available here.

Forthcoming Scottish Budget in December

The Scottish Parliament has published a discussion document on the role of income tax in advance of the Scottish Budget on 14 December. You may also be interested in our blog post Scottish Budget Expectations.



Talking to your clients

Pension problems

By Mark Morton

Mercia Blog Abusive Tax Arrangements

Penalties For Abusive Tax Arrangements

By Julia Penny

Mercia Blog Audit Files Reviewed

Why Have Your Audit Files Reviewed?

By Paul Ginman


Fresh faces

We're pleased to welcome Paul Ginman to our Audit team. Prior to joining Mercia, Paul was responsible for quality at Baker Tilly International. Paul qualified with what is now Deloitte before moving on to a role developing the Baker Tilly International network - increasing its global reach and introducing a global audit methodology and quality assurance processes. 

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