Following the new timetable and the Autumn Budget, Chancellor Philip Hammond will deliver the Spring Statement on 13 March. The Finance Bill is currently going through the UK parliament and both the Scottish and Welsh governments are legislating for devolved taxes. Our tax rates products which take account of these and other changes will be available following the Statement and in time for the new tax year.

On the A&A side, there are some important messages for auditors and accountants acting in the charity sector this month. The first relates to a recent report issued by the Charity Commission suggesting a need for greater understanding and better application of statutory duties relating to auditor and independent examiner whistleblowing. We also have news of a proposed update to charity accounting requirements following December’s revisions to UK and Irish accounting standards. See more in the A&A section below.

Nicola Hurley Managing Director
Mercia Free download

Help your employer clients deal with income tax and pension changes ahead

We consider income tax changes for the new tax year and increased pension contributions due under auto enrolment.


Getting ready for GDPR

Let us help you prepare for GDPR 

Face-to-face specialist course

13 & 15 March 2018

Online Training

Available until April 2018


Money Laundering, Bribery, Criminal Finances Act and GDPR

A new online induction pack aimed at providing essential training in key regulations and legislation to new starters as well as existing team members.


Reporting matters of material significance to the charity regulators

The Charity Commission for England and Wales has published results of its Accounts Monitoring Review on Reporting of Matters of Material Significance by Auditors.  The review focuses on 114 sets of charity accounts submitted in the six months to 31 October 2017 with audit reports containing information required to be reported to the Commission by the auditor.  A report was made to the Commission in only 28 of the 114 instances it was required.  In those 28 instances, only a small proportion of the reports were made on a timely basis.

Revised joint guidance for auditors and independent examiners was issued by the UK charity regulators that became effective on 1 May 2017.  This revised guidance included an updated list of matters always considered reportable as matters of material significance and requires a report to be made to the charity’s relevant regulator when issuing a modified audit opinion or an audit report containing an emphasis of matter or material uncertainty related to going concern paragraph, or when issuing a qualified independent examiner’s report identifying matters of concern to which attention is drawn.

The FRC have also reminded auditors of their duties under law and highlighted guidance in its Practice Note 11: The Audit of Charities in the United Kingdom, revised November 2017. 

Charity SORP consultation

The joint SORP-making body for charities has issued draft SORP Update Bulletin 2 for consultation. The draft Update Bulletin proposes a number of changes to the Charities Statement of Recommended Practice (FRS 102) to reflect amendments made to UK accounting standards published by the FRC in December 2017.

It is intended that amendments that seek to clarify SORP (FRS 102) application in line with the original drafting intention of FRS 102 are applied immediately after the Update Bulletin is finalised. These clarifying amendments affect the following areas:

  • the requirement to provide comparative information;
  • the removal of a SORP undue cost or effort exemption for depreciating assets comprising of two or more major components which have substantially different useful economic lives; and
  • clarifying when payments by subsidiaries to their charitable parents that qualify for gift aid are adjusting events occurring after the end of the reporting period.

Other proposed amendments reflect revisions to FRS 102 made in December 2017 and therefore carry a mandatory implementation date of reporting periods beginning on or after 1 January 2019, with early adoption permitted provided all amendments are applied at the same time. The consultation closes on 4 April 2018. It is anticipated the final version of the Update Bulletin will be issued in October 2018, subject to FRC approval.

Audit report guidance

The ICAEW has issued three new Audit and Assurance Faculty helpsheets designed to help firms prepare audit reports in specific situations.  These new helpsheets cover the following:

  • preparing an audit report with a disclaimer of opinion;
  • preparing an audit report for micro-entities; and
  • audit reports on defective accounts.

These helpsheets, along with others that are available to members and non-members of the ICAEW, can be found here.


UK and Welsh Governments confirm next steps in Welsh tax devolution

From 1 April 2018, Land Transaction Tax will replace Stamp Duty Land Tax. From 1 April 2018, landfill disposals tax will replace landfill tax and from 6 April 2019, Welsh rates of income tax will be introduced. More information from HMRC available here.

Changes to the proposals for Scottish income tax

The Scottish Government has altered its proposals for Scottish income tax rates for 2018/19. Find out more here.

On-time Self Assessment returns break the record again

According to HMRC, 10.7 million taxpayers submitted their return before the 31 January deadline. Find out more here.

Status review

As part of a series of measures, the Government has announced further consultation on employment status. Read more here.

Tax-Free Childcare opens to all eligible families

Tax-Free Childcare has opened to all remaining eligible families: parents whose youngest child is under 12. Find out more here.

Changes to the advisory fuel rates from 1 March 2018

These advisory fuel rates apply for all journeys undertaken on or after 1 March 2018. You can use the previous rates for up to one month from the date the new rates apply. Hybrid cars are treated as either petrol or diesel cars for this purpose. More information available here.

Engine size Petrol* Diesel* LPG*
1400cc or less 11p (11p)   7p (7p)
1401cc - 2000cc 14p (14p)   8p (9p)
Over 2000cc 22p (21p)   13p (14p)
1600cc or less   9p (9p)  
1601cc - 2000cc   11p (11p)  
Over 2000cc   13p (13p)  

* Amount per mile

Want to advise your clients on the car benefit changes including increased percentages and 4% diesel supplement as well as the capital allowances changes from April 2018. Watch out for our new client letter which will be available next week.



Talking to your clients

Rental income divided between spouses

By Mark Morton

Mercia Blog opinion Baby Boomer Generation

The impact of baby boomer generation on your client base

By Paul Ginman

British cash

Infographic Changes in the new Tax Year 2018/19

By Natasha Bodalia


Mercia Communications Day - February 2018

At the start of this month we held our Team Communications Day reflecting on our half year position. This year’s event was held at the home of the Foxes - King Power Stadium where we were joined by our SWAT colleagues from the London office and the SWAT technical team. Such events give us the opportunity to share results and news across all areas of our business. Putting the agenda together always highlights how much passion, innovation and talent there is across the Mercia team.

Included on the agenda was an sneak preview of our new website, launching later this year, progress on our new Learning Management System (LMS) platform, our preparation plans for GDPR and a session on how we are helping practices with social media activity. We also showcased our new Induction Pack which we launched this month.

But there was a sting in the tail as we also announced that we would like all 130 members of our team to complete the four modules on AML, GDPR, Bribery and the Criminal Finance Act!

Get in touch

0116 258 1200



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