Newswire October 2018

  • By Mercia Group
  • 30/10/2018

In a change to the traditional timing of a Wednesday in November, the Chancellor Philip Hammond delivered the Budget on Monday 29 October. In his speech he stated that 'austerity is coming to an end' and brought forward pledged increases in personal allowances and income tax bands. Key announcements include changes to Entrepreneurs' Relief and capital allowances, together with the extension of the off-payroll working rules to medium and large private sector organisations.

The government has also announced the public pilot of Making Tax Digital for VAT is now open, but that some businesses start date is to be deferred from April until October 2019. Keep your clients informed with our client letter and briefing.

In a relatively busy month for A&A news, we saw another two investigations opened into aspects of the audit market and the work of auditors.  This will continue to run, with change appearing to be the only likely outcome.  We'll be keeping track of implications for auditors as these parallel investigations come to a head over the coming months. 

In addition, the government continue to signpost some of the steps businesses need to take to plan for a no-deal Brexit, with a focus on accounting and auditing highlighted in the A&A section below along with details of amendments to the Housing and Charities Statements of Recommended Practice. 

Our free download, 'Uncovering the Covered Persons' looks into one of the issues that continues to land auditors in hot water when they fail to meet expectations and requirements for auditor independence.

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AUDIT & ACCOUNTING

Investigations into the audit market

The Competition and Markets Authority (CMA) has launched an investigation into the audit market which looks at five main areas:

  • characteristics of the audit market (including the expectation gap and the principal-agent issue)
  • incentives (i.e. the company not having the same incentives for a quality audit as the members)
  • choice and switching (i.e. the lack of choice and difficulty in switching due to the cost involved)
  • resilience (i.e. concerns that the Big Four are too big to fail and/or regulate)
  • Regulation of audit.

This investigation is in addition to the Kingman Review, which is focussing on audit regulation, and work being undertaken by the Financial Reporting Council announced in its strategy paper Developments in Audit earlier this month.

For more detail on the focus of these investigations and the potential outcomes, see our blog post All Change for Audit Firms here. 

Accounting and audit if there's no Brexit deal

The government has issued a technical notice that explains the implications for accounting, corporate reporting and audit 'in the unlikely event that the UK leaves the EU in March 2019 with no agreement in place'.

The notice focuses on where UK currently law offers equivalence, options and exemptions that are reliant on interaction with EU legislation highlighting actions that businesses and other stakeholders should take.  For an overview of the technical notice, see out blog post Accounting And Audit If There Is No Deal, here.

Charities and Housing SORP updates published

SORP-making bodies have continued to update respective SORPs for implications of the December 2017 Triennial Amendments to UK GAAP.

Update Bulletin 2 for charities consists of 'significant' and 'clarifying' amendments.  Significant amendments are applicable for reporting periods commencing on or after 1 January 2019.  Whilst clarifying amendments are noted as applicable for reporting beginning on or after 5 October 2018, the Bulletin also highlights that these clarifications reflect existing requirements of FRS 102 and are already applicable for charities preparing accounts in accordance with that standard.   This second Bulletin is read in addition to applying Update Bulletin 1 and the Charities SORP (FRS 102).

 

 

TAXATION

Budget 2018: tax-related documents

All HMRC tax related documents and other announcements for Budget 2018. To read more, please click here.

HMRC launch MTD pilot BUT deferral until October 2019 for certain businesses

HMRC has launched a comprehensive MTD pilot BUT has deferred the start date until October 2019 for certain businesses. To read more, please click here.

VAT: changes to the supply of digital services 2019

HMRC has issued a tax information and impact note about changes to the VAT rules for businesses making sales of digital services to consumers across the EU. To read more, please click here.

Government Gateway replacement: services that have moved

Services on the Government Gateway are gradually being moved to replacement systems. All services will have moved by March 2019. To read more, please click here.

Record £15.6 million underpayment identified for workers on the minimum wage

More than 200,000 workers who were paid less than the minimum wage have been identified following a record Government clampdown. To read more, please click here.

Complain about pay and work rights

HMRC has updated the online form to complain about information relating to National Minimum Wage, employment agencies, gangmasters or working hours. To read more, please click here.

 

 

OFFICE GOSSIP & IDLE CHAT

 

Mercia Incorporating SWAT - Joining forces

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