Need to know

FRC good audit guide a helpful benchmark, says ICAEW: FRC guidance aimed at beefing up audit quality has been welcomed as offering useful clarity after the watchdog warned that almost a third of audits this year do not meet acceptable standards.

What taxpayers should do when HMRC visits unannounced: ICAEW’s Tax Faculty provides guidance to members to help them support their clients in response to HMRC’s debt collection action.

How to pay self assessment liabilities without a UTR: HMRC’s backlog of registrations means that some taxpayers will need to consider settling self assessment liabilities before their unique taxpayer reference is issued. ICAEW’s Tax Faculty explains how this can be done.

HMRC to clear SA registration backlog: HMRC has pledged to clear its backlog of self assessment registrations by the end of December and shared a statement on correspondence delays. ICAEW’s Tax Faculty explains.

HMRC to contact SEISS claimants about missing 2019/20 tax return information: HMRC is writing to individuals who have received grants under the Self-Employment Income Support Scheme but have yet to fully complete a self-assessment tax return for 2019/20. The letter details the action claimants need to take.

ICAEW calls for FRC to rethink changes to Audit Firm Governance: Responding to a Financial Reporting Council consultation on proposed revisions to the Audit Firm Governance Code, ICAEW has warned the changes lack clarity, are excessively prescriptive and extend beyond the Code’s original purpose.

UK cryptocurrency owners nudged on CGT: HMRC has sent letters encouraging holders of cryptoassets, such as BitCoin, to consider their capital gains tax position, but stops short of sending them to non-UK domiciled individuals.

HMRC sends AML supervision emails in error: ICAEW members have reported receiving emails about anti-money laundering supervision from HMRC’s economic crime supervision unit. HMRC has confirmed to ICAEW that these emails were sent in error and it is investigating what went wrong.

HMRC issues COVID-19 guidance summary for the internationally mobile: Agent Update 90 provides a summary of guidance that HMRC has issued to help the internationally mobile and their advisers cope with restrictions imposed by the pandemic.

EU launches public consultation on statutory audit, corporate governance and supervision: The European Commission has initiated a broad review on the three core pillars of corporate reporting for large companies, paving the way for further EU legislative intervention.

Finance Bill includes basis period reform rules: Finance (No. 2) Bill 2021-22 was published on 4 November 2021. While many changes are effective from April 2022, it also includes the legislation for basis period reform, where the transition will happen in 2023/24. The Tax Faculty outlines its contents. 

Sustainability and climate change

New sustainability standards board targets globally comparable reporting: Moves to provide global financial markets with high-quality disclosures on climate and other sustainability issues moved a step forward after the IFRS Foundation formally announced the formation of the International Sustainability Standards Board, with a pledge for operations to begin in early 2022 and published prototype disclosure requirements.

More needed on carbon pricing to hit net zero: Attendees to an OECD webinar on carbon pricing highlighted the progress that governments have made in implementing carbon pricing arrangements in their territories but indicated that more was needed to help them meet their net zero carbon targets.

FRC publishes staff factsheet on climate-related matters: The Financial Reporting Council staff factsheet is part of a series that accompanies FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. 

Corporate reporting - no decline but sharp focus on climate risks: Despite the pandemic, the FRC has revealed that it has not detected a decline in reporting quality. But improvements in key areas are still necessary.

UK regulators climate change adaptation reports: The UK regulators of financial services are focused on making sure that the risks from climate change and the opportunities from the transition to a net zero economy are being identified and proactively managed across the financial sector. 

Other technical news and updates

Impact of COVID dominates HMRC annual report: HMRC’s annual report for 2020-21 confirms that the pandemic impacted not only its day-to-day work, tax revenues and customer service, but has potentially put delivery of the new plastic packaging tax and updating HMRC’s telephony services, at risk. The Tax Faculty outlines the key takeaways. 

SSP three-day wait to be reinstated in 2022: The standard three-day waiting time for statutory sick pay will be reinstated for coronavirus-related claims from 25 March 2022, unless government intervenes.

Helping employers with paying HMRC correctly: ICAEW’s Tax Faculty has published guidance to support employers who are struggling to ensure their payments to HMRC are being correctly allocated.

HMRC struggles to tackle huge rise in unpaid taxes: An NAO report has flagged an HMRC shortfall of 300 debt management staff to recover the £42bn owed by 6.2m taxpayers in debt as of 30 September 2021.

Limited additional funding for HMRC in Spending Review: HMRC’s Spending Review 2021 settlement will see its spending, excluding that ringfenced for COVID-19, increase to £5.2bn per year by 2024/25. ICAEW’s Tax Faculty explains how HMRC might prioritise the £0.9bn funding increase on its 2019/20 settlement. 

FRC reports local audit improvement after excluding delayed audits: The FRC’s annual Audit Quality Review of major local audits found 70% of 2019-20 audits required no more than limited improvements, compared to 40% in the previous year. However, the regulator could not review half of the audits initially selected due to delays in audit completion.

Member helpsheets and guidance

Change of professional appointment – outgoing accountant: This helpsheet has been issued by ICAEW’s Ethics Advisory Service to help ICAEW members understand their responsibilities when existing clients wish to transfer their relationship to a new accountant.

Using social media: Technical helpsheet highlighting key considerations for individuals and employers when using social media.