Audit / BEIS committee warned over audit reform proposals

Both academics and business experts raised concerns of ‘unintended consequences’ of audit reforms to the business, energy and industrial strategy (BEIS) committee, with broad disagreement over whether the changes should be led by government or business, reports James Bunney

Accounting / LLP SORP 2018: what it means for limited liability partnerships

The latest version of the LLP SORP 2018, released in December, updates the LLP accounting rules to meet the requirements of the FRS 102 Triennial Review. James Waller, technical writer, audit and accounting at Croner-i, examines the key changes

Tax / Amount of late self assessment penalties falls to £75m

The number of taxpayers missing the deadline for self assessment returns has fallen dramatically over the last three years reducing penalties issued by HMRC to £75m in 2018 as 10.7 million taxpayers submitted their return by 31 January deadline

Insight / FSB demands reform one year on from Carillion

The collapse of government outsourcer Carillion on 15 January 2018, which cost the taxpayer an estimated £150m, has prompted greater scrutiny of the outsourcing market and calls for a major reform from the Federation of Small Businesses (FSB)

Insight / 78% hike in fraud cases hitting courts

The number of fraud cases reaching courts in the UK rose by 78% in 2018 according to research by KPMG Forensic, which identified 453 cases with a total value of £1.2bn in its annual survey, and warns untested customs and tax arrangements post-Brexit could see levels rise further

Tax / VAT Q&A: Payments on Account regime and threshold compliance

In our regular VAT Q&A series, Croner Taxwise VAT specialist Hilary Budd explains the ins and outs of the payments on account (POA) regime for a business straddling the POA threshold and how to leave the scheme

Accounting / EU report on disclosure of climate-related information

The technical expert group on sustainable finance set up by the European Commission in July 2018 has published its first report on companies' disclosure of climate-related information

Insight / Accountants look to invoice finance as client cash flow option

The majority of accountants are advising clients on potential sources of funding as their advisory role expands, although one in three cite a lack of knowledge about finance options as a barrier to making recommendations

Tax / Money purchase annual allowance pension warning

HMRC has issued guidance only two weeks before the self assessment deadline to help taxpayers work out when the pensions money purchase annual allowance (MPAA) applies and whether tax is payable on pension savings

Audit / Half of council CFOs want changes to external audit

The government needs to improve its oversight of the governance system to help local authorities cope with increasing financial and demand pressures, with a quarter of chief finance officers (CFO) from councils calling for external auditors to focus on value for money, according to a report from the National Audit Office (NAO)

Technical Alerts

14 Jan 2019

Accounting / Winton: use and abuse of pre-packs to drop pension liabilities

Anne-Marie Winton, partner at ARC Pensions Law LLP, examines the pre-pack administration of publisher Johnston Press, which involved the abandoning of £109m in pension liabilities, and asks whether regulators should have greater control of this practice 

Tax / Inheritance tax: transferable nil rate bands – part 2

Compliance with the inheritance tax nil rate band (NRB) is a complex area but beneficial from a tax perspective as it allows a £1m IHT exemption. Lisa Macpherson ATT TEP, head of tax technical at PKF Francis Clark, examines transferable bands and residence issues

Tax / Directors taxed under PAYE no longer required to file return

HMRC has amended its guidance on self assessment tax returns to clarify that company directors with income taxed at source under PAYE and with no other tax obligations do not need to complete a tax return

Insight / Government launches economic crime taskforce

The Home Secretary and Chancellor are to jointly chair a government taskforce which will work with senior figures from the UK financial sector to tackle economic crime, including fraud, bribery, corruption and money laundering, which is estimated to cost the UK at least £14.4bn annually

Tax / FTT cannot rule on self assessment refusal

The First Tier Tribunal (FTT) has determined that it has no jurisdiction on whether HMRC accepts or rejects self assessment tax returns in the case of a shop owner who failed to file his returns for 16 years running and was then subject to a bankruptcy petition

Insight / Patisserie Valerie admits late payment issues

High street cake chain Patisserie Valerie, which is under investigation over accounting irregularities, has admitted it has problems over delays in payments to suppliers, after the business, energy and industrial Strategy (BEIS) select committee asked the company about its payment practices

Tax / VAT receipts threatened by Brexit

VAT receipts represent an increasing percentage of HMRC’s total tax take, suggesting the tax burden is increasingly being shifted to consumers, and increasing the risks to the tax base post-Brexit, according to research by UHY Hacker Young

Insight / Calls to strengthen diversity pay reporting

MPs are keen to see more action on gender, ethnicity and executive pay reporting according to a survey by the Association of Accounting Technicians (AAT) which found widespread support for tougher regulation, and is calling for more reporting on action plans to reduce imbalance

Insight / Bespoke furniture maker in administration

KPMG has been appointed to handle the administration of furniture manufacturer Godfrey Syrett Ltd, which has collapsed due to difficult trading conditions with the loss of over 200 jobs

Audit / Calls for full scrutiny of EU banking audits

The European Court of Auditors (ECA) wants EU legislators to intervene and ensure the European Central Bank (ECB) allows full access to documents for audits related to banking supervision, arguing that the current position prevents them from carrying out their work properly

Insight / Brexit hits demand for financial services

Demand for financial services fell for the first time in five years in final quarter of last year, rounding off three full years of flat or falling optimism, according to research by the CBI and PwC which cites Brexit and economic uncertainty as key factors

Technical Alerts

11 Jan 2019

Tax / EU probes Nike over Dutch tax arrangements

Nike is the latest multinational to find its tax affairs under scrutiny from Brussels, with the European Commission launching an investigation into whether five Dutch tax rulings in favour of Nike may have given the US trainer behemoth an unfair advantage

Tax / Are you paying national minimum wage correctly?

Miscalculation of national minimum wage and national living wage payments can have consequences for a business as well as an individual. To ensure you get it right, tax specialist John Davison examines the basis for calculations and potential pitfalls

Tax / £200m extra VAT recovered from online sellers

HMRC has collected over £200m in unpaid VAT from overseas sellers using online marketplaces in the past two years, since the introduction of a new regime to tackle tax avoidance which enables it to flag up those who are not registered for VAT

Audit / Pentagon pilots financial database after audit failure

The failure of its first audit has led the US Department of Defense (DOD) to begin the development of a central database that will record all financial transactions across its operations and aid it in managing a $692bn (£541bn) budget

Insight / AI skills demand grows but ethics lag

Over half of organisations do not have a policy to ensure the safe and ethical development of artificial intelligence (AI), even though three quarters of business leaders report that AI is fundamentally changing their organisation, according to research from Deloitte

Insight / People in the news: KPMG, BDO, Alvarez & Marsal Taxand

This week's news of professional moves in the sector includes the appointment of a partner and various directors in KPMG’s tax disputes team, BDO has appointed an audit partner to join its East Midlands team and Alvarez & Marsal Taxand gains a managing director in its tax advisory practice

Insight / EY launches domestic abuse guide for UK employees

EY has launched a domestic abuse guide for its 14,500 staff in the UK, backed by a new campaign to put employers at the heart of tackling abuse, and is to offer special paid leave for those affected by domestic abuse

Accounting / Third of councils risk emptying reserves in next 10 years

Over a third (36%) of all councils in England are at risk of financial failure in the next decade and 17% could be in crisis as early as 2021, according to research by Grant Thornton UK which examined the impact of cuts in revenue grants 

Insight / Accountants see marginal salary increase compared to lawyers

Accountants’ salaries saw a modest 3.2% growth in 2018 compared with legal services which saw salaries increase by 7.6%, although the average salary for an accountant remains higher, according to research from CV-Library

Insight / KPMG cooks up pre-pack for kitchenware retailer

KPMG has been appointed to handle the administration of Steamer Trading Ltd, a speciality kitchenware retailer with 38 stores across the UK, and has immediately sold the business in a pre-pack deal to kitchenware retailer ProCook

Insight / £60bn spike in defined benefit pension deficit

A survey of 5,600 of the UK’s corporate defined benefit pension funds shows that the deficit rose by £60bn to £290bn over the course of December 2018, reversing gains made in 2018 and indicating growing uncertainty over Brexit

Tax / Case: UK given unilateral right to revoke Article 50 notice

Audit / BEIS Committee begins future of audit inquiry

The Business, Energy and Industrial Strategy (BEIS) Committee is to hold the opening evidence session of its inquiry into the future of audit

Technical Alerts