Newswire April 2022

FRC Exposure draft of proposed ISA (UK) 600

The FRC has published an Exposure Draft of Proposed ISA (UK) 600 Special Considerations -Audits of Group Financial Statements (Including the Work of Component Auditors). The revisions build upon the recently revised international version of the standard, with an enhanced focus on the risk of material misstatement at the financial statement level and the need for robust communication between group and component auditors.

FRC 3-Year plan towards ARGA

The FRC has published its 3-Year Plan which sets out progress towards establishing the new Audit, Reporting and Governance Authority (ARGA).

The 3-Year Plan follows the government’s 2021 consultation ‘Restoring Trust in Audit and Corporate Governance’, which moved the FRC closer to its aim of becoming ARGA. Respondents to the FRC’s consultation expressed continued support for the establishment of ARGA. 

As the journey to ARGA continues, the Plan considers carefully how, and when, the FRC will need to increase its capacity to adapt to new powers and responsibilities. The Plan comprises a detailed breakdown of the FRC’s intended expenditure for 2022-23, alongside a summary of expected costs and headcount for the following two years.

FRC Periodic review of UK and Ireland accounting standards

The FRC has issued an update on the progress of its periodic review of UK and Ireland accounting standards, as at April 2022.

To support the review, the FRC will be holding a series of roundtables in May and June this year so that stakeholders can have their say on specific topics. They are particularly keen to hear from preparers and users of accounts on whether recent IFRS developments in leasing, revenue recognition and financial instruments should also be reflected in UK GAAP.

To register for the roundtables please email: stakeholderengagement@frc.org.uk. Note that stakeholders will be able to attend the roundtables in-person and virtually.

ICAEW guidance on auditor resignation statements

The ICAEW has responded to Brydon criticism aimed at the quality of auditor resignation statements with guidance on making them more informative for stakeholders.

In his 2019 Review, Sir Donald Brydon suggested that the vast majority of auditor resignation statements said little of substance and were not being shared in a timely manner.

In anticipation of the government’s decision on the BEIS consultation, the ICAEW has issued guidance highlighting a number of actions that auditors can take now to help drive more informative resignation statements.

Anti-Money Laundering

Working with individuals and organisations with links to Russia

Sanctions against individuals and organisations with links to Russia continue to be added so it is vital for firms with such clients to stay up to date with the latest measures. To assist with this process the ICAEW has created a Ukraine crisis: central resource hub which includes guidance about the sanctions as well as ethical, auditing and corporate reporting implications. Click here to access the hub.

Changes to the high risk third countries specified in Schedule 3ZA to the 2017 Money Laundering Regulations

Further amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 were made on 28th March 2022 and came into force the following day.

The amendments change the list of high risk third countries specified in Schedule 3ZA to the Money Laundering Regulations for which enhanced due diligence is required. The only changes were to add the United Arab Emirates to the list and remove Zimbabwe. Perhaps surprisingly, in the light of the extensive sanctions recently introduced, Belarus and Russia have not been added to the list.

TAXATION

Homes for Ukraine Scheme: payments not taxable

The Government has announced income tax, corporation tax and NIC exemptions alongside reliefs from the annual tax on enveloped dwellings and the 15% SDLT rate. To read more, please click here.

Employees’ home-office expenses - end of temporary easement

HMRC have announced the temporary easement for coronavirus related home-office expenses put in place during the COVID-19 pandemic will end. To read more, please click here.

Claim Income Tax relief for employment expenses by post

HMRC have stated that they will only accept employment related expensed postal claims using HMRC’s form P87. To read more, please click here.

New 64-8

From 31 March 2022, new clients will need to use a new form 64-8 to give authorisation to agents. Existing clients do not need to re-authorise their current relationship. To read more, please click here.

More than 142,000 use online payment plans to pay their Self Assessment tax bill

HMRC's online Time to Pay facility has been used by more than 142,000 Self Assessment customers since April 2021, helping to spread the cost of their tax bill. To read more, please click here.