Mercia Group 
27 July 2023 00:00Welcome to our July Newswire.
As many of us head towards our summer break, the world of tax and accounting continues to move apace. There have been changes to VAT late filing and payment penalties, while the FRC has published the results of its latest inspections into audit firms.
To find out more about these developments or about what’s happening in the areas of accountancy, audit and tax, take a look at our news and insights section on our website.
Mercia’s content offers valuable information on recent newsworthy topics while our podcast series offers more in-depth discussion and analysis.
In our Newswire, we look at HMRC’s plan to launch an online form for overlap relief, please see the tax section for details. On the audit side, we look at EFSA’s new Academy Trust handbook and amendments to FRS 102 and FRS 101.
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ESFA issues Academy Trust Handbook 2023
The ESFA have published the Academy Trust Handbook 2023 which comes into effect on 1 September 2023. This years’ handbook is a much shorter and sharper document and contains several key changes, including an increase in the threshold beyond which ESFA approval is required for related party transactions (from £20k to £40k) and removal of the requirement for explanations in annual accounts when holding fewer than 6 board meetings per year.
FRC issues amendments to FRS 102 and FRS 101
The FRC has issued amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and FRS 101 Reduced Disclosure Framework in respect of the International tax reform – Pillar Two model rules. The amendments to FRS 102 introduce a temporary exception to the accounting for deferred taxes arising from the implementation of the Pillar Two model rules together with targeted disclosure requirements. The amendments to FRS101 provide an exemption from some of the disclosure requirements in IAS12 Income taxes provided that equivalent disclosures are included in the consolidated accounts of the group in which the entity is consolidated.
Further amendments to FRS 102 in respect of FRED 82 are expected later this year.
FRC inspections show continued improvement at largest audit firms
The Financial Reporting Council (FRC) has published its annual inspection and supervision results of the largest audit firms (BDO, Deloitte, EY, Grant Thornton, KPMG, Mazars and PwC). Overall, 77% of audits inspected were deemed good or only required limited improvement. This percentage reflects a year-on-year improvement spanning four years, with a 10% increase compared to the 67% recorded in 2020.
ICAEW issues Factsheets dealing practice related matters
The ICAEW Technical Advisory service has issued factsheets dealing with a number of practical matters relevant to those in practice. The following factsheets are available to ICAEW members only.
ISSB issues inaugural sustainability standards and IAASB issues proposed sustainability assurance standard
The International Sustainability Standards Board (ISSB) has issued its inaugural sustainability standards—IFRS S1 and IFRS S2. The Standards are intended to improve trust and confidence in company disclosures about sustainability to inform investment decisions. The standards will not be compulsory in the UK until adopted by the UK Endorsement Board.
The International Auditing & Assurance Standards Board (IAASB) has also issued a proposed international standard on sustainability assurance approved for public consultation.
Overlap relief - preparing for the new tax year basis
This summer, HMRC is planning to launch an online form for submitting requests for details about overlap relief. This will provide an easier way to submit requests and make sure that these are dealt with separately from general post. To read more, please click here.
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