Accounting / Culture, financial controls and risk management in a Brexit world

Organisational culture has consistently been the business topic of recent months. Its influence on risk, and its relevance for regulators and investors, is becoming increasingly tangible. Malcolm Finn, financial controller at Costa Coffee and Mike Cowan, head of finance 4.0 at EY consider the significance of culture in the context of the organisation's finance function, and how culture is key to overall risk management

Tax / Government delays anti-recycling rules for non doms until 2018

An overhaul of the tax status for non doms with overseas trusts will see the loss of trust protection over certain property transaction into trusts but the government has delayed anti-recycling rules which would have stopped UK resident beneficiaries from receiving trust monies tax free via an indirect distribution and onward gift, reports Sara White

Tax / Exports and the EU Customs Union: post-Brexit options

The Institute of Export & International Trade’s senior director of special projects, Mike Josypenko considers some of the implications for UK SME businesses of exiting the EU’s Single Market and Customs Union

Tax / Government Gateway to link with Making Tax Digital

Existing clients of accountancy firms and tax advisers will transfer to newly-established Agent Services Accounts required to access HMRC under Making Tax Digital, the tax authority has confirmed

Insight / May triggers Article 50 in a letter to the EU

Prime Minister, Theresa May has triggered Article 50 setting in motion the Brexit process for the UK to leave the EU, as the historic Article 50 letter is delivered to European Council president Donald Tusk

Accounting / BCBS clarifies interim treatment of accounting provisions pre IFRS 9

The Basel Committee on Banking Supervision (BCBS) has released details of the interim regulatory treatment of accounting provisions and standards for transitional arrangements in the run-up to IFRS 9 implementation

Accounting / IASB consults on IFRS 8 Operating Segments review

The International Accounting Standards Board (IASB) is consulting on proposals to make minor amends to IFRS 8 Operating Segments, with a new requirement to disclose the title and role of the influential decision maker

Tax / HMRC updates historical claims for VAT bad debt relief

HMRC has published a brief setting out its policy on the scope for claims for VAT bad debt relief on supplies made between 1 January 1978 and 19 March 1997, which has been updated following two legal rulings which found that some of the conditions previously attached to claims were disproportionate

Accounting / IAS 34 consultation hints at earlier interim segment reporting

The International Accounting Standards Board (IASB) is to amend IAS 34 Interim Financial Reporting to tweak reporting dates to require companies that change their segments to provide restated segment information in the first interim report after the change

Tax / OTS encourages discussion on tax complexity

The Office of Tax Simplification (OTS) has published a focus paper on tax complexity, together with updated versions of its various complexity-themed papers, in a bid to encourage greater discussion of options such as ‘layered legislation’ and ways to regularise thresholds

Insight / Mobility products supplier enters administration

Keith Marshall and Gareth Harris of RSM restructuring advisory have been appointed joint administrators of Hartmond Ltd, a Yorkshire-based mobility products supplier, which has collapsed with the loss of all jobs

Insight / Outlook for financial services positive post-Brexit

The UK financial services industry will see slower but continued growth up to 2020 despite challenges on the horizon from Brexit, according to EY analysis published on the day the UK triggers Article 50 to start the official process to leave the EU

Accounting / FRC puts up membership fee by 2.5%

The Financial Reporting Council (FRC) has increased its fees on accountancy professional bodies by 2.5% with an overall 5% increase in the fees on preparers, detailed as part of its plan and budget for 2017/18

Insight / Economic trends: testing the mettle

Despite being surprisingly resilient to Brexit concerns in the run up to 2019, Chris Williamson, chief economist at Markit, forecasts a period of turbulence for the economy as the UK heads towards unchartered waters

Insight / Deloitte US scoops IT cloud consulting business

Deloitte in the US has acquired substantially all of the assets of Day1 Solutions, a cloud consulting firm, after announcing a commitment to add 3,000 high-tech engineering jobs and open new cloud studios in the US over the next year

Technical Alerts

28 Mar 2017

Accounting / SFO fines Tesco £129m over accounting misstatement probe

Tesco is to pay £129m under the terms of a deferred prosecution agreement (DPA) to be formally confirmed next month, to settle a probe by the Serious Fraud Office (SFO) into accounting practices at the retailer which resulted in a £263m black hole in its half year interim results in 2014. The supermarket giant will also pay out £85m to affected shareholders via a scheme which will be set up and run by KPMG, reports Pat Sweet

Insight / Insolvency rule change will create period of uncertainty

An overhaul of the way insolvency cases are handled from 6 April will create a period of uncertainty for practitioners as physical creditor meetings fall by the wayside and email communications become the default preference, warns Sean Moran, partner and insolvency law specialist at Shakespeare Martineau

Audit / Testing the safety net: insurance audit and PN20

Moore Stephens insurance sector partner Tom Reed examines Practice Note 20 which refreshes rules around materiality and reporting under Solvency II following withdrawal of Practice Note 24

Tax / US Tax Court sides with Amazon over Luxembourg transfer pricing

The US Tax Court has ruled in favour of Amazon over a costly transfer pricing dispute with the Internal Revenue Service (IRS) that could have seen it hit with a $1.5bn (£1.2bn) bill

Insight / Brexit from a French perspective - fog and frogs

It’s official… the clock is ticking to Article 50 day. France has been in Brexit mode since the vote and is now looking eagerly over La Manche in the hopes of attracting UK-based businesses to France in a post-Brexit world. Didier Hemion, partner at French accounting and consulting firm Primexis likes their pitch

Insight / FTSE 350 chiefs urged to increase diversity

Business minister, Margot James, has called on FTSE 350 companies to increase diversity, with the largest companies urged to take up the McGregor-Smith review recommendations on black and ethnic minority progression in the workplace

Tax / More museums set to benefit from VAT relief

Government has added 29 museums and galleries, which offer free admission to the public, to the VAT refund scheme as part of its commitment to free public access to collections displayed in national museums and galleries, which begins 1 June 2017

Tax / MEPs push for end to hybrid mismatches

MEPs on the economic and monetary affairs committee have voted to close loopholes which they say allow multinationals like Apple and others to avoid paying tax on profits by exploiting differences in the tax systems of EU and third countries

Insight / 99p Stores go into administration

AlixPartners has been appointed as administrators to the discount chain 99p Stores, having been called in by Poundland which bought its rival for £55m less than two years ago

Insight / Deliveroo riders in legal challenge over employment status

Riders who work for Deliveroo are the latest members of the gig economy to take legal action challenging their employment status, and bring claims in relation to the National Minimum Wage (NMW), holiday pay and age discrimination

Insight / 12-sided £1 coin becomes legal tender

A new 12-sided £1 coin becomes legal tender from Tuesday 28 March with the first redesign for more than 30 years, in a bid to tackle the rise of counterfeits, and will replace existing round pound coins over a six month transition period

Technical Alerts

27 Mar 2017

Accounting / IFRS 15: revenue recognition overhaul

IFRS 15 Revenue from Contracts with Customers comes into force from next year but has been surpassed by businesses focussing on IFRS 9, IFRS 16 and IFRS 17. Jeroen Van Doorsselaere, vice president of risk and finance at Wolters Kluwer, outlines the new rules on revenue recognition under IFRS 15

Tax / Dodwell: resentful acceptance of Making Tax Digital

Plans to roll out quarterly reporting under Making Tax Digital will raise admin and compliance costs but businesses are facing up to the reality of the overhaul in tax reporting requirements. Bill Dodwell, partner and head of tax policy at Deloitte, considers potential pitfalls, particularly with one-off payments

Tax / Leyton Orient winding-up order pushed back until June

Struggling League Two football club Leyton Orient has been granted a stay of execution to pay off its debt or sell by 12 June or be wound up

Insight / Banned accountant jailed for £5m fraud on friend

An accountant from Cambridgeshire, who has already been excluded from ICAEW over accounting failures as a company director, has now been given an eight-year prison sentence for stealing more than £5m from three companies owned by a personal friend of 25 years' standing

Tax / Tyrie calls for probe into real cost of Making Tax Digital

Andrew Tyrie MP, chairman of the Treasury Committee, has called for further analysis of the projected costs to small businesses of complying with quarterly reporting under Making Tax Digital as the Federation of Small Businesses (FSB) and HMRC’s estimations of the administrative burden differ immensely 

Audit / Deloitte in fashion at SuperGroup

FTSE 250 clothing retailer SuperGroup has announced it plans to replace PwC with Deloitte as its external auditor for the financial year ending 28 April 2018, following a competitive tender process

Audit / Deloitte picks up PZ Cussons audit from PwC

Personal care and homecare supplier PZ Cussons is to drop PwC as its auditor following a competitive tender process, and plans to appoint Deloitte as its external auditor for the financial year commencing 1 June 2017, subject to shareholder approval at its AGM in September

Insight / KPMG finds buyer to fit Jones Bootmaker

KPMG has found a buyer for Jones Bootmaker, the footwear retailer with over 100 branches across the UK, selling the company to private equity firm Endless, in a move which saves the company from going into administration

Accounting / OECD countries favour accrual accounting

Nearly 75% of OECD countries have adopted accrual accounting for their year-end financial reports and more than a quarter now prepare their annual budgets on an accrual basis, according to research by the International Federation of Accountants (IFAC) and the OECD

Insight / Charity trustee disqualified for immigration visa fraud

The Charity Commission has disqualified a trustee, barring him from becoming involved with charities again, after an inquiry found he had used the Khalsa Missionary Society as a conduit for immigration fraud

Tax / Warning to SMEs over hike in winding up applications

Last year saw a 12% hike in HMRC applications to wind up businesses in order to recover unpaid tax, up to 3,906 in 2016 from 3,485 in 2015, according to analysis by Funding Options, which says SMEs are at particular risk

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