Newswire July 2020

Mercia Group
31 July 2020 00:00

As announced during the Chancellor’s Summer Statement on 8 July, from 15 July 2020 until 12 January 2021 certain supplies of hospitality, accommodation and admission to attractions will be subject to VAT at 5%. Read our blog to find out more. We have also been looking at the next phase in MTD, announced earlier his month.

On the A&A side, the news with the most practical immediate effect this month is the automatic extension of a number of Companies House filing deadlines. There has also been some interesting activity from the FRC this month on audit standards and quality as well as firm structure and proposed revisions to UK GAAP. ACCA have also released their report on regulation, as audit firms continue to be closely monitored.

This month also saw the release of MyPractice, a partnership between Mercia and MyWorkpapers, which aims to provide next generation, new-normal, compliance and general practice solutions to accountants in the UK and internationally. To read more about this exciting new product, click here.

Latest tax and accounting products

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AUDIT & ACCOUNTING

Automatic extension of Companies House deadlines

At the end of June, the Corporate Insolvency and Governance Act came into force, and this brought about a temporary set of relaxations of certain requirements for Companies House filings. For any company or LLP with accounts that were due to be filed between 27 June 2020 and 5 April 2021, there is an automatic extension (for private companies, this takes the deadline from 9 months to 12 months) and the information on the Companies House website will be updated to reflect these deadlines. Other deadlines are relaxed too, for example changes to the PSC register now have to be notified within 42 days rather than the previous 28.

Proposed revisions to UK GAAP

The FRC has issued:

FRED 75 Draft amendments to FRS 104 – Going concern applicable to businesses subject to the requirements of FRS 104 Interim financial reporting; and
FRED 76 Draft amendments to FRS 102 and FRS 105 – COVID-19-related rent concessions.

The proposed amendments in FRED 76 are restricted to temporary rent concessions occurring as a direct consequence of the COVID-19 pandemic, when any reduction in lease payments affects only payments originally due on or before 30 June 2021. It is proposed that amounts should be recognised over the period the concession is intended to compensate.

The proposals in FRED 75 are expected to apply to interim periods beginning on or after 1 January 2021, and the proposals in FRED 76 are expected to apply to accounting periods beginning on or after 1 January 2020. In both cases early application will be permitted.

Other A&A news

Other A&A publications that you might find of interest include:

The FRC has issued ISAE (UK) 3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information
The FRC has written a letter to audit firms after reviewing going concern policies and procedures in light of the COVID-19 pandemic and also issued a thematic review on disclosures in this respect
The ACCA has released its 2020 report on regulation
The FRC has also issued its inspection reports relating to the seven largest firms and principles for operational separation of the largest audit firms.

Methodology & compliance products update

Earlier this month we issued an update to our Academies Specialist Assignment Manual to reflect changes applicable for the 2020 academies reporting season.

We have also improved the way we deliver a number of our methodology and compliance products. Subscribers to affected products will have received an email explaining the new platform, with updates for other products due through the remainder of 2020.

Action to help home buyers in Scotland

Further to the changes to SDLT announced in the Summer Statement, the Scottish Government has announce that the threshold at which LBTT begins to be paid will rise from £145,000 to £250,000 from 15 July 2020 and remain in place until 31 March 2021.

And Wales too

On 14 July 2020, the Welsh Government announced changes to the residential rates and bands of Land Transaction Tax. This change will take effect on 27 July 2020 until 31 March 2021.

TAXATION

Government sets out draft agenda for a 21st century tax system

The next steps in the plan to create a modernised digital tax system has been unveiled by the government. In effect, this is an extension to the VAT element of the MTD project. To read more, please click here.

Revenue and Customs Brief 10 (2020): temporary reduced rate of VAT for hospitality, holiday accommodation and attractions

This Brief explains the changes in the VAT treatment of certain supplies of hospitality, hotel and holiday accommodation and admission to certain attractions announced by the Government on 8 July 2020. To read more, please click here.

OTHER NEWS

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