Zoya Malik, 13 October 2021
130 countries sign up to global corporate tax reform
Following the announcement that more than 130 countries have signed up to a global deal on corporate tax reform, Marvin Rust, MD and European practice leader at Alvarez & Marsal Tax commented: “This is a good outcome for large UK businesses as we see the demise of the Digital Service Tax (DST) not just in the UK, but it’s equivalents in other countries as well. Each set of DST rules were different thus increasing the compliance burden substantively.
“The outcome brokered by the chancellor applies only to the largest most profitable corporations and should see some additional taxes raised in the UK. I am still surprised though that the US has signed up to this, given the rise of consumers in Asian countries, means the US over time looks like a loser in the battle to collect tax revenues from the largest companies.”
Zoya Malik, 6 October 2021
Leak of Pandora Papers puts HMRC on high alert
The Pandora Papers leak has put the HMRC on high alert to investigate tax affairs of those who have made use of offshore tax arrangements, says RPC, the international law firm.
The Panama Papers leak in 2016 led to the establishment of a taskforce, which resulted in arrests, criminal charges and civil penalties being levied. Following the publication of the Panama Papers, HMRC confirmed it was investigating 700 leads.
Adam Craggs, Partner and Head of Tax and Financial Crime at RPC says, “Those who are aware that their data has been leaked and who wish to review their tax affairs before HMRC come knocking, should seek expert professional advice and consider making a voluntary disclosure. This could potentially make the difference between HMRC pursuing a civil or criminal investigation. It is also likely to significantly mitigate any penalties which HMRC might seek to impose.”
Zoya Malik, 6 October 2021
Global accountancy bodies commit to net zero
Thirteen professional accountancy bodies from around the world have all committed to reach net zero greenhouse gas emissions.
The accountancy bodies are:
- Chartered Accountants Australia and New Zealand
- Chartered Accountants Ireland
- Consiglio Nazionale dei Dottori commecialisti e degli Esperti Contabili
- CPA Australia
- CPA Canada
- Institut der Wirtschaftsprüfer in Deutschland e.V.
- Regnskap Norge
- The Association of International Certified Professional Accountants
The accountancy bodies are part of The Prince of Wales’ Accounting for Sustainability Project (A4S) Accounting Bodies Network. This network represents more than 2.5m professional accountants and students, who work with businesses and governments in 179 countries.
The bodies have committed to reach net zero emissions as soon as possible and will publish plans to do so within the next 12 months and report annually to show progress.
Additionally, they have pledged to provide members with training, support and resources to help them create their own net zero plans and reduce their emissions, and to provide advice to help governments create the policies and infrastructure necessary for transitions to net zero economies.
Zoya Malik, 4 October 2021
Increase in cost of R&D tax relief explains HMRC clampdown
Commenting on HMRC’s annual Research and Development Tax Credit Statistics 2021, Jenny Tragner, director at the UK’s R&D tax credit consultancy ForrestBrown and a member of HMRCs R&D Consultative Committee said, “Today’s figures, which provide data for accounting periods up to 2019/20, highlight the huge cost increase the government faces for R&D incentives. £7.4bn of relief was awarded in 2019/20, 19% up on the previous year.
“This data relates to a pre-Covid period, and in the past 18 months HMRC has substantially tightened its approach to compliance. They are under pressure from HM Treasury to reduce fraud and errors in claims, but today’s statistics explain this change in approach and their focus on cost-cutting measures.
“The increase in cost is being driven primarily by SMEs, who make up 89% of all claims made. The average SME claim for 2019/20 is £57,330, up 7% on last year, whereas the average RDEC claim is more stable at £317,829, only a 0.5% increase on last year”.
Joe Pickard, 15 October 2021
Carbon pricing: ACCA calls for minimum price of carbon
The Association of Chartered Certified Accountants (ACCA) has called for more ambitious policies to achieve net zero emissions by 2050, targeting green infrastructure investment from the public and private sector and a form of carbon pricing.
ACCA says that global and EU policy-makers and governments have a crucial role in reducing carbon emissions through regulation, the provision of green infrastructure and appropriately targeted subsidies. But as with so much policy designed to change economic behaviour, the adoption of early and anticipated policy changes is the most effective approach. Such policies also need to be pursued at a global level.
ACCA chief economist Michael Taylor said: “A shift from fossil fuels to low carbon energy requires the replacement of existing carbon-intensive capital with low-carbon capital. Our recommended strategy to reach these ambitious goals involves two key elements: green infrastructure investment from the public and private sector and a form of carbon pricing.”
“ACCA is calling on a global minimum carbon price as, in an integrated global economy, unilateral action by individual countries has limits. While substantial progress to net zero can only be made by the bigger emitters such as China, the US and EU reaching that goal themselves, net zero will still be missed unless emerging markets also reduce emissions. The challenge is, however, much greater for emerging markets striving also for faster economic growth and higher living standards.”
Joe Pickard, 13 October 2021
FCA warns businesses over hybrid working risks
The Financial Conduct Authority (FCA) has issued guidance to companies operating a remote or hybrid working model.
Under the new directive, firms will be evaluated on a case-by-case basis and should be able to prove that the lack of a centralised location or remote working does not or is unlikely to affect the company’s ability to meet the threshold for the for the regulated activities it has or will have permission for.
The guidance states that companies should be careful to ensure that remote working does not affect the ability of the firm to oversee its functions, cause detriment to consumers, damage the integrity of the market, increase financial crime, or reduce competition.
Recommendations suggests firms need to ensure they have the systems and controls, including the necessary IT functionality, to support the above factors being in place, and these systems are robust. Additionally, companies are told they should also ensure they have considered any data, cyber and security risks, particularly as staff may transport confidential material and laptops more frequently in a hybrid arrangement.
Joe Pickard, 11 October 2021
Jenny Watson appointed as ICAEW Regulatory Board chair
The Institute of Chartered Accountants in England and Wales (ICAEW) Regulatory Board (IRB) has appointed Jenny Watson as its chair.
Watson will join the IRB on 1 November, and replaces Michael Caplan who has held the role since the IRB was created in 2015.
The IRB is an independent board responsible for oversight of ICAEW’s regulatory and disciplinary work, undertaken by the Professional Standards Department, to ensure it is carried out in the public interest.
Watson has previously served as chair of the UK Electoral Commission (2009-16), the Independent Complaints Panel at the Portman Group (2013-20) and the Equal Opportunities Commission (2005-07). She also held non-executive roles at the Financial Reporting Council and Financial Ombudsman Service.
Joe Pickard, 8 October 2021
AAT to move office to help meet net zero target
The Association of Accounting Technicians (AAT) has announced its headquarters will be moving to Canary Wharf in spring 2022, relocating from 140 Aldersgate Street in central London.
AAT will occupy the 10th floor of 30 Churchill Place, Canary Wharf, a serviced office space provided by WeWork. The building has an ‘Excellent’ rating under the Building Research Establishment’s Environmental Assessment Method, ranking it in the top 10% of new non-domestic buildings in the UK on measures including energy, waste, health and wellbeing, pollution, materials and land use.
Additionally, AAT will adopt a new hybrid model of working in a major shift of emphasis to accelerate progress towards net zero by 2030. Regular staff surveys have shown this was the clear preference for the majority of AAT employees. Combined with the office move, this approach will cut AAT’s current footprint from 25,000 sq ft of space to just under 11,000 sq ft.
Joe Pickard, 30 September 2021
CPA Canada appoints board chair and vice-chair
Chartered Professional Accountants of Canada (CPA Canada) has appointed a new chair and vice-chair for its board of directors.
Richard Olfert and Beth Wilson assume the roles of chair and vice-chair respectively, following the annual meeting of members.
Olfert earned his accounting designation in 1988 and joined the CPA Canada board of directors in September 2019. He succeeds Amanda Whitewood, who has completed her term of office of two years as chair.
Joe Pickard, 29 September 2021
Hong Kong’s FRC signs MoU with ICAC
Hong Kong’s Financial Reporting Council (FRC) has signed an MoU with the Independent Commission Against Corruption (ICAC). The MoU is part of ICAC’s efforts to enhance collaboration with financial regulators in the fight against corruption.
ICAC commissioner Simon Peh Yun-lu said: “The signing of the MoU marks an important milestone for closer collaboration between the ICAC and the FRC.
"In addition to signifying the two organisations’ determination in upholding the integrity of the financial market, it also sets out the framework for cooperation and collaboration and provides guidance on matters such as referral of cases, joint investigations, exchange of information and mutual investigative assistance.”