Technical and Insight
FRS 101 and FRS 102 tax overview
New guidance outlines the key tax considerations for companies transitioning from old UK GAAP.

New guidance outlines the key tax considerations for companies transitioning from old UK GAAP to the new standards. 

HMRC has updated its tax overview of FRS 101 and FRS 102. It highlights that the documents provide an overview of the ‘key tax considerations that arise for those companies that transition from old UK GAAP to the new standards’ and also that they have been brought up to date to reflect changes made to the standards. 

It is highlighted in the FRS 101 overview that the ‘primary changes from the original paper are:

  • additional commentary in relation to non-interest bearing loans
  • updated commentary on the application of the Disregard Regulations and Change of Accounting Practice Regulations, reflecting the changes made to these statutory instruments in December 2014
  • accounting commentary updated to reflect the amendments to FRS 101 issued in September 2015 (particularly in respect of the format of the profit and loss account and balance sheet, permitting contingent consideration to be measured at fair value and prohibiting the reversal of impairment losses on goodwill)’.

It is highlighted in the FRS 102 overview that the ‘primary changes from the original paper are:

  • additional commentary in relation to non-interest bearing loans
  • updated commentary on the application of the Disregard Regulations and Change of Accounting Practice Regulations, reflecting the changes made to these statutory instruments in December 2014
  • accounting commentary updated to reflect the amendments to FRS 102 issued in August 2014 and July 2015
  • where applicable it has been updated for any commentary specific to section 1A of FRS 102’.

The overview also highlights the effect in Change of Accounting Practice (COAP) Regulations (SI 2004/3271). It is stated that the ‘COAP Regulations apply to most transitional adjustments arising in respect of loan relationships or derivative contracts from change in accounting practice. As such, the Regulations are applicable to transitions to FRS 101 and FRS 102 in the same way as they applied to transitions to IAS or FRS 26. In most cases, the effect of the Regulations is to spread the transitional adjustment over 10 years, starting with the first period in which the new accounting policy applies.’ 

This section uses an example of an unconnected company with a loan due to be repaid in five years which has ‘non-vanilla’ terms. The example highlights the difference between the closing value and new treatment with the loan valuation at fair value spread over 10 years.


IR 35 – big changes for public sector bodies
How to determine when the changes around intermediaries’ rules apply to certain businesses.

How to determine when the changes around intermediaries’ rules apply to certain businesses. 

The intermediaries’ legislation (aka IR35) has been around for 16 years and has seen many twists and turns in its meaning and application in that time. Following consultations which ended in August, it is timely to recap on the history of the legislation and to summarise the current position and the planned changes for public sector bodies. 

A brief history
The intermediaries’ legislation is a set of rules that affects tax and national insurance where a person is contracted to work for a client through an intermediary, which can be: 

  • your own limited company
  • a service or personal service company (PSC)
  • a partnership.

If IR35 applies then the intermediary has to operate PAYE and national insurance contributions on any salary or wages it pays during the tax year. 

The intermediaries’ legislation was introduced in 2000 with the aim of ensuring that individuals who work off-payroll through their own company – who would have been taxed as employees had they been engaged directly – pay employment taxes on their income. 

Since its introduction, both accountants and clients alike have struggled to understand the detailed and complicated rules. In particular, the basic question of whether in fact the legislation applied at all was hard to answer. To muddy the waters further there have been changes over the years and also constant rumours circulating that IR35 would be either abandoned or in fact extended.

The current rules
In both private and public sectors the current legislation requires the PSC to determine whether the rules apply to a contract. So effectively ‘self assessment’. 

To do this the PSC would have to look at whether the: 

  • worker is personally obliged to perform services for the engager
  • worker is an office-holder of the engager
  • worker supplies their own equipment
  • engager controls how and where the work is done
  • worker is entitled to holiday pay, sick pay and/or termination payments.

So the main element of the current rules is that the decision on whether the legislation affects a PSC is down to themselves and not HMRC or the 3rd party client whom the contract is with.

Fundamental changes in the pipeline
A discussion document was published on 17 July 2015 following an announcement in the Summer Budget 2015 that the government had asked HMRC to engage with stakeholders on how to improve the effectiveness of the intermediaries' legislation. The government saw that changes were necessary to ensure employment taxes could not be avoided on income that would otherwise be employment income by employers and individuals, simply by engaging workers off-payroll through limited companies, whatever the underlying reason is for engaging them in that way. 

HMRC subsequently published a consultation document on 26 May 2016 with the closing date for comments being 18 August 2016. The document proposes changes from April 2017. The crucial proposal is that the liability to make the determination about whether the intermediaries’ rules apply, and the associated tax liability if so, are moved from the PSC to the public sector end-client or agency or other third party closest in the chain to the PSC if there is one. Note that the rules will not change for PSCs contracted to work for clients in the private sector. 

Therefore where it is deemed that the legislation applies, the public sector body, agency or other third party will be liable to pay any associated income tax and national insurance. 

How will HMRC help in the decision process?
To make the process of determining whether or not the intermediaries’ rules apply as simple and certain as possible, HMRC will provide a new interactive online tool. This is designed to provide a real-time and definitive HMRC view on whether or not the rules apply to a particular engagement. This will support the decision making process not only for public sector employers, but also for individuals working through PSCs in the private sector. 

Recommended action

HMRC’s contract review service
Where a PSC is in doubt about their status or would like further clarification, HMRC offers a contract review service which forms part of HMRCs general guidance on IR35.



Making tax digital – your thoughts so far
ACCA continues to consult with practitioners on HMRC’s plans for MTD.

ACCA continues to consult with practitioners on HMRC’s plans for MTD. 

Thank you to all members who have sent in comments responding to the briefing note ACCA sent in August, where we invited your comments and asked for your business insight and expertise. These comments are invaluable and help ACCA to highlight the impact of the proposals. 

The overwhelming majority of your comments highlight the cost to business and that Making Tax Digital (MTD) will take up management time and prevent businesses from looking at new opportunities. The feedback from businesses included a comment from a practitioner who stated ‘I have been contacted by a number of my clients recently who are universally horrified at these proposals.’ 

The areas we discussed in the note were:

  • the timelines
  • tax simplification
  • costs
  • penalties
  • exemptions
  • overlap relief
  • calculation of profits.

Please continue to send your comments on any of the questions in the consultations, together with any other thoughts on MTD, via email to 

As a reminder the six consultations making up the suite are open for comment until 7 November:

Bringing business tax into the digital age (78 pages)

Simplifying tax for unincorporated businesses (36 pages)

Transforming the tax system through the better use of information (35 pages)

Tax administration (38 pages)

Simplified cash basis for unincorporated property businesses (28 pages) 

Voluntary pay as you go (28 pages)

It is proposed that MTD will apply for:         

  • income tax and national insurance in April 2018
  • VAT obligations in April 2019
  • Corporation tax obligations in April 2020.

HMRC’s position is clear in the consultations and is illustrated by the statement ‘we believe that the full benefits of digital capability can only be delivered for all parties by mandating the use of digital record keeping software that links to and updates businesses' digital accounts with HMRC'. 

Clearly its view is that businesses must record business information in the form HMRC requires and that it must be sent to HMRC each quarter. Failure will result in a penalty. 

HMRC also makes it clear in paragraph 8.15 of Bringing business tax into the digital age that user testing is already due to take place in the second half of 2016 and throughout 2017! 

It is still important though to make sure your voice is heard and we would encourage you to comment on the merits of MTD and consider some of the key questions in the consultation document.

Making sense of MTD
Meet the firm that’s comfortable with HMRC’s proposals for Making Tax Digital.

Meet the firm that’s comfortable with HMRC’s proposals for Making Tax Digital. 

HMRC’s ongoing consultation on its plans for Making Tax Digital (MTD) has resulted in a flood of comments from ACCA’s practitioners across the country. 

While many have raised concerns with certain aspects of the proposals, one Bedford-based practice believes the concept makes sense in the long term. 

When Alex Falcon Huerta established Soaring Falcon Accountancy, she committed to operating solely in the cloud. She believes cloud accounting is changing how we do business today. 

Real time accounting information is vital to any business, allowing the owner to make important decisions faster and before it is too late. Alex believes HMRC’s bold plans set it on a path to embrace the digital future – and ultimately make life easier for small businesses and their owners.

‘You shouldn't have to wait until your financial year end to find out what profit you have made – or what the tax bill is going to be,’ says Alex. ‘Even today, that just sounds crazy.

‘When HMRC announced its plans I was happy because it felt like vindication that my business is going in the right direction.

‘HMRC is not known for its forward-thinking approach. Now, if HMRC is moving ahead of your firm, don’t you find that scary?’ says Alex bullishly.

‘Going digital will help clients be more aware of their tax position. A sole trader can have apps on their smartphone which show at a glance the business’s current financial position. The firm also no longer has to worry about a big tax bill at the end of the year. Surely clients want to be in more control throughout the year rather than leave it to the last minute and be faced with a daunting tax return?’

Quicker and easier
Moving to the cloud isn't a long winded process. When meeting with a potential new client, Alex likes to gather as much information as possible about how the business functions, what its short and longer term goals are, and how it manages its most precious resources – its people. 

From this point forward the online journey begins. ‘With all the tools we use – such as Xero, Receipt Bank and Practice Ignition – we can get a business online quickly and efficiently and eliminate many of the manual processing tasks,’ explains Alex. 

‘Only this week I met with a potential client, who after that initial meeting, “signed” their engagement letter via their smartphone and allowed us to immediately start creating their online package.’ 

With over 20 years’ experience in practice, Alex is only too aware of how the process used to be, with engagement letters taking days in the post in each direction. Today ‘millennials’ increasingly expect things to be done instantly. 

Most accountancy firms have made the move from paper-based accounts to Excel and now many are moving into the cloud. MTD represents part of this and Alex is convinced it will help deliver huge efficiencies overall. 

She cites the use of a tool such as Receipt Bank as one example of how it can help clients save money. ‘We attach a value to each client. We work out what their hourly rate is and look at how technology can free up time for business development and everything that directors should be doing. 

‘Until recently two directors of a client were processing around 50 invoices per month, using around £350 of their billable time. Yet by going digital for only £20 a month plus another £10 for an admin assistant, they are be able to focus on actively growing their business.’  

Big data
Big data is a term bandied around a lot, but in simple terms, the intelligent use of data is creating many opportunities for businesses in the future. Better understanding and analysis of data allows for greater insight into the future and what trends will emerge. Real-time data will help investors make critical calls on growing businesses. 

HMRC’s proposed penalties regime – the only part of its proposals that won’t be in real time – have drawn the most criticism from accountants so far. Alex understands these concerns: ‘It can be hard pushing clients to keep on top of tax returns and the associated paperwork. It can take up far too much of our time.’ 

Yet she also sees opportunities offered by practice and client management to improve working practices. ‘It’s about educating clients. I try and gear as many clients as possible to operate on a monthly cashflow. Many bills are paid monthly now. This increased discipline will help minimise clients’ risk of being penalised by HMRC.’ 

Summing up
‘Who can remember when mobile phones first appeared?’ asks Alex. Now, many people will carry a work and personal mobile and increasingly conduct their business from the palm of their hand. 

HMRC’s MTD proposals may be fraught with hurdles to overcome, but if the accountancy profession is going to move with the times – and technology – they are worth conquering to ensure your practice is fit for the future.

Lessons from the demise of BHS – how solvent are our pension schemes?
The Secret Accountant looks behind the headlines to gauge the current state of high profile schemes and how the government seeks to protect scheme members.

The Secret Accountant looks behind the headlines to gauge the current state of high profile schemes and how the government seeks to protect scheme members. 

The failure of BHS has hardly been out of the headlines.  Various reasons have been put forward to account for the insolvency of the high street giant from a failure to keep up with the times through to asset stripping by the owners.  But whatever caused its collapse the fact still remains that the big losers are the estimated 11,000 workers who lost their jobs and just as worryingly, along with former employees, will face dramatically reduced retirement provisions due to the £571m pensions’ deficit that the company accrued. 

But is the deficit a ‘one off’?
Unfortunately, no! Many people suggest that the BHS scheme’s woes are just the tip of the iceberg and that means a lot of pensioners and workers alike may be affected in the years to come. In 2008, the BHS scheme was fully funded with a reported surplus of £3.4m. So what went wrong? 

Commentators disagree on this point but the real answer is a range of things appear to be to blame, both avoidable and unavoidable. For instance, the company reportedly had a recovery plan for the scheme which extended to 27 years. They were also known for establishing ‘gold standard’ final salary pension schemes. Add to this low interest rates over the last few years producing poor gilt yields and some poor investment decisions and in the space of a few short years the scheme went from healthy surplus to huge deficit. 

How does the government protect workers and pensioners caught by the deficit trap?
The government has established the Pension Protection Fund (PPF). The fund was set up to pay compensation to members of eligible defined benefit pension schemes, when there is a qualifying insolvency event in relation to the employer and where there are insufficient assets in the pension scheme to cover Pension Protection Fund levels of compensation. 

So the government/taxpayers, via funding from levies and other sources, picks up the tab. It pays out a certain level of compensation to affected people. For instance, the current levels for retired workers are generally 90% compensation based on what the pension was worth at the time. The annual compensation is capped at a certain level. The cap at age 65 is, from 1 April 2016, £37,420.42 (this equates to £33,678.38 when the 90% level is applied) per year. The earlier the worker retired, the lower the annual cap is set, to compensate for the longer time they will be receiving payments. 

The BHS pension scheme is being absorbed into the PPF with an estimated 20,000 members facing cuts to their retirement income. The Regulator confirmed recently that it was investigating the BHS scheme and was debating whether to chase former business owners to settle pension debts, using so-called anti-avoidance powers. 

How many others schemes are affected?
The PPF publishes monthly reports on its website which show the latest estimated funding position, on a section 179 (s179) basis (a scheme’s s179 liabilities represent, broadly speaking, the premium that would have to be paid to an insurance company to take on the payment of PPF levels of compensation). These are effectively defined benefit schemes potentially eligible for entry to the Pension Protection Fund (PPF). A quick review of the situation for July 2016 reveals:

  • there were 5,020 schemes in deficit and 925 schemes in surplus
  • an aggregate deficit of these schemes estimated to have increased over the month to £408bn at the end of July 2016, from a deficit of £383.6bn at the end of June 2016
  • the funding ratio worsened from 78% to 77.4%
  • total assets were £1,401bn and total liabilities were £1,808.9bn.

Statistics on actual members transferred to the PPF are given only to March 2016:

  • PPF members transferred - 225,534
  • Members receiving compensation - 120,043
  • Average annual compensation - £4,225 per year
  • Total compensation paid - £2.3bn

The collapse of BHS highlighted a potential pension scheme time bomb. The current low rates of interest will hinder recovery from a deficit and the fact that the company is a high street name clearly does not provide a safeguard. 

The government is due to introduce legislation which will effectively increase the compensation payable to members by the PPF but this could be seen as a spiralling cost for the future and does not in itself provide an answer to the core issues. The PPF’s own strategic plan summarises the situation nicely: 

‘We recognise that managing the future of defined benefit provision is a complex challenge, with very few easy answers, requiring cooperation and expertise across the industry.’ 

The Secret Accountant is a practitioner based in the heart of England who comments on issues which affect many accountants.

How to reduce tax return errors
HMRC’s free checklists can help practitioners reduce tax return errors.

HMRC’s free checklists can help practitioners reduce tax return errors. 

HMRC has 20 Agent Toolkits which are a free online resource aimed at helping to avoid the most common errors that HMRC sees in returns filed by agents.  

Each toolkit is reviewed and updated regularly to make sure they reflect any changes arising from the relevant Finance Acts and other issues. The most recently updated toolkits are:

Each toolkit has a checklist which the agent can download and fill in to help in the tax return completion process. This will help to identify the key issues to address with links to further online guidance and information on each area: 


HMRC acknowledges that agents and advisers play an important role in helping their clients to get their tax returns right. These toolkits are designed to help reduce errors, demonstrate reasonable care and file timely and accurate tax returns. For more information on how HMRC see penalties and reasonable care follow this link to HMRCs ‘Penalties – an overview for agents and advisers’ here  

Have a look at the full list of toolkits.  HMRC tells us that the most popular is Property rental for landlords. HMRC would like to hear about your experience of using the toolkits to help develop and prioritise future changes and improvements. HMRC is also interested in your views of any recent interactions you may have had with the department. Send HMRC your feedback here 

Automatic enrolment: which pension scheme?
The Pensions Regulator has tackled two common questions on pension scheme choices.

The Pensions Regulator has tackled two common questions on pension scheme choices. 

1.  Does your client have an existing pension scheme they are thinking of using for automatic enrolment? 
Your client may already have a pension scheme that they are thinking of using for AE. However, schemes need to be 'qualifying' to be used for AE otherwise they run the risk of non-compliance. 

The Pensions Regulator has information to help you support your client to decide which pension scheme to use to automatically enrol their staff.  

2.  Have your clients decided which pension scheme to use?
As part of their automatic enrolment duties, employers with staff who must be put into a pension scheme will need to have a pension scheme in place that is set up for automatic enrolment. They may ask you for help with this. 

The Pensions Regulator has guidance and support available to help you to support your client in choosing a scheme that is right for their staff.


Six months until state pension top up applications close
With only six months left until the government’s state pension top up scheme closes on 5 April 2017, it’s worth considering if it could be right for your clients.

With only six months left until the government’s state pension top up scheme closes on 5 April 2017, it’s worth considering if it could be right for your clients. 

State pension top up is a class of voluntary national insurance contribution (known as Class 3A), which is available for a limited period. It allows those who reached state pension age before the introduction of the new state pension (women born before 6 April 1953 and men before 6 April 1951) an opportunity to exchange a lump-sum contribution for an increase in their state pension of between £1 and £25 per week. 

State pension top up could be ideal for small business owners and the self-employed who historically may have had more limited opportunities to build up earnings-related state pension. 

The cost of the contribution depends on the applicant’s age and the amount by which they wish to increase their state pension (the maximum per week is £25). The rates are actuarially fair and based on the age of the applicant, with rates reducing the older the person is. For example, to receive £10 extra per week at age 66 the cost will be £8,710 whereas at age 77 the cost will be £6,250. The increased payments are consumer price index-linked and it offers a secure income boost for life. For clients living overseas, if they live in a country where cost of living increases are not paid, then the top up amount will not increase. 

In most cases, between 50% and 100% of the increased amount is inheritable by a spouse or civil partner on reaching state pension age, unless they re-marry, as per arrangements for inheritance of additional state pension under SERPS (additional state pension built up before April 2002). 

As long as they are both eligible, both partners can pay contributions to receive the pension increase. However, if only one half of a couple is going to make a contribution, factors such as relative ages to each other and tax rates should be taken into account. 

The Department for Work and Pensions will promote the scheme until it closes on 5 April 2017, and will encourage prospective applicants to get independent advice on whether the scheme is right for them. 

The scheme isn’t appropriate for everyone, and the boosted amount is taxed as income and so may be more suitable for lower rate taxpayers (this could affect pension credits and any housing benefits). Options such as Class 3 voluntary national insurance contributions (‘VNICs’) should be considered first if there might be a shortfall in the person’s national insurance record for basic state pension. 

It is possible to combine a state pension top up contribution with deferral of the state pension payment. State pension top up is open even to those already receiving the full basic state pension and any additional state pension. 

The scheme has a 90 day cooling off period after payment, with payments already made deductible from any refund. 

Further details and an online scheme calculator are available

Ensuring stability when a business loses a partner
The Secret Accountant explains why they firmly believe in the value of cross-option agreements to ensure business continuity.

The Secret Accountant explains why they firmly believe in the value of cross-option agreements to ensure business continuity. 

The summer of 2016 has had many ups and downs…

  • Brexit
  • FRS102 accounts
  • a new prime minister
  • the reality of auto enrolment kicking in
  • the Olympics
  • the launch of a new website for our practice.

To top things off during all the above excitement, it has come to our attention that many clients – both existing and new – have not considered how to protect their business if a business partner dies. 

It may not be a comfortable thought, but at some point a business may be confronted by the critical illness or death of one of its owners. Have you considered what might happen to your company if you were to die or became critically ill? Or indeed, if one of your fellow shareholding directors were to die, or have an accident or illness making them incapable of returning to work? 

One way of protecting your business in the event of a shareholding director’s death or critical illness is for the shareholders to enter into cross-option agreements. 

Many clients who are shareholders in their own business with other non-family member shareholders have not considered what will happen if any of them dies. The cross-option agreement provides the surviving shareholders with the option to buy the deceased business owner’s share of the business. In addition to the surviving shareholders being able to call their option to buy the shares, the legal representatives of the deceased’s estate also have the option to sell the shares of the deceased business owner to the remaining shareholders. 

In either case, whether the remaining business owners want to buy the shares or the legal representatives want to sell, the agreement ensures the option is exercised. The cross-option agreement is set up in this manner to ensure there is no binding sale, ie in certain circumstances neither party could exercise their option, which means business property relief for inheritance tax purposes can be preserved. 

In the process of setting up the appropriate business protection it should also involve setting up a cross option agreement with all the directors/partners in the business, enabling the remaining directors or partners to purchase the share of the business from the deceased’s estate. 

As with most practices we have developed business relationships with solicitors and IFA’s so we feel between us we can offer the client a ‘one stop shop’ to fully explain how a cross option agreement could be useful to them. 

So the next time you’re talking to a client I would recommend speaking to them about what shareholder protection they have in place. 

The Secret Accountant is a practitioner based in the heart of England who comments on issues which affect many accountants.


Regional funders’ vital role in economic stabilisation
The Wales Business Fund provides essential support to businesses across Wales. Register for our webinar.

ACCA Wales is hosting a webinar on 4 October to help you understand how you could benefit from the new Wales Business Fund. Find out more and register now

Uncertainty sends shivers through economic and financial institutions. Whatever the outcome of Brexit negotiations, it is essential for businesses and those who support them to mitigate the yo-yoing of markets caused by this year’s EU Referendum. 

Regional funders have an essential role to play at this time to help provide confidence and stability to the SME market. 

‘In times like these it is our responsibility to maintain the liquidity of the economy,’ says Finance Wales CEO, Giles Thorley. He heads up the Finance Wales Group, one of the largest regional investment companies in the UK. Owned by the Welsh government, it was originally set up as an investment vehicle to address the funding gap for SMEs in Wales. The company now includes FW Capital, a fund manager for the North West and North East of England, and the Wales business angel network xénos. 

‘We’re still open for business. Our funds come from a variety of public and private sector sources. We can partner with a wide range of investors and support both B2B and B2C markets. Businesses can be assured there are still a wide variety of financing opportunities available to them. We’re looking forward to the timely launch of the £136m Wales Business Fund with WEFO later this month: it will bring the total amount of funds we manage in Wales to just under £700m,’ Thorley adds. 

Established in 2000, Finance Wales has experience of working through difficult economic times. The company achieved record levels of investment during the last financial crisis and is aiming to provide confidence and consistency in the wake of Brexit uncertainty with an open door policy for SMEs based in Wales. 

‘Our flexibility is our USP in many ways,’ says Investment Director Rhian Elston. ‘We can invest from £1,000 to £3m per round across sectors and all stages of a business’s lifecycle. The support is there for businesses - now they have to think more globally and seek more overseas opportunities. We’ve seen great success stories like tech start-up Biomonde who we co-invested in as a spinout and thanks to subsequent rounds have now launched their product in the US.’ 

The company has impressive portfolio funds to draw on. A number provide specialist support. These include the Wales Management Succession Fund, the Wales Property Development Fund and the Wales Technology Seed Fund; with an in-house Technology Investment Ventures team managing funding for technology-based companies. 

The Wales Business Fund was launched on 21 September 2016 with regional events around Wales. The fund can support debt and equity packages from £50,000 up to £2 million for SMEs based in Wales. 

‘The fund will be a great boost for SMEs in Wales and will increase our long-term ability to attract and support businesses,’ concludes Elston. ‘Companies need to remain proactive and take advantage of the support that’s available; often businesses who invest against the trend during economic difficulties perform best in the long-term.’ 

Find out more information on the fund and other funding options  

ACCA Wales is hosting a webinar on 4 October to help you understand how you could benefit from the new Wales Business Fund. Find out more and register now

When are pre-letting expenses allowed?
A look, with working examples, at pre-letting expenses and the issue of whether repairs are a capital or revenue expense.

A look, with working examples, at pre-letting expenses and the issue of whether repairs are a capital or revenue expense. 

Profits from UK land or property are treated, for tax purposes, as arising from a business. The broad scheme is that rental business profits are computed using the same principles as for trades (ITTOIA 2005, s 272). Expenses are allowable if they are incurred ‘wholly and exclusively’ for the rental business. 

If a property is let at less than the full commercial rent, any expenditure relating to that property will normally fail the ‘wholly and exclusively’ test. Although, strictly, no expenditure on such properties is admissible as an expense of the rental business, expenses can be deducted up to the amount of rent derived from that property. 

Pre-letting expenses
Usually a rental business begins when letting first commences. 

Allowable revenue expenditure incurred before the rental business begins can be relieved under the ICTA88/S401 or ITTOIA05/S57, provisions for pre-trading expenditure. Relief is only due if the expenditure:

  • is incurred wholly and exclusively for the purposes of the rental business
  • is not capital expenditure
  • is incurred within a period of seven years before the date the rental business is started, and
  • is not otherwise allowable as a deduction for tax purposes, and
  • would have been allowed as a deduction if it had been incurred after the rental business started.

Thus, for example, council tax on a property could be allowable under the above rules if it is due before the property is first let, provided the property was acquired solely for the purposes of the rental business. However, the relief is not allowable if the council tax was paid on the taxpayer’s own private residence before the property was let (as it would be the taxpayer’s own expense). 

Qualifying pre-letting expenditure is treated as incurred on the day on which the taxpayer first carries on their rental business. So, any repairs carried out before the letting starts can still be deducted from the first year’s gross rents. 

Capital or revenue – two contrasting court cases
Pre-letting expenses have been challenged successfully by HMRC in Law Shipping Co Ltd v CIR 12 TC 62. Pre-letting expenses were disallowed on the key point that a ship was bought in a defective state and could not be used until the repairs had been undertaken. 

This can be contrasted with the expenditure in Odeon Associated Theatres Ltd v Jones 48 TC 257, where the dilapidated state of cinemas was due to the accumulation of repairs in wartime (and just after) when building work was not permitted to be carried out. The courts allowed the deduction. 

Although both companies purchased assets in poor condition, there were key differences between the two cases:

  • In Law Shipping, the company acquired a ship in poor condition that had to be repaired before they could use it. This was capital expenditure on acquiring a working asset.
  • In Odeon, the company was able to operate the cinemas for a number of years before they carried out the repairs. Furthermore, the price paid was not reduced to reflect the state of repair. The expenditure was found to be on repairs and, therefore, allowable.

The following factors should be considered:

  1. Whether the purchase price is substantially lower in order to reflect the poor state of the asset. Is there any evidence in, for example, the contract for the sale of the asset or in negotiations leading up to the contract that the purchase price was substantially less because of the dilapidated state of the asset?
  2. Whether the expenditure merely reflects the reduced value of an asset due to normal wear and tear (for example, between normal maintenance cycles).
  3. Whether the asset could be used shortly after acquisition without being repaired.
  4. Whether there is a sound commercial accountancy principle for the expenditure to be charged as revenue or capital. For example, has the asset been improved or just restored to its original state? HMRC does accept that the use of more modern materials or better technology does not by itself constitute capital expenditure (see Business Income Manual at BIM46920 to 25).
  1. Whether abnormally heavy repairs expenditure is incurred on an asset shortly after the change of ownership.
HMRC withdraws free corporation tax software
HMRC announced last year that its free online filing form for corporation tax returns is being withdrawn.

HMRC announced last year that its free online filing form for corporation tax returns is being withdrawn. 

Currently it provides free, downloadable pdf forms which enable a company to file CT600 forms. 

This service will be available only until 31 December 2016 to file company tax returns for accounting periods ending on or before 31 December 2015 but not for later accounting periods. In its place there is a new online tool which according to HMRC is currently ‘available and is being enhanced’. 

This online tool is developed in conjunction with Companies House and is a ‘new, improved’ company tax return and company accounts filing service called Company Accounts and Tax Online (CATO). 

Who does this affect?
Most corporation tax returns are prepared and filed by agents using commercial software. However, companies that do not use an agent and do not have access to alternative software will now be forced to use the new HMRC online tool. 

 As previously highlighted there will be a small number of agents that currently use the downloadable forms on behalf of clients. These agents will also be affected as they will not be able to use CATO in the same way they use the current tool.. Therefore after the above deadlines they will also be forced to make alternative arrangements which will effectively be to use commercial software. 

Main changes to the revised ethical standards
The Revised Ethical Standard 2016 for auditors brings all the ethical standard provisions available for audits of small entities into one document.

The Revised Ethical Standard 2016 for auditors replaces Ethical Standards 1 to 5 and brings all the ethical standard provisions available for audits of small entities into one document. 

This was a consolidation exercise but did result in changes that need to be reflected within firms’ procedures. 

Main changes from the previous ethical standards

  1. Some changes on contingent fees. (Paragraphs 4.6R and 4.7R contain the changes and paragraphs 4.6R to 4.26 relate to contingent fees.) This affects all audits.
  2. Some minor changes on advocacy services relating to certain tax services which were contained in Ethical Standard 5 paragraphs 104 to 108 (paragraphs 5.97 to 5.102). This affects all audits. Some other changes relating to advocacy services to public interest entities are contained in paragraphs 5.167R and 5.168R (see point 4 below).
  3. New requirement for fees for non-audit services provided to the audited entity and its subsidiaries to be limited to no more than 70% of the fees charged (paragraphs 4.34R to 4.36R). The Standard states that 'the cap is based on average audit fees for the three consecutive financial periods commencing on or after 17 June 2016. Following the appointment of a new auditor after that date the cap will apply from the fourth financial period of that engagement.' This only affects public interest entities.  
    Public interesteEntities are defined in Article 2 point 13 of Directive 2014/56/EU. Further information about public interest companies within Europe together with the definition can be found in this document
    The AIM market in the UK is not an EU regulated market so a company listed on AIM will continue to be treated as a non-public interest entity listed entity. This will mean that the enhanced public interest entity requirements will generally not apply to AIM companies.
    The Regulation allows the Financial Reporting Council (in the UK) on request to grant an exemption from this fee cap for a short period of time.
    The Financial Reporting Council has published guidance on how to apply for this exemption.
  4. The Ethical Standard includes a list of prohibited non-audit services. These are services which an audit firm carrying out the statutory audit of a public interest entity shall not provide to the audited entity. This covers the audit firm and any member of its network of firms together with the audited entity and the group it belongs to (paragraphs 5.167R to 5.173R). This only affects public interest entities.
  5. The requirements for audit firm rotation are set out in the Companies Act 2006 sections 487 to 491 as amended. Statutory Instrument 2016 number 649 introduced many changes to the audit requirements including audit firm rotation. These changes took effect from 17 June 2016 with transitional provisions. The Ethical Standard states that ‘the firm shall ensure that it does not accept or continue an audit engagement that would cause those requirements to not be complied with’ (paragraph 3.9).
  6. Key audit partners responsible for carrying out a statutory audit of a public interest entity shall cease to act within five years of their appointment and shall not participate again before at least another five years (paragraph 3.10R). This only affects public interest entities.

Audit firm rotation
The EU Audit Directive (2014/56/EU) and Audit Regulation (537/2014) are measures to strengthen the audit regime. The Directive (2014/56/EU) applies to all audits required by EU law and the Regulation (537/2014) applies to all public interest entities. Statutory Instrument 2016 number 649 entitled 'The Statutory Auditors and Third Country Auditors Regulations 2016’ has been introduced in the UK which amends the Companies Act 2006 with effect from 17 June 2016. 

Amongst other changes this Statutory Instrument amends sections 487 to 491 and requires public interest companies to put their audit out to tender at least every 10 years and change their auditors at least every 20 years. 

The sections introduced into the Companies Act 2006 by SI 2016/649 include the following:

  • 487A  Maximum engagement period transitional arrangements
  • 489A  Appointment of auditors of public company additional requirements for public interest entities with audit committees
  • 489B  Appointment of auditors of public company additional requirements for public interest entities without audit committees
  • 491A  Maximum engagement period transitional arrangements.

The statutory instrument defines ‘public interest entities’ but in summary these are entities with debt or equity traded on an EEA regulated market, banks, building societies and insurance undertakings.

Charity reporting
Template supports charities comply with SORP FRS 102.

The Charity Commission have produced Template to help non-company charities with incomes of less than £500,000 prepare their trustees' annual report and accruals accounts in accordance with Charities SORP FRS 102.

It also includes an independent examiners report. Members who do not hold a practicing certificate should ensure that they also refer to the honorary reporting rules within the Rulebook.

Suspicious activity report codes updated
The NCA has issued changes to the Suspicious Activity Report (SAR) glossary codes and clarification of reporting routes.

The NCA has issued changes to the Suspicious Activity Report (SAR) glossary codes and clarification of reporting routes. 

The NCA has issued changes to the Suspicious Activity Report (SAR) glossary codes and clarification of reporting routes, which sets out new requirements that all under the reporting regime must adopt. 

It highlights that ‘SARs are recognised as a vital source of information – in some cases the only source of information – which can help fill knowledge gaps on a range of crimes and the highest risks outlined in National Risk Assessments. An improved glossary code practice could help enhance the effective use of that information for the purpose of such strategic planning and assessment. An improved glossary code practice would also enable more efficient analysis to feedback patterns and trends to the reporting sectors to help them better prepare their risk profiles and due diligence processes.’ 

From 1 October 2016 the new glossary codes will be used in the reporting systems and the old codes will no longer be valid. From December 2016 UKFIU will report on the progress made to the SARs Regime Committee, regulators, supervisors and SAR engagement groups. 

Summary of changes to SAR glossary codes: 

Codes remaining the same

  • XXS99XX request defence under the Proceeds of Crime Act (POCA) 2002/Terrorism Act (TACT) 2000
  • XXV2XX vulnerable adults
  • XXV3XX risk to children (including sexual exploitation and abuse)
  • XXF1XX proceeds from benefit fraud
  • XXF2XX excise evasion (duty of alcohol, tobacco, fuel etc.)
  • XXF3XX corporate tax evasion (evasion by business, corporation)
  • XXF4XX personal tax evasion (evasion by individuals eg income tax)
  • XXF5XX VAT fraud (eg carousel/missing trader intra-community (MTIC) fraud)
  • XXD9XX bribery and corruption
  • XXD8XX domestic PEPs
  • XXD7XX international PEPs
  • XXPCPXX counter-proliferation (project)

Codes removed from previous list

  • XXS1XX money laundering in action
  • XXD1XX funds leaving the UK
  • XXD2XX significant transaction
  • XXD3XX disguising proceeds
  • XXD4XX converting proceeds
  • XXD5XX concealing proceeds
  • XXD6XX transferring proceeds
  • XXF6XX tax credit fraud (confirmed)
  • XXF7XX tax credit fraud (suspected)
  • XXN8XX pension liberation fraud
  • XXN9XX mule ring analysis

Codes added to list

  • XXPRFXX professional enabler
  • XXTBMLXX trade-based money laundering
  • XXPROPXX property market (real estate)
  • XXTEOSXX tax evasion overseas
  • XXTEUKXX tax evasion UK-based
  • XXF9XX frauds against the private sector
  • XXFIREXX firearms
  • XXOICXX organised immigration crime
  • XXDRUXX illegal supply of drugs.

You can find the briefing that all reporting officers should read on the NCA website


Insurance Act 2015 – what you need to know
The Act fundamentally changes the way both commercial and consumer insurance and reinsurance contracts operate in the UK.

The Act fundamentally changes the way both commercial and consumer insurance and reinsurance contracts operate in the UK. 

On 12 August 2016 the Insurance Act 2015 (the Act) came into force, affecting all policies governed by the laws of England, Wales, Scotland and Northern Ireland (even if the risks covered by these policies are located outside these jurisdictions). The Act will affect all renewals and new policies, together with any changes made on policies already in force after that date. 

The Act fundamentally changes the way both commercial and consumer insurance and reinsurance contracts operate in the UK. The Act has been refined to meet the modern business environment, rebalancing the rights and remedies between you as the insured and your insurer, meaning that it is more likely for claims to be paid in full. This rebalance has a direct impact on how you disclose information on which the insurer will rely and the range of remedies on which both you and insurers can rely, if things go wrong. 

This article is split into three sections and provides a summary of the changes and our recommendations for what you can do to be prepared:

  1. Duty of fair presentation
  2. Remedies for breach of the duty of fair presentation
  3. Warranties and other terms.

As this is new legislation, the courts will be the ultimate arbiter of how the Act will be interpreted. This briefing note is intended to provide guidance as to how we perceive you may realise the benefits and take measures to avoid the pitfalls. 

1. Duty of Fair Presentation
The rules governing what information you must disclose to your insurers before the insurance policy is taken out have changed. This new requirement is called the ‘Duty of Fair Presentation’ and is more structured than the current duty to disclose all material information. While the new requirement does arguably increase the scope of the obligations that are imposed upon you, it extends the remedies you have against the insurers. 

How to comply?
To comply with the ‘Duty of Fair Presentation’, prior to the start of the policy you must: 

  • disclose ‘every material circumstance which the insured knows or ought to know’ (this can include disclosing the limits of the information you are able to provide); or
  • ‘failing that, [provide] disclosure which gives the insurer sufficient information to put a prudent insurer on notice that it needs to make further enquiries for the purposes of revealing those material circumstances’.

What is a ‘material circumstance’?
The new test for what is a material circumstance is largely the same as the current test: information will be material if it 'would influence the judgement of a prudent insurer in determining whether to take the risk and, if so, on what terms'. 

What am I deemed to know or ought to know?
The test for what ‘material circumstances’ you are deemed to know, and therefore disclose, is broader than the current test. You are deemed to know the following: 

  • what is known to the individuals who are part of your ‘senior management’
  • what is known to the individuals responsible for your insurance (for example, your insurance manager and/ or Lockton)
  • what should reasonably have been revealed by a reasonable search of information available to the ‘insured’, including information which is ‘held within the insured’s organisation or by any other person’.

Who are your ‘senior management’?
The Act does not identify who your ‘senior management’ are (beyond saying they are ‘those individuals who play significant roles in the making of decisions’ about how your activities are to be managed or organised). We will endeavour to agree with your insurers exactly who your ‘senior management’ are. However, to assist us you will need to provide information on your management structure, identifying those people who make decisions throughout your organisation (on a global basis if need be). 

What is a ‘reasonable search’?
In order to discover and disclose ‘material circumstances’ you are obliged to conduct ‘reasonable search of the information available’ to you. This search is for ‘information held within [your] organisation or by any other person’. 

This will include information held by us (with reference to the specific risk) or by, for example, your outsourced IT provider or joint venture parties.

The Act does not define what a ‘reasonable search’ is, so for larger or more complex clients, we will usually endeavour to agree the scope of your ‘reasonable search’ with your insurers. To do this we would work with you to understand what you perceive as a reasonable search, and present this to your insurers for consideration.

For all clients, please note that a reasonable search will encompass all areas of the business that are covered by the relevant insurance policy (on a global basis if need be). The insurer does not have to agree to a specific scope and so the more extensive your search is and the more evidence that you can provide on your internal policies and procedures the more likely it is that an insurer will agree to the scope. It is also extremely important that your internal record keeping (including of the enquiries undertaken and responses) is sufficient to prove that the reasonable search has been undertaken. 

How do I disclose ‘sufficient information to put a prudent insurer on notice that it needs to make further enquiries for the purposes of revealing those material circumstances’?
If you fail to disclose 'every material circumstance which the insured knows or ought to know', you may still have satisfied the Duty of Fair Presentation if you disclose information 'which gives the insurer sufficient information to put a prudent insurer on notice that it needs to make further enquiries for the purposes of revealing those material circumstances'. 

If the insurer does not then make enquiries of you to reveal the material circumstances, the insurer cannot later claim you failed to disclose them. We will try to ensure that your presentation to your insurers is as comprehensive as possible, but it is clearly more advisable to endeavour to discover and disclose all material circumstances than to rely on the presentation putting insurers on notice that they need to ask further questions. Because of this new rule, insurers are likely to ask more questions about your presentation than they did previously, so you need to make sure you have sufficient time to answer them fully before the start of your policy (and for any amendments to existing cover or endorsements).

What else do I need to know about the Duty of Fair Presentation?
The Act says your 'knowledge' includes 'matters which [you] suspected, and of which [you] would have had knowledge but for deliberately refraining from confirming them or enquiring about them'. 

Therefore you cannot ‘turn a blind eye’ in your search or fail to make enquiries in the knowledge that the answer will be damaging. Nor are you allowed to 'data dump'. It must be presented in a ‘reasonably clear and accessible’ matter. 

2. Remedies for breach of the Duty of Fair Presentation
There is a range of proportionate remedies which are based on the severity of the breach and depend on: 

  • whether the breach is deliberate or reckless, or
  • if the breach was not deliberate or reckless, what the insurer would have done if the Duty of Fair Presentation had been complied with.

What if the breach of the duty to make a fair presentation of the risk is deliberate or reckless?
If it is found that a breach is deliberate or reckless, then the position remains the same as under the current law, which is that the insurer is entitled to avoid the policy and can keep the premium. Where a policy is avoided it is deemed to never have existed, so you would have to repay any sums that you have received from the insurer in respect of claims under the policy. 

The insurer’s ability to keep the premium is essentially a penalty that is imposed to deter such deliberate or reckless conduct.

A breach is deliberate where you know that you are in breach of the Duty of Fair Presentation; it will be reckless if you do not care whether you are in breach of the Duty of Fair Presentation.

What if the breach of the duty to make a fair presentation of the risk is not deliberate or reckless?
If it is found that the breach of the duty is not deliberate or reckless, but it is still a breach, there are a range of proportionate remedies available to the insurer.

There are broadly three options available to the insurer based on what they would have done if there had been a fair presentation of the risk:

a)    Avoidance
If it is found that there was a breach of duty and the insurer would not have written the risk at all, then they may avoid the policy but must return the premium. This means that avoidance is still available as a remedy for insurers even where the breach is 'innocent' (or at the very least, not deliberate or reckless).

To be able to avoid the policy the insurer would have to be able to demonstrate that if you had made a fair presentation of the risk, they would not have been prepared to write the risk at all. This would have to be proved by evidence from the underwriter who was responsible for writing the risk.

b)   Variation of the terms
If, in the absence of a breach of duty, the insurer would have written the risk but on different terms, the contract will be treated as if it had been written on those terms. This does not include terms relating to premium (as to which, please see below).

This means, for example, that the insurer may impose certain exclusions where they can establish that these would have been imposed if there had been a fair presentation of the risk. This could affect whether they pay the claim in question.

This remedy can also have an effect on losses which the insurer has already paid because it involves treating the contract as if it had been entered into on those different terms, therefore having retrospective effect.

Therefore, if the insurer proves that it would have contracted on different terms, that would have reduced or extinguished its liability for losses which pre-date the insurer’s discovery of a breach of the duty of fair presentation, you may have to reimburse the insurer for those losses.

c)    Reduction of the claim
If it is found that there was a breach of duty and the insurer would have written the risk, but for a higher premium, then the insurer is entitled to reduce the claim settlement proportionately.

For example, if there is a claim for £100 and the original premium charged was £200. If the higher premium that would have been charged was £300 then the insurer can reduce the claim settlement to 200/300 x 100 = £66.67

This remedy may be used on a standalone basis or alongside the variation of terms discussed above.

3. Warranties and other terms, contracting out and abolition of basis clauses
NOTE: As currently, compliance with all warranties and terms in your policy is the best way to ensure that you have full protection under your insurance policy. The below only becomes relevant where you have failed to do so.

A warranty is a term in a policy which, if breached under the current law, discharges the insurer’s liability to you from the moment of the breach, even if the breach is later remedied.

Under the Act, the insurer will not be liable to pay any claims while you are in breach of warranty. If you later remedy the breach then the insurer is liable for subsequent claims, unless they are attributable to something that happened before the breach was remedied.

The insurer is also liable for losses which occur or are attributable to something that happens before the breach of warranty.

How to remedy a Breach of Warranty
In view of the importance of these terms, you need to understand how you can 'remedy' a breach of warranty to regain the benefit of your policy.

Where the warranty requires something to be done by a particular time – for example, installation of a sprinkler system by a particular date, and the sprinkler system is not installed by the required date, the breach will be remedied if the 'risk to which the warranty relates later becomes essentially the same as that originally contemplated by the parties' - so if the sprinkler system is subsequently installed, that will remedy the breach.

For other warranties, the breach is remedied if you cease to be in breach. For example, if you warrant that you will always have a security guard at your premises, but in fact one day there is no security guard, the breach will be remedied when there is a security guard once again present.

There may be situations where a breach cannot be remedied. For example, if you have a policy covering a shipment of goods in which you warrant that the goods will be stored in refrigeration units at all times, and during transit the goods are not refrigerated causing them to become damaged, but are then later moved to refrigeration units, then it is unlikely that the insurer would be liable because the damage caused by the breach cannot be remedied.

Terms not relevant to loss
The Act will prevent an insurer from relying on your breach of a term of a policy if that breach is entirely unconnected with the actual loss you suffer. For example, it is unlikely that the insurer can rely on breach of a fire alarm warranty where loss is caused by flood or burglary.

This applies to any term of the policy if your complying with that term would be likely to reduce the risk of loss of a particular kind, or at a particular location or time. For example, where you warrant that your sprinkler system will be inspected every six months, since that would reduce the risk of loss caused by fire.

This does not apply to terms which define the 'risk as a whole'– for example, terms which define who is entitled to drive a vehicle, or a warranty that a ship will not enter a war zone. Breach of those terms will allow insurers to deny a claim regardless of their connection to the loss.

The determination of whether a term is one that either: 

  • reduces the risk of loss of a particular kind, or at a particular location or time, so that the insurer cannot rely on a breach that is unconnected with actual loss suffered, or
  • a term which defines the risk as a whole, so that the insurer’s full rights are preserved in the event of a breach,

is not straightforward and is likely to lead to disputes. It is therefore imperative that you comply with all policy terms and conditions to avoid being in this position.

Contracting out
In business contracts, the parties are free to contract out of any part of the Act, apart from those relating to basis clauses (see below). In order to do this, the insurer must overcome two hurdles: 

  • first, the insurer must take sufficient steps to draw the term to your attention before the contract is concluded, and
  • second, the term must be drafted so that it is clear and unambiguous as to its effect. This means that the insurer has to explain the effect of the term.

For example, there may be circumstances where an insurer seeks to preserve the protection provided by the current law in respect of breaches of particular terms, such as premium payment warranties.

We will inform you if we become aware of insurers who look to contract out of any elements of the Act, for your particular insurances and what this might mean for you.

Abolition of ‘basis clauses’
Any representation made by you in connection with a proposed insurance policy is currently capable of being converted into a warranty as to its truth/accuracy by means of a term in either the policy or the proposal. Such 'basis clauses' will no longer be allowed.

This means that a term which states that the facts stated in the proposal form the basis of the contract will no longer be of any effect. The parties cannot contract out of this provision, which is good for you as it reduces the risk of inadvertent pre-contractual misrepresentation. However, please note that this does not have an impact on your Duty of Fair Presentation (as referenced above).

Conclusion and how to start preparing
To reap the benefits from the Act, you will need to consider how you currently compile the information you provide for insurance purposes. Does this align with the detail and scope required to comply with a ‘reasonable search’?

Certain senior management may have a peripheral understanding and involvement with insurances, but it is not about their understanding of the insurances per se, but their understanding of the risks within your business and how, together with the risk/insurance managers, they are controlled and, appropriately insured.

Evidencing how you have decided:                 

  • what is a reasonable search and how you have achieved it, and
  • who are the relevant senior management who play a significant role in making decisions on the business activities to which the insurance relate

will also mitigate the potential for insurers to question your compliance with your duty of fair presentation. Therefore there is an expectation that implementing the Act will take time so you should start work on this as soon as possible.

Should you wish to discuss this matter further, please speak to your usual Lockton contact.

Lockton Companies LLP. Authorised and regulated by the Financial Conduct Authority. A Lloyd’s broker.

Lockton Companies LLP is ACCA’s recommended broker for Professional Indemnity insurance. For information, please contact Lockton on 0117 906 5057.



All change for land transaction taxes in Wales
A summary of how the new Welsh Revenue Authority will function.

A summary of how the new Welsh Revenue Authority will function. 

The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill – together with the explanatory memorandum – has been laid before the National Assembly for Wales. The Act provided the legal framework to collect and manage devolved taxes, including the establishment of the Welsh Revenue Authority which will undertake the collection and management functions for land transaction tax. 

When enacted the Bill will establish a framework for setting the rates and bands for land transaction tax and these will be set through secondary legislation closer to April 2018. 

This Bill aims to replace stamp duty land tax from April 2018 and sets out:

  • Part 2 – the key principles of LTT, including which types of transaction will incur a charge to LTT and who will have to pay
  • Part 3 – how the tax will be calculated and what reliefs will apply
  • Part 4 – the application of the Bill in relation to leases and licences
  • Part 5 – special rules applicable to a variety of persons and bodies (such as partnerships or companies)
  • Part 6 – rules on making a land transaction return and paying the tax
  • Part 7 – specific measures to tackle devolved tax avoidance. 
British Accountancy Awards - the shortlist
ACCA strongly represented on the shortlist for the 2016 British Accountancy Awards.

The finalists of the British Accountancy Awards were decided by the 20+ strong judging panel* representing the very best of the profession, and its ecosystem. Large practices and small; institutes; long-standing advisory consultancies; and Accountancy Age’s editorial team.

The sixth annual British Accountancy Awards has, as in previous years, attracted a very high calibre of entrants representing the best of practice, service-line and individual excellence.

Due to the popularity and calibre of entries for 'Most Innovative Practice', we have created additional tiers that recognise innovation across firms of all sizes; Independent, Mid-Tier and Large.

The Awards ceremony will take place on 29 November 2016 at The Brewery, London.

Kevin Reed, Head of Editorial for Accountancy Age and Financial Director, and chair of the Awards judges, said: “I’m delighted to see another year of growth in both the quality and quantity of entries. The awards encompasses the vast range of practices by size and discipline, and also recognises individuals and tech providers that underpin accountancy. It’s particularly pleasing, this year, to see so many practices looking to show off their innovative strategies.”

View the complete shortlist for The 2016 British Accountancy Awards Finalists


Harnessing digital change
IRIS World 2016 will show how the digital revolution can benefit your practice.

IRIS World 2016 is the UK’s largest annual customer conference for accountancy practices to discover what’s driving the industry’s digital revolution and how IRIS is enabling accountants to harness these changes. 

Why you should attend 

  • Discover: Industry insight and thought leadership into becoming a more efficient and profitable firm.
  • Learn: How you can survive, thrive and conquer in an increasingly digital world.
  • Develop: IRIS World counts as 8 points towards your annual CPD.
  • Connect: With industry figures and domain experts as we reveal how you can propel your practice into the future.

Where and when

  • Thursday 29 September | ICC, Birmingham, B1 2EA
  • Tuesday 4 October | Hampden Park Stadium, Glasgow, G42 9BA

Sessions will include:

  • Harnessing Digital Change (10.00 - 11:30)
    Accountancy has changed, have you? Discover what’s driving the industry’s digital revolution from a leading Microsoft digital strategist and learn how IRIS is enabling accountants to harness these changes.  
  • Death and Taxes & Mind the GAAP (12:00 - 13:00)
    A senior HMRC thought leader explains the incoming ‘Making Tax Digital’ strategy and the impact it will have on your practice in the immediate future and beyond, plus learn how you can take advantage of the transition to new UK GAAP from FRS guru Steve Collings. 
  • Workshop Sessions 1 (14:15 - 15:00), 2 (15:00 - 15:45) and 3 (15:45 - 16:30)
    Choose either workshop A, B or C from a wide list of options. 
  • SME Panel, Industry Panel and close (16:30 - 17:45)
    Find out how your clients view the accountancy landscape, including what they now expect from their accountant and the growing need for business advisory services. You'll also hear from governing bodies, accountancy faculties – including ACCA’s head of technical advisory, Glenn Collins – and key figureheads as they give their thoughts on the ongoing digital revolution, the pain points caused by the changing legislative landscape, and how you can effectively combat them.

Find out more and register for your free place now.

Protecting the term accountant
A petition to protect the term accountant has been created.
An ACCA member - Anthony Kounnis FCCA - has created a petition calling on the government to protect the term accountant.

You can view the petition here and contribute to a discussion in ACCA's LinkedIn group for practitioners.

Online CPD offers
Take your pick from the latest online CPD offers.
Residential Conference for Practitioners

Grab an early booking discount for our premier CPD conference.

Residential conference for practitioners 
18-19 November, Derby 

Fee: £429
Early Booking Discount: Book by 17 October and pay just £386.

View the conference brochure

Book your place online now

Our residential conference for practitioners offers you 14 units of CPD in a relaxed and sociable environment. Providing you with the perfect opportunity to update your knowledge on the current developments in the profession. Taking place over a Friday and Saturday, this two-day conference minimises valuable time away from the office.

Select an area that you are interested in to view the topics on offer:

  • EU and UK VAT update
  • HMRC appeals, disputes, ADR and tribunals (breakout session)
  • Excel analysis tools (breakout session)
  • Pensions regime and tax explained (breakout session)
  • Practitioners and risk management - how to add value to your business (breakout session)
  • Company, commercial and employment law update
  • Accounting standards update
  • Corporate taxes for owner managed businesses
  • Personal taxes and benefit options

The above list includes four break-out sessions, those attending the conference can attend 7 of the 9 sessions. 

Webinar: Top 10 tips for completing a PCTR
Advice for anyone planning to apply for a practising certificate.

Top ten tips for completing a PCTR (Practising Certificate Training Record)
Thursday 13 October (12:30 to 13:30) 

Register to watch the webinar live or on demand

It is mandatory for members to hold an ACCA practising certificate in order to carry out work under ACCA's definition of public practice or to be partners or directors of a firm that undertakes public practice work. To obtain an ACCA practising certificate or a practising certificate and audit qualification, members must obtain a period of relevant experience. This experience must be recorded in the Practising Certificate Training Record (PCTR).

Did you know that most PCTRs are rejected upon their first review? If you are currently completing a PCTR or intending to complete one in the future, join Helen Simons, Licensing Compliance Manager, who will talk you through the Top 10 errors identified when completing the PCTR and advise how these can be avoided.  As part of Helen’s role she is responsible for reviewing PCTRs and supporting members through this process.  

In advance of the webinar it would be worth reviewing the PCTR and online guidance

Brexit and China - the role of accountants
The role accountants play is now needed more than ever.
Now that the UK government has given the green light to Hinkley Point there is a newly energised relationship forming between the UK and China.

Last week, ACCA was invited to join a UK trade visit, led by the Lord Mayor of London, to China and Hong Kong which provided an excellent opportunity to ensure that the expertise and views of professional accountants are heard during talks with Chinese government and businesses.

This exclusive article in The Accountant delves into the trip to China.
Building a better practice
Sign up now for one of three technical webinars to benefit your practice.

We will be holding three technical webinars in November, all designed to help practices grow. Register now to watch live, or on demand at a time that suits you.

The webinars will cover:

  • top 10 things to come out of monitoring visits
  • building a better practice
  • preparing for success - the path to partnership

Technical webinar - Top 10 things to come out of monitoring visits
Hosted by ACCA's Audit Compliance Team
8 November  10.00-11.00
CPD units: 1 


ACCA is required to undertake a comprehensive programme of monitoring visits to firms. This work is undertaken by ACCA’s Monitoring department and is designed to examine compliance with auditing standards, ACCA’s Global Practising Regulations (GPRs) and the Code of Ethics and Conduct. ACCA uses risk factors to determine whether a firm should be visited within the normal cycle of every six years, or earlier. Risk factors taken into account include the outcome of the previous visit and the number and types of audit clients. In some cases firms that hold auditing or investment business certificates but who do not undertake any regulated work may be subject to desktop monitoring instead of monitoring visits. This may also apply to firms that do not hold certificates but have principals who are ACCA members. Last year ACCA carried out monitoring visits to over 500 firms in the UK holding audit registration. In this webinar, Rob will discuss the top 10 issues emerging from monitoring visits.

Speaker: Rob Mukherjee FCCA, Compliance Manager at ACCA – Rob is a Compliance Manager within ACCA's Audit Monitoring department. He joined ACCA 13 years ago and oversees a team of compliance officers. 

Technical webinar: building a better practice

15 November 10.00-11.00
CPD units: 1 


Many practices fail to take control of their business and allow their clients and staff to dictate the direction that the business will take. In this webinar, Val will discuss what it means to be a captain of your ship and plan where you want to be in the future. She will also discuss the key factors in managing your practice – how to solve lock-up, billing, debt collection, cost management and staff management.

Speaker: Val Steward FCCA - For over 20 years Val has worked with accountancy practices, helping them to develop their businesses and remain compliant. She is the author and co-author of a number of technical guides and work programmes including the CCH Industry Audit and Accounting Guide on Clubs and Associations, and the Practice Society Anti-Money Laundering Procedures and Training Manual. She enjoys helping firms to develop, advising on training and staffing policy and all aspects of practice management. She also lectures widely on auditing, management skills and assurance services. 

Preparing for success – the path to partnership 

30 November 12.30-13.30
CPD units: 1 


We all need a plan – both for ourselves and for our businesses. For the lucky few, success lands in their lap, but for most of us, we are more likely to succeed if we plan a long term pathway for the career we want. Smart employers are also preparing for the long term success of their business through succession planning – yet only 37% of accounting firms have a formal succession plan in place (Crowe Howarth, 2015). In this webinar, Tara Aldwin will share her experiences of her own pathway to partnership at Foxley Kingham. Tara will explore all the practicalities – planning, objectives, finances, operations and timescales – that needed to be thought through for Foxley Kingham’s succession planning, and how this dovetailed with her own plan for success.

Speaker: Tara Aldwin, Director, Foxley Kingham Chartered Accountants - having started her career in a similar firm, Tara qualified with a large PLC and then joined Foxley Kingham as an Audit Senior in 1999. Tara became a Director in 2010.