UK Accounting Standards to Converge with IFRS

The UK Accounting Standards Board (ASB) is proposing to converge UK accounting standards with IFRS. The proposal includes a 3 tier approach whereby listed companies (Tier 1) can opt to prepare their accounts under full EU-adopted IFRS. 

Large and medium sized companies and the UK subsidiaries of listed companies will fall into Tier 2. Tier 2 companies will have the option of adopting full IFRS or reporting under the Financial Reporting Standard for Medium Sized Entities (FRSME). The FRSME is expected to be more in line with IFRS but with significantly reduced disclosure –which can run to as much as 2,000 pages under the full IFRS.

Small companies will report under the ASB’s FRSSE, which is similar to existing UK GAAP. The move will enable more consistent reporting within many UK and Global Groups. The new rules will come into effect in January 2015.

HMRC Requires VAT to be Paid Online

From 1 April 2012 all VAT registered businesses must submit their VAT returns online and make payments electronically. At present, online registration is required for business with over £100,000 revenue only.

Proposal to merge PAYE and National Insurance

The Chancellors budget announcement for 2011 included a proposal to merge PAYE and National Insurance in the future. No further updates have been provided at this time. Belsize comment hat whilst this will simplify the tax system for UK contractors and employees, this could reduce the current tax benefit employed by contractors who structure their taxes to minimise their National insurance payments.