Month: September 2024

IFRS S1 and S2 and the future of ESG reporting standards

McGills

Sustainability has become a core part of how businesses are expected to operate, whether we like it or not.  

You might think that all the talk about environmental, social, and governance (ESG) issues is only relevant to big corporations or public companies, but that’s not quite the case anymore.  

Even though adopting International Financial Reporting Standards (IFRS) might be optional for smaller businesses right now, the new IFRS S1 and IFRS S2 standards are worth understanding, as they could shape the future of sustainability for businesses of all sizes.  

What are IFRS S1 and S2? 

In June 2023, the International Sustainability Standards Board (ISSB) launched two new sustainability reporting standards: 

  • IFRS S1 – General Requirements for Disclosure of Sustainability-related Financial Information. 
  • IFRS S2 – Climate-related Disclosures. 

These standards are currently under review here in the UK, and the Government is planning to endorse them by March 2025.  

The idea is to create a common language around sustainability reporting, helping businesses communicate clearly and consistently about how they’re managing risks and opportunities related to ESG.  

And, once the Government gives the green light, these standards are going to be part of a broader Sustainability Disclosure Reporting framework. 

They will play a big role in how UK-listed companies report sustainability-related information to investors.  

What’s happening next? 

Once endorsed in March 2025, the Financial Conduct Authority (FCA) is expected to roll out these requirements for public companies, and there’s a consultation process to see if private companies, including SMEs, should also follow these rules. 

The Government will also be looking at the cost of these reporting requirements for smaller businesses, but they’ll be weighing that against the benefits for investors and the wider economy.  

There’s even talk of introducing a green taxonomy – which basically helps define what counts as environmentally sustainable. 

If you are curious about how IFRS standards could apply to your business or want to improve your ESG reporting, get in touch with us today. 

HMRC updates bank details for tax payments – What businesses need to know 

McGills

Keeping up with tax payments is something every business owner knows is important.  

On that note, HM Revenue & Customs (HMRC) has recently updated its payment details for certain tax regimes. 

Bank transfers remain one of the easiest ways for businesses to pay taxes.  

Businesses must use the correct payment information and understand the payment processing times to ensure HMRC receives payments promptly. 

HMRC’s new bank details 

The new bank details for HMRC affect the below tax regimes: 

  • Plastic Packaging Tax 
  • Biofuels or gas for road use — Fuel Duty 
  • Economic Crime Levy 
  • Soft Drinks Industry Levy 
  • Trust Registration Penalty 

Use the following details depending on where your business bank account is based. 

If your business account is in the UK: 

  • Sort code – 08 32 10 
  • Account number – 12529599 
  • Account name – HMRC General Business Tax Receipts 

If your business account is overseas: 

  • IBAN – GB86 BARC 2005 1740 2043 74 
  • BIC – BARCGB22 
  • Account name – HMRC General Business Tax Receipts 

All payments must be made in pounds sterling. Banks may charge if any other currency is used. 

Tax return and payment deadlines for businesses 

Meeting tax deadlines is crucial to avoid penalties. There are two main deadlines businesses need to keep in mind: 

  • Tax return filing deadline – The deadline for submitting your tax return is 12 months after the end of the accounting period it covers. Failing to file on time will result in penalties. 
  • Corporation Tax payment deadline – The deadline to pay your Corporation Tax bill is usually nine months and one day after the end of the accounting period. 

Penalties for late filing of tax returns 

If you do not file your Company Tax Return by the deadline, you will face penalties. These penalties increase over time: 

  • One day late – £100 penalty 
  • Three months late – Another £100 penalty 
  • Six months late – HMRC will estimate your Corporation Tax bill and add a penalty of 10 per cent of the unpaid tax 
  • 12 months late – Another 10 per cent of any unpaid tax 

If your tax return is late three times in a row, the £100 penalties increase to £500 each. 

Penalties for tax returns more than six months late 

If your tax return is more than six months late, HMRC will issue a tax determination, estimating the amount of Corporation Tax owed.  

This is a legally binding assessment, and you cannot appeal against it. You must pay the Corporation Tax due and file your return. 

Once your return is submitted, HMRC will recalculate the interest and penalties you need to pay. 

HMRC charges interest on unpaid tax from the due date until the payment is made. As of 20 August 2024, the late payment interest rate is 7.50 per cent. 

Appeals against penalties 

If you have a reasonable excuse for missing a deadline, you can appeal against late filing penalties online.  

After completing the online form, print it and send it to the address provided on the form.  

However, you must file your Corporation Tax return before appealing. 

What you’ll need to appeal: 

  • Your company’s Unique Taxpayer Reference (UTR) 
  • The date on the penalty notice 
  • The penalty amount 
  • The end date of the accounting period the penalty relates to 
  • An explanation of why you missed the deadline 

For personalised advice on managing your tax obligations, contact our team of accountancy professionals who can provide expert advice.