News and views

ACCOUNTING STANDARDS

UKEB website launched

The UK Endorsement Board (UKEB) is being set up as the body responsible for influencing the development and subsequently endorsing and adopting new or amended international accounting standards, issued by the International Accounting Standards Board (IASB), for use by UK companies, from 1 January 2021.

The UKEB website has now been launched. It will provide access to all key developments in relation to the UKEB and its work, including: ● UK-adopted international accounting standard; ● UKEB adoption status report; ● UKEB appointments and meetings agendas and minutes, etc.; and ● the UKEB work plan.

The website supports access from a range of devices, including mobile, and allows subscribers to receive email alerts on the UKEB’s activities. You can subscribe to the website by sending an email to contact@endorsement-board.uk.

Chair of the UK Endorsement Board, Pauline Wallace said: “The UK Endorsement Board will be guided by certain principles when fulfilling its responsibilities in influencing the development of international accounting standards and their subsequent adoption for use in the UK. These principles include accountability, independence, transparency and thought leadership. I am delighted to launch the website. It will be an important platform for the Board to conduct its activities transparently, as well as keeping stakeholders up to date with all news and events.”

The website can be found at: www.endorsement-board.uk.

MONEY LAUNDERING

HMRC issues record £23.8million fine for money laundering breaches

HM Revenue and Customs (HMRC) published the latest list of businesses handed fines for breaching strict regulations aimed at preventing criminals from laundering illicit cash.

The list includes money transfer company MT Global Limited, which has been handed the largest ever fine issued by HMRC, for significant breaches of the regulations between July 2017 and December 2019 relating to: ● risk assessments and associated record keeping; ● policies, controls and procedures; and ● fundamental customer due diligence measures.

Nick Sharp, Deputy Director of Economic Crime, Fraud Investigation Service, HMRC, said: “Businesses who fail to comply with the money laundering regulations leave themselves, and the UK economy, open to attacks by criminals.

“Money laundering is not a victimless crime. Criminals use laundered cash to fund serious organised crime, from drug importation to child sexual exploitation, human trafficking and even terrorism.

“We’re here to help businesses protect themselves from those who would prey on their services. That includes taking action against the minority who fail to meet their legal obligations under the regulations as this record fine clearly shows.”

HONG KONG

Hong Kong Budget: government to be prudent

Carrie Lam, Chief Executive, Hong Kong

Hong Kong Chief Executive Carrie Lam said the government will have to be prudent after it rolled out multiple financial relief schemes last year. She said: “The Hong Kong Special Administrative Region Government has been rolling out financial relief schemes in the whole year last year. It took a heavy toll on the public finances of the Hong Kong SAR, so we have to be very prudent.

“At the moment, I understand we have no plans to extend the Employment Support Scheme, and hence I can foresee that the unemployment figures that the government is going to announce will be bad.”

Mrs Lam said the government will also take into account the views of the public and the Legislative Council in the Budget consultation when considering financial relief and other future relief measures. The Financial Secretary is conducting the consultation sessions in advance of the 2021/22 Budget, which will be delivered on 24 February.

ENERGY TAXES

Better use of energy taxes

Developing countries could raise much needed public revenues, while cutting emissions and air pollution, by making better use of energy taxes and reducing energy subsidies, according to a new OECD report.

“Taxing energy use for sustainable development: Opportunities for energy tax and subsidy reforms in selected developing and emerging economies” examines energy taxation in 15 developing and emerging economies in Africa, Asia and Latin America and the Caribbean. The report finds that well-designed energy and carbon taxes can strengthen efforts to improve domestic revenue mobilisation.

While the revenue potential varies across countries, the report finds that on average the countries could generate revenue equivalent to around 1% of GDP if they set carbon rates on fossil fuels equivalent to €30 per tonne of CO2.

Energy tax and subsidy reform is key to achieving the triple objectives of decarbonisation, domestic revenue mobilisation and access to affordable energy. Developing and emerging economies battling to recover from the Covid-19 crisis with much lower tax revenues than advanced economies would benefit from better designed energy taxes accompanied by targeted support to low-income groups. Tax-toGDP ratios in the 15 countries studied average just 19%, compared to 34% across OECD countries.

None of the 15 countries applies an explicit carbon price or uses CO2 emissions trading systems. To support poor households, fossil fuels used for heating, cooking and lighting are often taxed at low rates or subsidised, yet this weighs on public finances and in some cases can encourage excessive fuel use. In four of the 15 countries, the cost to public finances of energy subsidies exceeds income from energy taxes. Reducing subsidies, which tend to benefit wealthier consumers, and improving tax design could provide additional revenues for more targeted support to enhance energy access and affordability. The full report is available at www.oecd.org.

SELF ASSESSMENT

No Self Assessment late filing penalty for those who file online by 28 February

Self Assessment customers who cannot file their tax return by the 31 January 2021 deadline will not receive a late filing penalty if they file online by 28 February.

Self Assessment customers will not receive a penalty for their late online tax return if they file by 28 February, HMRCs’ Chief Executive Jim Harra has announced.

More than 8.9 million customers have already filed their tax return. HMRC is encouraging anyone who has not yet filed their tax return to do so by 31 January, if possible. However, anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February, according to HMRC.

COVID-19

Football clubs miss out on €2 billion revenue due to the Covid-19 pandemic

The 20 highest revenue generating clubs in world football will have missed out on over €2 billion in revenue by the end of the 2020/21 season, according to the 24th edition of the Football Money League published by Deloitte’s Sports Business Group. Set against the context of the global economic and social disruption caused by the Covid-19 pandemic during the 2019/20 season, the report profiles the highest revenue generating clubs in world football.

Under normal circumstances, clubs typically have a financial year-end that aligns with their domestic season (May or June for most European leagues). The disruption to the 2019/20 football season and the differing approaches by the various leagues, broadcasters and commercial partners have resulted in clubs’ revenue generated in respect of the 2019/20 season being spread across two financial years ending in 2020 and 2021. The majority of Deloitte’s analysis in this year’s Money League is focused on the financial year ending 2020.

As a result, this has led to a deferral element and a permanently lost element (notably on matchday income, but also rebates to broadcasters) to the reduction in revenue. In terms of deferral, the disruption to the 2019/20 season in most clubs’ cases meant that approximately one quarter’s revenue from the financial year ending in 2020 has been shifted to the financial year ending in 2021, resulting in 2021 having an additional quarter’s revenue.