UK unveils scheme for energy-intensive companies; IESBA proposes code revisionsThis roundup examines the UK government’s plan to support energy-intensive businesses and the IESBA’s exposure draft on tax planning.
Three hundred businesses across the UK stand to benefit from a new government scheme designed to ensure energy costs for key industries are in line with those of other major economies.
The scheme, named the British Industry Supercharger, will focus on sectors particularly exposed to the cost of electricity, such as steel, metals, chemicals, and paper, according to a news release. These industries employ around 400,000 skilled workers across the UK and support many more in their supply chains. They made up around 28% of total exports in 2019, the release said.
According to the release, the proposals, set to be consulted on in the spring, would exempt businesses from "certain costs arising from renewable energy obligations … whilst exploring reductions on network charges, which are the costs industrial users pay for their supply of electricity".
The proposed measures "will help deliver the affordable, reliable energy that these industries need to become greener, and secure jobs for the future", Energy Security Secretary Grant Shapps said in the release.
IESBA proposes framework for tax planning
The International Ethics Standards Board for Accountants (IESBA) released an exposure draft, Proposed Revisions to the Code Addressing Tax Planning and Related Services, for comment. The proposed revisions respond to public interest concerns about tax avoidance and the role played by consultants, including professional tax advisers, in light of revelations in recent years, a news release said.
The proposals strengthen the ethical expectations for professional accountants in business and in public practice when performing tax planning activities for employing organisations or providing tax planning services to clients, the release said.
"It is crucial that there are clear and robust ethical guardrails when professional accountants assist their employing organisations' and clients' tax planning to safeguard the public interest. These timely proposals are also designed to provide professional accountants with practical guidance to navigate the ethical challenges in this complex area," IESBA Chair Gabriela Figueiredo Dias said in the release.
The proposed ethical framework:
- Explains the types of threats to compliance with the fundamental ethics principles of the code that might be created when professional accountants are involved in tax planning.
- Sets a clear principle that professional accountants recommend or otherwise advise on a tax planning arrangement only if they have determined that there is a credible basis in laws and regulations for it.
- Requires consideration of the reputational, commercial, and wider economic consequences that could arise from the way stakeholders might view the tax planning arrangement before determining whether to proceed with the recommendation or advice.
- Provides practical guidance to assist professional accountants in navigating situations of uncertainty when carrying out tax planning.
- Deals with other practical matters, including disagreement with the client or management or those charged with governance, and documentation.
The proposals may be modified in light of comments received before being issued in the final pronouncement, the draft publication said. Comments are requested by 18 May.
The IESBA invites all stakeholders to comment through the website.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.