The transition period following Brexit is coming to an end, which means it’s now time to understand your responsibilities as a business. If your company or parent company is incorporated in the UK, it’s crucial that you comply with the new reporting and accounting requirements.
Here, we discuss what you’ll need to do from the 1st January 2021.
Preparing your accounts
After the 1st January 2021, companies can no longer use EU-adopted International Accounting Standards (IAS). Instead, you will need to use UK-adopted IAS when preparing your annual accounts. While there may be minor differences if the UK decides to adopt or amend standards and the European Union does not, both will remain the same on 1st January.
With this in mind, you can still use EU-adopted IAS when preparing your accounts for financial years starting on or before the end of the transition period. Further action will need to be taken for specific companies from January 2021, including:
- UK-incorporated parent companies
- UK companies with a presence in the EEA
UK public companies with a UK listing
When January arrives, incorporated groups with security admitted to a UK-based regulated market must prepare their accounts using the previously mentioned UK-adopted IAS. This must be done for all accounting periods that begin either before or after the 1st January 2021.
If you require further assistance, Nabarro Poole aims to prepare your accounts within just a few weeks of the period end.
UK public companies with an EEA listing
If you own a public company with an EEA listing, you’ll need to produce accounts that adhere to the UK Companies Act (2006) and comply with the rules of the specific country where the daughter company is located.
Auditing
Following the transition period, public interest entities in the United Kingdom – including building societies and banks – must follow all of the rules issued by the Prudential Regulation Authority (PRA). They will also have to follow Disclosure Guidance and Transparency Rules published by the Financial Conduct Authority (FCA).
The Audit Directive
Issuers of debt securities or shares that are solely admitted to trading on regulated markets in the EEA will not be subject to the statutory Audit Directive. However, it will still apply to you if you have a parent company incorporated in the United Kingdom.
Appointing audit firms
Next year, companies must select a UK-registered audit firm to complete tasks such as bookkeeping and financial management. Individual auditors registered in the UK must sign any audit report on behalf of the audit firm.
It’s important to bear in mind that, as we enter the new year, the government will likely make further changes to UK accounting and reporting requirements. As such, we strongly advise that you keep an eye on the official HMRC website.
Here at Nabarro Poole, we can continue to provide assistance after the transition period. Whether you require professional business advice or budgeting and forecasting assistance, contact us today to find out how we can support you.
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