What the Queen’s speech told us about accountancy in 2016
In addition to her 90th birthday celebrations this month, the Queen has announced the introduction of new accountancy laws designed to enhance pension protections and combat corruption in her annual speech to parliament.
These new plans will come into effect later on this year, and small businesses owners should be aware of how these changes will impact them in order to keep everything running smoothly. Here’s a summary of the points you’ll need to keep in mind:
Protecting pensions
Recently, there has been growing concern among MPs with regards to the way in which gaps in pension regulation have allowed “unstable Master Trusts” into the market, threatening the success of the auto-enrollment scheme.
The new ‘Pensions Bill’ addresses the need for stronger legislative standards for Master Trusts. The bill aims to provide increased supervision and protections for people in Master Trusts, as well as eliminating barriers for those who want to access their pension savings flexibly.
A Master Trust is a multi-employer occupational scheme, whereby each employer has its own division with the master arrangement. Drawn together by one legal trust or trustee board, employers receive the benefit of a governance function but with reduced operating costs and bureaucracy, as well as increased expediency compared to a single employer scheme.
It is unclear whether existing Master Trusts will be affected by the new Pensions Bill, however there are signs that this could be a belated attempt to create a barrier to entering such schemes. It should improve oversight and strengthen the auto-enrolment scheme – a factor that’s extremely beneficial for small businesses, but may require additional attention to accountancy.
Tax evasion and financial crime
The Queen’s speech has given significant momentum to the UK’s fight against international financial corruption. The measures announced will focus on money laundering and bringing to justice those who profit from crime. Crime legislation will be reformed, enabling the government to recoup additional illicit income, as well as to use legal mechanisms to prosecute business owners that fail to stop staff found to be facilitating tax evasion.
Commentators have already warned that this legislation must be phased in gradually in order to give small businesses a chance to adapt and implement the correct procedures. As the fallout from The Panama Papers illustrated, holding a company responsible for an individual’s actions can be problematic. By gradually implementing this law, the government will give small-business owners a chance to familiarise themselves with the regime and react accordingly. With the new model, proper and effective guidance will need to be given to companies of all sizes to ensure that they can assess whether their safeguarding measures are adequate.
Find out how the friendly team at 3 Wise Bears can help prepare your business for the upcoming changes to pensions and tax evasion legislation.
