Finance

3 legislative changes to watch out for 2017

Here's our list of the top 3

1)      Apprenticeship levy

Government funding of apprenticeships in England is to change from April 2017. It means some organisations will contribute to the apprenticeship levy.

This will hit the top 2% of UK employers. That is, those with a payroll of more than £3m. It'll equate to a 0.5% levy on their pay bill, but there will be an allowance of £15k to fund apprenticeship training. 

The aim is to get employers to invest in apprenticeships. The Government sees this as a long-term drive to develop skills in the UK, to improve standards of training, and support economic growth. 

In England, there'll be a digital voucher system for levy paying employers offering apprenticeships. They'll be able to use these vouchers to train their apprentices. It's also worth noting the Government will be providing all employers with a 10% top up payment. 

Find out how the apprenticeship levy will work.  

 

2)      Gender pay gap

Gender pay has been on the agenda for some time now. It's an interesting topic and one in which the answers you get depends on the questions you ask. You've only got to read the recent article on the BBC: Four ways the gender pay gap isn't all it seems, which highlights this.

So what does the Government's draft regulation mean? Any employer with 250-plus employees will need to disclose information on gender pay gaps. 

This entails companies ‘taking their first snapshot of gender pay gap data in April 2017. Then, analysing that data and publishing the results no later than April 2018. Organisations then have to report annually.

With six months to go, businesses should assess their gender pay gap data now. This will provide time to make changes, should it be necessary.

Reports should include:

  • Mean and median calculations
  • A breakdown of the number of males and females ‘working within salary quartiles’
  • Base salary separate from bonuses and commissions

The data will need the seal of approval from a senior individual within the organisation. Then publish straight on the company website. It'll also appear on a Government website too. 

This area of non-compliance is under Government review. Currently, there are no civil penalties. But, consider this, the impact of negative publicity and reputational damage could be huge. 

 

3)      FRS 102: the financial reporting standard

OK, so this isn’t technically new. It’s already live for year ends on or after 31 December 2015. But by 2017, every organisation that’s implementing FRS 102 will have gone through one cycle of it. These include many private companies, individual listed companies, listed parent companies and not-for-profit organisations.1

The background: this single reporting standard replaced a number of different financial standards and statements (referred to as UK GAAP). It's based on the International Financial Reporting Standards (IFRS) for SMEs but with some significant changes to comply with Companies Act. It meant a change to the format of financial statements and what had to be disclosed. It also meant changes to asset and liability recognition, how certain items are measured as well as how gains and losses are treated.

And so, in 2017, organisations will have (hopefully) got their heads around the rules. If you’re completing your first cycle of the reporting standard, it’s worth reviewing the process to date and looking at how you can make it more efficient the next time around. Always better to do this whilst it’s still fresh in your mind.

And whilst there is talk of further changes in light of the recent IFRS update2, any anticipated amendments are not expected until 1 January 2019 and 1 January 2022 respectively. Implementing any changes, of course, will therefore be some way off.

  1. Some organisations will adhere to IFRS (namely, groups listed on LSE and AIM), FRS101 (a reduced disclosure framework) or FRS105 (for micro entities). More details can be found here.
  2. You can read more on AccountingWEB and the ICAEW FRS102 update; the full consultation document from the FRC can be found here.