Mha Plc · LSE:MHA
Mha — Investor Presentation (February 2025)
90 slides from Mha's investor presentation, February 2025
Slide 1: Finance Directors Update Course
Finance Directors Update Course February 2025
Slide 2: Disclaimer & Copyright
Disclaimer & You shall not copy, make available, retransmit, reproduce, sell, disseminate, licence, distribute, publish, broadcast or otherwise circulate either within your business or for public or commercial purposes any of (or any part of) these seminar materials provided by MacIntyre Hudson LLP
Slide 3: Thank you for joining us
Thank you for joining us A copy of the slides has been sent to you this morning, are available to download from our website, via the QR code here, or via the link in the Chat, where you will also find other useful information. Please use the Q&A to ask any questions. We will do our best to answer th
Slide 4: Feedback & CPD Certificates
Feedback & CPD Certificates This is a CPD Course and provides 3 hours of relevant CPD. Please use our feedback form to request your certificate for attending. Certificates will be sent out by the end of April, once your attendance has been verified. We appreciate all feedback, which helps us to plan
Slide 5: Our Speakers
Our Speakers Chris Danes Richard Maitland Beverley Scott Jonathan Dowding Tax Partner & Employment Tax Corporate Tax Tax Chairperson Partner Partner Director Chris Liu Robin Prince Neil Parsons Jay Desai Transfer Pricing VAT & Indirect Tax Head of Financial Senior Research and Partner Partner Report
Slide 6: Agenda
Agenda 08.30 – 08.45 Chris Danes Introduction and insights on the current market Partner conditions 08.45 – 09.00 Richard Maitland Employment Tax update Employment Tax Partner 09.00 – 09.30 Beverley Scott Corporate Tax update Tax Partner 09.30 – 09.50 Jonathan Dowding International Tax update Tax Di
Slide 7: Poll Results – Top challenge for businesses over the next 12 months
Poll Results – Top 3 challenge for businesses over the next 12 months 0% 5% 10% 15% 20% 25% Economic slowdown Wage increases Recruitment / Skills shortage Impact of cost-of-living on customers Interest rates Technology Regulatory burden Supply chain disruption Energy costs Inflation Global threats C
Slide 8: Poll Results – Highest priority for your business over the next 12 months
Poll Results – What is the highest priority for your business over the next 12 months? 0% 5% 10% 15% 20% 25% 30% 35% Reducing costs / finding efficiencies Retention of staff / recruitment Rasing prices / increasing margins Expansion (acquisition / organic growth) Diversification of product or servic
Slide 9: Update on the UK Economy
Update on the UK Economy Chris Danes Tax Partner chris.danes@mha.co.uk
Slide 10: Global Economy Update
Global Economy Update ‘Global growth is expected to remain stable yet underwhelming’ (IMF) • Predicted growth of 3.3% in 2025 and 2026. • Medium-term growth prospects are at their lowest in decades – and uneven across regions. • Concerns about global inflation due to Trump threat to impose new tarif
Slide 11: State of the UK Economy
State of the UK Economy • GDP growth showed signs of a rebound in first half of 2024 • But recovery came to a halt with zero growth in second half • Increased government and consumer spending will help stimulate growth in 2025 and 2026 – but only modest growth expected (0.75%) • Stronger recovery ex
Slide 12: The Budget & Business Confidence
The Budget & Business Confidence • 63% of businesses say tax, including NI, is now a concern, Latest BCC Survey (5 January 2025) following the Chancellor’s Budget on 30 October – the highest level since 2017 • Business confidence has slipped to its lowest level since the aftermath of the mini-Budget
Slide 13: UK Economic Outlook - Summary
UK Economic Outlook - Summary • Slow recovery in 2025 & 2026 – driven mainly by significant increase in government spending • More positive outlook for 2027 and 2028 • ‘Sticky’ inflationary pressures in the service sectors • Stagflation is a threat (rising inflation with rising unemployment) • Can f
Slide 14: Employment Tax
Employment Tax Richard Maitland Employment Tax Partner richard.maitland@mha.co.uk
Slide 15: Employment Tax – key recent developments
Employment Tax – key recent developments Key developments impacting tax and payroll compliance • Autumn Budget: • Increase in the rate of Employer National Insurance Contributions and lower threshold • Increase in Employment Allowance • 'Tackling non-compliance in the umbrella company market' • Apri
Slide 16: Employment Tax – risk and opportunity areas
Employment Tax – risk and opportunity areas • Maximising salary sacrifice – pension contributions and EVs • National Insurance on Car Allowances – potential refund opportunity • Tronc arrangements in hospitality • Key risk areas: • Employee expenses – permanent vs. temporary workplaces; home to work
Slide 17: Corporate Tax
Corporate Tax Beverley Scott Corporate Tax Partner beverley.scott@mha.co.uk
Slide 18: Corporate Tax update - agenda
Corporate Tax update - agenda • Autumn Statement – 30 October 2024 • What was announced? • What was announced but not enacted? • Lets look into the future... • Case Law update
Slide 19: Autumn Statement 2024 – what was announced?
Autumn Statements 2024 – Corporation tax – no major changes • Confirmation of tax treatment on double cab pick up following what was case • Extend 100% FYA to Zero emission cars to 31 March 2026 announced? • Cryptoasset Reporting Framework (CARF) introduced from 1 January 2026 Income Taxes – no majo
Slide 20: Autumn Statement 2024 – what was announced but not enacted?
Autumn Statement 2024 – what was announced but not enacted? Inheritance Tax • Unused pension funds and death benefits will form part of an Estate from 6 April 2027 • Reform of Agricultural Property Relief ('APR') & Business Property Relief ('BPR') - 100% for the first £1m and 50% thereafter • ISA li
Slide 21: Autumn Statement 2024 – consultations
Autumn Statement 2024 – consultations • Technical consultation on APR & BPR (Early 2025) • Explore the treatment of pre development costs (Early 2025) • Land Remediation Relief: is it still meeting its objectives and evaluating its value for money (Spring 2025) • Technical consultation on draft legi
Slide 22: Autumn Statement 2024 – let's look into the future
Autumn Statement 2024 – lets look into the future... Corporation Tax Roadmap • Roadmap published 30 October 2024 • Current summary of where we are • Additional consultations: • Modernisation of CT; • R&D advance clearances • Interesting points / indicators: • Devolution of CT rate in Northern Irelan
Slide 23: Case Law update – cases Oct 24 – 31 Jan 25
Case Law update – interesting CT Lloyds Asset Leasing Ltd • cases Oct 24 – to First Tier Tribunal 20 January 2025 • Use of cross border losses • Inference of tax motivation 31 Jan 25 Scottishpower (SCPL) Ltd and other companies • Court of Appeal 17 January 2025 • Fines and penalties are not always f
Slide 24: Blackfriars Hotel (UK) Holdings Ltd v Revenue and Customs
Blackfriars Hotel (UK) Holdings Ltd v Revenue and Carried forward losses s730G CTA 2010 Customs Commissioners Bank loan £28m 2015 c/f NTLR Dr £2.36m [2024] UKFTT 1095 (TC) BHHL BHL TTHL
Slide 25: Blackfriars Hotel (UK) Holdings Ltd v Revenue and Customs
Blackfriars Hotel (UK) Holdings Ltd v Revenue and Customs Carried forward losses s730G CTA 2010 Commissioners [2024] UKFTT 1095 (TC) Loan £10m New Loan £20m Funded by share capital Funded by a dividend from BHL, itself the proceeds of BHHL raising and shareholder loan. Used to purchase a a capital r
Slide 26: FTT Taxpayer's Position
FTT Taxpayer’s Position S730G CTA 2010 sets out a motive based test: The taxpayer made 2 arguments: • A ‘Relevant Profits’ exist as a result of an “relevant profits” is a defined term in condition A and arrangement it refers to all the profits for an accounting period. • B Deductible expenses are br
Slide 27: FTT – HMRC's Position
FTT – HMRC’s Position HMRC’ Argument • 1 If the BHL new loan did not exist BHHL would have made a loss. The taxpayer’s interpretation leads to an absurd and improbable application of S730G which makes the section ‘comically unlikely to apply’ e.g. create a tax arrangement Interest paid to bank (935,
Slide 28: FTT Decision
FTT Decision “The two Supreme Court cases cited by Mr Fell [for HMRC] make it clear that the approach we should take to construing section 730G is a purposive one.” “It is hard to see why Parliament would want a company which engaged in arrangements within the scope of section 730G to be able to imp
Slide 29: FTT Decision
FTT Decision They did, however, agree that the profits arising as a result of the arrangement could be removed to arrive at ‘untainted profits’ against which the NTLR Dr could be offset Interest paid to bank (935,165) “Subsection (10) clearly contemplates the existence of “untainted” profits to whic
Slide 30: Unallowable Purpose
Unallowable Purpose Blackrock: Blackrock, Kwik-Fit and JTI were all refused permission to LLC 4 appeal against the Court of Appeal decision on their ‘unallowable purpose’ (s441 CTA 2009) cases. LLC 5 LLC 6 2.4bn prefs (c$4bn) Target
Slide 31: Unallowable Purpose - Implications
Unallowable Purpose - Some uncomfortable reading from Syngenta: 1• Courts are prepared to enforce the ‘unallowable purpose test’ Implications “We do not find Mr and take their own view (a concession is not required) Kuntschen's explanation plausible. …. In general tax 2• The test is annual so profes
Slide 32: International Tax
International Tax Jonathan Dowding International Tax Director jonathan.dowding@mha.co.uk
Slide 33: Topical International Tax News
Topical International Tax News 1• Donald Trump’s inauguration in the US on 20 January this year was followed closely by a wave of various global and domestic tax and tariff announcements. 2• These included the withdrawal by the US from the Pillar 1 and 2 discussions and a stated commitment to oppose
Slide 34: Pillar 2 Update
Pillar 2 Update 1 Reminder: 15% Global Minimum Tax and applies to all Multinational Groups with EUR 750m consolidated turnover. 2 More Pillar 2 notification / registration deadlines have been announced in recent months. Some initial registration deadlines have now passed, with others fast approachin
Slide 35: Pillar 2 Implemented
Pillar 2 Implemented
Slide 36: EU Direct Tax Legislative Initiatives
EU Direct Tax Legislative Initiatives • UNSHELL • BEFIT • HOT • DAC 9 • SAFE • DEBRA • FASTER
Slide 37: Transfer Pricing
Transfer Pricing Chris Liu Transfer Pricing Partner chris.liu@mha.co.uk
Slide 38: Transfer Pricing
Transfer Pricing • HMRC Guidelines for Compliance for Transfer Pricing (GfC7) • Reminder of the updates in the UK transfer pricing documentation requirements • Recent experience of dealing with HMRC enquiries
Slide 39: HMRC Guidelines for Compliance for Transfer Pricing (GfC7)
HMRC Guidelines for Compliance for Transfer Pricing (GfC7) • HMRC correspondence • Objective of the Guidelines • Key takeaways
Slide 40: Reminder of the updates in the UK transfer pricing documentation requirements
Reminder of the updates in the UK transfer pricing documentation • For accounting period starting on or after 1 April 2023, requirements multinational groups with a consolidated group revenue over €750M are required to prepare a transfer pricing Master File and a Local File in the UK. The format of
Slide 41: Recent experience of dealing with HMRC enquiries
Recent experience of dealing with HMRC enquiries • Quality of the transfer pricing documentation • Selection of transfer pricing methods • Type of transactions – IP related transactions and financial transactions
Slide 42: VAT & Tax Governance
VAT & Tax Governance Robin Prince VAT & Indirect Tax Partner robin.prince@mha.co.uk
Slide 43: HMRC Guidelines for VAT Compliance
HMRC Guidelines for VAT Compliance • HMRC has recently published guidelines for VAT compliance (“GfC8”). • These guidelines outline HMRC's recommended approach to VAT compliance processes. • They apply to all VAT-registered businesses that operate under invoice accounting. • While primarily aimed at
Slide 44: General Approach to VAT compliance
General Approach to VAT compliance The guidelines cover systems and governance, with the expectation that even smaller businesses should implement well- documented processes and controls. People Process Technology • Appropriately trained • Document controls • System interface controls • Roles & resp
Slide 45: Control Design
Control Design The effective design of a control will look at the nature, frequency and coverage of the control. Good practices for control design would include: Manual Automated Complex Simple Detective Preventative High Level Transactional Sampling 100% Retrospective Real Time
Slide 46: Cladding Remediation Work
Cladding Remediation Work • No specific VAT relief on cladding remediation work • HMRC have previously stated that works must be undertaken under the ‘responsible Actors Scheme’ to be eligible for deduction. • In December 24, HMRC issued Revenue & Customs Brief 3/24, in which they set out their revi
Slide 47: EU Updates – ViDA Approval
EU Updates – ViDA Approval On 5 November 2024, ECOFIN (the European Council on Economic and Financial Affairs) adopted the proposal VAT in the Digital Age (“ViDA). The ViDA proposal is comprised of 3 pillars: 1 E-invoicing 2 Platform Economy 2025 – Member states are able Jan 2030 – Travel and to int
Slide 48: EU Update – Virtual Events
EU Update – Virtual Events Previously, both the UK and the EU treated streamed events supplied to individual consumers as taxed where the supplier is established. Virtual events include: • Online conferences/ webinar • Distance learning courses UK Spain £100 +20% UK VAT From 1 Jan 2025 The EU change
Slide 49: Break
Break We will resume shortly
Slide 50: Research & Development
Research & Development Jay Desai Senior Research and Development Manager jay.desai@mha.co.uk
Slide 51: R&D Compliance: Recent FTT Decisions
R&D Compliance: Recent FTT Decisions • Recent cases, including Collins Construction Ltd v HMRC and Get Onbord Ltd v HMRC, have clarified key aspects of R&D tax relief, such as subsidised expenditure, contracted-out activities, and the use of existing technologies. • These rulings, although not bindi
Slide 52: FTT Decision: Collins Construction vs HMRC
FTT Decision: Collins Construction Background vs HMRC • Collins Construction Ltd appealed HMRC’s decision to deny SME relief because its R&D expenditure was subsidised. • HMRC contended that payments received from clients for completed projects should be considered subsidised, arguing that these pay
Slide 53: FTT Decision: Get Onbord Ltd v HMRC
FTT Decision: Get Background • Get Onbord Ltd, a software development company, claimed enhanced R&D tax relief for its work (automating verification and Onbord Ltd v HMRC risk profiling). • HMRC denied the claim, arguing that the project did not involve genuine scientific or technological uncertaint
Slide 54: R&D Disclosure Service: Overview
R&D Disclosure Service: Overview HMRC launched the service on 31 December 2024. The service allows companies to voluntarily disclose errors in R&D claims that are no longer within the time frame to amend their CT returns and repay any amounts owed due to inaccuracies. While it does not offer any par
Slide 55: R&D Disclosure Service: Process & Requirements
R&D Disclosure Service: Process & Requirements How the Service Works Submission Process • Submit the online form with supporting calculations. • Include a signed letter of offer for contract settlement. • HMRC will then either accept or request more information Prepare Your Disclosure • Key informat
Slide 56: Financial Reporting and Company Law Update
Financial Reporting and Company Law Update Neil Parsons Financial Reporting Director neil.parsons@mha.co.uk
Slide 57: Changes to Company Law affecting financial reporting
Changes to Company In July 2024, the FCA published Policy Statement PS 24/6, setting out significant changes to the UK’s listing regime and a Law affecting financial major overhaul of the Listing Rules. The changes include: reporting • The current ‘premium’ and ‘standard’ listing segments are being
Slide 58: Changes to the UK Listing Rules
Changes to the UK Listing Rules Changes to Company Law affecting financial reporting * Graph is from Financial Reporting Council
Slide 59: Changes to the UK Listing Rules
Changes to the UK Listing Rules Changes to Company Law affecting financial reporting * Graph is from Financial Reporting Council
Slide 60: Changes to the UK Listing Rules
Changes to the UK Listing Rules Changes to Company Law affecting financial reporting * Graph is from Financial Reporting Council
Slide 61: Changes to Company Law affecting financial reporting
Changes to Company Law affecting financial Before Christmas 2024 the long-awaited statutory instrument was published by the government amending the qualifying conditions reporting for companies and LLPs that determine the size of the company or LLP as micro-entity, small, medium or otherwise large w
Slide 62: Changes to the directors' report – small companies
Changes to Company Law affecting financial Small companies (SI 2008/410) reporting • Statement regarding full and fair consideration to applications for Changes to the directors’ employment by company by disabled persons report – periods on or after 6 • Appropriate training of employees who are disa
Slide 63: Changes to the directors' report – medium and large companies
Changes to Company Law Medium and large companies (SI 2008/410) affecting financial • Statement regarding full and fair consideration to applications for employment by company by disabled persons reporting • Appropriate training of employees who are disabled persons Changes to the directors’ • Train
Slide 64: Changes to the qualifying conditions for companies
Changes to the qualifying conditions for Changes to companies for periods on or after 6 April 2025 Company Law affecting financial Benefits for reporters are some way off reporting Accounting periods Accounting periods commencing before commencing on or 6 April 2025 after 6 April 2025 Must apply old
Slide 65: Benefits for reporters are some way off – standalone companies
Changes to Company Law Benefits for reporters are some way off affecting financial Standalone reporting companies Changes to the qualifying conditions for companies for periods on or after 6 April 2025
Slide 66: Benefits for reporters are some way off – parent companies
Changes to Company Law Benefits for reporters are some way off affecting financial Parent companies reporting Changes to the qualifying conditions for companies for periods on or after 6 April 2025
Slide 67: Important matters to note in respect of financial reporting
Changes to Company Law affecting financial There are some matters to consider in respect of changes to company reporting sizes and the future of financial reporting: Important matters to note in • The legislation discussed here does not alter the £36m reporting criterial for greenhouse gas and energ
Slide 68: Financial Reporting Council
Financial Reporting Council
Slide 69: FRC Staff Guidance on Changes to Listing Rules
Financial Reporting Council FRC Staff Guidance on Changes to Listing Rules in July 2024 Staff Guidance focuses on matters related to: •1 Impact of changes •2 Ethical considerations for reporting accountants •3 Impact on Standards for Investment Reporting (SIRs).
Slide 70: FRC Market Study into SME audit and reporting challenges
Financial Reporting Council FRC Market Study into SME audit and reporting challenges The Financial Reporting Council (FRC) has today launched a market study examining how effectively the audit market serves small and medium-sized enterprises (SMEs) and exploring opportunities to reduce their reporti
Slide 71: FRC Commentary on accounting areas often missed in the accounts
Financial Reporting Council FRC Commentary on accounting areas often • Liabilities for financial guarantees especially in parent entities missed in the accounts • Impact of covenant breach on loan classification • Provisions for onerous contracts • Dilapidation provisions • Contingent Liabilities •
Slide 72: FRC's Top Ten Reporting Topics
Financial Reporting Council FRC’s Top Ten Reporting Topics • Graph is from Financial Reporting Council
Slide 73: FRC 2024/25 Thematic Reviews
Financial Reporting Council FRC 2024/25 Thematic Reviews From Financial Reporting Council •
Slide 74: Narrative Reporting
Narrative Reporting
Slide 75: Revised QCA Corporate Governance Code
Narrative Reporting Quoted Companies Alliance (QCA) Code - There is a new 2023 QCA code applying for periods commencing on or after 1 April 2024, with a transition period of 12 months, and will be particularly relevant for AIM companies as, Revised QCA according to the QCA, over 90% of them use it.
Slide 76: Revised UK Corporate Governance Code
Narrative Reporting Revised UK In January 2024, The 2018 Corporate Governance Code (the Code) was updated following a limited consultation which concentrated on a limited number of changes. Corporate However, in relation to risk and internal control, the Code now includes an annual declaration by th
Slide 77: International Financial Reporting Standards
International Financial Reporting Standards
Slide 78: Summary of Recent IFRS Standards Changes
International Financial Periods on or after 1 January 2024 Reporting • Amendments to IFRS 16 – Lease liability in a sale and leaseback transaction • Amendments to IAS 1 – Classification of Liabilities as current or non-current Standards • Amendments to IAS 1 – Non-current liabilities with covenants
Slide 79: IFRS Exposure Drafts
International Financial Reporting Standards Exposure Drafts • Business Combinations – Disclosures, Goodwill and Impairment • Translation to a Hyperinflationary Presentation Currency • Amendments to IAS 1 – Non-current liabilities with covenants • Amendments to IFRS 19 Subsidiaries without Public Acc
Slide 80: UK GAAP
UK GAAP
Slide 81: Changes to FRS 101 Reduced Disclosure Framework
Consultation on changes to FRS 101 Changes to FRS 101 Reduced Disclosure Framework Reduced Disclosure On 14 December 2024, the FRC issued an exposure draft of Framework amendments to FRS 101 Reduced Disclosure Framework (2024/2025 cycle) (“FRED 86”) which essentially updates FRS 101 for the issuance
Slide 82: Forthcoming Changes to FRS 102
Forthcoming Changes to FRS 102 Changes to FRS 102 for periods commencing on On 27 March 2024, the FRC issued amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and other FRSs – Periodic Review 2024. The effective date for most amendments is or after 1
Slide 83: Timeline for transitioning to amendments to FRS 102 (2025)
Changes to FRS Timeline for transitioning to amendments to FRS 102 (2025) 102 for periods commencing on Accounts for year ended 31 or after 1 January December 2025 2025 1 January 1 January 31 December 2025 2026 2026 Amendments to Amendments to FRS 102 – FRS 102 – All other Supplier Finance amendment
Slide 84: Timeline for transitioning to amendments to FRS 102 (2026)
Timeline for transitioning to amendments to FRS 102 (2026) Changes to FRS Must NOT restate 102 for periods comparatives for leases. commencing on Catch up adjustment Comparative period made on first day of or after 1 January current period. 2026 1 January 1 January Accounts for year ended 31 2025 20
Slide 85: Discounting lease payments
Changes to FRS Forthcoming Changes to FRS 102 102 for periods Discounting lease payments commencing on or Given that lease payments should be recognised at their after 1 January present value, they should be discounted using one of the following rates: 2025 and 1 - The interest rate implicit in the
Slide 86: Lease exemptions
Forthcoming Changes to FRS 102 Changes to FRS Lease exemptions 102 for periods Where exemptions are taken, lease payments should be recognised on a straight-line basis over the lease term or other commencing on or systematic basis that is representative of the pattern of the benefit obtained. after
Slide 87: Five-step revenue recognition model
Forthcoming Changes to FRS 102 Changes to FRS 102 for periods Step 5 Recognise revenue commencing on or when (or as) the entity satisfies a after 1 January Step 4 performance obligation 2025 and 1 January Allocate the transaction price to the performance 2026 Step 3 obligations Determine the transac
Slide 88: Questions
Questions Chris Danes Richard Maitland Beverley Scott Jonathan Dowding Tax Partner & Employment Tax Corporate Tax Tax Chairperson Partner Partner Director Chris Liu Robin Prince Neil Parsons Jay Desai Transfer Pricing VAT & Indirect Tax Head of Financial Senior Research and Partner Partner Reporting
Slide 89: Save the date Finance Directors Update Course
Save the date Finance Directors Update Course Date: Thursday 18th September 2025 Time: 8.30am – 12.30pm CPD: 3 hours © 2025 MHA
Slide 90: Now, for tomorrow
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership, registered in England with registered number OC312313. A list of partners’ names is open for inspection at its mha.co.uk registered office, The Pinnacle, Building A, 150-170 Midsummer Boulevard, Milton Keynes, MK9 1FD.