New UK GAAP meaning

In this issue: Budgets and Finance Bills Taxes management and litigation Employment taxes VAT Funds Energy International Current issues LexTalk®Tax: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Budgets and Finance Bills Finance Bill 2025 substantively enacted On Monday, 3 March, the Finance Bill 2025 cleared report stage and its third reading successfully in the House of Commons, with the government’s report-stage amendments duly agreed. For IFRS and UK GAAP, the Bill is now regarded as ‘substantively enacted’. The text transmitted from the Commons had its first reading in the House of Lords on Tuesday, 4 March. The Lords’ second reading, committee stage, report stage, and third reading are all firmly set for Wednesday, 19 March. To follow ongoing amendments to the Finance Bill as it moves through Parliament, see: Tax—Finance Bill 2025 tracker. CIOT issues Finance...

In this issue: Companies and corporation tax Individuals and income tax Stamp and transfer taxes Taxes management and litigation International Employment taxes LexTalk®Tax: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Companies and corporation tax UT upholds FTT decision on valuation and allocation of consideration in acquisition of care homes (Nellsar v HMRC) In Nellsar Ltd [2025] UKUT 164 (TCC), the Upper Tribunal rejected both appeals, affirming the FTT’s finding that Nellsar’s accounts did not comply with GAAP for corporation tax relief on goodwill amortisation. Nellsar purchased five care homes as going concerns and assigned substantial elements of the price to goodwill, valuing the properties using depreciated replacement cost (DRC). The FTT decided that, under UK GAAP, the correct basis was market value, adjusted for special assumptions, because operating care homes were sufficiently ‘similar in type and condition’ to the...

In this issue: Budgets and Finance Bills Employment taxes Taxes management and litigation Corporation tax VAT Daily and weekly news alerts New and updated content Latest Q&A Dates for your diary Trackers Useful information Budgets and Finance Bills Finance Bill 2026 substantively enacted On Wednesday, 11 March 2026, FB 2026 completed its report stage and third reading in the House of Commons. The government’s report stage amendments were approved, and the Bill is now treated as substantively enacted for IFRS and UK GAAP. To monitor changes as the Bill proceeds through Parliament, see: Tax—Finance Bill 2026 tracker—progress through Parliament. HMRC publishes updated explanatory notes to FB 2026 HMRC has issued explanatory notes covering the government’s amendments tabled for the report stage of FB 2026. As noted above, these amendments were passed on Wednesday, 11 March 2026. See: LNB News 10/03/2026 17. House of Lords makes report stage amendments to...

FORTHCOMING CHANGE relating to the treatment of forex under UK transfer pricing rules: From 1 January 2026, the Finance Bill 2026 introduces a series of updates to the UK transfer pricing framework. Among the measures are changes that bring foreign exchange gains and losses arising on loan relationships and derivative contracts within the main transfer pricing rules, while leaving the tax rules for forex hedging untouched. Previously, such amounts were adjusted under bespoke provisions in the loan relationships and derivatives regimes addressing non‑arm’s length transactions. The changes also broaden the existing loan relationships anti‑avoidance rule in CTA 2009, s 452, to accommodate a new election allowing companies to be treated as guarantors of a non‑arm’s length borrowing for transfer pricing purposes. For further detail, refer to News Analysis: Budget 2025—Tax analysis—International and Tax—publication of Finance Bill 2026. Numerous entries in a company’s corporation tax return will be tax‑adjusted figures sourced from accounts prepared in line with generally accepted accounting practice (GAAP)—either UK GAAP or international accounting standards (IAS). In...

R&D reliefs—meaning of R&D This Practice Note explains what counts as R&D for four corporation tax reliefs: Pre‑1 April 2024: SME R&D relief/tax credit and the R&D expenditure credit (RDEC) Post‑1 April 2024: the merged RDEC and enhanced relief for loss‑making R&D‑intensive SMEs For tax, R&D follows GAAP (FRS 102/IAS 38) as modified by Secretary of State guidelines maintained by DSIT. The 7 March 2023 version confirms that pure and applied mathematics count as science. HMRC’s Guidelines for Compliance expand on this. FRS 102/IAS 38 broadly define research as planned original investigation for new knowledge, and development as applying that knowledge to design new or substantially improved outputs before commercial use. Under the Guidelines, qualifying work sits within a project seeking an advance in science or technology, directly addressing scientific or technological uncertainty, with certain related indirect tasks also eligible. R&D runs from the start of work to resolve the uncertainty until resolution or abandonment; some prototype costs may qualify,...

This Practice Note serves as a primer on financial covenants (financial undertakings). It outlines the rationale for using financial covenants, then describes how they are established and measured. It also covers the typical financial covenants seen in commercial finance, such as: minimum net worth test gearing ratio leverage ratio (or debt to equity ratio) current ratio (or acid test ratio) cashflow ratio interest cover ratio loan to value ratio Note that this Practice Note does not delve into financial covenants for specialist transactions in detail. The final section, however, signposts additional resources on applying financial covenants across various specialist transactions. Where relevant, it draws attention to provisions in the Loan Market Association (LMA) senior multi-currency compounded rates/term rates term and revolving facilities agreement for leveraged acquisition finance transactions (the LMA leveraged facilities agreement) (available to LMA members on the LMA website). Note also that the LMA investment grade facility documentation omits financial covenants because they are considered too...