KING’S SPEECH: LEADING GLOBAL ACCOUNTANCY BODY REACTS

• The King’s Speech covers a wide range of topics affecting accountancy and finance professionals in the UK

• ACCA’s team of experts weighs in on the topics that matter most to Wales

ACCA welcomes the King’s Speech and its positive focus on growth and the importance of stability in economic policy.  

 However, with so many Bills for parliament to consider, it will be important for the government to think small first, ensuring that legislative changes consider the implications for the smallest businesses. The government should focus on getting the framework right so that businesses can plan and invest to generate growth.  

Lloyd Powell, head of ACCA Cymru/Wales, said: “Although there are announcements that will affect Wales, such as the opportunities from Great British Energy and potential investments following pension reforms, we now face a further period of uncertainty as the new First Minister is selected. We hope that this period of tumult will not result in Wales missing out on opportunities arising from announcements and initiatives from the new UK Government.” 

On HMRC investment and reform – Glenn Collins, head of technical and strategic engagement, ACCA, said: “HMRC is a cornerstone of the UK’s economic and business systems, and as ACCA has highlighted repeatedly over the past few years, it is a system that has been badly let down by repeated cuts, lack of investment and a general disregard for the role it plays.  

“We were disappointed not to see a reference to measures to improve the service in the King’s Speech. We hope look to see restored trust between HMRC, taxpayers and agents, in the near future, by implementing a programme of improvements, including additional resource and training for staff to address serious issues with unacceptably low service standards at a foundational level.

“ACCA will continue to challenge and support HMRC to see how the investment benefits businesses and the exchequer over the next 12 months, and will remain in close communication with HMRC to pass on feedback from members and provide expert insight as needed.  

“Dedicated reform and ground-up change in HMRC will would no doubt be music to the ears of accountants up and down the country who have struggled with a system not fit for purpose for too long.

“HMRC should seek to enable professionally regulated agents to provide services which can save time and resource for HMRC, for example, restricting the R&D tax relief claims to professional agents.”

On AI legislation introduction – Alistair Brisbourne, head of technology research, ACCA, said: “The advancement of AI is something ACCA has been a strong advocate for in recent years, and our members have fed back positive responses to the use and adoption of AI.  

 “It is positive to see that the government is committed to establishing appropriate legislation regarding the most powerful artificial intelligence models.  We are confident this will be a step towards mitigating the way in which AI can be used for unethical, immoral or illegal activities. AI is a tool which can open a huge amount of productive potential in accountancy, and effective deployment of the tool relies on proper legality around its use, as well as demystifying the role in which it will play in work.   

“Recognising the unpredictable nature of AI’s development and potential impact, we recommend a principles-based regulatory approach. This can strike a balance between innovation and protecting consumers while also providing the necessary clarity for businesses to plan investments and ensure compliance. 

 “A focus on transparency, responsible adoption, and AI literacy is central to the successful long-term integration of AI in the business world. As such we would also welcome due consideration to training incentives. 

“We urge the government to consider wider implications of AI and to consult with businesses, adopting a multi-stakeholder perspective to address their concerns and shape a bill that is best fit for all at this current time.”  

On new powers for the Office of Budget Responsibility, Jonathan Ashworth, chief economist at ACCA, said: “The government’s decision to strengthen the powers of the OBR is something that ACCA welcomes with great enthusiasm. As with all entities, proper financial forecasts play a significant role in increasing transparency and ensuring stability. The changes will enhance the government’s fiscal credibility, as well as that of the broader UK policy making framework. The move will be welcomed by business and investors – both domestic and foreign.” 

On audit and corporate governance reform – Mike Suffield, director of ACCA policy and insight, said: “Audit reform has been severely overdue in the UK, yet repeated delays have sidelined it, despite the importance of it in promoting the UK as a great place to do business. ACCA has long called for this implementation, so to see it included in the King’s Speech as one of the first points of the speech is a huge step forward.  

“Legislation will place the planned new regulator, the Audit, Reporting and Governance Authority (ARGA), on a statutory footing and will set out clear expectations and accountability for Boards, management and auditors.

“The shift of the FRC to ARGA as a clear independent watchdog will strengthen the oversight of audit quality so that audit firms can be held properly to account, introducing changes that have been needed since the collapse of Carillion in 2018.”

Visit ACCA’s website for more information.