Technical developments and emerging issues impacting the investment community are listed below.


Draft VCT guidance published

On 10th May HMRC published their draft guidance on the new VCT rules. The guidance clarifies how the changes introduced at the end of 2015 by Finance (No.2) Act 2015, should be interpreted.

The guidance is subject to feedback and some clarification or amendment might arise. The following link will take you to the draft guidance:

Replacement Capital

The issue of allowing VCTs to provide investment on a replacement capital basis has been the subject of much discussion and debate. The AIC’s paper on the case for appropriate replacement capital investments is available on their website.


No withholding tax on interest distributions from investment trusts

From April 2017, and subject to Royal assent, interest from OEICs, authorised unit trusts and investment trusts and peer to peer loans may be paid without deduction of income tax.  It has also been confirmed that interest distributions from investment trusts would be eligible for inclusion in an individual’s relevant personal savings allowance. This simplification of not having to deduct income tax at source from interest distributions will significantly reduce the compliance burden for those investment trusts operating the interest streaming regime.

Should you have any queries on this or other matter, please contact Chris Riley, Tax Partner, on or +44 (0)20 7516 2427.

Financial Reporting

Less is more?

Ahead of the 2016 reporting calendar the FRC wrote to investors explaining the principal changes which have taken place to help continue with the enhancement of the quality of financial statements. Their focus is on presenting relevant and material information which is presented clearly and concisely which is fair balanced and understandable. The letter deals with: 

  • Risk, internal control
  • Viability statements
  • Brexit
  • The appropriate use of alternative performance measures
  • Audit reporting Extended audit committee and auditor reporting requirements were introduced in 2013.
  • Dividend disclosures
  • Governance reporting
  • Accounting policies and impact of new

With the FRC encouraging investors “to engage with companies to provide a steer on what information they believe is relevant and to challenge where reporting falls short of these expectations” it will be interesting to see if inboxes will be slightly fuller after the financial statements have been circulated and whether there will be more questions at the AGM.

The letter does provide a useful summary of changes and areas of focus and it’s worth building time into the reporting and audit cycle to run the metaphorical ruler over the financial statements to make sure the areas covered by the letter are addressed. 

The FRC also comment on their own transparency by letting companies know when they have reviewed their report and accounts and have no substantive points to raise; and, from 2017, naming the companies whose reports have been subject to their corporate reporting or audit quality reviews. 

If you would like to discuss your financial reporting requirements or have an independent view on how you might present or restructure your annual report to reflect these changes please contact Rhodri Whitlock on or +44 (0)20 7516 2433.