In the final Budget before Brexit, the Chancellor confirmed that the “era of austerity is finally coming to an end” after eight years of central government spending cuts of £45bn.
We briefly outline potential assurance and consultancy activities for audit leaders to consider in relation to key aspects of the Budget.
|All - 1
||Public Sector - 2
||Private Sector - 3
||Charities - 4
|Healthcare - 5
||Retail - 6
||Construction - 7
||Utilities - 8
National Living Wage - 1
The National Living Wage will increase by 4.9%, from £7.83 to £8.21 an hour, from April 2019.
- Internal audit should be aware of how the organisation will fund this increase. Where are savings to be made, are controls being squeezed, are poorly informed risks being taken?
- Is it time to revisit compliance with National Minimum Wage regulations? Technicalities such as uniforms, time off in lieu can lead to embarrassing breaches.
- How does NLW impact the overall reward strategy, does the increase disadvantage salaried employees? Would the board benefit from assurance that it remains sustainable whilst attracting and retaining talent?
Employment Tax - 2
Since April 2017 enforcement rules have been in place for IR35 in the public sector (off-payroll working such as contractors). These will be extended to the private sector from April 2020.
- Auditors will need to understand the existing rules and impact of non-compliance.
- For organisations with a sizeable population of contractors (e.g. IT, management consultants, designers) a readiness assurance audit may be useful as this impacts multiple areas including recruitment, workforce planning, payroll, operations, projects and budgeting.
Plastic tax - 1
A consultation will begin to “introduce a new tax on the manufacture and import of plastic packaging which contains less than 30% recycled plastic… transforming the economics of sustainable packaging.” The government ruled out…