Which accounting bodies and standards are covered by section 497 TIOPA 2010?

The definition covers the International Accounting Standards Board (setting IFRS standards) and the Accounting Standards Board (now succeeded by the Financial Reporting Council for UK GAAP). It extends to successor bodies and broadly includes formal standards, statements of practice, guidance notes and similar documents issued by these organisations.

Can regulations under section 497 have retrospective effect?

Yes, regulations made under section 497 can apply retrospectively to accounting periods that began before the regulations were made, provided the relevant accounting change applies to that period. This ensures the tax rules align with accounting changes from the point those changes take effect rather than only from the date of the regulations.

What parliamentary safeguard applies to regulations under section 497?

If the regulations could increase a company's corporation tax liability, they must be approved in draft by a resolution of the House of Commons before they can be made. This affirmative procedure ensures parliamentary scrutiny of any change that could result in a company paying more tax than it would otherwise owe.

Taxation (International and Other Provisions) Act 2010 section 497

Q: What does section 497 of the Taxation (International and Other Provisions) Act 2010 do?

Section 497 grants the Treasury power to amend the hybrids and other mismatches legislation by regulations when accounting standards change in a way that affects how amounts are presented or disclosed in financial statements. This avoids requiring a new Act of Parliament each time an accounting standard changes, allowing timely updates through secondary legislation.

Change in accounting standards

Section 497 gives the Treasury the power to amend the hybrids and other mismatches legislation by regulations when accounting standards change in a way that affects how amounts are presented or disclosed in financial statements.

The Treasury may amend this part of the legislation by regulations to reflect changes in accounting standards that affect how amounts are presented or disclosed in financial statements.
Accounting standards are defined broadly to include statements of practice, guidance and similar documents, and the relevant accounting bodies are the International Accounting Standards Board and the Accounting Standards Board (or their successor bodies).
The regulations may be conditional on elections or other specified circumstances, and may apply retrospectively to periods before they are made, provided the accounting change is relevant to that period.
If the regulations could increase a company's corporation tax liability, they must be approved in draft by a resolution of the House of Commons before they can be made.

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