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Non dom eligibility widespread
Accountancy Age, Accountancy Age, Monday 15 March 2010 at 09:27:00
Up to five million people could be non-doms
Almost five million people could be eligible for
non-dom status according to information obtained by the
Sunday
Telegraph. The paper says that information from the Treasury reveals up to 4.9 million
people could use non-dom status because they or their parents came to Britain
from overseas. The status would only work if bank accounts or property are held offshore.
Controversy over non-dom status was recently reignited by the news that Tory
donor Lord Ashcroft remains a non-dom, not paying tax on his overseas income.
Read more:
Ireland enraged as EU unveils tax hike plans
David Jetuah, Accountancy Age, Monday 15 March 2010 at 09:35:00
Ireland reacts angrily to proposals for a common consolidated corporate tax base across Europe
Plans for a flat rate of corporation tax across Europe have been panned by
Ireland. EU taxation commissioner Algirdas Semeta floated a plan last week to bring in
a common consolidated corporate tax base which would make taxes on businesses
the same across Europe. Detractors say this has come just months after EU mandarins promised there
would be no fiscal changes in the pipeline which would affect Ireland. Dana Rosemary Scallan, a No campaigner against the Lisbon Treaty told the
Sunday Mirror: "A
common tax rate was always the intention of the EU. Unfortunately, the eurocrats
lie and they lied to us about that tax guarantee. "Anyone who raised concerns about this was branded a scaremongerer. I hate to
keep saying 'I told you so', but I've been warning this was coming since 1999.
We've been deceived by Europe."
Lehmans: What the papers say
Kevin Reed, Accountancy Age, Monday 15 March 2010 at 09:47:00
The role of audit is once again questioned as weekend papers consider the revelations from the US bankruptcy court into Lehmans' collapse
A root and branch review of the audit profession is required, the weekend
papers have reported, after criticism of Ernst & Young's audit of
Lehman
Brothers. The
Guardian reported that MPs want a review of how the audit
industry works, plus consideration of the non-audit consultancy work they
undertake for clients. Tory MP Michael Fallon said a "fresh approach" was needed that revealed risky
practices by banks. Lib Dem Treasury spokesman Lord Oakeshott said banning audit firms from
accepting additional consultancy work was a starting point to cleaning up the
profession. The report into the collapse of Lehmans alleged that the bank used legal
accounting practices to help misrepresent the financial position of the company.
It also questions whether auditors Ernst & Young were professionally
negligent over their acceptance of Lehmans use of accounting rules, which saw
$50bn of debts kept off the balance sheet. The
FT
said that the report would bring auditors' role back into the spotlight – but
the fallout shouldn't damage E&Y irrevocably. The
Daily
Mail's Simon Watkins wrote: "This weekend E&Y is far from
finished, but it is safe to say that the Valukas report has left its stunned."
Further reading:
Lehman
administrators consider damning report
E
&Y "negligent" in Lehman audits, report claims
Report
claims E&Y knew about Repo transactions
Lehman
CFOs were warned of "reputational risk" of transactions
New international standard to redefine audit role
Mario Christodoulou, Accountancy Age, Monday 15 March 2010 at 09:53:00
International body wants guidance to be "clearer and more readable"
New international guidance is being considered which could redefine the
characteristics of an “audit professional”. The International Accounting Education Standards Board (IAESB) is seeking
feedback on a revised education standards, including better guidance on “who is
an audit professional”. “We want to make IES 8 clearer and more readable, and reduce ambiguity,” said
Mark Allison, IAESB chair. “In revising IES 8 and developing implementation guidance for this standard,
we intend to ensure consistent application, assist in its adoption, and
facilitate international implementation.” Further Reading:
A
Consultation Paper on the Revision of International Education Standard 8
Readers Digest administrators consider nine offers
Rachael Singh, Accountancy Age, Monday 15 March 2010 at 09:54:00
Moore Stephens has no plans to shut publication as the offers keep coming
Nine offers have been made for Readers Digest according to administrator
Philip Sykes, head of advisory services at Moore Stephens. "The process is progressing as planned and we are very pleased with the
number and quality of offers we have received. We are now evaluating the bids
and will begin detailed negotiations and due diligence with selected bidders
from the beginning of next week,” Sykes said. This is a significant drop in the number of companies which showed interest.
Earlier this month administrators reported nearly 100 expressions of interest
from businesses. Readers digest is continuing to publish, with the April issue available now
and work already underway for the May edition. The publication entered administration in February with just nine of the 117
employees made redundant. Further reading:
100
‘interested’ in buying Reader's Digest UK
Moore
Stephens confident on buyer for Reader's Digest
Readers
Digest US parent could be held liable for UK pensions deficit
Sainsbury's paying bonuses before 50% rate strikes
David Jetuah, Accountancy Age, Monday 15 March 2010 at 09:57:00
Supermarket giant trying out a "new award timetable" to pay its 1200 senior managers three months earlier than usual
Sainsbury's is aiming to buffer the effects of the impending 50% bonus rate
by paying its bonuses early. The supermarket giant is trying out a "new award timetable" to pay its 1,200
senior managers three months earlier than usual, which will see the awards taxed
at 40p in the pound instead of 50p for high earners making more than £150,000
from 6 April. Sainsbury's said it was "fairer to the individual for the proportion of their
bonus awards that are based on Sainsbury's financial performance to be paid, and
therefore taxed, in accordance with the rates that applied across the financial
year in which they were earned,"
The
Independent reported. Further reading:
Leonard Curtis fail to secure buyer for Stockport FC
Rachael Singh, Accountancy Age, Monday 15 March 2010 at 10:02:00
Discussions breakdown with the Football League and Melrose Consortium, sending administrators back to the drawing board
Administrators of football club Stockport County have been left in the dark
over problems with an attempted sale of the club. Discussions broke down between the purchasers and the Football League,
however details on the reason for the failure of the deal are as yet unknown,
said the administrators. “We have been informed by the Football League that at the board meeting held
yesterday it was not possible to reach a conclusion regarding the attempted
purchase of the club by the Melrose Consortium due to there being a number of
unresolved matters," said a statement by joint administrators John Titley and
Paul Reeves, directors at Leonard Curtis, appointed joint administrators. "We have not been informed as to the nature of these queries but are seeking
further information." “We will continue to work with both the consortium and the Football League to
try and resolve any outstanding matters to their satisfaction, however given
that approval has yet to be given after a number of recent attempts, it is far
from certain as to whether the Consortium will be successful in their bid to
acquire the club." In January the Football League postponed the sale of the club to resolve
issues with a meeting to discuss the sale taking place late last week. It was in
these negotiations that a decision was unreachable. Football club Stockport Country entered administration on 30 April last year.
Further reading:
Football
League blocks Stockport County sale
E&Y "negligent" in Lehman audits, report claims
Mario Christodoulou, Accountancy Age, Friday 12 March 2010 at 09:18:00
E&Y says Lehman's financial statements were "fairly presented"
Big Four auditors Ernst & Young were “professionally negligent” in
allowing collapsed bank Lehman Brothers to use off balance-sheet devices in the
years before its collapse, a sensational report into the bank’s demise has
claimed. In a report prepared, for the United States Bankruptcy Court, examiner Anton
Valukas claims Ernst & Young, allowed key reports to go unchallenged as
senior executives channeled fund through an off balance sheet vehicle known as
Repo 105 In a statement reported on the BBC's website the firm said: "Our last audit
of the company was for the fiscal year ending November 30, 2007. Our opinion
indicated that Lehman's financial statements for that year were fairly presented
in accordance with US Generally Accepted Accounting Principles, and we remain of
that view." According to the report, Lehman’s recorded Repo 105 transactions as sales
rather than financing transactions, which meant accounting rules did not require
Lehman to record the liabilities arising from the cash borrowings. Valukas claims the transactions to temporarily remove securities inventory
from its balance sheet, usually for a period of seven to ten days, to create a
materially misleading picture of the firm’s financial condition in late 2007 and
2008. Lehman’s net leverage ratio for November 30, 2007 was 16.1x. Without the
balance sheet benefit of Repo 105 transactions, Lehman’s net leverage ratio
would have been 17.8x, according to the report.
HSBC stolen data finds its way to tax authorities
Kevin Reed, Accountancy Age, Friday 12 March 2010 at 10:04:00
Tax authorities sniff around stolen HSBC account details
Thousands of
HSBC
accounts details have been stolen in Switzerland and passed onto the French and
Swiss tax authorities. Around 15,000 existing and 9,000 former clients have been affected, after a
former HSBC IT specialist stole the data. HM Revenue & Customs is interested in receiving details of UK citizens'
details from the stolen data, reports the
FT.
It is unclear whether the authorities will use the information to scour for
tax dodgers. Further reading:
Pompey administrator investigate mystery payments
Rachael Singh, Accountancy Age, Friday 12 March 2010 at 10:07:00
Portsmouth insolvency practitioner unveils £1.5m in unexplained payments
Administrators of Portsmouth FC are investigating unexplained payments from
the club, totaling £1.5m during the current season. The payments are alleged to have taken place during the four month ownership
of Ali Al Faraj, the
Daily
Telegraph reported. The alleged payments were made between October 2009 and the end of January,
the same time a winding up order was petitioned by HMRC over a £7m unpaid tax
bill. Andrew Andronikou confirmed he is investigating the details leading up to the
administration of Portsmouth. News of the investigation comes days after Andronikou, a partner at
UHY Hacker Young, was
forced to make 85 staff redundant. The club is expected to appear in the High Court next week where it is
expected HMRC, will drop its challenge against the appointment of Andronikou as
administrator. Further reading:
Portsmouth
administrators investigate missing millions
HMRC
to drop Andronikou challenge as Portsmouth administrator
