Latest Industry News 

Debts mount at Ramsay's restaurants

Accountancy Age, Accountancy Age, Friday 3 July 2009 at 08:32:00

Profits slide to £383,000

The latest set of accounts for Gordon Ramsay's restaurant empire showed a fall in profits of 87% last year and a quadrupling of debt.

Four of Ramsay's restaurants closed between December 2007 and January 2009, as the restauranteur became increasingly stretched, trying to cover mounting bills with less revenue.

During the year he owed £2.9m of taxes and social security costs to HM Revenue & Customs and more than £5.5m to suppliers, according to telegraph.co.uk.

But Ramsay says he has attempted to turn things around with a cash injection of £5m and the closing of some overseas ventures.

His flagship restaurant also fell off the list of the 50 best restaurants in the world.

Further Reading:

KPMG ‘told me I was ****ed’ admits chef Ramsay

Late Filer Gordon Ramsay now reveals all!

VAT evasion on imports tackled by European Council

Judith Tydd, Accountancy Age, Friday 3 July 2009 at 09:40:00

Measures adopted to strengthen battle against imports fraud

The European Council has announced plans to strengthen moves against VAT evasion on imports.

Under the directive, conditions in which the importing of goods is exempt from VAT if followed by a supply or transfer of those goods to a taxable person in another member state, according to tax-news.com

Provisions under the directive include the VAT identification number of the importer issued in the member state as well as the customer, and evidence that the imported goods are intended to be transported or dispatched across borders.

The European Commission has given a high priority to cracking down on VAT fraud, particularly missing trader intra community (MTIC) fraud, also known as carousel fraud.

The European Council said the importation of goods is exempt from VAT if followed by a supply or transfer of those goods to a trader in another member state.

'Inadequate implementation of this exemption in national law has led to difficulty in following-up the physical movement of the imported goods. Experience shows the increasing use of this particular exemption in missing trader fraud schemes,' the Council said.

Further Reading:

European Commission probes privacy concerns over tracking technologies

BDO wins High Court battle with HMRC over commission VAT

Mid-sized firms brave the downturn

Accountancy Age, Accountancy Age, Friday 3 July 2009 at 09:40:00

83% say they will survive the recession

Nearly all mid-sized businesses surveyed by the Chartered Institute of Management Accountants said they expected to survive the recession.

Of over 600 CIMA members surveyed across the UK and Ireland, 83% said they could weather the downturn, while 80% of management accountants were confident of keeping their job.

But many firms had already shed staff, and the majority reported a decrease of over 10% in either turnover or net profit in the past year. But they had not experienced a commensurate decline in costs, including overheads, supplier prices or basic salary packages. One-third of respondents had experienced cost hikes between 1-5% in these areas.

Most of the businesses sais the government's 2.5% value added tax reduction has not had a measurable effect.

Parkwood grabs new FD

Rachael Singh, Accountancy Age, Friday 3 July 2009 at 09:50:00

Michael Quayle leaves paint manufacturing for support services

Michael Quayle has been recruited to the board of support services company Parkwood Holdings as finance director, taking up the position later this year.

He joins Parkwood, which provides services such as grounds, leisure and healthcare management, from dye and paint manufacturers European Colour where he was company secretary and finance director.

Quayle, who was previously at KPMG where he spent 14 years working in the firms' London, Manchester and Preston offices, takes over from Terry Bowman who stepped down as group finance director in March having served two years. Bowman also served as group FD for the company from 1993 to 1998 and hopes to return to interim.

Tony Hewitt, Chairman, said: 'I am please to welcome Mike to the Board where his experience from KPMG and then European Colour Plc will be invaluable.'

Further reading:

Parkwood FD returns to interim management

FSA reveals next stage in 'radical' overhaul

Gavin Hinks, Accountancy Age, Friday 3 July 2009 at 10:04:00

City watchdog pushes ahead with internal reforms

The Financial Services Authority has unveiled a fresh operational structure as part of efforts to overhaul its work in the wake of the credit crisis.

Chief executive Hector Sants said: 'This new structure completes the radical internal reforms that I initiated when I became CEO in July 2007.'

The FSA's financial stability unit will be turned into its own division to concentrate on macrp-prudential issues.

A new international division is to be created to improve communication with overseas regulators.

Another new division will be luanched by bringing together enforcement and financial crime units to beef up deterrence.

For more go to FSA.

SkyEurope collapses

David Jetuah, Accountancy Age, Friday 3 July 2009 at 10:55:00

Struggling budget airline goes into holding pattern after seeking protection from creditors

Budget airliner SkyEurope has gone into administration after several years of heavy losses.

The Slovak-based airline has long been regarded by City watchers as one of the most vulnerable European carriers as restructuring and consolidation carries on apace in the European aviation industry, the FT reported.

Last ditch attempts to find new investors failed, which led to the company seeking protection from its creditors by filing for administration at the district court in Bratislava.

Timms outlines tax negotiating agenda

Judith Tydd, Accountancy Age, Friday 3 July 2009 at 14:01:00

UK treasury minister reveals jurisdictions on tax priority list

Stephen Timms has unveiled the onshore and offshore jurisdictions the Treasury will be negotiating tax treaties with until 31 March, 2010.

The financial secretary to the Treasury said the tax agreements are revisited annually to ensure they according to meet the needs of the businesses and individuals receiving income from abroad, tax-news.com

Jurisdictions high on the priority list include Australia, Germany, Israel, Qatar and Thailand.

In addition, the UK is pressing ahead with plans to sign off on a tax information exchange agreement with Anguilla, Gibraltar and the Turks & Caicos Islands.

Further Reading:

Country-by-country tax reporting gains favour

Treasury closes £1bn loss relief loophole

Barkers sold to Penna in pre-pack deal

David Jetuah, Accountancy Age, Friday 3 July 2009 at 16:30:00

Barkers enters administration and HR consultancy Penna simultaneously announces purchase of the business and assets of the troubled group

Troubled recruitment business Barkers is the latest high-profile company to pull off a pre-packaged administration, the controversial process which some claim disadvantages unsecured creditors.

Earlier this week, Barkers collapsed and HR consultancy Penna simultaneously announced it had purchased the business and assets of the troubled group.

Around 250 of Barkers’ former staff will be employed by Penna in their Creative Communications, Recruitment and Resourcing businesses.

Britain's SMEs face battle to secure credit

David Jetuah, Accountancy Age, Thursday 2 July 2009 at 00:23:00

A lack of timely and detailed figures is hurting vast numbers of smaller businesses with turnovers of up £5.6m

A staggering 1.8m businesses have poor credit ratings largely because they do not file timely or detailed accounts at Companies House.

Up to 60% of SMEs in a group of three million were described as ‘high risk’ or ‘above normal risk’, in terms of defaulting on trade payments or getting into financial difficulties.

The news will come as confirmation that, not only are companies suffering because of poor trading conditions in the recession, but also because of the formal procedures for filing statutory accounts. A poor credit score means companies will find it difficult if not impossible to access funding or credit from suppliers.

Insurers have been warning for some time that companies will not be able to access trade credit insurance, which guards against a suppliers collapse, if they do not provide up to the minute accounts but instead rely on statutory filings at Companies House that can be anything up to 18 months out of date.

The absence of readily available management accounts has so far only affected the relatively small number of companies seeking trade credit cover. It now appears the lack of timely and detailed figures is hurting vast numbers of smaller businesses with turnovers of up £5.6m.

Companies at this level are obliged to file only abbreviated and unaudited accounts with Companies House.

‘The lack of up-to-date financial information is one of the main reasons companies have received poor credit scores and it’s something that the credit industry has fought against the government about,’ said Martin Williams, MD of Graydon, the credit rating agency that compiled the research.

‘Something’s got to give because it’s becoming a crisis,’ he added.

Credit ratings agencies say that government legislation to slash red tape by allowing smaller businesses to file reduced accounts has created major problems in assessing risk.

‘How are you supposed to give a company the all clear if there’s no profit and loss statement?’ added Williams.

While £5.6m is the current audit threshold, for companies with financial years starting on or after 6 April last year the threshold rose to £6.5m ­ a move set to expand the number of companies likely to receive poor credit ratings.

‘That’s probably going to exacerbate the situation,’ said Martin Austin, director at Tenon Recovery.

‘The thing that staggers me is there is not sufficient investigation by the SMEs on the companies they do business with. The SMEs should be demanding management accounts themselves.’

But business groups have hit back, saying the dangers posed by the financial and administrative burden outweighed the credit community’s demands for more information.

A Federation of Small Businesses spokeswoman said: ‘The Federation of Small Businesses is not in favour of increasing the administrational and financial burden on small firms, which would be the case if SMEs were asked to provide more information.

‘The majority of small businesses do not have to file their end of year figures at Companies House because their turnover is too small to require it.’

US watchdog stalls on key convergence post

Mario Christodoulou, Accountancy Age, Thursday 2 July 2009 at 00:28:00

Candidates are being considered to replace Conrad Hewitt who stood down as chief accountant at the SEC

The US financial watchdog is refusing to say when it will fill a senior post central to cross-Atlantic negotiations on international accounting convergence.

It is now seven months since Conrad Hewitt stood down as chief accountant of the Securities and Exchange Commission ­ a critical position at the heart of global accounting convergence discussions ­ which has fuelled uncertainty about America’s commitment to global standards.

In a statement an SEC spokesman declined to comment on the ‘status, requirements or timing’ of the appointment ­ but said candidates were being considered for positions vacated around the change of administration.

‘Our work on international financial reporting standards issues continues,’ he said.

The SEC’s dithering on Hewitt’s replacement had left observers speculating about which direction the US will take on IFRS convergence amid fears their enthusiasm for global standards is beginning to wane. A source close to convergence discussions in the UK said there had been concerns about the time being taken to fill the position.

‘There is serious concern that this is taking so long and in particular that a number of names seem to have been floated around as rumours who would be seen as real opponents to IFRS and the US moving to IFRS,’ the source said. ‘Fortunately those rumours have subsided.’

Earlier this year rumours that the position would be filled by Charles Niemeier, described as an outspoken critic of IFRS, were circulating but this speculation has subsequently died down.

SEC chairman Mary Schapiro has done little to quell fears but she has also appeared dismissive when asked about her view on a convergence timetable. During her Senate confirmation hearing in January she said she was ‘not prepared to delegate standard-setting or oversight responsibility to the IASB’.

A roadmap to convergence by 2014 was announced by her predecessor last August. The Obama administration’s recent white paper on financial regulatory reform reiterated the objective for ‘broad convergence’ of US GAAP and IFRS by the end of 2010.