BDO says it thinks Chancellor Alistair Darling will restrict or remove
corporation tax relief on carrying forward tax losses against future trading
profits in December’s pre-Budget report. It sees a possible reduction in
corporation tax from 28% to 25% to take account of the collapse in revenues and
compete with other European countries for inbound investment. It also predicts
that the PBR will include measures to encourage share options, including the
simplification of approved company share option schemes.
Baker Tilly believes VAT may rise above the 17.5%, which is to be restored in
January, to as much as 20% sometime in early 2010. It also moots a reduction in
corporate tax rates for small companies and says it expects more anti-avoidance
rules targeting bonus payments through trusts, especially arrangements involving
Grant Thornton disagrees with Baker Tilly’s VAT rise prediction saying that,
in the current economic climate, it would only slow growth, add to inflationary
pressure and “be unpalatable”. It thinks the government will fail to address the
approved mileage rates and employee car ownership schemes and the possibility of
more tax rises. Any changes, Grant Thornton says, may be presented in a ‘green
wrapper’ and linked to the CO2 emissions of the vehicles.
Lloyds Banking Group and Royal Bank of Scotland will sell some of their retail
banking networks at the behest of the government. Lloyds will sell 600 branches
across its Lloyds TSB Scotland and Cheltenham & Gloucester businesses. RBS
will sell branches in England and Wales and NatWest branches in Scotland. The
divestment will represent nearly 10% of the UK retail banking market.
Improvements in its latest results led GM to cancel the sale of its majority
stake in European car manufacturer Opel. The automotive giant had initially
agreed a deal with Canadian car parts maker Magna to sell the stake, which
included UK arm, Vauxhall.
But GM now says it is focused on “a restructuring of its European operations
The Cosmen family, the largest shareholder in trains operator National
Express, which wanted to buy the company as part of a consortium, has criticised
the company’s lack of strategy after it closed down acquisition talks and
rebuffed an offer from Stagecoach.
“We have serious concerns about the absence of a well-defined strategy to
address the company’s broader and longer-term issues,” the Cosmen family said in
UK economic recovery
Company insolvencies rose by 14.6% in the third quarter of 2009, says the Office
for National Statistics. There were 4,716 compulsory liquidations in Q3, broken
down into 1,301 compulsory liquidations which are actually down 9.8% on Q3
2008 and 3,415 voluntary liquidations, which, in themselves, are up 30.2%.
The Institute of Directors has put a dampener on talk of recovery. It says
that 44% of executive directors have had a pay freeze in 2009, with a further 6%
taking a pay cut, while 46% of directors work more than 55 hours (it was 30%
British spend on research and development is falling behind the global
competition, a new survey finds. Booz & Co’s fifth annual global innovation
spending analysis shows that while UK spend increased by 3.5%, the global
average reached 5.7%. The number of UK companies in the top 1,000 R&D
investors fell from 36 to 33, with GlaxoSmithKline best placed at 11.
An annual survey of CFOs by Baker Tilly found that 41% of CFOs more than
twice the number in its 2008 survey say late payment is a serious problem. The
survey shows an increasing number of businesses having to fund their working
capital through stretching credit terms with their suppliers because they can’t
rely on invoices being paid on time.
HM Revenue & Customs and the Charity Finance Directors Group (CFDG) are
holding talks about taxation of charities. Charity FDs pinpoint the VAT regime
as ripe for reform. Following consultation, the CFDG said it would help
charities if they were able to find savings in the current recession by
combining their back office functions, instead of becoming liable for
Regulation and compliance
The two main bodies leading the charge towards convergence of accounting
standards have reiterated their commitment to achieving their goal. The
International Accounting Standards Board and the Financial Accounting Standards
Board issued a statement following a joint meeting confirming they would go
ahead with efforts to force the convergence agenda.
Regal Petroleum has suffered the ignominy of receiving a public rebuke and a
£600,000 fine from the London Stock Exchange after it was found to have supplied
misleading information to the market. LSE announced the punishment after its
investigation found that Regal used language that “created a misleading
impression” of one of its prospects. Regal also failed to announce without delay
poor exploration results.
The Office of Fair Trading will investigate the corporate insolvency market
on concerns around the fees companies pay on their insolvency to firms and the
often meagre sums creditors receive back. This comes as Woolworths ex-chairman
Richard North and chief executive Steve Johnson voiced dissatisfaction over the
retailer’s administrator Deloitte’s position as an adviser to its banking
syndicate and to the group’s insolvency process.
Bernard Madoff’s accountant admitted his part in the fraud that saw the New
York financier jailed for 150 years in November. David Friehling was charged
with four counts of fraud and now faces up to 100 years in jail. Friehling, 49,
worked for Madoff between 1991 and 2008. He is scheduled to appear in court in
Wolseley is to cut up to 800 UK jobs and close around 80 branches costing the company about £100 million, the plumbing and heating supplier said on Tuesday despite reporting rising sales and profits
GoCompare is to demerge from esure and and be floated on the London Stock Exchange with the aim of boosting growth and performance
Three former Tesco executives, including the former finance director of Tesco UK, have been charged with fraud in relation to a £263m accounting scandal at the supermarket chain
Co-operative Group is trialling a new blockchain technology that can be used to track food from source to ensure its authenticity and sustainability