Rachael Singh, Accountancy Age, Wednesday 28 July 2010 at 15:11:00

Accountancy firm Goodman Jones labelled traditional software as "high maintenance", after signing a deal with online IT suppliers Twinfield

Top 80 accountancy firm Goodman Jones said it is "not possible" to work easily with international clients or keep staff connected without the use of online accountancy software.

The firm announced it is signing up with Twinfield online accountancy software suppliers, to "enhance" its services to clients.

Larry Phillips, managing partner at Goodman Jones, said: "We have a number of international clients, as well as staff who are based remotely, and we can now connect our people and our clients at anytime, from anywhere. The ease with which this can be done is simply not possible with traditional accounting systems.

Phillips said traditional accounting systems were "high maintenance" while online systems require no installation from clients or the firm.

Online software significantly reduced time spent on IT maintenance and client book-keeping management while also giving real time information, he added.

Goodman Jones, which ranked 76 on the Top 50 + 50 tables this year, has 14 partners and more than 70 staff.

Further reading:

Twinfield expands online operations

Top 50 + 50

Cloud computing on the rise despite security concerns

David Jetuah, Accountancy Age, Wednesday 28 July 2010 at 13:05:00

"Disappointing" number of people taking advantage of the Liechtenstein Disclosure Facility, says law firm McGrigors

419 taxpayers have registered for the Liechtenstein Disclosure Facility out of the "thousands" eligible to do so, law firm McGrigors said today.

The low response rate to the LDF, which runs until 2015, comes after it emerged just 1,500 medical professionals had registered for a special tax amnesty out of the 30,000 believed to have undisclosed tax liabilities.

It had been hoped that the more favourable terms of the LDF amnesty, including only having to come clean about undeclared tax liabilities in offshore accounts going back ten years - compared to 20 years in the New Disclosure Opportunity - would act as a draw.

However, the law firm said HMRC figures showed just 419 taxpayers have registered for the LDF between 1 September 2009 and 31 March 2010. This compares to approximately 10,000 who registered for the NDO.

Phil Berwick, director of tax investigations at McGrigors, said: "It is surprising how few taxpayers have registered for the LDF. Many more probably would have done so, but were unaware that they qualified, or even that the LDF existed."

"Many taxpayers could have reduced their tax, interest and penalty bill by a significant amount by using the LDF. Overall, we could be talking about millions of pounds here."

The taxman remained optimistic despite the relatively low numbers. "HMRC is very pleased with the number of people who have so far voluntarily registered for LDF, and that the number doing so is steadily increasing.

"Unlike other short term disclosure opportunities, registration for LDF is available until 2015," he added.

Kevin Reed, Accountancy Age, Wednesday 28 July 2010 at 12:41:00

Changes to New Zealand tax rules set to impact on Millenium & Copthorne's group interims

Hotels group Millennium & Copthorne will post a 5m deferred tax expense in its next interims after changes to New Zealand's tax rules.

Changes introduced in New Zealand's May Budget, including a reduction in the corporation tax rate from 30% to 28%, and removing the ability to depreciate buildings for tax purposes, will lead to the expense.

Its New Zealand company will take on an increase of $26m (16.7m) in its deferred tax liability, pushing the subsidiary into an after-tax loss for the period.

Further reading:

Controlled foreign companies talks kick off

Cable warns banks must lend or face tax

William Hill driven offshore by tax

David Jetuah, Accountancy Age, Wednesday 28 July 2010 at 11:48:00

Advisers say proposed changes to the taxation of overseas subsidiaries show commitment to keeping the UK commercial

Leading tax advisers are hoping talks with the government on how overseas arms of multinationals are taxed will end up keeping the UK an attractive place to do business.

The coalition has started an informal consultation on how controlled foreign companies should be taxed but has stressed that the UK's tax base will be protected at the same time.

Anneli Collins head of tax policy at KPMG said:

"The government is making all the right noises where business is concerned so its crucial that UK plc remains engaged in the dialogue and fully participates in the debate over the next few weeks.

"What is really key is that the announcement further indicates that the current governments approach is to really try to be commercial and make the UK more business friendly."

Under the timetable proposed, interim improvements to the CFC regime will be introduced in Spring 2011 to make the existing rules easier to operate, making the UK more competitive.

Full CFC reform is planned for Spring 2012.

Chris Sanger, head of tax policy at Ernst & Young, welcomed the government settling on a course of action instead of bringing out new proposals to further cloud the issue.

"Finally, the controlled foreign companies consultation represents more of an update and timetable for the rest of the fiscal year, rather than any new proposals."

Further reading:

IoD issues controlled foreign companies call

Rachael Singh, Accountancy Age, Wednesday 28 July 2010 at 10:33:00

The Premier League gave its side of the story yesterday over preferential payments to football creditors in football administrations

The Premier League defended its preferential payments rule in an insolvency at a Business Finance and Accountancy (BFA) parliament group meeting.

Bill Bush, director of communications and public policy at the Premier League, defended the football creditor rule (FCR) at the briefing yesterday, claiming smaller clubs would suffer if it was taken away. He reminded attendees that HMRC has previously challenged the rule in court and lost.

The football creditor rule enables football creditors, such as players and other clubs, to receive payment in full ahead of preferential and unsecured creditors in the event of a club entering insolvency.

Bush said it would be "interesting" to see what happens at Portsmouth where HMRC has legally challenged a company voluntary arrangement (CVA) deal proposed by administrators from UHY Hacker Young. The taxman said it was "unfairly predjudiced" in the voting process of the CVA.

One attendee at yesterday's briefing labeled the rule "disgraceful", while another claimed no other business would be able to "get away" with such a rule.

The BFA group concluded that if football wants to "justify" its preferential rules, it must give back to society.

The event was chaired by Iain Wright, MP for Hartlepool, who opened the discussions highlighting high debt levels, tax payment problems and financial sustainability problems in the football sector.

Deloitte's director in the sports and business group, Paul Rawnsley, said despite concerns of financial stability from football clubs, the industry increased revenues by 15% in the last season.

Deloitte was working with the UEFA on bringing financial stability to European clubs, he added.

The ICAEW is the secretariat for the BFA.

Further reading:

HMRC tackles Premier League football creditor rule

Budget 2010: HMRC's new powers will hit football clubs

HMRC fights for full voting rights at Portsmouth

Rachael Singh, Accountancy Age, Wednesday 28 July 2010 at 10:05:00

FTSE 100 financial software company Sage says its debt has dropped by 25m in the last three months

Accountancy software giant Sage announced a drop in net debt and improved growth trends in its latest interim management statement released this morning.

Net debt fell to 280m at 30 June from 305m at 31 March. The results are consistent with management expectations announced at the interim results on 5 May 2010.

Paul Walker, Sage's outgoing CEO, said the economic environment continues to be uncertain and the business was managing its "cost base prudently, whilst investing to enhance our competitive position".

He added that the company's growth internationally would position it well for the future.

Analysts expect the firm to report pre-tax profits of 332.6m for the year, up from 307.5m the previous year, Reuters reports.

In May this year, Sage announced in its H1 results that its Practice Solutions product, aimed at UK accountants, grew 7% compared to the same period a year ago. It also announced that operating profit had grown 3% to 44.9m compared to the same period last year.

Further reading:

Guy Berruyer takes CEO role at Sage

Sage profits up

Intuit problems sees rival Sage's shares increase

Kevin Reed, Accountancy Age, Wednesday 28 July 2010 at 10:03:00

Paul Wallace joins oil and gas business Forum Energy as a director

Accountant Paul Wallace has been appointed as a director of oil and gas business Forum Energy.

Wallace is the former group finance director of Sanctuary Group, and is a non-executive director of JP Morgan Global Emerging Markets Income Trust.

Further reading:

Jubilee Platinum uncovers new FD

David Jetuah, Accountancy Age, Wednesday 28 July 2010 at 09:49:00

Moves to work out pensions tax relief welcomed by advisers, but there is still a long way to go

Accountants and employee benefits experts have welcomed the government's efforts to reach a compromise on taxing high earners' pensions contributions.

HM Revenue & Customs and the Treasury are jointly handling a consultation on pension tax reliefs, after plans floated by the last government were roundly criticised for being highly complicated and expensive.

Vincent Oratore, president of the CIoT said: "The review of the proposed changes to pensions tax relief is especially welcome.

We all understand that pensions tax relief is going to be curtailed, but there has to be a simpler way than the complex and costly system previously legislated for."

Joanne Segars, chief executive of the National Association of Pension Funds said:

"Many details still need to be resolved, but we are pleased the government is taking our proposals on board."

Further reading:

Cameron pledges tax reform to woo Lib Dems

Paul Grant, Accountancy Age, Wednesday 28 July 2010 at 09:44:00

Qualifying period for furnished holiday lets to be extended under Treasury plans

Owners of furnished holiday lettings could lose the tax relief available on their properties unless they are made available to let for longer.

Government plans would extend the amount of time that homes need to be let out and available to let for their owner to continue to qualify for currently available relief.

Currently, homes have to be let out for 70 days a year and available to let for at least 140 days to receive entrepreneurial relief on capital gains tax at 10% and rollover relief on the tax. Treasury plans would see the qualifying period raised so that homes have to be let out for 105 days a year and available to let for 210 days, according to the Times.

Rachael Singh, Accountancy Age, Tuesday 27 July 2010 at 16:14:00

Second quarter results for German software giant SAP show a decline in cash flow

SAP, the financial software giant, has seen cash flow fall by 30% for the first six months of this year compared with the same period last year.

Financial results out today from the German IT company highlights cash flow has declined 30% in H1 2010 to 1.28bn (1.07bn) from 1.82bn for the same period in 2009.

The company said the year on year decrease is a result of receiving significantly more payments in 2009 than 2010. This is due to a surge in late payments from 2008. SAP also attributed the decline to a one-time payment, in the second quarter of 2010, from a settlement of a lawsuit with the insurance reimbursement expected later this year.

However, there was some good news. The business increased operating profit, under IFRS, by 21% to 774m in the second quarter of 2010, up from 641m for the same period in 2009.

Profits after tax also increased in Q2 2010 to 491m from 426m Q2 2009; software related services increased 16% to 2.26bn compared to the same period in 2009; and software revenues grew 17% to 637m from 543m compared to the second quarter of last year.

Bill McDermott, Co-CEO of SAP said the increases to the top line was due to growth in software and support revenue as well as "double digit growth" in subscription revenue.

The latest report excludes acquisition related charges and discontinued activities costing a total of 66m.

The business managed to secure Delta Air Lines and Malaysia Airports as customers in the second quarter of 2010.

Further reading:

Double digit growth for SAP

SAP's shares could fall following news of acquisition

SAP chairman admits customer trust was lost

David Jetuah, Accountancy Age, Tuesday 27 July 2010 at 16:05:00

Professional Oversight Board says it has "significant concerns" about the regulatory work of institutes and efforts to open up the audit market have had little impact

Watchdogs have warned that accountancy institutes must improve their monitoring of auditors as the profession continues to come under fire for its work in signing off company accounts.

In a report to business secretary Vince Cable, the Professional Oversight Board said it had "significant concerns" about the work of the institutes charged with keeping an eye on audit firms.

Much of the regulatory practice was of a high standard, the report said.

However there were "aspects of regulatory activity at some recognised bodies that give us significant concerns," POB warned.

Specifically, POB chiefs called for the monitoring of approved training offices to be more rigorous.

Procedures for verifying audit experience before awarding audit qualifications also needed to be more robust, while complaints against auditors had to be investigated "without undue delay."

While many bodies have taken many positive steps in response to previous recommendations, POB was pessimistic about accountancy institutes being able to check all the firms under their watch.

"We are not confident that all recognised supervisory bodies will meet their statutory obligation to inspect all relevant audit firms at least once in the six years from June 2008 without close monitoring and decisive action."

Market Participants Group recommendations on audit choice had now been implemented, but there was only "limited evidence that they have had a significant impact on market concentration," POB added.

Dame Barbara Mills, chair of POB, said the report, which covered a range of issues including the quality of audit at the large audit firms, to oversight of professional bodies regulation of their members, was particularly important at a time when there was "much debate on the value and nature of audit for the future."

"Our work in 2010/11 will pay particular attention to how those we regulate h ave addressed the issues we have raised, Mills warned.

Further reading:

Clients blind on audit quality

Rachael Singh, Accountancy Age, Tuesday 27 July 2010 at 12:01:00

Accountant Eduard Victor succeeds Andrew Sarosi as FD of mining business Jubilee Platinum

Accountant Eduard Victor takes the finance director role at Jubilee Platinum on 1 August. He will suceed Andrew Sarosi who moves on to become executive director.

Victor is promoted from director and manager of dump retreatment at Jubilee Platinum.

He worked closely with the FD when the business acquired Braemore Resources at the end of last year. A statement from Jubilee said he helped with the " seamless" integration of the businesses.

Most recently Victor spent three years as executive business manager for Pan African Resources (PAR). Prior to PAR he was financial manager of Harmony Goldmine for six years, including acting mine manager for its Evander gold mine.

Other board changes for Jubilee Platinum include the non-executive chairman Malcolm Burne stepping down, due to other commitments, and current CEO Colin to suceed him. Leon Coetzer will assume the CEO title relinquishing his position as MD Smelting and Refining.

Further reading:

Northern Rock FD banned and fined 320,000

Former FD takes non-exec role at Inc & Growth VCT

New FD for Norman Hay

David Jetuah, Accountancy Age, Tuesday 27 July 2010 at 11:57:00

Government unveils latest attempt to keep multinationals in the UK, while ensuring the way company funds are used in low tax jurisdictions does not erode the UK's tax base

The coalition government has kicked off a raft of consultations in efforts to hammer out solutions to some of the UK's most contentious tax issues.

The way UK-based multinationals use income in low-tax jurisdictions has been a major sticking point for several years and the new government has made good on its promise to address the situation by starting an informal consultation about controlled foreign companies.

HM Revenue & Customs is jointly handling the consultation with the Treasury.

Senior figures from Anglo American, British American Tobacco, Xerox, IBM, Intercontinental Hotel Group, Rolls-Royce and Aviva have been drafted into a working group operating alongside the consultation.

However, a warning was also issued by the government that any proposed changes would not short-change the UK's tax coffers by eroding the tax base.

HMRC and the Treasury also opened a discussion document which proposed moving to a "territorial" treatment of foreign company taxation rather than basing it on ownership.

A working group including representatives from BG group, BP, HSBC Sony and Standard Chartered has been set up to discuss options and proposals in more detail.

In total, the Exchequer Secretary to the Treasury David Gauke MP published nine documents for discussion and consultation relating to tax, following commitments made in the June Budget.

In addition to the foreign branch taxation discussion and informal consultations on CFC interim improvements, issues being discussed include PAYE reform, furnished holiday lettings, pensions tax relief, associated company rules, disclosure of inheritance tax avoidance and modernisation of investment trust company rules.

Gauke said: "We want to make the tax system simpler and work better for the taxpayer.

"By reducing burdens, making the right choices and involving taxpayers, we are

sending a very clear signal that Britain is open for business."

"I want to encourage relevant parties to provide their feedback

on the tax consultations that we have published today."

Further reading:

Vodafone settles marathon case with taxman for 1.25bn

Battlelines drawn in CFC conflict

Gavin Hinks, Accountancy Age, Tuesday 27 July 2010 at 11:27:00

Economic affairs committee will examine the dominence of the Big Four and whether auditors should have done more in the crisis

The audit market is to come under the scrutiny of the House of Lords which will look at the domination of the Big Four and whether auditors should have done more ahead of the banking crisis.

Lord MacGregor, chairman of the Lords economic affairs committee, said: "The auditing industry has been dominated by a very small number of players for some time now. We will look at the scope for promoting more competition."

The competition issue is already on the agenda of the Financial Reporting Council and has been examined by the House of Commons Treasury committee.

A recent report from the FRC and FSA criticised the role of auditors during the crisis saying they had failed to tackle management bias.

The Lords investigation will look at basic questions such as wether Big Four dominance increases the price of audit and whether the market needs to be opened up.

But it will also examine much more sensitive issues about the audit of banks and whether the auditors were sufficiently sceptical in the run up to the crisis, and could they have done anything to mitigate the crisis.

The Lords are inviting responses to the probe by 24 September.

Read more:

New FSA powers will force auditors to speak out

Treasury committee accuses auditors of "tunnel vision"

Gavin Hinks, Accountancy Age, Tuesday 27 July 2010 at 10:46:00

Bank FD guilty of misrepresenting mortgage arrears

David Jones, the former finance director of Northern Rock, has been banned from working for a regulated company and fined 320,000 by the Financial Services Authority for misreporting mortgage arrears at the bank.

The FSA said that Jones misconduct began in mid January 2007 when he agreed "to allow false mortgage arrears figures to appear in explanatory text published with the 2006 annual accounts".

Margaret Cole, the FSA's director of enforcement, said: "Even though other senior directors within the firm were involved in the misreporting of arrears and possessions figures, as a senior director himself and as an FSA authorised person, Jones had a duty to reveal the true position to the public and to important internal committees. He had numerous opportunities to put things right, but failed to do so."

The FSA said Jones misrepresented the arrears figures for a year to the bank's assets and liabilities committee and to the Council of Mortgage Lenders.

Jones issued a statement today voicing his disappointment in the verdict.

He said: "I accept that I did not ensure that information on residential arrears prepared and presented by others was corrected to includ certain accounts known as pending possession cases.

"However, I consider that the FSAs conclusions and imposed penalty are both unfair and disproportionate."

Jones said stakeholders received sufficient information on credit quality to assess future provisioning levels and that in the first of 2007 the provisioning charge at 2m was too low to be material to the financial position of Northern Rock.

Jones added he intended to put the events behind him and pursue other opportunities.

Read more:

Northern rock Fd steps down

No compensation for Rock shareholders