The most recent articles from Accountancy Age

Barkers sold to Penna in pre-pack deal

David Jetuah — 2009-07-03T16:30:00.000Z

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.

Timms outlines tax negotiating agenda

Judith Tydd — 2009-07-03T14:01:00.000Z

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.

SkyEurope collapses

David Jetuah — 2009-07-03T10:55:00.000Z

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.

FSA reveals next stage in 'radical' overhaul

Gavin Hinks — 2009-07-03T10:04:00.000Z

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 launched by bringing together enforcement and financial crime units to beef up deterrence.

For more go to FSA.

Parkwood grabs new FD

Rachael Singh — 2009-07-03T09:50:00.000Z

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 for 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.'

Mid-sized firms brave the downturn

Accountancy Age — 2009-07-03T09:40:00.000Z

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 and 5% in these areas.

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

VAT evasion on imports tackled by European Council

Judith Tydd — 2009-07-03T09:40:00.000Z

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 import 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.

Video: The taxman's new debt collector and are pre-packs working?

2009-07-03T09:38:00.000Z

Accountancy Age, Friday 3 July 2009 at 09:38:00

Pre-pack adminisrations in review and HMRC outsources outstanding debt collection

Gavin Hinks talks to David Jetuah about the review of pre-pack administrations and whether they are doing they job they were designed for. Judith Tydd also talks about the growing concerns over HMRC's decision to outsource its debt collection process.

Debts mount at Ramsay's restaurants

Accountancy Age — 2009-07-03T08:32:00.000Z

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 restaurateur 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 and 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.

Web seminar: SMEs and surviving the recession

Damian Wild — 2009-07-02T18:54:00.000Z

Damian Wild, Accountancy Age, Thursday 2 July 2009 at 18:54:00

Our experts discuss what steps small businesses need to take to make it through recession and find funding

Is a lack of access to funding the number one issue for SMEs today?

Stephen Alambritis, head of public affairs, Federation of Small Businesses

It has been very tough from October last year, right through to mid-April. Access to money is key for those small businesses; access to money to survive, to improve cash flow, to get over these very, very difficult times. You have the lethal cocktail of trade down and costs up, so it has been a huge issue.

Things are improving; banks are beginning to relent and relax. But it’s been slow. The average age of a bank manager is 44. They haven’t been through a recession before and were very concerned for their own position, let alone helping out small businesses.

We estimated 36,000 small businesses would close through out the whole of 2009, so it was not as bad as the early 90s. In 1992 I believe 52,000 small businesses closed, so I guess a number of small businesses are dipping in to their war chest. In October of last year they used up £900m rather than go to the bank because they were concerned about flagging a problem with their bank manager.

We want to get to the situation where viable small businesses get the money they need. Almost 90% of small businesses are locked into the four major high street banks. That’s why the relationship is important and that’s why it’s got to be at its optimum for the good of the economy. When that relationship breaks down, we all suffer, so hopefully we should be on a road to a good relationship now between banks and small businesses.

What are the tools SMEs need to survive the recession?

Steve Priddy, technical policy research director, ACCA

One wonders to what extent banks have failed to lend simply because their own internal commands that control their procedures are not set down. We’ve had to go through a lot of pain and business owners have to rebuild this confidence. Certainly our members are finding that they are a trusted confidant and they are the ones who are helping to put together business plans, helping with all the management accounting and helping to put together all the things you need to run a small business well.

We know that good business owners treat financial records and financial management accounting with the seriousness that it needs. It’s not there as a luxury but to help you steer your way through. The fact that you file a set of accounts is the end of quite a significant process which is a very valuable and important one.

What’s interesting is that we have lived through this nice decade, with no inflation and constant expansion, and perhaps all of us have become a bit flabby about the things that we should have been doing.

The audit profession is talking about the difficulty of going concern and evaluation. That’s always been around and it’s always been the responsibility of the board to ensure their business is going to be around for the foreseeable future. Similarly, it’s always been the case that credit insurers need a lot of information about the business.

It’s the same with the access to finance. You’ve got to have cash collection processes in place and you’ve got to follow them through. There is significant evidence that there is a fraction of the SME sector that is doing ok because they’ve had these processes in place and they’ve been following them through. They will be the ones that weather this storm.

How can banks and credit insurers move from using historical information alone?

Martin Williams, managing director, Graydon UK

The recession came on us so quickly and violently it caught banks and credit insurers on the hop. They’re using normal information channels that they both use to assess credit risk. But looking at the normal channels wasn’t good enough. How many risks were out there that they didn’t understand?

When you’ve got that fear in place you’re going to get jittery and probably start to pull cover in many more places than you should do.

When it comes to trade credit insurers there’s been a pulling of trade insurance cover, not just affecting SMEs but affecting big companies as well. I think we’ve seen the worst of the pulling of cover; the cover’s already been withdrawn in most cases, I don’t see too much more cover being pulled from the position that they’re in today.

The credit insurers have really got to re-examine the models that they’ve used for many, many years. We’re entering a new era of transparency. Transparency of financial performance, for example, has always been the case in exchange for limited liability. It’s always been part of corporate reality.

In this era, this fast moving economic situation we’ve had in the last year, people have begun to question the validity and usefulness of this so-called ‘historical’ information at Companies House.

That historical information is still extremely useful and I’m not advocating the closure of Companies House.

What I think we have discovered in the recent months is that there has got to be a need for more up-to-date information in this economic environment. Credit insurers and banks have every right have always had the right to ask for management accounts information. They’ve done it for decades, it’s just within the last six months or so it’s been done on a grand scale, that’s the difference.

Up-to-date management information if you can believe in it and capture it in a structured way is the breakthrough I think people are looking for in the credit-granting world. And we’re working on that.

Chaired by Damian Wild

Equality: breaking through

Bernadette Pritchard — 2009-07-02T18:50:00.000Z

Bernadette Pritchard, Accountancy Age, Thursday 2 July 2009 at 18:50:00

Has the glass ceiling been broken and are partners now appointed purely on merit?

Rightly or wrongly, the accountancy profession is still hung up on the issue of women in partnership.

Although the number of female partners is increasing, Accountancy Age’s Top 50 survey revealed that the average percentage of female partners in the 50 top firms is still just 11.9% up from 10.9% last year. This may explain why many people, particularly those outside the profession, still believe there is a glass ceiling in place.

There have certainly been significant changes in accountancy since I entered the profession in 1995.

When deciding on a career in accountancy I was not aware of the glass ceiling issue and it did not occur to me for a second that being a woman would have a negative impact on my career. When deciding which firm to train with I was not swayed by diversity polices; I knew I wanted a mid-tier firm where I could gain varied experience and advance quickly if I performed well.

My intake was divided fairly evenly between men and women and, when I joined the firm, there was a good representation of females across all departments, although there were no female partners. The long-running debate over the lack of women in partnership may still deter some female graduates or lead them to place too much emphasis on diversity policies. I was qualified for two years before the firm had any female partners, but I never felt there was a barrier to women progressing.

After qualifying I became an audit manager in 2000 and subsequently decided that I would stay in private practice. I was aware that there was an opportunity to progress quickly at haysmacintyre and my expectation was that, if I proved I was right for the role, and there was a business case to be a partner, there would be no reason why I should not expect partnership in a short timeframe.

A first

When I became partner in 2006 there was only one other female partner and I was the first woman to be internally promoted to that level. The firm has a relatively high proportion of female partners (21%) although it is easy to place too much significance on this.

We have a comparatively high number of female partners simply because, in the last three years, the best candidates for partnership have been female. We have promoted the best people for the roles and it would be unfair to suggest it has been driven by corporate social responsibility or trying to manufacture a particular reputation for the firm.

While the number of female partners will always be monitored and probably continue to make headlines for a few years, diversity will never influence the decision to promote an individual to partner. It has to make sense for the firm as a business.

As long as the glass ceiling is still perceived to exist there will be interest in the number of female partners at the Top 50 firms.

It is difficult to know whether diversity or the number of female partners specifically is an issue for prospective clients. I work with corporate clients from a range of sectors, including manufacturing, property and financial services, all of which have traditionally been male-dominated.

Many of the clients I advise are male, but it has never been an issue either for them or for me. Although I have had positive comments from some who have noticed that we have a good representation of women in the partnership, I would be surprised if it was a factor for prospective clients. Above all, clients want high-quality, cost-efficient service, and for that they need the right people. Whether they are male or female is irrelevant.

The fact that the number of female partners is increasing must be reassuring for female graduates and other women considering a career in the profession. I’d like to think that the success of female former trainees at haysmacintyre in the last three years we have seen four admitted to the partnership acts as an incentive for the other female staff here.

Certainly the number of female partners we have reinforces the fact that, if you are good enough, you will progress regardless of gender. The firm’s willingness to fast-track strong individuals has been a factor in more women becoming partner in recent years it is possible to make the jump in as little as nine or ten years.

However, it is worth pointing out that reaching the top of their profession as soon as possible is not necessarily every person’s goal, male or female. In any career or profession, women in particular face a trade-off; family versus career. Of course it is not one at the expense of the other, but an extended time away from work, whether you are male or female, will have an impact on your progression in the short-term.

Ability alone

The ongoing debate about the glass ceiling can leave a bitter taste, as there is the inference that women who have reached the top have been assisted in some way. Partners need to be promoted on ability alone if we are to continue to service clients and grow our business.

With the number of female partners increasing across firms of all sizes, it is starting to look like the glass ceiling was a generational problem which will continue to be eroded over time. I would be surprised if women entering the profession now genuinely think their gender may be an issue for them in progressing in their chosen career. As is quite often the case with trends like this, change can be a long time coming but once it does come it can accelerate very quickly.

Bernadette Pritchard is a partner at haysmacintyre

Leadership: you'll never be top dog

Paul Bridle — 2009-07-02T18:44:00.000Z

Paul Bridle, Accountancy Age, Thursday 2 July 2009 at 18:44:00

So you think you’d be a great leader – think again

Sometimes I think that the world is divided between the people who make things happen and those that account for it. I know it is an over simplification but all the personality assessments, type indicators and their like break us into four types: the pragmatic, the analytical, the amiable and the extrovert.

Analytical personality types make great accountants. Conscious of the minute details and focused on ensuring that everything is accounted for. They check and re-check everything; analysing all possible outcomes; each possible permeation; things that can go wrong; things that can go right... And basically, because of this attitude they appear totally boring to the rest of us.

Unkind, unfair, unjustified I hear you cry! Maybe but only just. The analytical can’t be two things at once. They are unable to be an extrovert and an analytical, which means they don’t make good sales people.

In addition to this damning description, they typically aren’t good at getting people fired up or excited, which means they tend not to be good leaders. It is simply not part of who they are, their individual make-up, the DNA of their personality.

2+2 is always 4

Ultimately accountants are too focused on the details to be fun or dynamic. One and one is two, and that is that, the question is answered and that is all there is to it.

Of course, the exception proves the rule and the occasional accountant can make two plus two equal 22 if they position it right on the page, but that glimmer is as far as they go. Some people will argue that the best accountants get creative with tax issues but the truth is far from creativity, they are merely following or exploiting a set of specific rules.

At this stage you could be forgiven for thinking that I am against accountants or analytical people. Far from it in fact the world would be a terrible place if the analyticals, and accountants in particular, were not ther e filling a very important role. We need people that will focus on the detail and follow through to the end when the extrovert and amiable have got bored and moved on.

And most of all we need them because their absence would mean no grounding to ensure liquidity within organisations.

Mechanics don’t fly the planes

In the same way that I would not employ an extrovert to be an accountant, an accountant does not make a good salesman or leader for that matter. When I hear that the CEO has been fired and an accountant is put in charge of a company that is in trouble or on the verge of bankruptcy, I groan (and dump any stock I might have left) because I hear the last nail of the coffin being driven home.

I can hear you cry out in response: ‘The company is failing because the CEO has been negligent and not heeded the advice of the CFO!’ That is a strong argument and might be true in many cases but that does not mean the ideal replacement is the CFO. Imagine an aeroplane. The mechanic that maintains the engine is not necessarily going to be the best pilot. He can tell the pilot how to fly to get the best out of the engine but that does not mean he knows how to fly.

Know your place

Accountants hold a very valuable position and are key to ensuring that a business stays healthy, a fact that should never be underestimated and always valued. The accountant should bring the balance to the leader, much like the mechanic balances the pilot. The leader and pilot rarely see everything in logical figures, which is why they see the opportunities and the best way to make the most of the situation.

Typically an accountant is unable to see anything from a different perspective unless it involves facts based on logic. The leader on the other hand is required to see the intangibles that simply do not make sense at face value. The leader sees the human perspective and the need to think beyond the simple equations of people pitching up and doing what is expected.

When seeking to expand a business, the leader will see the opportunities and the accountant will bring the leader down to earth to face the realities. One without the other is like a pilot without a mechanic. The very best companies are those that have the perfect balance of a pragmatic CEO and an analytical accountant/CFO and both value the input of the other. When both see each other as a vehicle to understand things from a different perspective you have a force to be reckoned with.

May we always have the balance of good accountants and good leaders. May we never fall into the trap of thinking that one is more important than the other. They are both as valuable as the heart and lungs are to the human body.

Spot the difference

An accountant sees a cost and seeks to reduce it.

A leader may well see how to double the output from the same costs.

An accountant will see the need to reduce overheads and retrench people.

A leader will consider the impact that has on others and how to achieve the reduction in a way that does not de-motivate people.

Type cast

The Pragmatic is typically your CEO or Entrepreneur, someone who thinks strategically and is out there trying new things.

The Extrovert is the salesman, always excitedly trying to get people to buy his or her wares and services.

The Amiable is the person that gets things done in a slow and methodical way – but it is a way that is comfortable to everyone.

The Analytical is the person doing all the analysis and making sure all I’s and T’s are crossed before moving on.

Paul Bridle is a leadership methodologist and managing director of Bridle International

Sole practitioners: the revolution is underway

Ron Goldsmith — 2009-07-02T18:40:00.000Z

Ron Goldsmith, Accountancy Age, Thursday 2 July 2009 at 18:40:00

From outsourcing to deals with multi-partner firms, there is a revolution underway in the world of the sole practitioner

Many sole practitioners are from the baby boomer generation. On qualifying, they were authorised to undertake most activities requiring on behalf of their clients, whether it be an audit or a tax investigation. Even insolvency was covered by the original qualification.

Over successive years there has been increasing legislation from the government and ever tighter restrictions placed on the profession by the various institutes and more rules introduced. This has narrowed the work that can be undertaken by an accountancy practice let alone a sole practitioner.

The end result is that a multi-partner firm of a reasonable size has been able to cope with the changes, designating partners to undertake various roles. Not so the sole practitioner.

Sole practitioners are the biggest single group in the country and far outnumber the number of multi-partner firms. The vast majority operate from either a home environment or a high street or suburban offices. One of their great joys is the ability to make decisions without referral (whether good or bad) and to run their own business.

The downside to that is that whatever happens in that office is their responsibility. This can be everything from being the money laundering officer to fixing computers.

Traditionally, the sole practitioner has undertaken very similar work to the multi-partner firm and would pride themselves on the ability to undertake audits and to differentiate themselves in this manner from the non qualified firm around the corner. Up to now the vast majority have not appeared that different from partners in a multi-partner firm.

Times are changing, and a trend that started a few years ago is gathering pace. Older accountants want to dispose of their remaining audits, and we received requests to place them with another local multi partner firms. But they want to retain control of the client, and only pass on the audit work.

Some fees are sold outright, some are managed jointly. Also one or two of the older practitioners decided not to renew professional qualifications with their appropriate institute as it was deemed to have little or no advantage. The underlying truth behind this was that they did not want practice assurance visits.

The sole practitioner of the future will be different. The role of the new-age sole practitioner will be to assist a client’s business to grow and manage itself in a profitable and secure manner. The client will feel the comfort of knowing that he has many choices by going to the sole practitioner and that a search has been undertaken to ensure he has been directed to the most appropriate service.

Clearly, this does not suit everyone, but there are enough businesses out there that want the support of a sole practitioner and not the anonymity of a multi-partner or multi-director firm. The opportunity exists for a sole practitioner to create a very substantial personal business, but on a different basis. The demand is there from accountants who wish to be sole practitioners, and from clients.

Another big change is the increasing prevalence of outsourcing. Many practitioners have now taken advantage of cheaper accounts production abroad and this has given some the opportunity to reduce direct employment costs and commitment.

There has always been a demand from clients for a sole practitioner to look after them personally. Going to a multi-partner firm has meant that they may just be one of many, and does not have the same priority that he could potentially receive from the sole practitioner. Whether this is true or imagined is a different matter. Commercial businesses tend to enjoy a very close relationship with a sole practitioner.

Partners in larger practices fail to see the attraction of being a sole practitioner, but it is true the other way around. Sole practitioners do not see the point of having partners who can interfere in the way they run the business.

But the (near) future role of the sole practitioner will be to introduce the client to a multi-partner or multi-director firm who can undertake this work on their behalf on an economic basis and leave the sole practitioner free to give general advice to the client.

The advantage to the client is that the sole practitioner will know who is best at which type of work and can introduce the client to the most appropriate source for the audit. This is a major change for the profession, as sole practitioners have steered clear of multi-partner firms, fearing the competition. We believe this will move to co-operation.

The client hand-holding model will grow and develop between sole practitioners, their clients and multi-partner firms. Bookkeeping work may well still be undertaken by the practitioner but could even be outsourced to a cheaper alternative abroad.

Corporate finance is another area of interest. While the sole practitioner is, in theory, capable of dealing with the issues, there is normally no capacity in terms of staffing to deal with client requirements. Clients requiring specific areas of expertise will refer to the sole practitioner, who will then guide the client appropriately. This started with insolvency and financial services, and we can well see it growing. Most make referrals, and the sole practitioner is therefore ensuring a client is referred to someone that can be trusted.

Currently, the sole practitioner does not look that different from a multi-partner firm in most areas. The average sole practitioner turning over somewhere between £200,000 and £400,000 a year.

The majority of sole practitioners largely do everything for the client, and have a small staff to assist generally with the bookkeeping issues, payroll, tax returns etc. They are however just support services for the main act.

Taking a snap shot of the past shows us an accountant with £300,000 of turnover working from a suburban office. Several members of staff, some part time, and files everywhere. The accountant working up to a 12 hour day, staff considerably less. They are the anti-money laundering officer, the bookkeeper, the client carer, absolutely everything.

Move forward a few years and the accountant will be in front of his laptop. He will be referring clients on to appropriate sources and even attending meetings himself in order to give the client comfort. How this will all be charged for is an issue for another day.

The virtual sole practitioner can now operate from anywhere, with minimal overheads and maximum benefit from being able to spend most of their time looking after client needs not government and institute requirements.

These are exciting and challenging times, and while the traditional model has worked well with the baby boomer accountants, the next generation coming through are not expected to go down that route. They are essentially only interested in looking after quality clients and making sure the service they introduce them to are perfect for their requirements and charging properly for that service.

Again, up until recently there has been little contact between sole practitioners and multi partner firms. We believe that this will change and we are already seeing the seeds of change taking root.

Look to the future

Just to take a step forward in time, the sole practitioner may not even require an office. They may not even require staff.

Given modern technology, the accountant can work from virtually anywhere. The client comes to the accountant for advice on the audit, and the sole practitioner introduces him to the local firm, or outsourcing unit, specifically created to undertake audits.

The accountant will ensure that the bookkeeping work is undertaken properly. This may well be outsourced to India or wherever is appropriate at that time. The client needs some advice on tax or financial services. The accountant will take him along to the appropriate source for that.

This model would mean that the accountant can reduce considerably fixed and variable overheads, and there will be less of a limit on the amount of turnover that can be handled. The sole practitioners will be there to give solid and reliable business advice to the client, while drawing in the expertise from other areas to support that advice.

Multi-partner firms

Changes are afoot for multi partner firms. Over the next few years we will see a fall in the number of firms.

Those that will remain will be much larger and will be all things to all men with regard to the client requirements. The core of the practice will be accounts production and audits and will have their own separate businesses covering financial services, corporate finance, computer requirements etc.

Whatever the client wants, it should be available from that practice

Ron Goldsmith is managing director of the Goldmiths Group

Overview: Peter Caryana rocks the boat

Verity Reynolds — 2009-07-02T18:33:00.000Z

Verity Reynolds, Accountancy Age, Thursday 2 July 2009 at 18:33:00

Prospects: will Gibraltar’s tax changes affect its reputation?

In a bid to remove Gibraltar’s ‘tax haven’ image, Peter Caruana, chief minister of Gibraltar, recently announced the introduction of a corporate tax rate of 10% for both international and domestic companies within Gibraltar. But how will the attitudes of many businesses in Gibraltar change as a result of a prospective tax hike?

What’s happened?

Caruana is aiming to remove Gibraltar from the OECD’s ‘grey list’ of countries considered unsavoury on tax matters and on to the ‘white list’ of fiscal good guys. This will be a difficult task indeed considering Gibraltar, like many other jurisdictions, has generally been held in low esteem for tax reasons by the OECD.

He hopes, however, that through his introduction of a 10% corporate tax rate he will gain the trust of those countries that doubt the credibility of those choosing to invest their money in Gibraltar.

If this were not enough, the recent agreement signed by Caruana and the USA, agreeing to the exchange of tax information, could also shed some light on those high net-worth individuals who use ‘the rock’ to house their considerable incomes.

In many ways Caruana has molded the face of Gibraltar today; the economy is no longer dominated by the British Military but by the financial services sector. The GDP has steadily risen since 2004 from around £600m to £850m, inflation has dropped and taxes on almost all areas of business are extremely low.

Despite these promising figures, Caruana’s small-yet-affluent, state is, to many, only an offshore centre for multinationals seeking to take advantage of the 0% corporate tax rate.

What will happen?

Caruana will certainly have to consider many areas that may be affected as a result of the impending change. The 10% rate, although potentially shifting Gibraltar into the ‘white list’, may result in adverse affects to the economic stability of the country.

Given the current economic climate he may find that many businesses withdraw, to place their money in other low tax jurisdictions which are available. And having your details handed over to American tax authorities is hardly an advertising campaign likely to entice new business to the territory.

But they are holding steady. Finance director James Tipping commented on the tax rule, saying ‘our philosophy is a low tax, not no tax, jurisdiction’, suggesting the government is confident that business will stay on.

Their confidence is perhaps based on the fact that, so far, no business has declared an intention to relocate.

Gibraltar may now be a leading member in the changing face of global tax as other countries consider following suit. Caruana will be hoping that 10% is enough, but not too high a price to pay.

View from the board: just say no... but nicely

Mark Freebairn — 2009-07-02T18:25:00.000Z

Mark Freebairn, Accountancy Age, Thursday 2 July 2009 at 18:25:00

‘I don’t like finance - they just say no all the time.’

'Finance come in and act like the Monday morning quarterback. It’s easy to say what went wrong after the event it’s getting help beforehand that we need’.

No. I haven’t had a break down, and I’m not writing this in the small hours of Sunday morning. I’m just repeating a couple of the quotes that I have heard recently from some of the operational management with whom I deal. And they make an important point. Not necessarily that what they are saying is true they could be talking rubbish for all I know.

Finance people the world over could be reading this saying that it isn’t fair. In this market, of course someone in finance has to say no more often than before.

But that doesn’t, sadly, matter very much. Because, as Jordan and Peter Andre are proving so wonderfully, right now, it’s not the truth that matters but the perception of the truth.

Are finance departments saying no more often than before? I hope so. If they aren’t then I should be even busier than I am replacing many of them. We are in the middle of what’s being recognised as the worst recession of the last 30 or 40 years. If finance isn’t saying no a lot more than during a ten year growth phase, then we’ve got bigger problems coming.

But and this is the critical point marketing managers, salespeople, R &D Directors or whoever don’t care about that, not when they are talking to you to try to get the money for their favourite project. They want to get sign-off on this one thing and you are the gatekeeper.

And that’s when perception matters because you are going to say no, and deep down, they probably know that. The important thing, though, is how you do it. Right at that moment, you have the ability to make ‘no’ seem like a good thing.

Right now, when all they are hearing is no, you have a vital role to play in making them feel positive about the business, the product, the market, and most importantly, about the finance function. If they walk away from you unde rstanding the reasoning, they will defend you and the function to anyone that complains. But if they walk away and all they have heard is no, the perception of finance will conform to the old stereotype, and the carousel will start turning again.

Having spent ten years fighting our way off that particular merry-go-round, please let’s not turn straight back onto it.

Mark Freebairn is a partner at Odgers Ray & Berndtson