News in brief - 12 August
Spice Girls royalty audit
The Spice Girls are facing a worldwide royalty audit, Deloitte & Touche’s Charles Bradbrook, the band’s accountant, said this week. Describing the audit as ‘standard practice’, Bradbrook played down reports that millions of pounds from worldwide record sales had gone missing. ‘When there are large amounts of money flowing there are always minor errors,’ he added.
Summer break for Age
The next issue of Accountancy Age will appear on 26 August.
Soccer wage bill alarm
‘Five or six’ football clubs will go bankrupt this year, Gerry Boon, head of Deloitte & Touche’s football industry team, has warned. Speaking at the launch of the firm’s latest review of football finance, Boon called for more profit-related pay for players to counter a wage bill that is rising in the top two divisions by 37% a year.
Revenue’s IBM inquiry
The Inland Revenue has launched an investigation into alleged improper tax avoidance at IBM. The IT giant confirmed an audit was under way into the issue but said this was normal and routine. IBM refused to comment on reports claiming the company avoided paying up to $500m (£311m) in UK taxes from 1991 to 1996 by increasing the percentage of royalties the UK group paid its US parent on goods and services sold in the UK.
Mid-tier accountancy firm Chantrey Vellacott DFK has merged with Framework Consulting to form a combined services group with a &£163;20m income. The merged consulting arm of the firm will be called Framework Consulting DFK and it plans to expand into energy, environment and EU harmonisation work.
Going bust is booming
Insolvencies in the three months to June shot up by 14%, according to government figures. Personal insolvencies have also risen by more than 20%. Alan Bloom, president of the Society of Practitioners of Insolvency, said he hoped publication of a government consultation paper on company rescues would introduce ‘radical solutions’ to tackle the problem.
MPs say ‘stop bribe relief’
The government has been told to put a stop to companies’ ability to offset bribes to foreign governments against tax. The Commons international development committee said Western companies that indulge in corruption made third-world poverty worse. The committee said while the government supported international moves to criminalise the bribery of foreign officials and cease the tax deductibility of such bribes, it had done nothing in the UK.
Top Bank job for O’Donovan
Kathleen O’Donovan, finance director of Invensys, the company created from the merger of BTR and Sieve, has been appointed to the Court of the Bank of England. A former Ernst & Young partner, she is one of two new appointments to the court which reviews the work of the bank and approves its budget. The appointments run for three years until May 2002.
Web tax warning
The government has been warned not to allow small-scale deals to undermine the creation of a broad global tax system for e-commerce and the Internet. The Commons trade and industry committee said national governments agreed taxation of e-commerce should be technology neutral, certain and transparent, effective and efficient to keep compliance costs down. But it warned it would be difficult to reach an international agreement.
ABA delays MDP vote
The American Bar Association has delayed its long-awaited vote on lifting the ban on multidisciplinary practices between accountants and lawyers. The ABA was due to vote next week on the issue after one of its working parties recommended allowing MDPs with strict safeguards to protect lawyers’ interests. A vote on MDPs is now expected to take place next year.