News in Brief - 4 March
The English, Scots and Irish ICAs have combined to launch WebTrust, an electronic commerce assurance service pioneered by the US and Canadian accountancy bodies AICPA and CICA. Chris Howard, director of the English institute’s assurance services strategy, said 34 firms had applied for the scheme’s accreditation. Smaller firms will have to pay around #7,000 per year to qualify.
> Tax penalties double The proportion of inheritance tax cases still in progress after three years has been reduced from 4,400 in 1992 to 1,750 in 1998, the National Audit Office has revealed. NAO chief Sir John Bourn said the use of penalties since 1992/1993 has more than doubled to 106 cases.
21st century reporting The English ICA has launched the ’21st Century Annual Report’ which discusses the change in how companies report their financial performance. It includes the move towards a more market-led reporting model, the increasing use of electronic means to publish reports and the growing importance of social and environmental reporting. Charity VAT ruling Customs & Excise will regard routine domestic tasks provided by charities on a not-for-profit basis as VAT-exempt. But the concession only applies if it can be shown that the recipient of the service would be at risk if they did the task themselves. Deloitte & Touche VAT partner John Kennedy (who was wrongly described as an Ernst & Young partner last week) said: ‘Unfortunately, the requirement for an assessment to have been carried out is a further administrative burden for charities and appears to be an unnecessary condition.’
PAC slams Guy’s The Commons Public Accounts Committee this week condemned the ‘appalling’ financial management of a major construction project at London’s Guy’s hospital. Thomas Guy House was completed three years and four months late at a cost of #151m – #116m more than the #35m estimate and #68.7m more than the final approved Budget. PAC chairman and former Tory Treasury minister David Davis said: ‘The initial plans were inadequate. There was a lack of grip at the highest level.’ NHS chief executive Alan Langlands said money was not spent without proper authorisation.
Anchor gets court order Customs & Excise has won a High Court order preventing Anchor Foods, now New Zealand Milk (UK), from transferring its assets to its parent company, allegedly to avoid a #264m import duty bill. Customs said the proposed #9m valuation was ‘grossly undervalued’ by Ernst & Young. Both parties can take the rulings to the Court of Appeal.
Central role for FDs Finance directors need to take a central strategic role in running local authorities, according to a CIPFA consultation paper. ‘The Role of the Finance Director in Local Government’ recommends that FDs take on both statutory accounting roles as well as policy development, and says the FD should be a member of the authority’s corporate management team.
PwC business recovery PricewaterhouseCoopers has established a new pan-European business recovery service for failing businesses and stakeholders. The practice group will include insolvency and advisory services to banks, as well as outsourcing.