News in Brief - 19 November
PwC audit out to tender
PricewaterhouseCoopers faces another battle to prevent one of its prestigious banking audits slipping into rival hands after Allied Irish Banks, Ireland’s largest banking group, put its #1.5m contract out to tender. PwC, which last week lost Abbey National’s audit to Deloitte & Touche, has held the contract for 30 years. A bank spokesman said: ‘The decision was made to ensure we have an audit service best fitted for our business, which has changed over the years.’
Welsh audit error The District Auditor is investigating the cause of an #800,000 error in the highways budget of Rhondda Cynon Taff County Borough Council. The error at Wales’ second largest authority was discovered during a routine audit process at the council. Finance director Steve Perry said this week there was no question of the money having disappeared. The District Auditor is due to report shortly.
Hampel code adoption Companies must take steps to bring them into line with the Hampel committee’s code on corporate governance, according to PricewaterhouseCoopers. The code, which was adopted by the Stock Exchange in June, includes new rules for all UK-listed companies and applies to accounting periods ending on or after 31 December 1998. PwC has highlighted internal controls, board structure and appointments, and the need for an internal audit department among its ten key recommendations for action.
VAT rules revision Revised VAT rules have been implemented to stop businesses which lease their cars avoiding the 50% restriction on VAT recovery. The change ensures the 50% restriction on input tax recovery will apply, as parliament intended, to all leased business cars also used for private motoring. Financial Secretary to the Treasury Dawn Primarolo said the government acted quickly to tackle this ‘blatant avoidance scheme marketed by some of the leading accountants’.
ISA delay overruled The government has flatly rejected a Tory plea for a year’s delay in introducing Individual Savings Accounts to allow providers time to prepare computing systems and deal with the millennium bug. But Treasury economic secretary Patricia Hewitt said providers had been given long enough to prepare and any delay would increase concerns and waste time. Hewitt was responding to a warning in the Commons from Conservative chartered accountant Nick Gibb MP.
Insolvency helpline Pannell Kerr Forster has established an Insolvency Helpline to give advice to businesses facing commercial problems or professionals assisting clients. The service is free and features a single national number to put callers in touch with one of PKF’s 35 insolvency practitioners. The firm believes that some people often do not have immediate access to an appropriate professional where the problem may not require the formality of an instruction.
Welsh call to set tax rates The new Welsh Assembly should have the right to set business rates in the principality, an all-party group of MPs has said. The House of Commons Welsh Affairs Committee accepts that giving it separate control of corporation tax is not possible, but says there is ‘potentially greater discretion’ for business rates.
Mobile phone VAT victory Deloitte & Touche VAT partner Andrew Burns claimed last week to have persuaded Customs & Excise to maintain the status quo for free and subsidised mobile phones. After losing a VAT tribunal over a phone promotion by Thorn, Customs considered changing its policy so that dealers would have to pay VAT for the full price of the handset, even though it was being given away or sold at less than cost. After his representations, said Burns, Customs undertook to collect only the VAT on cash actually paid for subsidised phones.