Revenue does not get GAAP, says KPMG
KPMG has slammed the Inland Revenue for misunderstanding the nature of UK GAAP in a consultation on reforming the taxation of intellectual property.
Experts at the firm say that any reform could be undermined by the Revenue’s assumption that it is possible to determine exactly which accounting practice is required by GAAP.
It is also says there is a real risk companies could lose tax relief if the Revenue continues with its view.
KPMG fears the Revenue could take a rigid view of accounting procedures under GAAP when it actually allows flexibility.
‘Companies must be free to amortise costs as they see fit within accepted accounting treatment without losing crucial tax relief,’ David O’Keeffe, the head of KPMG’s capital allowances consulting group, said.
There has been widespread support for reforming the taxation of intellectual property and intangibles but there is growing dismay that the consultation is taking far too long.
The Inland Revenue was unable to comment.