More than 80% of the UK’s FDs believe that accounting firms are earning
excessive fees from administration, after it emerged that PwC had taken home
£6.6m for their work on MG Rover up to 7 October.
Of the 224 FDs surveyed in the Accountancy Age/Reed Finance Big
Question, 84% said that accounting firms were paid too much for administrations,
with 10% neutral. The rest of finance executives polled, 6%, said accountants
were not overpaid.
‘They (accountants) play an important role, because the company in difficulty
is legally obliged to appoint such a firm,’ said Bev Sherratt from TM Logistics.
‘The firm seems able to name its price. It is really profiting to the detriment
of the creditors and the business when recovery is possible.’
John Owen from Bristol Street Motors, however, said it was necessary to look
deeper into the work that administrators performed before criticising the fees
‘The whole point of administrators/receivers is to salvage as much as
possible from the wreckage for the benefit of the creditors. So, you need
expertise, and this comes at a price,’ he said. ‘If you restrict the amount to
be paid to the investigators, you may end up with a second-rate service, and the
creditors may suffer. It’s a question of balance.’
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies