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News round-up 9 September 2010

Tax blunder affects millions
Up to six million PAYE taxpayers have paid the wrong tax, according to HM
Revenue & Customs. Of those 1.4 million will receive letters in the post
informing them that they owe outstanding liabilities of up £1,400. About four
million people are expected to receive rebates. HMRC was due to send out 45,000
letters this week. The errors were discovered during implementation of a new
computer system and appear to mostly affect taxpayers who have recently changed
their employer. Later it emerged that HMRC may have exceeded its own 12-month
time limit for demanding unpaid tax, casting doubt on whether many of the errors
would result in the correct sums being paid.

Tax
man ploughing through 17m extra cases

Six
million pay the wrong tax

All change at Audit Commission

The strategy to turn part of the Audit Commission into a business got
underway with the appointment of Gareth Davies,a former district auditor, to the
post of managing director of the Commission’s audit practice. There have been
suggestions that the practice could evolve into an employee-owned or mutual
audit organisation competing with audit firms for public sector work. Meanwhile,
the future of Audit Commission chief executive Eugene Sullivan remains unclear.

Audit
Commission names Gareth Davies in crucial MD role

Begbies branches out

Begbies Traynor has branched out launching a new forensic accounting and
security division. Called BTG Global risk Partners, the new business brings
together four separate practices already in the firm. The business launches into
a highly competitive market place with significant players already present but
new executive chairman John Reynard said the launch was a “milestone” that would
help the firm serve not only mid market clients but also those in the FTSE100
and the Fortune 500.

Begbies
Traynor Group sets up global fraud and risk division

LargeOsborne
dumps PBR

The pre-Budget report (PBR) is to be abolished. Chancellor George Osborne is
to replace the autumn event with a slimmed-down statement that will include
forecasts. Many have come to see the PBR as a second opportunity for the
chancellor to grandstand on policy and even the previous incumbent Alistair
Campbell is on record saying the practice should end when the economic crisis is
over. The PBR was a Gordon Brown innovation that began in 1997. The content of
Osborne’s much reduced report is yet to be finalised and is likely to depend on
decisions still be made by the new Office for Budget Responsibility.

Osborne
to can pre-Budget report

Menzies steps in at HLB

Menzies is to replace collapsed practice Vantis as the UK branch of
international network HLB, though there might be more appointments to follow.
Menzies hopes the tie-up will expand its international business, particularly on
cross-jurisdictional issues such as transfer pricing. However, it is understood
HLB will look for other network partners in the UK with “strong local
reputations”.

M
enzies replaces Vantis as HLB partner

PwC keeps number one
spot
Medium

PwC has reported that its revenues for the year ending June 2010 have risen
by 4% outstripping those Deloitte reported a week before which saw a small fall.
However, PwC saw profits per partner drop for the second year running to
£759,000. The results widen the gap between the UK’s two largest firms though
Deloitte chief executive John Connolly, due to step down next year (see page
16-17) has threatened his firm can overhaul PwC’s position at the top. Advisory
at PwC saw growth of 9% which was countered by a stumble in the tax practice of
2%. Ian Powell, PwC UK chairman, took the opportunity to sound off about the
competitive­ness of the UK saying: “Ensuring that the UK is seen as ‘open for
business’ will determine the future success of our own firm and the UK economy.”
He said government emphasis “must be” on “investing to accelerate business
growth”. Powell was voted a rise in salary to £3.6m, up £300,000.

PwC
revenues rise 4% to £2.3bn

PwC
boss Ian Powell’s salary up to £3.6m despite partner profits slump

Accountants are in demand

The demand for accountants reportedly “surged” over the summer. Recruitment
specialist Reed said the positions for pre-qualified accountants were at their
highest since the start of the year. The Reed Job Index showed a 17% uplift on
the position in December 2009. However, Reed also said salaries slipped back
marginally while those for qualified staff held firm. Days before the Reed
announcement, fellow recruiter Hays revealed its profits slumped from £158m in
2009 to £80.5m for 2010.

Demand
for accountants surges over summer

New favourite at FASB

A new favourite emerged for the now vacant post of chairman of the US
accounting standard setter FASB. Bob Herz made a surprise announcement that he
was to retire two years early and one of his current staffers, Robert Golden,
currently technical director, was revealed as the tipster’s choice. The
appointment is being viewed as critical to the progress of converging
international accounting standards (IFRS) with US GAAP and whether the US
financial regulator, the SEC, will finally sign off on adopting IFRS for
America. In the UK, Golden is viewed as friendly to IFRS and the International
Accounting Standards Board. The SEC has said it will make a choice on IFRS next
year though it is likely to be in the second half. There remains stiff
opposition among companies and markets in the US to IFRS adoption.

Favourite
emerges for top post in US accounting

Analysis:
Herz’s departure could speed up convergence

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