RegulationRegulatory BodiesIFRS Foundation cuts provision for HMRC tax inquiry

IFRS Foundation cuts provision for HMRC tax inquiry

IFRS Foundation able to cut provision for HMRC tax investigation by £290,000

IFRS Foundation cuts provision for HMRC tax inquiry

THE OVERSIGHT BODY of global standard setter the IASB has cut its provision for a HMRC investigation into its employment tax obligations.

According to its latest annual accounts, the IFRS Foundation said it was able to cut its provision to cover a HMRC investigation into the taxation of staff and secondees from other parts of the world by £290,000 to £170,000.

In May 2011, HMRC began a review of records for inward bound expatriate staff and other more general tax matters and requested further information in six areas. Four were immediately dealt with, while two remained subject to further discussion.

During 2012, HMRC agreed with the IFRS Foundation’s position on one of the outstanding issues, resulting in a reduction in provision being recognised in the statement of comprehensive income.

One issue remains outstanding and a final liability has not been assessed. The iFRS Foundation estimated a remaining cost of £170,000 and the net liability amounts to £94,000.

The IFRS Foundation reported a 2.4% drop in 2012 operating income to £25.5m from £26.1m in 2011. Total operating expenses decreased by 7.4% to £23.8m from £25.7m the previous year. Savings were mainly from staff-related costs relating to salaried and travel, the foundation said.

Funding from contributions – mainly from levies administered by national regulators and voluntary payments from accountancy firms – remained broadly consistent with the previous year at £20.7m.

“This reflects a mix of new or increased contributions received from several countries and at the same time, some decreases, particularly because of a reduction in voluntary contributions received from the US of approximately £0.5m,” the IFRS Foundation said.

The largest portion of funds (£3.3m) came from the European Commission, while the FRC contributed around £940,000 to the foundation’s coffers. International accountancy firms – Deloitte, PwC, KPMG, Ernst & Young, BDO, Grant Thornton and Mazars – contributed just under £6m.

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