Almost two million companies in the UK have poor credit ratings labelled
high risk or above normal risk, their low scores come about largely because they
do not makemanagement accounts available to third parties.
Even if no one else will say it, the number verges on a crisis. With such
poor credit ratings vast numbers of businesses will be unable to access funding,
arrange trade credit insurance or satisfy the inspection of potential business
As the companies involved mostly range up to the audit threshold of £5.6m in
size, we are talking about the engine room of the UK economy being badly
affected by what are procedural matters regardless of whether current trading
conditions are also causing damage.
What should be done? One way around this is for the companies with low
ratings to simply bite the bullet and start making management accounts
available. This will be an extra burden, but the burdens are not insurmountable.
Perhaps the biggest obstacle is not necessarily putting the accounts together
but the cultural issue of making information available to people who would not
otherwise see it. SMEs have always been shy about revealing their numbers. The
current Companies House demands for abbreviated accounts allows inhibitions to
It looks like companies will have to overcome their shyness. There was a time
when it could be argued that management accounts might not be so useful anyway.
But that argument is beginning to look weak in the face of a mounting crisis.
Besides the choices are stark. Keep your numbers under wraps or survive. Not
much choice in that.
Does Darwin's theory apply to taxation? Colin ponders...
"The whole idea of HMRC officials supplying confidential information about individuals to the media on a non-attributable basis is, or should be, a matter of serious concern," say Supreme Court judges
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season