New code for internal auditors published
The Chartered Institute of Internal Auditors (CIIA) has published a new industry code designed to bolster the power of internal auditors and give them greater credence as a force to stamp out poor governance and misconduct. Internal auditors are hired by companies to check for compliance with regulations. The new code, which CIIA members voluntarily sign up to, says internal auditors should have unrestricted access to any part of a company and be able to attend and observe executive committee meetings. A direct line to the company CEO should also be established along with one to the company’s external audit committee. Internal auditors should share information with external auditors and every company should have a chief internal auditor, even when internal auditing is outsourced as in the case of Carillion, the code said. A code for internal auditors at financial services companies created several years ago led to vastly improved attendance of executive committee meetings by chief audit executives and a near doubling of the number of financial firms carrying out audit work on risks from poor culture. The CIIA hopes the new, separate code for companies in other sectors will replicate these achievements. The new code was written by a committee of officials from leading UK companies and the Financial Reporting Council.
Business beware HMRC’s latest focus
Andrew Sackey, partner and head of tax fraud investigation at Pinsent Masons, explains how HMRC’s investigations into non-compliance have progress since 2010 when the UK’s tax administration undertook a Spending Review, which boosted funding for criminal investigators. Periodic improvements in enforcement work since have seen revenue from prosecutions rise sharply and the scope of targets broaden. In 2020, there are already more than twice as many corporates and wealthy individuals under criminal investigation as there were ongoing criminal prosecutions of any type in 2010, says Sackey, adding that with HMRC’s Offshore, Corporate and Wealthy compliance division (OCW) now prosecuting corporates for failing to prevent tax evasion by employees or agents, businesses “would be well advised to ensure that their tax governance and compliance measures cover the unique risks posed by the new corporate compliance landscape.”
Source: The Scotsman (10/01/2020)
HMRC set to make £70m from late tax returns
Analysis suggests that HMRC is set to make at least £70m from fines related to late tax returns this year. Last year, 93% of tax returns were completed on time, while the number of people missing the deadline has hovered around the 700,000 mark in recent years.
Source: Daily Express (15/01/2020)
Small businesses wary of open banking
A survey by the Federation of Small Businesses has found that two-thirds of smaller firms would not consider sharing banking data with other financial service providers, with 40% thinking it is unsafe and 37% “unsure of the benefits” it could bring. The FSB said although such reticence is understandable, it was holding up progress in open banking and depriving those firms of the benefit of having invoices, cash flow, payroll, utilities and tax data in the same place. Elsewhere, Paul Galligan, the chief executive of bills switching service Bionic and the former boss of Comparethemarket.com, has called on the Government to allow energy, insurance and telecoms firms to share customer information so small firms can significantly reduce their bills. Galligan said an open banking-style system across the sectors would “help SMEs cut the red tape and fight the faff”. Research by Bionic showed SMEs are overpaying by almost £9bn a year on overheads and unnecessary administration.
Source: City AM (13/01/2020) The I (13/01/2020) Daily Express (13/01/2020) Daily Mail (13/01/2020) The Press and Journal (13/01/2020) Yorkshire Post (13/01/2020)
New company formations hit record levels in 2019
The Centre for Entrepreneurs will this week release data gleaned from Companies House showing a record 681,704 new businesses started in 2019, up 2.8% on the previous year. London was the No 1 place for starting a business, while Leicester, Glasgow and Bristol all saw sharp increases in the number of companies formed. The number of new tech start-ups was 43,765 while 14,259 takeaway food shops and mobile food stands were established.
Source: The Sunday Times (12/01/2020)
SMEs owed £50bn in late payments
New research from digital banking platform Tide revealed that UK SMEs are chasing an estimated £50bn in late payments with the average small business chasing five outstanding invoices at once, wasting an hour and a half every day. London-based businesses are the hardest hit with an average of seven invoices outstanding. Oliver Prill, Tide’s chief executive, said: “It has been known for a while now that late payments are crippling SMEs, with the government having tried a number of times to address the issue. It is however shocking to see exactly how much time SMEs, and particularly the self-employed are wasting by having to chase clients to pay promptly. Cash flow is crucial for SMEs, and just a few late payments can tip them into danger of becoming insolvent.”
Source: City AM (09/10/2020)
Alt-Fi – a vital source of cash for start-ups
Peter Evans examines the evolution of crowdfunding in the Sunday Times, suggesting a string of business failures have hardened attitudes to platforms such as Crowdcube and Seedrs, but the successes should not be forgotten. Andrew Whelan, chief executive of GLI Finance, says his concern is that should the UK be forced into a recession the alternative finance industry will suffer from more bankruptcies and defaults. However, a recession could also create more demand as banks tighten up lending, he adds.
UK economy contracted in November
Figures from the Office for National Statistics (ONS) show that the UK economy shrank 0.3% in November on the previous month, less than the 0% growth forecast by economists, while in the three months to November GDP grew by just 0.9% on the same period the year before – its weakest pace of annual growth since the spring of 2012. The ONS figures show that November’s manufacturing output was down 1.7% while services were also down 0.3%. However, construction grew by 1.9% compared with October. The UK’s trade balance hit a record high surplus of £4bn in November and the three months to November saw the surplus stand at £1.1bn – the second consecutive quarter in the black. The next two weeks will see the release of key survey data which will be crucial to Bank of England policymakers as they consider whether to cut rates.
Source: The Daily Telegraph (13/01/2020) The Daily Telegraph (13/01/2020) Financial Times (13/01/2020) Financial Times (13/01/2020) The Times (14/01/2020) City AM (13/01/2020) The Guardian (13/01/2020) Daily Mirror (14/01/2020)
Business lobby stunned after meetings scrapped
Andrea Leadsom, the business secretary, is to stop her weekly meetings with the UK’s five largest business groups; the CBI, the British Chambers of Commerce, the Institute of Directors, Make UK and the Federation of Small Businesses, and instead hold monthly meetings with a wider audience of business representatives, including the Creative Industries Federation, Tech UK and the British Retail Consortium. A government source said the move “levels the playing field” and has nothing to do with the stance of any of the groups on Brexit.
Source: The Times (11/01/2020)