Finance: In Brief
Wednesday 11 November 1998
THE DEPARTMENT of Trade and Industry's plans to introduce a new corporate entity, the limited liability partnership, have been strongly supported by the Institute of Chartered Accountants in England and Wales. The institute has been lobbying with the large firms for a reform of the law on liability on the grounds that it is claimed that existing legislation allows auditors to be unfairly targeted by aggrieved investors when companies collapse. Although the draft law would reduce the exposure of individual partners rather than the whole firm, the organisation welcomes the move.
SMALL AND medium-sized enterprises (SMEs) face cash-flow problems as a result of tax changes to leasing finance contained in Gordon Brown's first Budget in July 1997. The Finance & Leasing Association says its figures for the year to September 1998 show asset finance business growing by just 4 per cent, compared with 11 per cent in the previous 12 months. It attributes the lower rate to a decrease in the tax allowances that can be claimed on leased assets.
CATER ALLEN Bank has responded to its research on foreign banking services for SMEs by launching a Euro-denominated bank account for such businesses. Companies will be able to open immediately an account in Ecus, which will be converted into Euros from 1 January 1999. A Euro Visa Card will also be available from that date. Cater Allen's survey of readers of "Export Trade" magazine showed that nearly half of companies expressed a need for Euro banking facilities from January 1999.
LLOYDS TSB Commercial Finance has published a free guide to invoice discounting with the aim of demystifying the jargon and providing a checklist of issues to consider and questions to ask. Ted Ettershank, managing director of Lloyds TSB CF, said that invoice discounting was a fast-growth business. However, he added that companies had to "get it right first time" - and the guide was "the ideal way" to make sure of that.
BDO, THE international accounting and consulting organisation of which Stoy Hayward is part, has strengthened its presence in Belgium through merging with Fiducaire J Van Breda & Co, one of the leading Antwerp firms.
SELF-EMPLOYED people are being warned that they face paying more than twice as much tax in January 1999 as they did the previous year as a result of the move to self-assessment and the related change to taxing them on current year's earnings. Accountants at Arthur Andersen are urging them to work out their liability urgently so that they plan their finances accordingly. Failure to do so could mean that they are unable to pay the bills and are therefore going to be subject to interest charges on top of the tax itself.
UK EXECUTIVES' pay is at a similar level to that of their counterparts in other European countries, according to the latest survey of directors' and senior managers' pay across Western Europe. The study by Monks Partnership, the remuneration specialists, says that, after taking account of tax and the cost of living, the UK director ranks eleventh out of 16 in the table, but points out that the spread covering half the countries is small. Switzerland tops the list, with a director of a pounds 50m turnover subsidiary company receiving pounds 76,600 a year, while Finland is bottom, earning pounds 29,700 after tax and cost-of-living adjustments.
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