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Accounting standards

23 May 2009

The Chancellor's announcement in the Budget to intensify tax-reporting rules for corporations has been met with opposition in the finance industry.

The Chancellor's announcement in the Budget to intensify tax-reporting rules for corporations has been met with opposition in the finance industry. Under the new rules, senior account officers of large corporations are responsible for ensuring adequate accounting systems to prepare tax returns. The move has been compared to the Sarbanes-Oxley Act introduced in the US after scandals such as Enron and is seen by some as an encroachment on free trade. Tax head at Berwin Leighton Paisner, Michael Wistow, has described the plans as an "extraordinary retrograde step, which shows little sign of earning the lessons of Sarbanes-Oxley". The government hopes the proposal will raise £140m over four years by forcing companies with poor systems to sharpen their tax calculations. The government believes it could affect between 1,600 and 2,000 businesses.

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