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9am lowdown: Toshiba boss quits after accounting scandal

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21st Jul 2015
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Here's your Tuesday news

Toshiba boss quits after accounting scandal

Toshiba’s president and Chief Executive, Hisao Tanaka is stepping down after an independent investigation found that he had been aware of the company inflating their profits over a number of years. The report released on Monday said Toshiba had overstated its operating profit by 151.8 billion yen (783 million pounds) over several years, roughly triple Toshiba's initial estimate.

“Within Toshiba, there was a corporate culture in which one could not go against the wishes of superiors,” the report said.

“Therefore, when top management presented ‘challenges’, division presidents, line managers and employees below them continually carried out inappropriate accounting practices to meet targets in line with the wishes of their superiors.”

Hisao Tanaka, president and chief executive, will be replaced by Toshiba’s chairman, Masashi Muromachi, on Wednesday. Tanaka’s predecessor, Norio Sasaki, who is vice chairman, will also quit.

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HMRC publishes IR35 consultation

HMRC has published a new consultation into IR35, strengthening the IR35 rules against “disguised employment.”  HM Revenue & Customs said in a discussion paper that it expected to lose £430m in tax and national insurance receipts this year from non-compliance with the IR35 rules.

Companies that use freelancers would be required to police their tax affairs, under proposals to reform a system that is failing to halt the avoidance of hundreds of millions of pounds a year.

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HMRC 2.7bn tax avoidance crackdown

HMRC has secured an extra £2.7bn for the government by clamping down on tax avoidance and evasion in the last year, its annual accounts have shown.

When the extra is accounted for, the tax office clawed back a total to £26.6bn in 2014-15, up from £23.9bn the previous year. Tax evasion as, opposed to avoidance, is a criminal activity and criminal sanctions are available against those who facilitate or encourage tax evasion.

The Chancellor pledged in his March Budget the government will clamp down harder on tax avoidance and plans to introduce new measures to collect an extra £3.1bn from those found to have avoided or evaded tax payments.

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By Scriptic
21st Jul 2015 14:07

Toshiba Independent Investigation

Do we take it therefore that Toshiba's "independent investigation" was not the annual audit and if that didn't pick up these losses, why not?

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Replying to adam.arca:
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By abaco
22nd Jul 2015 14:06

Toshiba

It appears that inflating profits at Toshiba's lap top computer division had been going on for seven years, so the auditors "failed" to spot it.

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