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9am Lowdown: SFO fines Tesco over scandal

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28th Mar 2017
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Good morning and welcome to the 9am Lowdown which today features Tesco, news of an accounting firm opening an on-site pub and calls for an investigation into MTD compliance costs.

 

SFO fines Tesco over accounting scandal

The Serious Fraud Office (SFO) has hit Tesco with a £129m fine over its accounting scandal.

The retail giant said its subsidiary Tesco Stores reached a deferred prosecution agreement with the financial watchdog following a two-year investigation into false accounting. However, the supermarket has escaped prosecution so long as it fulfils certain requirements, including paying the penalty.

The SFO found that Tesco had committed market abuse when it inflated profits by £263m, later revised up to £326, in a trading update in August 2014.

The Financial Conduct Authority (FCA) has also forced the supermarket to compensate investors who had bought shares and bonds on or after 29 August and had held the securities when the statement was later corrected on 22 September.

According to the Huffington Post, Tesco said the compensation bill for investors is expected to reach £85m and will be overseen by KPMG.

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Norfolk accounting firm opens its own pub

Farnell Clarke Accountants and Business Advisors has completed its new office refurbishment, including the unusual addition of an on-site pub: The Tax & Pounds.

The Norwich-based firm ran a competition on social media to name the new pub with the winning name, The Tax & Pounds, being suggested by Laura Johnson.

The revamped Farnell Clarke offices were designed by Norwich firm Bluespace to provide a flexible, inspirational and practical working space. There are themed meeting rooms including The Beach Hut, The Quayside and The Library. The design includes sound-proofed seating areas and private work pods to encourage agile working and team collaboration.

Frankie Kay, client services director at Farnell Clarke, said: “We’ve invested significantly in the transformation of our offices for several reasons. Firstly, the design and layout is different from a typical accountancy practice to allow us to work more efficiently; with minimal clutter. But it is also packed full of personality with extra design touches such as our on-site pub which is open for staff drinks every Friday from 4pm.

“To thrive, we must attract the best calibre of staff and retain our most talented, skilled team members, and we hope this new environment is somewhere people will enjoy working. It’s important to retain professionalism too, so the space is also very client friendly, with soundproof pods and meeting rooms so our clients can catch up on emails in a quiet space or enjoy a change of scenery and work from our office if they want to,” said Kay.

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Tyrie calls for MTD cost probe

Andrew Tyrie, the chairman of the Treasury Select Committee, has called for a comprehensive pilot scheme to ensure that businesses are not burdened by Making Tax Digital.

Tyrie has called for further analysis of the projected costs to small businesses as the FSB and Jane Ellison, financial secretary to the Treasury, presented him with different pictures on the compliance cost.

The Revenue estimated that on average, businesses will incur £280 in the year of transition, while the FSB said the cost will be £2,770 per business in the first year.

Tyrie has called for a widespread pilot of MTD to estimate to true costs to businesses before mandatory rollout in 2018.

“There are huge differences between the FSB and HMRC about the administrative burden of Making Tax Digital. This is the heart of the matter. The FSB think that with MTD, businesses might spend three times as much time on their tax obligations as they currently do. This could cost them around £3,000 a year in time, salaries and accountants’ fees. HMRC think that they will spend less time, leading to a small net saving. A comprehensive pilot should shed some light on which assumption is closer to reality,” he said.

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