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SFA Return Problems

SFA Return Problems

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RMARs have to be filed with FSA within only 6 weeks of a period end (twice a year!). Where the client is a small mortgage adviser this makes the task almost impossible. Also, if the company is a new limited company, one cannot include unaudited retained profits for capital adequacy purposes. If profits are being paid out as dividends then the retained profits are very low. Directors' Loans are not included in capital either. So one ends up with capital 'inadequacy' (less than £5,000) and threats from FSA to close the firm down. If firm is not a company, sole trader/partnership capital includes money left in firm (unaudited profits less drawings)(i.e. just like a directors loan). Thus no level playing field. I read somewhere that small companies trading as mortgage advisers need not have their accounts audited. Is this correct ? This will cause even more problems with reporting verified profits.

Comments about other difficulties with the RMAR most welcome.
Ian Dalzell

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