MPs have accused the “big four” accountancy firms of “feasting on what was soon to become a carcass” as it emerged they banked £72m for work linked to collapsed government contractor Carillion in the years leading up to its financial failure.
How much of that is mandatory under the law? What would be a likely audit fee? That is, how much of that £70 large odd is because the MPs insisted?
They were utterly silent when the lawyers ate up all of Jimmy Saville’s estate. Without coming to any conclusion either. They just stopped work when the cash ran low.
Scum, all of them.
Besides,
Responses to questions from the committees revealed that the quartet of firms issued bills worth £71.6m over 10 years from 2008 for work for Carillion, its pension scheme and its government contracts.
£71.6 million over ten years? Get the f**k out of here. Carillion was a £5 billion company. About one thousandth of that per year in legal fees? For £20,000 employees? Just f**k off.
How much employers NI did it pay in the same period?
“How much employers NI did it pay in the same period?“
None. It may have handed over the cheque but it was paid by the employees
Employers ni is not paid by the employees. Employees ni is, but not employers ni clue is in the name
Both types of NI are a cost of labour and must ultimately fall (almost) entirely upon the employee.
? Employers NI is almost entirely paid by employees?
Makes me wonder why firms are so keen to avoid taking on employees and use contractors instead. Makes me wonder why hybrid company/LLP structures have been used for senior management levels by a number of clients I have advised.
In the real world, where I advise real companies on their real issues, they see their real employers’ NI as a real cost to their real selves and if they can save it they keep all or most of it, they don’t boost reward for work. Really. Whatever the theoretical theories may say happens in theory.
And the story is utter bollocks of course. Has any other supplier of goods or services to Carillion been accused of ‘feasting’ because they supplied those goods or services?
Course not.
Big 4 = convenient punch bag/scapegoat for just about anything not least because they can’t be bothered to answer back properly.
If they did they would say something along the lines of
“Because we aren’t fucking idiots, we apply the law on tax to our clients as it is, not as some fuckwits think it ought to be. If people think tax law is bad they should blame the people who created it and if you want a fucking great big clue, it wasn’t us”
I wonder how much the Government ‘feasted’ on Carillion in those ten years. I suspect a tad more than £72m, and with less given in return.
And if taxation was radically simplified the accountancy profession would throw its collective hat in the air & dance round the bonfire of regulations garlanded in flowers, Andrew C? The Treasury has its tax experts drafting tax laws & the Infernal Revenue its, implementing them. All parties on generous remunerations of wonga.
A cynic might say the complexity of tax regulation is the point.
I bloody well would 🙂
We don’t get paid for dealing with the complicated bits. What happens is that we tell the client there’s a problem, they associate the problem with us (consciously or not) and complain mightily about (and refuse to pay for) the time we spend fixing it for them, and we write off most of the time and apologise to the wife for being late home every night.
Make the rules simpler and clients get from A to B just as well, they pay us the same amount for the advice, but I get to go home at the time I’m supposed to.
KPMG (auditor) was £20m
http://www.dailymail.co.uk/news/article-5383909/Big-Four-accountancy-firms-feasted-Carillions-carcass.html
“PwC has banked £21.1million, KMPG £20.2million, EY £18.3million and Deloitte £12million”
I know that two of the Big 4 were sounded out about being receivers, took one look at the books and said “No way, there’s not enough money left to pay our fees”. So PwC are now working for the government, doing fundamentally the same job but being paid by the government rather than creditors
What the hell has happened to Frank Field? He used to be fairly sound. But lately he just seems deranged.
@pellinor
Too right.
The myth is that tax advice is some sort of magic alchemy which dances through loopholes to save squillions in tax which would otherwise save babies lives.
The reality is I spend most of my time trying to stop clients from tripping over pedantic rules and complying with endless red tape for which I receive grudging thanks tempered by them wondering why I’m not using my evil magic skills to make them rich.
Not so fast. Accounting is required, even if tax laws are simple. You still have to identify and quantify costs to deduct from revenue to determine profit.
Getting rid of tax on profit is the only way to “simplify.”
@Andrew C
“it wasn’t us”
If very often was, actuallly. And we can say that without having Murphy-esque butthurt re. the accountancy profession, and without rejecting this scandal as the bollocks that it was, and without failing to hold the pollies principally accountable for the shitshow they contracted the big four to help them script.
The Big Four get very fat indeed ‘assisting’ their clients in navigating the law. They have zero interest in a system that doesn’t need them.
“The reality is I spend most of my time trying to stop clients from tripping over pedantic rules and complying with endless red tape for which I receive grudging thanks tempered by them wondering why I’m not using my evil magic skills to make them rich.”
Amen to that.
You eat what you kill seems somewhat apposite in the context of Carillion and the Big 4.
Largely because of greater flexibility and (much) less red tape. Contractors typically get paid significantly more than an equivalent salaried employee, more than enough to negate any saving in employer’s NI.
A publicly traded company on the LSE.
All sorts of jurisdictions with all sorts of mandates. My guess would be that most of the amount in question was required by law.
@Philip Scott Thomas, February 13, 2018 at 11:59 am
Frank Field lost his soundness during BHS closure. Perhaps trying to conquer his conflicting view on Gov’t, BoE base rate, Pensions, Monaco was too much and his brain exploded.
KPMG’s audit fees will have been required by law. The rest probably arose largely from advising Carillion on the preparation of bids for PFI contracts. If PFI bids weren’t so onerous to prepare because of the pointless detail required by government in the first round of bidding, the amounts would have been a lot lower.