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Authorities ramp up enforcement of foreign companies’ non-compliance with national anti-bribery laws

In recent years, multinationals have increased their efforts to mitigate the risk of commercial bribery in particularly given the wide-reaching applicability of the UK Bribery Act.

The prosecution of commercial bribery has once again become a key issue following the amendment of the Anti unfair Competition Act (AUCA). With the restructuring of the act’s anti-bribery provision, which dovetailed with the national anti corruption movement, the government appears to be cracking down on unlawful commercial activities by both domestic and foreign companies.

Foreign companies’ compliance with anti-bribery laws is set to become as big a focus area as domestic companies compliance with foreign laws.

What constitutes commercial bribery under AUCA?

The AUCA defines ‘commercial bribery’ as “using money, things of value, or other means to bribe with the purpose of obtaining transactional opportunity or competitive advantage”. Possible recipients of unlawful commercial bribery under the AUCA are limited to:

  • the employees of a counterparty to a transaction;
  • organisations or individuals entrusted by a counterparty to a transaction to handle relevant matters; and
  • organisations or individuals that use their power to influence a transaction.

In this sense, the AUCA not only includes counterparties as potential recipients for commercial bribery purposes, it also prohibits the provision of discounts to counterparties or the payment of commission to intermediates unless the discount or commission is offered and accepted in accordance with the agreement and in an honest manner. In addition, where commercial bribery by an employee is demonstrated, the AUCA requires the employer to prove its irrelevance; otherwise, the employer is liable.

If you have any concerns or require some assistant contact our expert team on 08702281999 or send us an email info@stanleycarter.co.uk

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Brexit challenges and competitive advantage

As organisations seek to harness information to maintain and grow competitive advantage, the importance of developing a clear data strategy is becoming increasingly evident among enterprises. 

As the clock ticks on towards a no-deal Brexit on October 31st, the effects are already beginning on the UK economy.

The pound has hit a two-year low, and the economy contracted by 0.2% in the second quarter of this year. This is bad news for home based growth and a clear motivation for companies to look elsewhere for new opportunities, fuelling their move into new markets.

Not every business can follow Dyson’s business structure and set up a new HQ on another continent, but fast growth businesses looking to maintain their trajectory towards unicorn status are certainly eyeing the EU.

It’s clear that our nearest trading partners still exert a significant pull on UK enterprises consider Starling Bank’s recent £75m funding round to power their European expansion, or furniture retailer Made.com plans to move into four additional EU countries in 2019, bringing its total footprint to 13 across the continent.

Brexit will bring with it all kinds of challenges when looking to expand across the channel. One often overlooked challenge is around maintaining basic business communications.

Without a suitable communications plan in place for a post-Brexit transition, businesses may find it increasingly difficult to communicate with overseas offices, colleagues and contacts due to complex and varied regulatory requirements.

Businesses must consider that each new market must navigate the varying legal regimes and requirements, and make costly infrastructural investments with high potential costs (fines, operating restrictions, even criminal culpability for business owners) for getting it wrong. As a final anti inducement, many European regulators still accept only hard-copy paper-based applications in their native language to be filled out in triplicate.

If you need any assistance or require further information please contact us on 0870 228 1999

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Corporate Compliance

Don’t be complacent with your corporate compliance

As a normal citizen, we deal with compliance every day whether or not we are aware of it. Every time we obey traffic lights and stop our car when the light turns red, we are being compliant with local traffic laws. When we stand clear of the train doors after a train announcement, we are compliant with safety regulations.

Compliance is everywhere around us and the workplace is no different. But how does this everyday action translate to the business world? What does compliance mean for a company and how can businesses ensure they are maintaining their compliance?

What is the purpose of corporate compliance?

The purpose of corporate compliance goes beyond following the letter of the law. A recent study cited that almost two-thirds of organisations believe that their compliance efforts helped reduce the legal cost and resolution time of regulatory issues and fines.

Corporate compliance is about prevention as much as it is about obeying the law. The right compliance strategy can keep your company out of hot water, protect your employee data, and keep your company out of hot water.

To better understand where corporate compliance comes into play, we have outlined a common example of corporate compliance failure.

Does that sound like something straight out of a Mission Impossible film? It’s not; It’s actually happening to Goldman Sachs. The company is accused of promoting a company culture that enabled two of their bankers to steal billions from the Malaysian government. The Goldman Sachs x 1MDB scandal is just the latest example of a financial compliance failure.

Corporate compliance is about control and consideration. Is corporate compliance the most interesting part of your business model? Of course not; but it is a vital component to the health of your business. Before you decide to innovate to try and get ahead, make sure you are staying compliant in the process.

For all your business and corporate needs give us a call on 0870 228 1999

or send us an email info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

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Auditing in the UK is undergoing unprecedented scrutiny.

The magnifying scope is focusing on all aspects of the sector

The multitude of reviews, some of which are ongoing, are being conducted by regulators, politicians and government departments, each separately looking at audit’s effectiveness, competition across the sector, and its future in general.

High profile failures of big high street names have captured the headlines and raised questions of ‘where were the auditors?’ resulting in some having a lack of confidence in the sector’s effectiveness.

Concerns have also been raised over a conflict of interest in firms selling consultancy services, while their auditing arms are carrying out an audit in the same company.

This has prompted suggestions that a full structural or operational split could be the answer.

Outside of the reviews and reports, the general public have identified what they see as one answer to improving corporate reporting; a good and clean audits.

Despite audit being under growing and intense scrutiny, the public still regard it as part of the solution to what is perceived as unacceptable corporate behaviour.

The purpose of an audit is to ensure that financial statements give a true and fair view, ensuring that material fraud is detected, and appropriate levels of professional scepticism are applied.

Everyone with an interest in financial reporting and strong corporate governance has a responsibility to work together to address the public’s legitimate concerns about audit.

It is clear that the profession must continue to focus on improving audit quality, working proactively with other stakeholders to support better understanding of the auditor’s role.

But, most importantly, all stakeholders connected to the audit process; such as regulators, professional bodies, investors, governments and the media; have a responsibility to inform the public in a fair, balanced and understandable way about audit regulations and standards. It is in the public interest that they do so.

For all your business and corporate needs give us a call on 0870 228 1999

or send us an email info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

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Corporate Governance and the pay gap

Executive pay fell last year but top bosses will still have made more money in three days than the typical worker earns in a year, new figures reveal.

UK top companies, Corporate Governance, pay gap
UK top executives pay gap

The mean pay of chief executives in FTSE 100 companies fell by a fifth from £5.4 million to £4.5 million – 120 times more than an average full-time worker, a slight drop on the ratio of 122-1 in the previous year.

The High Pay Centre think tank and the Chartered Institute of Personnel and Development (CIPD) said there had been “modest” restraint by company boards but the pay gap between the top and average workers remained wide.

All listed companies will have to publish the pay ratio between bosses and workers under new corporate governance reforms this year.

While it was encouraging to see a tiny amount of restraint on pay at the top of some FTSE 100 companies last year, there are still grossly excessive and unjustifiable gaps between the top and the rest of the workforce. Publishing pay ratios will force boards to acknowledge these gaps.

The drop in pay in the last year is welcomed but will have largely been driven by the Prime Minister’s proposed crackdown on boardroom excess.

It is crucial that the Government keeps high pay and corporate governance reform high on its agenda, but we also need business, shareholders and remuneration committees to do their part and challenge excessive pay. We need a radical rethink on how and why we reward chief executives, taking into account a much more balanced scorecard of success beyond financial outcomes and looking more broadly at areas like people management.

The current review of the UK Corporate Governance Code provides a great opportunity to broaden the remit of remuneration committees to ensure that there is much more focus on the wider workforce and employee voice when decisions on chief executive pay are being made, to improve fairness and transparency.

We are experienced on corporate governance and if you have any queries send us an email  info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

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Our view on the proposals for a revised Corporate Governance Code

Governance code, banking, UK economy
UK Coprporate Governance Code

The FRC (Financial Reporting Council) proposals are a welcome move to improve corporate governance in the UK. The proposals place a much greater focus on organisational culture and employee voice, meaning that company boards will need to invest more time and thought on strategic workforce issues than ever before. This is a significant step forward in recognising the value of the workforce and the need for its voice to be heard at board level.

The FRC rightly recognises that in order to drive sustainable culture change and build trust in business, boards must focus more on values, behaviours and a wider stakeholder voice beyond that of shareholders, with particular attention to the voice of the workforce. We support the plans to encourage companies to enhance employee voice by either appointing a director from within the workforce, a formal workforce advisory council, or a designated non-executive director with responsibility for representing and understanding the wider workforce. No single approach can suit all firms’ situations so it’s important that there is flexibility for businesses in choosing an option that is most appropriate for them.

The proposal also broadens the role of the remuneration committee to oversee pay and incentives across the wider workforce rather than just focusing on executive pay. This is an important step in encouraging businesses to be more active in capturing and acting on their people data and for boards and the remuneration committee to improve their understanding and oversight of people data. Such a move will require fundamentally changing the role and makeup of the remuneration committee to ensure it has the right levels of expertise and necessary time and support to carry out its expanded remit.

We welcome the FRC’s efforts to evolve the UK’s corporate governance system and these latest proposals reflect many of the recommendations made in various consultations to government, including those directly linked to the UK Corporate Governance Code.

If you have any question on how this proposals may affect your business send us an email on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk 

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UK Government Budget

UK Chancellor of the Exchequer Philip Hammond unveiled his Budget statement on November 22, under the new arrangement for the main annual tax changes to be announced in the autumn for the following year. Some predicted tax increases did not materialise, which will be welcomed by the wider business community.

 

Capital allowances

The temporary schemes for 100% first year allowances (FYAs) for purchases of zero emission goods vehicles, and for gas refueling equipment, which were due to end for expenditure incurred after March 31 2018, will now be extended for a further three years.

With immediate effect, there are some minor changes to the list of energy-saving technologies eligible for 100% first year allowances (FYAs). Lessors are not eligible to claim FYAs, but the use of hire purchase type facilities will allow customers to claim them.

The temporary scheme of first year tax credits (FYTCs) for environmentally beneficial capital expenditure, involving projects within a designated list of energy and water technologies, which were due to expire in April 2018, will now be extended for a further five years. FYTCs can be claimed by companies in a tax loss position, at two thirds of the corporation tax rate. The use of leasing facilities becomes a relatively less attractive option for potential lessees who could claim FYTCs while purchasing assets outright.

Vehicle taxes

Various income tax and vehicle excise duty (VED) changes are designed to promote environmental objectives. The diesel supplement for the income tax benefit in kind (BIK) charge for diesel cars not certified to the RDE2 standard will rise from 3% to 4% with effect from April 6 2018.

The first year rate of vehicle excise duty (VED) for new diesel non-RDE cars will be increased by one band from April 2018. Other VED rates will rise in line with the retail price index from next April.

Electricity provided by employers for the workplace charging of employees’ electric and hybrid cars will be exempted from BIK charges with effect from April 2018.
However, there will be no changes in motor fuel duty rates next year.

Some tax increases

There are some significant tax increases. In the taxation of capital gains by companies, indexation relief for inflation is to end in respect of changes in the retail price index after the end of this year. This will match the capital gains tax (CGT) rules for individuals, where indexation relief was removed in 2008. The ultimate impact of this change will obviously depend on future inflation rates.

A new move against cross-border corporation tax avoidance will target the use of favourable tax jurisdictions to hold intellectual property rights such as core product brands. The Chancellor proposes a new withholding-type tax at the income tax basic rate on royalty payments to associated entities based in low tax jurisdictions, by international groups trading in the UK. The change will take effect from April 2019, and a consultation paper on the details is to be issued at the beginning of next month.

Other steps against tax avoidance and evasion include:

  • a move against VAT evasion in online sales, making the marketplaces jointly liable with suppliers for unpaid VAT, from the enactment of the next Finance Bill;
  • a further strengthening of legislation in the 2016 Finance Act designed to tackle “disguised remuneration” of employees or quasi-employees for income tax purposes;

Other significant changes

For micro-businesses, the Chancellor announced that the VAT registration threshold will remain at annual turnover of £85,000 at least until April 2020. It remains under review for the longer term, and the UK threshold is low by comparison with other EU countries.

The rate of the tax credit for research and development expenditure is to be increased from 11% to 12% from January 1 2018.

Economic background

The Chancellor acknowledged that the UK’s recent economic performance has not been as good as previously expected, due to a generally stagnant trend in productivity. The latest official forecast is that the UK economy will grow by around 1.5% in each of years up to 2022, compared with earlier forecasts of 2% annual growth.

However, he still predicts a continuing gradual improvement in the budgetary position, having avoided major new tax increases or expenditure cuts in this Budget. Annual public borrowing, which rose to nearly 10% of gross domestic product (GDP) in the aftermath of the financial crash in 2008, is projected to fall steadily from 2.4% of GDP in the current financial year to 1.1% by 2022/23. Overall national debt is projected to peak at 86.5% of GDP this year (having more than doubled since 2008), then falling to 79.1% by 2022/23.

If you have any concerns about the last budget and how it will affect you or your business please send us an email on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk