FIN 48 coming to the UK

Posted on

That's not the most gripping headline I have ever written. But it's important. As Accountancy Age reports:

The FIN 48 standard requires all companies that file US GAAP accounts to disclose any uncertain tax positions in their financial statements and quantify the financial risk from them. Experts believe that UK regulators could adopt similar rules for British companies.

And as I said in Accountancy Age:

Richard Murphy, director of Tax Research LLP, said the standard would protect investors and ensure companies were correctly valued.

He said that GlaxoSmithKline's $3.4bn (£1.8bn) settlement with the US Internal Revenue Service, and Vodafone's tax issues, demonstrated how important it was for companies to disclose uncertain tax positions.

'Companies have been taking tax risks that shareholders don't know about, and have been incorrectly valued as a result,' Murphy said. 'There are substantial future cashflows at risk and shareholders need to know about it.'

Reducing those risks will benefit everyone. Bar those who market schemes, I guess.