More Visibility into UK Corporate Tax Liabilities is Likely

A new standard from the International Accounting Standards Board, which if adopted in the UK, could force companies to be clearer about any possible tax liabilities they could be facing. The move could prevent incidents such as when Vodafone announced to a stunned stock market in 2005 that a dispute over tax liabilities could cost the company as much as US$10 billion.

The USA based FASB's FIN 48 standard will affect all companies that file US GAAP accounts, and a variant now seems likely to be adopted within the UK as well.

Ross Wilkinson, director of corporate tax at Chiltern, Accountancy Age that the additional disclosure required under FIN 48 would have a significant effect on the way shareholders, banks and revenue authorities viewed a companyĆ's tax affairs. "An actual financial number will now be appearing in accounts," he said. "Banks and shareholders will be able to use it to assess a company's tax risks, and HM Revenue & Customs will have a window into the tax affairs of companies."

On the web: Accountancy Age

Posted to the site on 7th February 2008