Rates cut
29 Jun 09
The Financial Reporting Council has announced that its levy rates will not be quite as high as outlined in its consultation paper published in December
Its final rates for its preparers’ levy and insurance and pension levies for 2009/10, further to its December 2008.
The rates for the preparers and pension levies are a little lower than those proposed by the FRC in December. The rate for the insurance levy remains at its 2008/09 level.
The FRC’s core operating costs for its activities in relation to accounting, auditing and corporate governance for 2009/10, are £12.5m, £0.2m less than proposed in the December consultation paper. The FRC has, therefore, been able to set lower rates.
The average levy charged in 2009/10 to UK companies which paid the levy in 2008/09 will be 7 per cent higher than in 2008/09 (compared to an increase of 9 per cent proposed in the December consultation paper), though there is a wide range of increases and decreases for individual preparers.
The increases are largely attributable to the reduction in the Government contribution to the FRC’s costs in 2009/10 compared to previous years.
The levy rates are applied to publicly-traded companies (the largest group contributing to the levy) on the basis of their market capitalisation, which for many companies has sharply reduced, resulting in a significant increase in the rates in order to raise the required amount.
Following consultation in 2008, the FRC has extended the preparers’ levy this year to include large private entities with a turnover of more than £1bn, including the private subsidiaries of listed companies, and public sector organisations. These entities are already within the scope of, or have regard to, most of the FRC’s regulatory responsibilities but have not previously contributed to its costs.
Meanwhile, the FRC has also published its annual report for 2008/09. The FRC’s Annual Open Meeting will be held at 2.30pm on Thursday 16 July 2009 in the Council Chamber of the Institution of Engineering and Technology (IET), 2 Savoy Place, London WC2R 0BL.
Further information can be found on the FRC website.