TheBriefing
HORIZON
Fujitsu rules itself out of UK public contract bids
Fujitsu has told the government it will not bid for public contracts while the inquiry into the Post Office scandal continues.
Minister Alex Burghart said the technology firm had written to the Cabinet Office to inform it of the decision. Fujitsu developed the faulty Horizon software used by the Post Office that was at the centre of the one the UK’s biggest miscarriages of justice. More than 900 sub-postmasters and postmistresses were prosecuted after Horizon incorrectly made it look like money was missing from their branches.
Speaking in the House of Commons, Burghart said: “The Cabinet Office received a letter from Fujitsu voluntarily undertaking not to bid for government contracts while the inquiry is ongoing, unless of course the government ask them to.”
WHAT'S THE IMPACT OF...
The Red Sea shipping crisis?
“We don’t really see another solution right now than to sail south of the Cape of Good Hope. We have ships that are being shot at.”
Vincent Clerc, chief executive, MaerskBank
“With inflation and interest rates still relatively high, the Red Sea attacks could prolong the cost-of-living crisis.”
Megan Simpson, tax associate, RSM UK
“The longer this persists, the higher the adverse pressure on inflation, interest rates and growth compared to what would have prevailed otherwise.”
Mohamed El-Erian, president, Queen’s College, Cambridge University
TAX
HMRC penalties bring in an extra £851m to public purse
here has been a 25% increase in the HMRC’s income raised from tax penalties, hitting a record £851m, according to analysis by UHY Hacker Young.
The figure is up from £681m in 2021/22, as HMRC has ramped up compliance activity after the pandemic, when investigations stalled.
This was the highest value on record for tax penalties and has been consistently rising over the last three years, exacerbated by the growing size of the tax debt, estimated at £37bn. However, half of the penalties are withdrawn on appeal.
The firm found that the majority of the fines affected businesses that were already experiencing issues with their finances and struggling to pay on time. Many more were being fined due to errors in paperwork.
News in numbers
The rise in bailiff referrals over council tax debts in 2022/23
Source: BBC News
The expected fall in energy prices from April 2024
Source: Cornwall Insight
Average Asia-Europe shipping costs in January, up from £1,186 in December 2023
Source: Reuters
The rise in tax rebate scams in 2023, up to 79,000
Source: HMRC
UK government borrowing in December 2023, lower than expected
Source: ONS
The proportion of taxpayers who say they struggle with their tax returns
Source: Standard Life
AUDIT
Firms fined record £33.2m for audit failures last year
Poor performance by audit firms led to the regulator issuing record fines of £33.2m for audit misconduct in 2022/23, up slightly from £32.8m the previous year.
Once legal costs were factored in, auditors had to pay out £40.4m in 2023 to the Financial Reporting Council (FRC). Back in 2020-21, fines totalled just £19m. The FRC has been enforcing higher standards for audit work following a spate of corporate collapses, where auditors have been accused of ignoring key financial warnings.
The worst performing firm was KPMG, which was involved in five investigations resulting in FRC sanctions for the firm and involved partners, followed by PwC with four audits which were subject to various probes and fines by the regulator.
