Brokers with poorly-timed year ends may well return from their summer holidays to a fine...
Brokers with poorly-timed year ends may well return from their summer holidays to a £250 fine and extra financial penalties which could exceed £6,000 for some firms as well as a substantially increased bill from their accountants, warned Gary Dixon, managing director of Compliance.co.uk.
"For brokers with financial year ends of 30 June 2005 and later, insurance brokers have just 30 working days to prepare and submit the FSA's new retail mediation activities return," said Dixon. "This also applies to firms with a 31 December 2004 year end for their half year return.
"This return requires significantly enhanced financial information and reporting. Many smaller and medium sized brokers aren't in the habit of producing their own management accounts during the course of the year and the collation of the information within the timeframe – the end of August for many - will be causing an enormous headache for the average broker.
Dixon claims that while most brokers will rely on their accountants to do the work, he has reservations whether the accountancy profession is aware of the extra work required, or the shorter timescale.
"In addition, many small accountants will still see their small broker clients as small businesses and simply assume that they have an audit exemption for their annual accounts which they do not," said Dixon.
