The government has today (20 July 2015) announced its intention to remake and enhance existing rules giving US and Japanese companies moving to the UK up to 4 years to adopt British accounting principles, for their group accounts. The measures will reduce the cost of settling in the UK for eligible companies and will allow Britain to become an even more attractive base for international businesses.
The measures were originally introduced on a temporary basis in 2012 and allowed companies listed on the US or Japanese stock exchange 3 years to transition accounting practices when moving to Britain. Under the new rules the transition period has been increased to 4 years to provide further flexibility.
Business Minister Baroness Neville-Rolfe said:
These rules make it simpler and more cost effective for companies to bring business and jobs to the UK, without undermining the value we place on consistency and transparency in company accounts.
Before the rules were first introduced in 2012, companies that chose to relocate their headquarters to the UK were required to switch accounting principles in the first 18 months. This led to substantial costs for large and complex companies, in particular for parent companies that are responsible for the accounts of a number of subsidiaries.
The government is today publishing a review of the 2012 rules that evaluates the effectiveness of the measures and concludes that a transition period should be permanently offered to companies listed on US or Japanese stock exchanges. The new rules will reduce the burden on businesses looking to relocate to the UK while maintaining the integrity of the UK’s accounting regime. In introducing changes the government’s priority is always to maintain the integrity of, and confidence in, the UK’s accounting and financial reporting framework.