The Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008
| Jurisdiction | UK Non-devolved |
| Citation | SI 2008/489 |
| Year | 2008 |
2008 No. 489
Companies
The Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008
Made 23th February 2008
Laid before Parliament 27th February 2008
Coming into force 6th April 2008
The Secretary of State is a Minister designated1for the purposes of section 2(2) of the European Communities Act 19722in relation to auditors and the audit of accounts.
The Secretary of State makes the following Regulations in exercise of the powers conferred by section 2(2)(a) of the European Communities Act 1972 and sections 494, 538 and 1292(1)(a) of the Companies Act 20063.
PART 1
INTRODUCTORY
Citation and commencement
1. These Regulations may be cited as the Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008 and come into force on 6th April 2008.
Application and revocation
2.—(1) Regulations 3 to 7 do not apply to the accounts of a company for any financial year beginning before 6th April 2008.
(2) The Companies (Disclosure of Auditor Remuneration) Regulations 20054continue to apply to the accounts of a company for any financial year beginning before 6th April 2008.
(3) Subject to paragraph (2), the Companies (Disclosure of Auditor Remuneration) Regulations 2005 are revoked.
Interpretation
3.—(1) In these Regulations—
“the Act” means the Companies Act 2006;
“associated pension scheme” means, in relation to a company, a scheme for the provision of benefits for or in respect of directors or employees (or former directors or employees) of the company or any subsidiary of the company where—
(a) the benefits consist of or include any pension, lump sum, gratuity or other like benefit given or to be given on retirement or on death or in anticipation of retirement or, in connection with past service, after retirement or death; and
(b) either—
(i) a majority of the trustees are appointed by, or by a person acting on behalf of, the company or a subsidiary of the company; or
(ii) the company, or a subsidiary of the company, exercises a dominant influence over the appointment of the auditor (if any) of the scheme;
“parent” means a parent undertaking (as defined in section 1162 of the Act) which is a body corporate, and “parent company” is a parent which is a company;
“principal terms” has the meaning in section 536(4) of the Act;
“remuneration” includes payments in respect of expenses and benefits in kind;
“subsidiary” means a subsidiary undertaking (as defined in section 1162 of the Act) which is a body corporate, and “subsidiary company” is a subsidiary which is a company.
(2) For the purposes of these Regulations—
(a)
(a) a company is small in relation to a financial year if the small companies regime as defined in section 381 of the Act applies to it for that year;
(b)
(b) a company is medium-sized in relation to a financial year if—
(i) it qualifies as medium-sized in relation to that year under section 465 of the Act; and
(ii) it is not excluded from being medium-sized under section 467(1) of the Act;
(c)
(c) references to an associate of a company are references to—
(i) any subsidiary of that company, other than a subsidiary in respect of which severe long-term restrictions substantially hinder the exercise of the rights of the company over the assets or management of that subsidiary; and
(ii) any scheme which is an associated pension scheme in relation to that company; and
(d)
(d) a person is an associate, or a distant associate, of a company’s auditor if that person is specified as such by Schedule 1 to these Regulations.
PART 2
DISCLOSURE OF REMUNERATION
Disclosure of remuneration: small and medium-sized companies
4.—(1) A note to the annual accounts of a small or medium-sized company must disclose the amount of any remuneration receivable by the company’s auditor for the auditing of those accounts.
(2) Where the remuneration includes benefits in kind, the nature and estimated money-value of those benefits must also be disclosed in a note.
(3) Where more than one person has been appointed as a company’s auditor in respect of the period to which the accounts relate, separate disclosure is required in respect of the remuneration of each such person.
(4) For the purposes of section 1224 of the Act, the functions of the Secretary of State under Part 42 of the Act include (without prejudice to the generality of that section) consideration of the total remuneration receivable by the auditor of a medium-sized company for the supply by the auditor to the company of each of the following types of service where that remuneration is not disclosed in a note to the company’s annual accounts—
(a)
(a) assurance services other than the auditing of the company’s accounts;
(b)
(b) tax advisory services;
(c)
(c) other services.
Disclosure of remuneration: other companies
5.—(1) A note to the annual accounts of a company which is not a small or medium-sized company must disclose the amount of—
(a)
(a) any remuneration receivable by the company’s auditor for the auditing of those accounts; and
(b)
(b) subject to paragraph (6) and regulation 6(2), any remuneration receivable in respect of the period to which the accounts relate by—
(i) the company’s auditor; or
(ii) any person who was, at any time during the period to which the accounts relate, an associate of the company’s auditor,
for the supply of other services to the company or any associate of the company.
(2) Where the remuneration includes benefits in kind, the nature and estimated money-value of those benefits must also be disclosed in a note.
(3) Separate disclosure is required in respect of the auditing of the accounts in question and of each type of service specified in Schedule 2, but not in respect of each service falling within a type of service.
(4) Separate disclosure is required in respect of services supplied to the company and its subsidiaries on the one hand and to associated pension schemes on the other.
(5) Where more than one person has been appointed as a company’s auditor in respect of the period to which the accounts relate, separate disclosure is required in respect of the remuneration of each such person and his associates.
(6) Disclosure is not required of remuneration receivable for the supply of services falling within paragraph 10 of Schedule 2 supplied by a distant associate of the company’s auditor where the total remuneration receivable for all of those services supplied by that associate does not exceed either—
(a)
(a) £10,000, or
(b)
(b) 1% of the total audit remuneration received by the company’s auditor in the most recent financial year of the auditor which ended no later than the end of the financial year of the company to which the accounts relate.
(7) In paragraph (6)(b)—
(a)
(a) “financial year of the auditor” means—
(i) the period of not more than 18 months in respect of which the auditor’s profit and loss account is required to be made up (whether by law or by or in accordance with the auditor’s constitution (if any)), or
(ii) failing any such requirement, the period of 12 months beginning with 1st April;
(b)
(b) “total audit remuneration received” means the total remuneration received for the auditing pursuant to legislation (including that of countries and territories outside the United Kingdom) of any accounts of any person.
Group Accounts
6.—(1) Group accounts must comply with regulation 5(1)(b) as if the undertakings included in the consolidation were a single company except where the group—
(a)
(a) qualifies as small or medium-sized under section 383 or 466 of the Act; and
(b)
(b) is not an ineligible group under section 384(2) or 467(2) of the Act.
(2) A note to the individual accounts of—
(a)
(a) a parent...
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