Walker Crips FSCS levy doubles in £440,000 error
Incorrect tariff data resulted in levy underpayment in both 2010/2011 and 2011/2012.
Financial services group Walker Crips will retrospectively double the amount it paid to the Financial Services Compensation Scheme after a “miscalculation” resulted in incorrect levy data being submitted, in an error that will cost the company £440,000.
The company faces retrospective payments of £210,000 for the year ending March 2011, more than double the initial levy paid of a little more than £200,000. A spokesperson for the company told FTAdviser that the same amount was paid in the following year as well. However, the recalculation means it will pay a top-up of £230,000.
In a statement on the London Stock Exchange the company revealed this morning that it had misinterpreted the guidance regarding levy calculation and thus submitted “incomplete tariff data” for the years to 31 March 2011 and 2012.
The company said it will make retrospective adjustments in relation to these periods, which relate to its regulated advice subsidiary Walker Crips Stockbrokers, in its accounts for the year ending 31 March 2013.
Rodney Fitzgerald, chief executive officer of Walker Crips, said: “Like many other companies in our sector we have suffered from FSCS tariff data confusion over the last two years.
“We misinterpreted the guidance on FSCS tariffs and immediately contacted the FSA as soon as we realised the likely outcome. The outstanding fee is one that we should and will pay and it won’t affect our financial position.”
Walker Crips’ board echoed Mr Fitzgerald’s statement that the payments will not materially affect the firm’s capital position. The firm’s 2012 annual results revealed it had £1.3m of cash or equivalent liquid assets on its balance sheet at March 2012, down from £4.3m a year previously.
The company’s net assets at March 2012 were £13.8m, plus an additional £10m from the disposal of its asset management business to Liontrust.
Walker Crips said in a statement: “Due to a misinterpretation of the guidance regarding the basis of its calculation, tariff data submitted to the Financial Services Authority and used to calculate the FSCS levy for the company’s regulated subsidiary, Walker Crips Stockbrokers Ltd, for the years to 31 March 2011 and 2012, was incomplete.”