Common RMAR Reporting Errors

The FCA have recently flagged common mis-reporting errors relating to Gabriel returns. We have selected a few of the perhaps more relevant ones that we know firms get stuck on. For a full list of the issues please use the following link:

https://www.the-fca.org.uk/firms/gabriel/common-misreporting-errors-rmar

Intangible assets

Firms that report an intangible assets figure box 1 RMA-A should remember to deduct this amount when calculating their total capital resources box 30 or 36 RMA-D. Intangible assets are not physical in nature. Examples include copyrights, patents, intellectual property and goodwill. As these cannot be realised instantaneously therefore, they cannot be included as part of a firm’s capital resource.

Recoverable and readily realisable debtors

Monies owed to the firm must be recoverable and readily realisable. If a firm has reason to doubt that a debt may not be repaid in full or not paid at all, or that it will take a significant time to recover, then these should be excluded.

Corporation tax

Taxation should be based on an estimate of the likely effective tax rate for the year applied to the profit or loss arising. This is true at both the 6-month submission and full year return.

Client money and assets

RMA-C is greyed out for firms that do not have the permission to hold client money but are still required to answer the question ‘does the firm hold any client assets (other than client money)’ in box 10. Firms that hold client assets must firstly have the permission to hold client money.

Personal assets

Sole traders or partnership firms that have the permission to hold client money are not allowed to use personal assets as part of their capital resource as set out in MIPRU 4.4.5R.

For those sole traders or partnerships that do not hold client money permissions, they can only use their personal assets provided those assets are not being used for any other business activities.

Limit of indemnity

A firm with a limit of indemnity described as ‘any one claim’ or ‘each and every claim’ in its PII is recognised as having an unlimited aggregate cover. Therefore, it should report ‘Unlimited’ aggregate indemnity cover in box O RMA-E when reporting details of its PII policy.

Retroactive start date

A retroactive start date is a date before which an insurer will not provide cover. Our rules require authorised firms to have continuous cover from the date of their authorisation. If a firm’s PII policy has a retroactive start date then it should enter this date in box 4D of the RMA-E otherwise, this box should be left blank. A retroactive start date is not the same as the policy start date.

(Source: FCA)

 

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