News October 2018


Accountant Barney Bushbuck was reprimanded by the ICAEW in July 2018 after a client complained about an erroneous letter his firm sent to Barclays Bank and the preparation of an inaccurate accountant’s certificate.

After criticising his “poorly worded letter” that lacked transparency and accuracy, the ICAEW tribunal ordered Bushbuck to pay £10,000 costs and fined him £3,000. The costs were reduced after the defence argued against the “excessive” original figure, the “antiquity” of the complaints and the inordinate length of the investigation.

Bushbuck, an ICAEW member for 19 years, prepared the personal tax returns and sole trader accounts for the client, referred to as Ms Gazelle, and also prepared the accounts of her two companies.

In August 2013, Ms Gazelle complained to the ICAEW that Bushbuck had sent a letter on her behalf to Barclays Bank in March 2011 that included errors. She also claimed that he inaccurately prepared and signed an accountant’s certificate for her the following year and improperly prepared her personal tax return in 2013.

Bushbuck admitted the inaccurate accountant’s certificate, which he attributed to not checking the certificate prepared by staff more thoroughly before sending it.

The tribunal dismissed the tax return complaint because Bushbuck had acted on a direct instruction from the client to change the figures.

Letter to the bank

The central feature of the case concerned Bushbuck’s letter to Barclays Bank, where it was alleged that:

  1. He stated that Ms Gazelle’s salary for the year ending 5 April 2011 from one of her companies was £5,700
  2. He based dividend payments on financial statements when the financial statements had not yet been prepared
  3. The dividend figures did not take into account her two companies’ corporation tax
  4. The dividend figures did not take into account mortgage arrears payable by Ms Gazelle
  5. The dividend figures for Ms Gazelle’s company were calculated without taking into account negative reserves of £14,465 as at 31 December 2009; and
  6. The dividend figures for the same limited company were calculated without taking into account negative reserves of £10,893 as at 31 December 2010.

The tribunal concluded that Bushbuck’s errors featured in the 10 March 2011 letter would not bring discredit to him when taken alone, but viewed together the complaint was upheld

The tribunal noted that confusion could have easily been rectified in (a) and (b). In (b), for example, the letter to the bank claimed the monetary figures were based on financial statements when they were actually based on SAGE management figures, whilst in (a) Bushbuck should have said that the salary was “to be confirmed”.

The tribunal disagreed with Bushbuck’s decision in (c) not to include corporation tax on the basis that the letter’s purpose was to aid the bank’s assessment of the client’s future income.


The tribunal hinged their sentencing on the fact that third parties, such as Barclays Bank in this case, should have confidence in the information provided by accountants.

The tribunal initially applied for £15,582 in costs. But it adjusted the amount to £10,000 after accepting the defence’s argument that the five-year investigation costs, together with 8.5 hours for report writing and a charge of £3,425.50 for file reviews were excessive.


We need to declare an interest in that we represented Mr Bushbuck before the tribunal. A number of points:-

  • The length of the investigation was excessive, largely due to Ms Gazelle insisting that the ICA investigated yet more complaints, all of which were baseless.
  • The tribunal did not consider that Mr Bushbuck’s conduct should be regarded at the upper end of the scale in relation to sanction.
  • The figures in question were relatively small.
  • Of the three complaints, one was found not proved.
  • This was one of the last complaints considered under the old system where the chairman is a lay member and not legally qualified. In future, disciplinary tribunals will be chaired by Queen’s Counsel. Consequently, there will be no need for the tribunal (QC, lay member and chartered accountant) to sit with an independent legal adviser.



Accountant Arnold Kudu has been excluded from the ICAEW after being found guilty of involvement in a fraudulent film investment scheme.  

Following his two-year suspended prison sentence in June 2016 at Birmingham Crown Court, Mr Kudu stated that he recognised how his actions has brought the profession into disrepute. But arguing against the imposition of further financial penalties, he said that he must now live with the “opprobrium” of the criminal conviction, loss of reputation and the financial and personal costs it has involved.

The Crown Court heard how Mr Kudu assisted four ‘film executives’ who devised the scheme that raised money from high net worth individuals keen on taking tax breaks the government offered to film investors.

By investing in a series of limited liability partnerships, the scheme originally presented an opportunity for these investors to reduce their personal tax liabilities, with no intention to cheat the revenue.

The executives for whom Mr Kudu acted advised the LLPs to enter into ten-year agreements. The LLPs spent over £256m in the first accounting year on pre-production and development, but the judge said the scheme was “not all it appeared to be”.

The report said that although Mr Kudu was recruited to provide legitimate services when the scheme was devised in 2002, it should quickly have become apparent that it was not legitimate.

The judge described a “complex and sophisticated tax evasion scheme” at the centre of the case. The group submitted tax returns containing false statements about the LLPs’ allowable losses, which it diverted and repeatedly circulated around other companies. Had the group succeeded in this, the judge noted that they would have cheated HMRC out of £98m.

ICAEW membership

Mr Kudu attempted to relinquish his ICAEW membership, realising that the conviction would lead to his exclusion.

In a letter, Mr Kudu informed the membership department that he was no longer undertaking work as an accountant. He was advised that he could not resign his membership as he was under investigation.

Mr Kudu pointed to the confiscation proceedings which have resulted in him having to pay the court £150,000 as forcing him into a situation where further financial penalties would be unaffordable and highly prejudicial, especially as he was now retired. He also mentioned the stress the criminal proceedings had placed on himself and his family.

The tribunal ruled that although Mr Kudu’s involvement in the conspiracy was less than the other four men, he still played a significant role. The tribunal excluded Mr Kudu for bringing discredit on himself and the profession and ordered that he pay £2,500 towards the cost of the proceedings.


  • It is remarkable how long it takes to bring matters to a conclusion. The conspiracy in which Mr Kudu was involved dates from the period January 2002 to August 2009. However, the trial did not take place until May 2016. It was another two years before the matter reached the Disciplinary Committee.
  • Although Mr Kudu did not appear before the tribunal and was not represented, bearing in mind that he now lives in France, one can readily appreciate why he did not attend. A conviction involving dishonesty and a suspended prison sentence will result in exclusion from membership.
  • We are not advised about the real cost of the disciplinary proceedings, only that Mr Kudu was ordered to make a contribution of £2,500.

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