Pay cut for KPMG partners after profit slide

PARTNERS at accounting giant KPMG received a 10pc pay cut this year after the group’s UK profits were hit by a string of unsuccessful investments.

Pre-tax profits at the UK business fell 19.5pc for the year to Sept 30, dragging partner pay down to £519,000 for the period, or £63,000 less than last year.

That stands in contrast to “Big Four” rival EY, where each UK partner received a bumper pay boost to £677,000 for the year to June, £15,000 more than the previous year. Bill Michael, the KPMG UK chairman, said the profit fall was down to “writing off investments that hadn’t worked for us” such as data analytics business Flexeye, which the group acquired for a sum of £3m only two years ago.

Profits at the business, which was recently cleared over its audit of HBOS, were not impacted by a $6.2m (£4.63m) fine in the US over KPMG’S audit of an oil and gas company, nor a scandal in South Africa involving the controversial Gupta family, Mr Michael said. “[However] they’re both timely re- minders that we’re part of a global brand, and risk reputation is paramount to us,” he added.

The UK’S accounting watchdog closed its investigation into KPMG’S audit of HBOS in September.

The 600-partner company saw its revenues inch up by 5pc to £2.2bn during the period, with Brexit driving demand for advice and its audit business growing 10pc on last year after winning BT, and Legal and General as new clients.