Majority of businesses 'do not understand competition law well'

The Competitions and Markets Authority (CMA) has developed a '60-second summary' for accountants, aimed at helping them to inform their clients of the consequences of failing to comply with competition law.

Accountants have been targeted by the CMA as they are 'trusted advisers for businesses of all sizes working across all sectors, so they are well placed to guide clients on where to look for legal guidance'.

Failure to comply with the law could result in a fine of up to 10 per cent of global turnover, and a maximum five-year jail term for individuals involved in cartels. Directors may be disqualified for up to 15 years.

Judith Frame, CMA head of compliance, commented: 'Research shows that many businesses, particularly smaller ones, could benefit from having a stronger understanding of how competition law affects them.

'It explains the importance of competition in creating a level playing field for businesses and outlines where accountants can find more information on anti-competitive behaviours.'

She added: 'We hope this will help accountants put competition law on their clients' radars to help them avoid risks and to benefit from competition.'

Research conducted by the CMA in May 2015 revealed that 77 per cent of businesses 'do not understand competition law well'.

The summary has been developed alongside the Association of Chartered Certified Accountants (ACCA) and The Institute of Chartered Accountants of Scotland (ICAS).

Ken McManus, head of practice support and international services at ICAS, was keen to stress the incumbent duty upon accountants to aid their clients in any way they can, even if it requires expertise beyond their skill set.

'Accountants are trusted advisers and as such are ideally placed to put competition law on the radar of business clients. Many businesses might be breaking the law without knowing it, with serious consequences.

'We've worked in partnership with the CMA to produce this quick guide and would encourage all accountants to make business clients aware of their duty to comply with competition law.'

Binyamin Ali is editor of Private Client Adviser