From the Ed: Whatever happened to our 'fixed cost' definition?

Scott Sinclair
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A promise is a promise is a promise. The FSA pledged a year ago to consult on how to apply a consistent method for calculating firms' expenditure-based requirement (EBR) and, so far… nothing.

This is important. In November, the regulator extended the EBR to all firms based on three months of relevant annual expenditure and doubled the minimum capital resources floor to £20,000. According to a number of stakeholders, this is a bigger deal than the RDR, because the rules appear to punish those businesses that invest in infrastructure and staff, and reward those that do not. The FSA’s current definition of fixed expenditure – used to calculate the EBR – is likely to include, among other things, most salaries and staff costs, office rent and the lease of office equipment. O...

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