Thursday 12 February 2015

Thursday, February 12, 2015 Posted by Hari 2 comments Labels:
Posted by Hari on Thursday, February 12, 2015 with 2 comments | Labels:

Supermarket watchdog investigates Tesco’s dodgy fees that cripple its suppliers
Christine Tacon, the groceries code adjudicator, said she had a reasonable suspicion that Tesco had breached the code. Likely violations, involving many suppliers and large sums of money, include:
  • penalties imposed when Tesco claimed items were missing from deliveries
  • charging more than an item cost when a customer returned it to Tesco
  • delays in refunding suppliers when Tesco incorrectly issued duplicate invoices
  • charges for in-store promotions that were either incorrect or not agreed.

Urging suppliers to come forward if they had evidence of breaches by supermarkets, Tacon said she could widen her inquiry if she had reasonable grounds for suspicion that others had also breached the code. The adjudicator, who can force companies to give evidence, said she would protect the anonymity of anyone providing information. Tesco is now facing three formal inquiries, all prompted by the company’s revelation last September that it had overstated expected profit by £250m. The financial hole, since revised to £263m, was caused by incorrect accounting for charges on suppliers stretching back at least two years. It is now being investigated by the Serious Fraud Office and the Financial Reporting Council. GUARDIAN

160,000 care workers 'miss out on minimum wage', costing them over £800/year
More than a tenth of UK care workers are being paid less than the national minimum wage of £6.50 an hour, a study suggests. The Resolution Foundation think tank says its research indicates that about 160,000 people are losing out on an average of £815 each a year. It said some firms wrongly did not pay staff when they travelled between clients, on training or when "on call". Ministers said they were taking action against employers who broke the law. The national minimum wage is paid to adults aged 21 and over and there are lower rates for younger workers and apprentices. The minimum wage regulations say working time includes travelling in connection with work, and training or travelling to training during normal working hours. The Resolution Foundation said the total amount that care staff were missing out on was estimated to be about £130m a year, but it could be higher. This is because the study did not take account of illegal deductions to pay which it said was "the most common reason for non-compliance" with the minimum wage regulations. The care industry sector, which employs about 1.4 million people in the UK, has long been associated with low pay, while funding cuts and an ageing population is creating an additional strain on wages, it added. BBC NEWS

Taxpayer hands £26.7bn to private landlords through housing benefit, tax breaks, says campaign group
Private landlords are benefiting from subsidies worth the equivalent of £1,000 for every household in the UK, the campaign group Generation Rent has claimed, with tax breaks and housing benefit bolstering their gains from house price increases. The £26.7bn pocketed by private landlords is made up of £9.3bn of housing benefit paid on behalf of low-income tenants, £1.69bn through the “wear-and-tear” tax relief landlords can claim on their properties, £6.63bn of tax that landlords do not have to pay on mortgage interest payments and £9.06bn of tax landlords do not pay on their annual average capital gains. The buy-to-let industry has boomed in recent years as the rising rents and house prices have made property an increasingly attractive investment for those with enough money to raise a deposit. HM Revenue & Customs showed the total number of buy-to-let investors in the UK had increased by 120,000 in 2014, to 1.6 million. New pension freedoms set to come into force in April are expected to lead to even more landlords entering the market. The campaign is calling for an additional landlord levy of 22% on rental income, which it said would recoup the £9.3bn housing benefit bill and should be used to fund 90,000 new council houses. In the post-war period the number of new homes peaked at 352,000 in 1968, while the number of new social homes reached its highest level of 207,730 in 1954. In 2013, 22,510 social homes were built, out of a total of 109,640 newbuilds. House of Commons library research showed that the housing benefit budget had risen in real terms by 220% since 1985, while investment in housebuilding had fallen by 41%. GUARDIAN

Extra £5bn for pensioner bonds: Osborne gives wealthy older voters a pre-election boost
George Osborne has announced that hundreds of thousands more over-65s will benefit from the government's flagship pensioner bonds scheme in the run up to the General Election. The Chancellor said that an additional £5billion worth of bonds will be made available over the next three months because the government wants to "back savers [and] support people who do the right thing". More than 610,000 over-65s have bought pensioner bonds worth £7.5billion since they were launched last month in an unprededented stampede which caused websites to crash. The government initially made £10billion worth of bonds available, but Mr Osborne said that figure is likely to be extended to £15billion. Mr Osborne said the policy was to compensate pensioners who have suffered from the governments "deliberate" policy of keeping interest rates low. The bonds, which pay an interest rate of 2.8% for one year or 4% for a three year investment, offer significantly better rates than existing products. However Mark Littlewood, of the Institute for Economic Affairs, criticised the move. He said: "This announcement well and truly proves that we are not all in it together. Borrowing more expensively than the government needs to is effectively a direct subsidy to wealthy pensioners from the working-age population...Pensioner bonds have never been anything other than a gimmick that will benefit pensioners at the expense of the taxpayer, and it beggars belief that the government is prolonging such a foolish policy. It’s high time our politicians stopped buying votes with subsidies for the old and rich.” TELEGRAPH

Record-breaking £5.1bn TV deal, but Premier League boss under fire over minimum wage paid to stadium staff
The Premier League came under fire today after defending top clubs paying stadium staff the minimum wage — despite selling British TV rights for its matches for a record £5.1 billion, up 70%. Its chief executive Richard Scudamore said he was “not uncomfortable” with clubs paying star players huge salaries, some reportedly more than £300,000 a week, while some staff earn just £6.50 an hour. Business Secretary Vince Cable urged Premier League clubs to pay the “living wage” if they could afford it. He told the Standard: “There is a lot of money in the sport...If companies can afford to pay the living wage, they should.”  Tottenham Labour MP David Lammy, who has campaigned for clubs to pay the living wage of £9.15 an hour in London and £7.85 outside, said of  Mr Scudamore’s stance: “He should not just feel uncomfortable, he should feel ashamed. "This is conscious greed, plain and simple.” Tory MP Chris Heaton-Harris, and vice-captain of the all-party parliamentary football team. Chelsea are the only Premier League club officially accredited with the Living Wage Foundation for paying the living wage. Staff on the minimum pay are often contract workers doing catering, cleaning and security, rather than being directly employed by companies. EVENING STANDARD

HSBC arm 'helped clients evade taxes' as thousands of clients including celebrities and sports stars hold secret Swiss accounts
The Swiss arm of HSBC, Britain's biggest bank helped wealthy clients such as sports stars, celebrities and politicians evade huge amounts of tax, according to an investigation by journalists. The Guardian newspaper and the BBC's Panorama programme analysed details of 30,000 thousand accounts holding nearly £78billion worth of assets and say they found evidence of secret Swiss accounts being used to help clients deliberately conceal assets from tax authorities. Holding a secret bank account is not itself illegal, using such accounts to deliberately conceal assets in order to evade tax is against the law. The leaked documents have already prompted a series of criminal probes in several counties. In the UK, HM Revenue & Customs, which received the data in 2010, has clawed back £135million from over 3,600 Britons. But it has faced complaints from MPs over the pace of progress and the fact that only one evader has been prosecuted. DAILY MAIL

PwC promoted tax avoidance 'on industrial scale', say MPs
"We believe that PricewaterhouseCoopers's activities represent nothing short of the promotion of tax avoidance on an industrial scale," said Margaret Hodge, chairwoman of the Public Accounts Committee (PAC). She said PwC had written more than 500 letters to the tax authorities in Luxembourg, on behalf of more than 300 international clients. The tax avoidance schemes, which are legal, involve companies diverting profits to tax havens like Luxembourg via a series of loans between different parts of the business. The profits are eventually taxed in that country, but often at tiny rates. The MPs also accused PwC of misleading the committee at an earlier hearing. "We consider that the evidence that PwC provided to us in January 2013 was misleading, in particular its assertions that 'we are not in the business of selling schemes', and 'we do not mass-market tax products, we do not produce tax products, we do not promote tax products'," said Ms Hodge. The European Commission is currently investigating the internet giant Amazon, over its agreements with the Luxembourg tax authorities. The UK government is also in the process of introducing the Diverted Profit Tax, announced by the chancellor, George Osborne in the Autumn Statement. The tax aims to counter the use of "aggressive tax planning techniques" to divert profits from the UK to low tax jurisdictions. Profits made after 1 April 2015, and diverted to other countries, will be taxed at 25%. BBC NEWS

Wonga escapes criminal investigation over faked legal letters that threatened customers
In June 2014, Wonga was fined £2.6m by the City regulator when it emerged that it had been sending out demands for repayments in the names of fabricated law firms, and in some cases charging an administration fee for its services. Between October 2008 and November 2010 Wonga 45,000 sent letters to customers in arrears under the names Chainey D’Amato & Shannon and Barker & Lowe Legal Recoveries, in an action the Financial Conduct Authority said was designed “to maximise [its] collections by unfairly increasing pressure on customers”. After action by the FCA to secure compensation for the affected customers, the matter was referred to the City of London police to see if the firm should face a criminal investigation for fraud. Police have now decided that there are no grounds for action. They confirmed that, with the exception of some of the earliest versions of the letters, they had all said somewhere in the small print that they had come from the lender. GUARDIAN

University students are being forced to accept unfair and unexpected changes to their courses
Which? questioned whether colleges were giving students a fair deal for their tuition fees, and called on the Competition and Markets Authority to examine what it claims is evidence that some colleges use terms and conditions that breach consumer law. Freedom of Information Act requests sent by Which? to 142 UK universities found half (51%) use terms that allow them to change the content and location of courses, even when such changes could have been prevented, it said. One in five universities (20%) – used terms that Which? lawyers thought breached the Unfair Terms in Consumer Contracts Regulations, while 31% used wording deemed to be bad practice and likely to be unlawful. Just 5% used terms considered good practice and only one, the University of York, used terms that were best practice. The 26 universities that used terms Which? considered potentially unlawful included Aston University, King’s College London and the University of Leicester. Which? executive director Richard Lloyd said: “Students deserve to know what they can expect from a course before signing up so that they can be confident they will get what they pay for. With tuition fees higher than ever before, we want universities to take immediate action to give students the protection they’re entitled to.” GUARDIAN

Small businesses say UK public have lost faith in big business and believe government should step in
According to the Forum of Private Business, 76 per cent of the 2,000 survey respondents agree that the next government should penalise big businesses that act unfairly towards small businesses. While 74 per cent agreed that the majority of big businesses have no concern for small business owners in the UK. Phil Orford, chief executive of the Forum of Private Business said: 'From tax avoidance and high street domination to late payment and supply chain abuse – every week our members tell us that some of the biggest names in British business are threatening their livelihoods.' Meanwhile, the latest BDO Monthly Business Trends survey said companies appeared 'unruffled' by the upcoming election, despite the current debate around business confidence in political parties. BDO partner Peter Hemington said 'By discounting the political noise and taking a realistic view of the economy's strengths, businesses are remaining cautiously optimistic.' DAILY MAIL

Low income “Rent-to-own” customers face rip-off interest rates of 94%, say MPs
Hundreds of thousands of customers who buy household goods through rent-to-own schemes are being "ripped off", a group of MPs has concluded. The All Party Parliamentary Group on Debt and Personal Finance said some of the poorest people in the UK are being charged interest rates of up to 94% a year to buy TVs or washing machines. Under the rent-to-own model, consumers take out an agreement to buy a product, and then pay weekly instalments until they own it - similar to a hire purchase agreement. But usually customers have to take out compulsory insurance and warrantees, which can double the eventual cost. The MPs said that such insurance may have been mis-sold - especially where people already had household cover. BrightHouse, the largest company, said it was disappointed by the report. BrightHouse is the biggest chain in the UK, with 291 stores, mostly based in deprived areas. BBC NEWS

NHS whistleblowers ignored, bullied and intimidated, inquiry finds
Launching the results of his Freedom to Speak Up Review, Sir Robert Francis QC said: “Some 30% of people who had raised a concern said they felt unsafe after after they had done so. Eighteen per cent of staff said they didn’t trust the system so they wouldn’t speak out; 15% told us they feared being victimised if they did so … I’ve spoken to people who have not only lost their jobs, their livelihood, they’ve not been able to find other jobs to do. And I’m afraid in some cases have felt suicidal and become ill as a result.” His recommendations will lead to an overhaul of trainee doctors’ and nurses’ training to make it “rigorous and enhanced”, which from September will include teaching on how they should alert their superiors if they see unsafe care happening. GUARDIAN


  1. It's interesting to observe that the pensioner bonds are on offer until May 15: about a week after the general election.

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