Thursday 30 July 2015

Thursday, July 30, 2015 Posted by Hari No comments Labels:
Posted by Hari on Thursday, July 30, 2015 with No comments | Labels:

Tax havens: Super-rich 'hiding' at least $21 trillion (£13tn)
A global super-rich elite had at least $21 trillion hidden in secret tax havens by the end of 2010, according to a major study. The figure is equivalent to the size of the US and Japanese economies combined. The Price of Offshore Revisited was written by James Henry, a former chief economist at the consultancy McKinsey, for the Tax Justice Network. The report comes amid growing public and political concern about tax avoidance and evasion. Some authorities, including in Germany, have even paid for information on alleged tax evaders stolen from banks. Mr Henry said that the super-rich move money around the globe through an "industrious bevy of professional enablers in private banking, legal, accounting and investment industries”. He added: "From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution of our most pressing global problems." The three private banks handling the most assets offshore are UBS, Credit Suisse and Goldman Sachs. Less than 100,000 people worldwide own about $9.8tn of the wealth held offshore. BBC NEWS

New York's $15 minimum wage would be the highest in the world
Fast-food workers in New York City will be paid a minimum wage of $15 an hour by 2018 with the rate rolling out to the rest of the state by 2021. The move follows more than a year of campaigning on the issue. San Francisco, Los Angeles and Seattle have all approved a $15 minimum wage for all employees in the three cities. Internationally, Australia comes closest with a $12.50 base hourly wage. Major European economies such as France and Germany (which introduced a minimum wage after the last general election) hover around the $10 and $9 mark respectively. The rate is below $5 an hour in Greece and Spain, which is similar to Japan ($6), and even lower in Brazil where it’s $1.25 - though of course the cost of living varies between states and countries. An hourly wage of $15 is of course still the exception in the US and many jobs are exempt from the rate. The minimum wage at a federal level is $7.25. The UK chancellor George Osborne’s recent introduction of a “national living wage” will take the base rate to $11.15 (£7.20), rising to $13.93 (£9) by 2020. GUARDIAN

Barclays profits rise to £3.1bn despite increasing compensation payouts for mis-selling
Profits jumped by 25% to more than £3.1billion in the first half of 2015. The star performance was Barclays' casino banking arm, with profits from the investment division up 36% to £1.4billion, helped by market instability caused by the Greek debt debacle and Eurozone crisis. But the firm set aside another £850m for ripping off UK customers. The bulk of that was a £600m bill for payment protection insurance in the three months to June alone, taking its total PPI cost to date to an eye watering £6billion. It also set aside £250m for compensating customers missold packaged bank accounts. Yet that didn't stop Barclays estimating it would pay nearly £1billion of bonuses in the first half of the year, broadly in line with last year. The bumper results come weeks after Barclays chief executive Antony Jenkins was fired for apparently not boosting the bank's fortunes fast enough. It came shortly after industry veteran John McFarlane joined as chairman. Mr McFarlane, who has temporarily replaced Mr Jenkins, has set out plans to turbo charge the firm, focusing on its investment bank in its core markets, and its retail arm, including its booming Barclaycard business. David Hillman, spokesperson for the Robin Hood Tax campaign, said: “Barclays' results rarely come without massive provisions for ripping off its customers, and today is no exception... If banks can afford to pay out these colossal fines and still turn a profit, they can afford to make a greater contribution to the public purse." MIRROR

Banks and financial companies to be banned from forcing customers to call premium rate numbers
Currently, customers looking for help or to complain face charges of up to 50p a minute from a mobile when calling numbers beginning 084 or 087. But from October 26, these calls will be charged at the same level as dialling a standard rate number — typically no more than a few pence per minute. The new rules, which were announced by City watchdog the Financial Conduct Authority (FCA), will also bar banks and insurers from profiting from customers by taking a share of the cost of calls to premium rate lines. At present, many banks and building societies print premium rate contact numbers on the back of their customers’ credit and debit cards. The City watchdog said that, in future, customers who call these numbers will have to be redirected by banks on to cheaper lines. And in a further boost for consumers, the FCA also announced that financial firms will be forced to publish numbers of all customer complaints made to them — no matter how minor they appear to be. As things stand, companies are obliged to include in their official complaint statistics only those gripes that take more than one business day to sort out. But from September 2016, they will have to list every single complaint they receive — even the ones that have been resolved quickly. However, companies will be given three days to deal with these minor complaints, instead of the one day they are allowed at the moment. DAILY MAIL

Cancellation of Trans-Pennine and Midland rail upgrade kept secret until after election
The electrification of the Trans-Pennine and Midland main line routes was put on hold in June, shortly after the election, when the government said it received an assessment of the state of major Network Rail projects. But Network Rail boss Mark Carne said the Department for Transport was told in March that decisions about deferring schemes could be due within months. The department had previously said it was not told Network Rail's board expected delays until after the election. Labour accused the government of a cover up, where the Conservatives promised to electrify lines in their manifesto knowing the projects would be shelved. Shadow minister Lillian Greenwood said the Conservatives had "serious questions to answer" about why they promised rail electrification in their manifesto. In a letter to shadow rail minister Lillian Greenwood, Mr Carne wrote: "In mid-March 2015, Network Rail informed DfT that decisions may need to be made in the coming months about the deferral of certain schemes." Mr Carne added Network Rail had recommended another assessment was made before decisions were taken. It was completed after the election. He said Network Rail, the DfT and the Office of Rail Regulation all knew around 80% of current projects were "at an extremely early stage of development, with inevitably high levels of uncertainty regarding their cost". BBC NEWS

Morrisons faces probe over demanding one-off payments from suppliers. Again
The big retailers have been condemned for using their buying power to force suppliers to pay large sums to keep their goods on the shelves. In this latest episode, buyers at Morrisons are accused of trying to secure one-off payments from about 20 suppliers in a potential breach of a government-backed code, with only “a handful” blocked by the supermarket’s legal team. A government-backed code prohibits one-off demands and states that supermarkets must not “vary any supply agreement retrospectively”, except in very specific circumstances. An internal email from Morrisons’ legal team, seen by the Guardian, also tells buyers to get advice on how to continue to demand one-off payments from suppliers but satisfy regulators. The email says: “We have seen a number of requests for H1 [first-half] funding recently that don’t appear to be based upon any existing supplier obligation.” It goes on to advise buyers to contact them for advice on how to “construct arguments that are credible” in order to continue to demand such payments - meeting the letter of the code but, it could be argued, not the spirit. The Groceries Code Adjudicator (GCA) is investigating the emails. Under powers finalised by parliament earlier this year, the GCA now has the power to fine retailers up to 1% of UK annual turnover, if they breach the code. For Morrisons that would amount to £168m. A survey of suppliers published by the GCA last month, 30% of Morrisons suppliers thought the supermarket rarely complied with the grocery code and a further 2% thought it never did - making it the second worst performer of the ‘big four’ supermarkets behind Tesco. GUARDIAN

Liquid Gold Saver?! Ban misleading account names, regulator tells banks
Enticing names such as Liquid Gold and Gold Saver on savings accounts that pay some of the worst rates of interest could become a thing of the past under rules proposed by the City watchdog. In a proposed shake-up of the £700bn savings market, the Financial Conduct Authority (FCA) said accounts with low interest rates should not be given names that are misleading, and that it would take action against banks and building societies that continue to do so. The idea, opposed by banks, should see the end of accounts like the notorious Liquid Gold from Halifax. The account has been around since the 1980s when Arthur Daley, played in the ad by George Cole, promised the account would be a “nice little earner”. At the time it paid 10% interest; now it pays 0.05%. The FCA will introduce a series of rules to force firms to provide clear information on the interest rates on their cash savings products as well as alerting consumers to changes in interest rates or the end of an introductory rate. One of the proposed new rules will stop banks and building societies from a favourite way of confusing customers into choosing the worst deal. Anna Bowes of explained: “At the moment many banks tell someone their bonus rate will end months before it is due to do so. This means they either switch then and lose the extra interest or risk waiting and forgetting to do so.” The proposed new rule is to tell savers about the end of a bonus rate in a timely fashion, no more than 14 days before it is due to end, perhaps by text. Andrew Hagger of financial website said the FCA’s measures were “welcome but long overdue... Too often banks and building societies offer best buy deals for new customers while hoards of loyal savers on the back book are left with long forgotten deals paying next to nothing.” GUARDIAN

Big businesses should commit to renounce aggressive tax planning, says HMRC
The government wants the UK’s largest businesses to sign a voluntary code of conduct on tax which would see them renounce aggressive tax planning and vow to follow the spirit as well as the letter of the law. Under the voluntary code of conduct, businesses would avoid structuring their transactions in artificial ways that serve only to slash their tax bills. The draft code states: “In all cases, the business should reasonably believe that transactions are structured in a way that gives a tax result which is not contrary to the intentions of parliament.” Big businesses would also be obliged to publish an annual tax strategy, signed off by a named executive at board level, under new rules proposed by HM Revenue and Customs. Businesses may have to publish whether the UK group has an effective tax rate, what that rate is, and what measures the business is taking to maintain or reach this target. While UK corporation tax is currently 20% and will drop to 18% in 2020, some businesses pay more or less tax depending on how they structure their companies. Vodafone, for example, paid no UK corporation tax in its most recent financial year. The measures would apply to businesses with a turnover of more than £200m or more than £2bn of assets, and HMRC believes having companies publish their tax strategies could bring in about £65m a year in extra receipts. GUARDIAN

Payday scandal: Cash Genie to pay £20m to 92,000 customers after rip-off tactics exposed
The high-credit lender has admitted to exploiting customers by rolling over their loans without consent and without proper checks of customers’ financial health. Cash Genie also piled on fees and interest to customers, which were found to be at unfair levels by the regulator Financial Conduct Authority (FCA).  This included charging £50 to transfer debt to its sister debt collection firm, even though the move incurred no additional costs.  Customers who had provided information to other payday firms that were part of the same group also had their loan used to take payment for existing Cash Genie loans without their consent. In a number of cases customers were encouraged to apply to sister websites for loans and give their banking details under the false pretence that the loan had been pre-approved, according to the FCA. Cash Genie also failed to send annual statements to customers who had not repaid their loans after 12 months, which means it should not have then applied any further fees or interest to accounts. The high-credit lender handed itself over to the FCA last year over unfair practices and agreed to carry out a redress scheme and review of past business. Affected customers do not need to take any action and Cash Genie should have made contact by 18 September 2015. Cash Genie stopped offering new payday loans to customers in September 2014, three months after referring itself to the regulator. Its US-based parent firm, EZCORP, announced shortly afterwards that it would leave the UK payday lending market in 2015. EXPRESS


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