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Thursday, 3 March 2016

Thursday, March 03, 2016 Posted by Hari No comments Labels:
Posted by Hari on Thursday, March 03, 2016 with No comments | Labels:

Google unpaid taxes: France seeks €1.6bn from search giant
The tax arrangements of international companies have come under close scrutiny recently. Several have been accused of using legal methods to minimise their tax bills. In Google's case, its tax structure allows it to pay tax in Ireland, even when sales appear to relate to the UK. In January it struck a deal with UK tax authorities to pay an extra £130m in tax for the period from 2005, but that deal was heavily criticised. Earlier on Wednesday the UK Public Accounts Committee (PAC) said the £130m settlement "seems disproportionately small", compared with the size of its UK business. Europe's competition authorities have been examining whether some deals struck by big companies with national tax authorities amount to illegal state aid. Starbucks and Fiat Chrysler were told they must pay back up to €30m (£22m) in taxes after European tax breaks were ruled illegal. But the two companies disagreed with the ruling, and Starbucks said it would appeal against the decision. Further investigations into tax deals, including those covering Amazon and Apple, are continuing. BBC NEWS

Starter Home scheme: 200,000 “lucky” buyers could make a £141,000 taxpayer-funded profit, but raise prices for everyone else
The government’s starter homes initiative could deliver a taxpayer-backed windfall of £141,000 each to 200,000 lucky first-time buyers, but 2 million more aspiring homeowners will be stuck renting, campaigners say. The scheme, which allows developers to replace shared ownership and affordable rented homes with properties sold at a 20% discount, has been widely criticised since it was first announced in December 2014. One of the key concerns for housing campaigners is that the homes can be sold on at the open-market rate after five years. Lobby group Generation Rent said buyers could therefore stand to make a profit of £228,139 on a home bought for £383,200. Generation Rent said that the original buyers stood to gain, while those who missed out getting onto the scheme would find it ever harder to get on the housing ladder. The group is calling for the homes to be subject to rules saying that they can only be sold on at a 20% discount. Betsy Dillner, the director of Generation Rent, said this would help many more first-time buyers “instead of a jammy handful of winners in a multibillion pound raffle”. Research carried out by Savills for the Local Government Association (LGA) found that the discounted starter home prices were out of reach for all people in need of affordable housing in 220 council areas and for more than 90% in a further 80 council areas. GUARDIAN

Britain's poorest households to suffer five years of ZERO income growth while the rich get richer
The poorest households in Britain will suffer a five-year period of zero income growth, while the country's richest will see their incomes rise 2.3 per cent a year above inflation, a study by the Institute for Fiscal Studies (IFS) has forecast. And with planned cuts to benefits and tax credits, the proportion of children in relative poverty will rise, as will the number living in 'absolute poverty', the IFS report said. The think-tank warned: 'Income inequality will rise significantly over the course of the current Parliament.' Planned cuts to working age benefits will reduce incomes in poorer households by 3 per cent within the next five years, today's study suggested. In real terms, average gross earnings in the UK were nearly 5 per cent lower in 2013 than before the recession, the IFS said. Between 2013/14 and 2015/16, real growth in incomes, after inflation, was 4.1 per cent for the poorest, 4.9 per cent for average households and 3.2 per cent for those near the top, the think-tank estimated. James Browne, one of the authors of the report, said: 'Following an historically slow recovery in living standards after the recession, stronger growth in household incomes at all income levels over the last two years will have been welcome news... For some, particularly the better-off and pensioners, this is likely to continue over the next five years as earnings and state pensions grow more quickly than inflation... But the prospects are not so good for others, including large families with low incomes, who will bear the brunt of planned benefit cuts.' DAILY MAIL

The rate rip-off: Banks rake in huge and easy profits by cutting savings faster than mortgages
Banks have to pay savers a return to convince them to leave their cash in their accounts. They then lend out this money and charge a higher interest rate, creating a profit margin. The larger the gap, the harsher the bank is treating its customers. Over the past three years this interest-rate margin has ballooned at Lloyds, Nationwide, Santander and Barclays. In 2013, the gap at Lloyds was 2.23 per cent, indicating that savers were earning 2.23 per cent less than borrowers were paying on their loans. In its latest set of reports, the gap had expanded to 2.4 per cent, helping the bank increase profits from banking customers by £286 million to £3.5 billion last year. And what’s more, it’s decided it can afford to pay a dividend to its shareholders for the first time in six-and-a-half years. Nationwide’s interest-rate margin has risen from 1.02 per cent to 1.46 per cent. Profits soared 32 per cent to £1.2 billion last year. Santander’s margin grew from 1.55 per cent to 1.83 per cent between 2013 and 2015. It made a profit of £920 million in 2015 — £252 million lower than the previous year. Barclays yesterday revealed that its margin for 2015 was 2.99 per cent, up from 2.91 per cent in 2013. Its High Street arm made a profit of £3 billion, a 5 per cent rise on 2014. Anna Bowes, of consumer website SavingsChampion, says: ‘Banks are penalising savers to make a profit. It’s unfair and hurts people who are trying to do the right thing... The number of cuts to savings rates is unprecedented.’ Around £160 billion of savings sits in UK accounts that pay a paltry 0.5 per cent interest or less. Ian Gordon, a banking analyst at Investec, says banks haven’t been able to lend out as much as they’d like. That means they’re sitting on piles of savers’ cash that isn’t making them any money. ‘The Bank of England base rate is so low at 0.5 per cent that banks are desperately seeking to maintain their profits — and that means squeezing savers,’ he says. ‘The clearest conclusion is that the pain for savers will only get worse.’ Savers also appear to be losing out as banks battle to tempt mortgage and loan customers. Loan rates for borrowing £7,500 to £15,000 have fallen from 5.1 per cent in 2013 to 3.3 per cent today. To fund these discount deals, banks have hit savers with a devastating round of rate cuts. DAILY MAIL

RBS pays chief executive Ross McEwan £3.8m as it reports £2bn loss
The bank’s full-year results for 2015 follow its admission last month that it was on track to report its eighth consecutive year of losses because of a £2.5bn hit to profits for a string of problems, including having to pay compensation for payment protection insurance mis-selling. Shares in the bank, 73%-owned by the taxpayer, slumped 10% in early trading after the figures were announced. McEwan – who has received the highest pay for a chief executive of the bank since the bailout – said further problems lay ahead for the bank, particularly from “big conduct” issues. Among these is a penalty, yet to be determined and which could run to billions of pounds, for the way it sold US mortgage bonds in the run-up to the 2008 banking crisis. The results – which followed a £3.5bn loss a year ago – mean that the bank has incurred more than £50bn of losses since 2008, when £45bn of taxpayer funds was used to prevent it from collapsing. The performance of the bank was accompanied by disclosures about pay. It said 121 of its staff received more than €1m (£800,000) during the year while its former chief executive Stephen Hester, who was forced out in 2013, received £2.1m from bonus schemes that dated to his time at the bank. GUARDIAN

Lloyds hands CEO £8.5m pay package despite 7% profit fall
Lloyds Banking Group has handed its chief executive an £8.5m pay deal and ignited its share price by announcing a special dividend – despite reporting a 7% fall in profits. António Horta-Osório’s pay was disclosed alongside 2015 financial results showing profits had been knocked to £1.6bn by a further £4bn charge for mis-selling payment protection insurance (PPI). The bank, bailed out in 2008, has now incurred a total bill of £16bn for the long-running scandal which drove it to a fourth-quarter loss. The government has been gradually cutting back its stake, from 43% to less than 10%, but despite Thursday’s rally the shares remain below the 73.6p break even price. He was also handed shares worth £3.6m in a long-term incentive plan, which could pay out in three years’ time. His 10-strong management team were handed shares worth £17m in the same scheme. The total bonus pool was cut to £353m from £369m. Sixty-six staff received total pay of €1m (£800,000) or more. GUARDIAN

Housebuilder Taylor Wimpey profits boosted 34% by Help-To-Buy, and average home prices hitting £230,000
The FTSE 100-listed housebuilder said sales were boosted by the Government's Help to Buy scheme, which offers an equity loan and a smaller deposit for buyers of newly-built homes. Taylor Wimpey said it sold 37 per cent of its houses through the scheme - which is scheduled to run until 2021. The strong profit gain came after the UK's third largest builder sold 13,219 homes last year, up 7.5 per cent from 12,294 in 2014, with average selling prices hitting £230,000 apiece, an increase from £213,000 a year earlier, which in turn helped boost revenue by 17 per cent to £3.14billion. Taylor Wimpey is the latest house builder to post strong results with Persimmon, another FTSE 100 housebuilder, recently posting 2015 pretax profit growth of 34 per cent, while Barratt Developments' saw its half-year profits soar by 40 per cent. DAILY MAIL

UBS confirms fresh tax evasion probe in the US
The Swiss bank said US regulators were investigating potential sales of so called "bearer bonds". These bonds can be transferred without registering ownership, enabling wealthy clients to potentially hide assets. The fresh investigation by the US Attorney's Office for the Eastern District of New York and from the US Securities and Exchange Commission comes after UBS paid $780m (£512m) in 2009 to settle a separate Justice Department tax-evasion probe. And it comes as authorities in a range of countries are considering examining HSBC's actions in helping more than 100,000 wealthy individuals avoid paying tax. UBS results for the full year, were hit by more than $1bn to settle past scandals. In November, it was one of six banks fined by UK and US regulators over their traders' attempted manipulation of foreign exchange rates, paying 774m Swiss francs in total. It also paid $300m in the second quarter to settle charges it helped wealthy German clients evade tax. The US Department of Justice (DOJ) is continuing to investigate UBS over currency manipulation allegations. BBC NEWS

Asda backs down over food bank ban
The supermarket chain Asda has announced a policy U-turn that will see the return of permanent collection points for food banks and other charities in all its UK stores. The move comes after news broke that the collection points were being removed across Britain. Some food banks said the move would threaten 25% of their supplies, while the Trussell Trust food bank network warned of losses of food of up to a third. Asda has more than 525 UK stores and is owned by the US retailer Walmart. In response to its initial policy change, 88,000 people signed a petition hosted by the campaigning organisation 38 Degrees and a number of MPs raised concerns. While this ad hoc campaign took shape, Asda’s rival Tesco announced it was installing 100 new collection points in its stores. Opposition to Asda’s decision was expressed by the mayor of Liverpool, Labour’s Joe Anderson, in an open letter to Asda’s chief executive Andy Clarke. Anderson said he and his extended family were all regular shoppers at Asda stores, but the chain’s decision meant “we can no longer consider being customers of yours, and I will publicly urge Liverpool residents and others to do the same”. In response to Asda’s U-turn, Anderson said: “It’s disappointing that we had to lobby a company like Asda, who are usually good contributors to good causes. But all credit to them for listening. I’m just glad that they’ve done the right thing and reversed the decision.” GUARDIAN

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