Rip-off News round-up. Our pick of the last week's media (Thu 13th Apr)

Google accused of being 'less than transparent' after revealing latest UK tax payments

The search giant said in its UK accounts that it had made sales of £1 billion - despite declaring a figure of over £5 billion to US officials. In Google's US accounts for 2016 the company said it made sales of $7.8 billion in the UK - which is £5.65 billion at current exchange rates. That means it paid just £36.4 million in UK corporation tax on pre-tax profits of £148.8 million - much less than if the full £5.65 billion of turnover had been put through the UK. It is the result of a legal loophole which means some sales are recorded via Ireland where the revenue is untouchable by the UK taxman. Tax expert Richard Murphy, a Professor of Practice in International Political Economy at City, University of London, told ITV News: "What this implies is that £4 in every £5 that Google sells in the UK is not subject to UK tax, and as the accounts note, this is with the full agreement of our tax authority." He added: "The implications are big. Google is reporting profits in its UK accounts of £149 million, or roughly £15 for every £100 of sales it does actually record here. But if, as its US accounts imply, Google should be recording five times more here than it does then the profit in the UK would logically be at least five times higher too. And in that case so too would the tax payment be bigger. And that’s why this matters." The company has faced mounting pressure over its tax affairs amid a backlash against corporate tax avoidance by multi-national companies. Google agreed to a controversial £130 million deal with HM Revenue & Customs in January last year to settle a 10-year tax inquiry into its UK business. Labour's Shadow Chancellor John McDonnell tweeted: "It seems Hammond and May are more interested in cutting Google’s taxes than making them pay their fair share.” A Google spokesman said: "As an international business, we pay the majority of our taxes in our home country, as well as all the taxes due in the UK.” ITV NEWS

Benefits Cap reduces thousands to 50p-a-week housing benefit

A Panorama survey of hundreds of councils shows at least 67,600 homes in England, Scotland and Wales have lost some money due to the new welfare cap. The cap is £23,000 in London and £20,000 in the rest of the country. More than 7,500 of those households have all but entirely lost their housing benefit and instead receive a nominal 50p a week. They have to be in receipt of some housing benefit in order to be eligible to apply for discretionary housing payments, a special government fund set up for those particularly affected by the cap. The cap is part of the government's drive to get unemployed people back into employment by cutting out-of-work benefits. The amount of money above the limit is taken from either housing benefit or Universal Credit. Alison Garnham, chief executive of the Child Poverty Action Group, said: "Removing people's housing benefit basically means that people can't afford their home, so it puts people at risk of homelessness. "It also means that they have to use money that's intended to buy food for their kids and for their other living expenses - this has to be used to plug the hole in their rent." Where someone finds work - 16 hours a week for single parents, 24 hours for a couple - their benefits are reinstated, and research suggests about 5% of those affected by the cap have returned to work. But Ms Garnham said about 80% of those affected cannot be expected to work as they are sick or have very young children. BBC NEWS

Lloyds to pay £100m to victims of HBOS Reading fraud as FCA reopens probe

The bank has already written off about £250m of fraudulent loans made in the scandal, which in February saw six people, including two former HBOS employees, being jailed for a combined 47 years and six months. It now expects to spend a further £100m reimbursing customers who suffered “economic losses, distress and inconvenience” because of the fraud at HBOS’s Reading office in the years before the financial crisis. In a further blow, the Financial Conduct Authority (FCA) also announced that it had resumed a probe that it had suspended in early 2013 while Thames Valley Police conducted its own six-year investigation into the scam, which resulted in this year’s convictions. The scam was carried out at HBOS’s division in Reading which handled small businesses that had run into trouble and took place between 2003 and 2007, before Lloyds rescued the bank with a disastrous takeover in 2009 during the financial crisis. It involved bribery with sex parties, luxury holidays, expensive watches and cash to refer companies that were HBOS clients to a consultancy firm called Quayside Corporate Services (QCS). The troubled businesses were then asset-stripped by QCS. The £100m provision taken by Lloyds will surprise investors because the bank, which is just under 2pc-owned by the taxpayer, had recently been playing down the amount of compensation it expected to pay. It had initially estimated that about 50 customers had been embroiled in the fraud but because others have come forward it now believes between 70 and 100 clients could have been hurt by the scam. TELEGRAPH

Libor: Bank of England implicated in secret recording

A secret recording that implicates the Bank of England in Libor rigging has been uncovered by BBC Panorama. The 2008 recording adds to evidence the central bank repeatedly pressured commercial banks during the financial crisis to push their Libor rates down. Libor is the rate at which banks lend to each other, setting a benchmark for mortgages and loans for ordinary customers. The Bank of England said Libor was not regulated in the UK at the time. The recording calls into question evidence given in 2012 to the Treasury select committee by former Barclays boss Bob Diamond and Paul Tucker, the man who went on to become the deputy governor of the Bank of England. Libor, the London Interbank Offered Rate, tracks how much it costs banks to borrow money from each other. As such it is a big influence on the cost of mortgages and other loans. In the recording, a senior Barclays manager, Mark Dearlove, instructs Libor submitter Peter Johnson, to lower his Libor rates. He tells him: "The bottom line is you're going to absolutely hate this... but we've had some very serious pressure from the UK government and the Bank of England about pushing our Libors lower." Banks have already been fined more than £6bn for allowing submitters to be influenced by requests from traders or bosses to take into account the bank's commercial interests, such as trading positions. Chris Philp MP, who sits on the Treasury committee, said: "It sounds to me like those people giving evidence, particularly Bob Diamond and Paul Tucker were misleading parliament, that is a contempt of parliament, it's a very serious matter and I think we need to urgently summon those individuals back before parliament to explain why it is they appear to have misled MPs. It's extremely serious." BBC NEWS

Struggling credit card holders could see fees and charges waived

The Financial Conduct Authority (FCA) has announced a raft of measures to help people in persistent credit card debt, including waiving or cancelling interest and charges if customers cannot afford to curb their liabilities through a repayment plan. The watchdog found that 3.3 million people have fallen into a persistent credit card debt spiral, where all their money is spent on repaying interest, while the total debt is never lowered. Debt campaigners welcomed the announcement, but warned that the proposals do not address the fundamental question of how credit cards trap people in “persistent debt”. Andrew Bailey, chief executive of the FCA, said credit card companies are reluctant to intervene to help these customers because they are profitable business. Persistent debt can be very expensive – costing customers on average around £2.50 for every £1 repaid – and can obscure underlying financial problems. Because these customers remain profitable, firms have few incentives to intervene. The proposals drawn up by the FCA would force firms to contact customers and ask them to make faster repayments if they are struggling with persistent debt. Those customers that remain in debt for another year-and-a-half would then be put on a repayment plan. However, customers could have their card suspended if they fail to respond, or can make the repayments but refuse to do so. Credit card holders that cannot afford any of the options would be offered even greater help from firms, such as cutting or waving their interest or charges. GUARDIAN

Credit Suisse embroiled in major global tax evasion investigation

In a fresh blow to Switzerland’s attempts to clean up its reputation for banking secrecy and tax evasion, the Netherlands is leading a coalition of five tax authorities conducting a criminal investigation into undeclared “black” accounts and money laundering. Raids on homes and offices took place across the Netherlands and France on Thursday and Friday. Taxpayers and high ranking bank employees in Britain, Germany and Australia are under investigation. Dutch prosecutors acted after receiving a tip-off on assets hidden within “offshore accounts and policies”, estimated in the millions of euros. They say the information concerns a single Swiss bank, but have so far declined to name the target. However, Credit Suisse confirmed on Friday that its offices in London, Paris and Amsterdam had been searched by local authorities concerning “client tax matters”, and that it was cooperating with their inquiries. The action has prompted fresh calls for an end to Swiss banking secrecy. If proven, evasion on this scale would amount to a “global criminal enterprise”, one tax expert said. The raids sparked a diplomatic row between Switzerland and the Netherlands, with officials in Geneva furious at what they claim was a deliberate decision to keep them in the dark. Two arrests have been made in the Netherlands, where the haul of assets seized from safes and homes in the Hague and other areas included property, cash, 35 paintings worth €1.2m (£1m), a luxury Mercedes, and a 1 kilogram gold ingot. The country’s Fiscal Information and Investigation Services (FIOD) has reportedly been handed the names of 3,800 account holders and details of 55,000 accounts by a Dutch informant. Dozens of Dutch taxpayers are under investigation. More actions would follow in the coming weeks, the agency said in a statement released on Friday. France announced that 25 customs agents had carried out raids across the country as part of an inquiry into “aggravated money laundering and financial fraud” which began on 26 April last year. Investigators have found “several thousand” bank accounts opened in Switzerland by French taxpayers who are suspected of having failed to declare them to the authorities. Alex Cobham, chief executive of Tax Justice Network, said: “Allegations of laundering and tax evasion on this scale would, if proven, indicate the bank was effectively a global criminal enterprise.” GUARDIAN

Travel websites ticked off over 'misleading' claims

Websites that show bargain prices for flights, hotels and other travel bookings, are not giving customers accurate information, say European consumer protection authorities. The first price shown was often much lower than the final price, they said. Some offers that look too good to be true, are - because when you click to buy they aren't available. The Consumer Protection Cooperation body said the 235 websites that they had identified would be required to correct the problems. If websites failed to comply, national authorities could pursue legal proceedings, it said. Key findings: In one third of cases the first price shown was not the same as the final price to pay; In one fifth of cases promotional offers were not really available; In nearly one third of cases the way the total price was calculated was not clear; In one quarter of cases prompts on scarcity (eg "only 2 left") only applied to availability on that particularly website, which wasn't made clear. The CPC screened the sector in October 2016, covering 28 European countries. It checked a total of 352 sites, including ones offering to book accommodation, transport tickets and car rental. Some were price comparison websites. It also found that over a fifth of the sites it looked at presented consumer reviews in an unclear way, sometimes throwing doubt over their truthfulness. BBC NEWS

MPs urge crackdown on excessive pay to rebuild public trust in business

Among their wide-ranging recommendations, the MPs’ committee called for a ban on long-term investment plans, complex multi-year pay deals that have been criticised for masking the true extent of huge awards to executives and for encouraging short-term thinking. Responding to the gulf in pay that has emerged between bosses and average workers, MPs on the business, energy and industrial strategy select committee also called on firms to publish pay ratios between top executives and other employees and to put workers on remuneration committees. The MPs urged the government to grant the corporate governance watchdog more powers to hold company directors to account. The committee highlighted revelations that workers at Sports Direct were being paid less than the legal minimum wage and the demise of BHS, which cost 11,000 jobs and prompted MPs to declare that the retailer had been subject to “systematic plunder” by former owners Sir Philip Green, Dominic Chappell and their respective “hangers-on”. It said that gathering evidence for the report, MPs were told by one witness “pay was now so complex that executives themselves do not always understand their own remuneration”. It also heard LTIPs could distort executive behaviour, with chief executives tailoring decisions to affect the share price around the time their shares were due to vest. The MPs’ new report recommended companies establish stakeholder advisory panels, including workers, consumers, and suppliers. It also suggested workers be represented on remuneration committees and for the chairs of those committees to be expected to resign if fewer than 75% of shareholders fail to approve the company’s pay policy. But it stopped short of demanding a worker representatives on boards – something proposed and then watered down by Theresa May last year. The Institute of Directors said that call reflected its own longstanding concerns about the lack of transparency in the governance of unlisted firms. “A code for private companies is supported by two-thirds of IoD members and should be established for the largest firms,” said IoD director general Stephen Martin. The TUC welcomed that and other recommendations. “British people are fed up with the bad behaviour of big business. Workers are getting a raw deal, and our economy is harmed by short-term thinking in the board room. Reform is badly needed, and the government should take up many of the excellent ideas in this report,” said the TUC general secretary, Frances O’Grady. GUARDIAN