“Google Tax”: George Osborne tells tech giants 'We will make you pay your taxes'
In an ardent speech before the Conservative party conference, George Osborne said that some multinational technology firms go to "extraordinary lengths" not to pay tax in the UK. "You are welcome here in Britain with open arms," said the Chancellor to those firms. "While we offer some of the lowest business taxes in the world, we expect those taxes to be paid… If you abuse our tax system, you abuse the trust of the British people," he continued, vowing to stop such abuses. New legislation will prevent global technology firms from doing what is known as a 'double Irish' - in short, using artificial arrangements to divert profits to offshore tax havens that have been earned in the UK. Companies such as Google have faced grillings by politicians on the House of Commons Public Accounts Committee over why they appear to pay low rates of tax in the UK. Google was branded "devious" and accused of operating "smoke and mirrors" when it appeared before the PAC last year, charges which the company denied. TELEGRAPH Apple may have to repay billions from Irish government tax deal
Apple’s international headquarters are based in Knocknaheeny, a run-down northern suburb of Cork. Two-thirds of Apple’s global profits for 2011 were attributed to companies registered in Cork. Apple says that it pays all taxes due. EU Commission experts say it paid just 3.7% tax on non-US profits of $31bn (£19bn) last year. The European commission has formally opened an investigation into the Irish deal. The outgoing competition commissioner, Joaquín Almunia, said the commission’s preliminary investigation suggests that deals made between Apple and the Irish government in 1991 and 2007 “constitute state aid” and that “the commission has doubts about the compatibility of such state aid with the internal market [in the EU]”. He said that a deal which replaced them in 2007 also breaks the rules. Apple has also come under fire in the US for its complex tax arrangements, under which a company called Apple Sales International, which until 2012 had no employees and was controlled by a US-based board, is based in Ireland – where in 2011 it paid taxes of $10m on revenues of $22bn from non-US-based Apple activities, a rate equivalent to 0.045%. Senator Carl Levin, who published a damning report on Apple’s tax practices last year, issued a strong statement in support of the investigation. “The facts are abundantly clear: Apple developed its crown jewels – lucrative intellectual property – in the United States, used a tax loophole to shift the profits generated by that valuable property offshore to avoid paying US taxes, then boosted its profits through a sweetheart deal with the Irish government,” said Levin, who chairs the Senate Permanent Subcommittee on Investigations. Over 40 multinationals – including Amazon, Google and software security group McAfee – have operations in and around Cork, bringing 100,000 jobs to the area, according to Conor Healy, chief executive of the Cork chamber of commerce.
GUARDIANBanks face paying out billions to more than 12million customers after landmark legal battle against Lloyds over 'unfair' £750 fine for customer who was just £2.67 overdrawn
Oliver Foster-Burnell from Taunton, Somerset, went a few pounds over his £500 limit with Lloyds while he was in between jobs in 2008. Within weeks, the 28-year-old received a letter saying for that every day since he had been charged £20 by the bank. The fees spiralled to £750 before Mr Foster-Burnell was able to find a way out of his financial mess. But, after settling his debts, he took his case to county court where a judge ordered the bank to pay back the fees with interest. His victory could pave the way for billions to be returned to customers in similar situations if Mr Foster-Burnell is able to convince a High Court Judge that his case could apply to others. If successful, banks could face returning as much as £30billion to 12.6million customers, according to a study by The Office of Fair Trading.
DAILY MAILHousehold energy bills rise 4% while price paid for gas and electricity by Big Six suppliers falls by up to 20%
Consumer organisation Which? executive director, Richard Lloyd, said: 'The Competition and Markets Authority should now investigate how the independent regulator could establish a price people can trust that will spur suppliers to compete and reassure worried consumers that they're not being ripped off.’ MPs also discovered earlier this month that energy customers face a £215 bill for the installation of smart meters that will only save them around 3 per cent on their average annual bill by 2030 – a much smaller saving than had been predicted. Public spending watchdog, the Commons public accounts select committee, estimated the smart meter rollout will cost £10.6billion for the actual meters, with households forking out up to £11 running costs a year, plus the £215 cost of installing the meter.
DAILY MAILLloyds sacks eight traders over Libor and other rate rigging scandal, and claws back £3million in bonuses in the process
Lloyds dismissed the traders over attempts to rig the Libor interest rate and another rate used to calculate what the bank paid to use a government scheme designed to help save it from collapse during the depths of the banking crisis. Sources familiar with the situation said that the laws on recouping bonuses made it impossible to claw back payouts, worth millions more, that have already been pocketed. But the sacked bankers could face further financial penalties, bans from working in the City, or even criminal prosecution, amid ongoing probes by the Serious Fraud Office and City regulator the Financial Conduct Authority. Lloyds was initially investigating some 22 staff, four of whom have since returned to work after being exonerated by an internal probe. A further 10 have escaped without any punishment because they left the bank before it could claw back any bonuses or other payouts for misconduct. The bank was slapped with fines adding up to £218million by US and UK regulators earlier this year, after dealers tried to manipulate the Libor inter-bank lending rate and the Sterling repo rate. Chief executive Antonio Horta-Osorio sought to draw a line under wrongdoing at Lloyds, in the light of what he called ‘totally unacceptable behaviour’. The FCA is understood to be considering further action against the Lloyds staff, which could include bans from working in the City or fines worth hundreds of thousands of pounds. And the Serious Fraud Office, which has brought criminal charges against 12 people in connection with rigging Libor, is thought to be considering further prosecutions. Banking analysts still expect billions of pounds in new fines, with Barclays, RBS and HSBC expected to join a settlement of up to £1.8billion with six firms accused of foreign exchange manipulation. Analysts at Bank of America said Barclays, RBS and HSBC were facing £14billion in future fines, when including issues such as RBS’ role in the sale of US mortgage-backed securities widely seen as a key trigger for the global financial meltdown of 2008.
DAILY MAILWonga profits nosedive by 53% as it counts the cost of fake legal letter scandal - and reveals it will now be 'smaller and less profitable'
Pre-tax profits fell to £39.7million and the company said it expects to be 'smaller and less profitable' in the near term while it cleans up its image and reshapes its business. It said the slide in profits was due in part to a one-off charge in relation to the fake letter scandal earlier this year. Wonga sent thousands of bogus letters from made up law firms 'Chainey, D'Amato & Shannon' and ‘Lowe Legal Recoveries' to mislead customers into believing their outstanding debt had been passed to lawyers, it was revealed in June. It was forced to pay £2.6million in compensation to the customers. The FCA is also bearing down on providers of short-term credit, proposing earlier in the summer a cap on payday lending meaning that from next January, interest and fees must not exceed 0.8% per day of the amount borrowed. It also wants to impose a cap on the overall cost of a payday loan so that it cannot exceed 100 per cent of the original sum borrowed.
DAILY MAILConsumers face 'lost decade' as spending squeeze bites
Annual wage growth is likely to remain well below the 4.5%-to-5% rises seen before the financial crisis struck in 2008, the EY Item Club survey says. This will slow consumer spending growth over the next two years. Median pay in real-terms is forecast to fall from £18,852 in 2008 to £17,827 by 2017, the survey suggests. The Item club, a non-governmental forecaster that uses HM Treasury's model of the UK economy, believes that record numbers of people in work - currently 30.6 million - will act as a brake on wage rises. The report expects the pace of consumer spending growth to be 2% over the next two years, compared to the annual average growth rate of 3.7% during the pre-crisis decade. "Total household incomes have strengthened because more people are in work, but individuals do not have extra money in their pockets," said Martin Beck, the EY Item Club's senior economic adviser. "Real wages are being held back by strong growth in the supply of workers and the fact that firms are facing increased non-wage costs, such as new pension schemes," he added. Mr Beck believes the so-called "squeezed middle" - households containing neither highly-skilled nor low paid workers - will continue to see limited growth in disposable income as pay rises remain below the rate of inflation - currently 1.5% - and competition for jobs remains strong. Younger people in particular face the most pressure on spending, the report concludes, as unemployment among people in their 20s and 30s remains above average and the cost of buying a property continues to rise.
BBC NEWSTop fund manager Neil Woodford says his industry overcharges
One of the country's most successful fund managers has criticised his industry for charging customers too much, and paying its managers too much. Neil Woodford says fund managers often claim to be actively managing a fund, when in reality they are following the herd. This means fund managers don't actively choose which stocks to invest in, but instead tend to follow a big index such as the FTSE 100. However, he says that wiser customers and stricter regulation will lead to lower fees in the future. Mr Woodford set up his own fund in May and has £7bn under management. Neil Woodford is considered in the industry as one of the country's best performing fund managers. He puts that down to always taking a long-term view on his investments, arguing that most fund managers take a far too short-term approach. "Fund managers are constrained by the fear that if they were to underperform the index for a three, six or 12 month period, their careers would be in jeopardy," he said. As a result, Mr Woodford argues, they are reluctant to buck the trend or invest in start-ups.
BBC NEWSBanking regulator FCA may fine banks £2bn for currency-rigging
The City regulator has this week held secret talks with some of the world's biggest banks about a settlement for the manipulation of global foreign exchange markets that could cost the lenders a total of around £2bn in fines. The banks, which also include Barclays, HSBC, Royal Bank of Scotland, Citi, JP Morgan and UBS, would pay different sums, depending on the gravity of their traders' alleged efforts to artificially move foreign currency rates. However, a person close to the talks said the FCA had informed some of the banks' lawyers that the smallest of the penalties imposed for foreign exchange-rigging were likely easily to outstrip the biggest of the fines it has so far handed out for manipulation of the interbank borrowing rate Libor. Such an outcome would chime with a warning from Martin Wheatley, the FCA chief executive, in February, when he told MPs that allegations about collusion to rig prices in the $5.3tn (£3.25tn) spot market were "every bit as bad as they have been with Libor". The largest fine dished out by the FCA for Libor-rigging to date was £160m paid by UBS in December 2012.
SKY NEWSFor every fatal accident, 100 construction workers die from a work-related cancer
During a month long initiative, the Health and Safety Executive (HSE) will carry out unannounced visits to sites where refurbishment projects or repair works are underway. From 22 September, HSE Inspectors will ensure high-risk activities particularly those affecting the health of workers, are being properly managed. These include working with harmful dusts such as silica and asbestos, and other hazardous substances. If unacceptable standards are found Inspectors will take immediate enforcement action. HSE is urging industry to ‘think health’ as over 30,000 construction workers are made ill by their work every year. Philip White, HSE Chief Inspector of Construction, said: “Industry has made much progress in reducing the number of people killed and injured in its activities, but for every fatal accident, approximately 100 construction workers die from a work-related cancer. During the recent health initiative, enforcement action was taken on one in six sites. Time and again we find smaller contractors working on refurbishment and repair work failing to protect their workers through a lack of awareness and poor control of risks. This isn’t acceptable – it costs lives, and we will take strong and robust action where we find poor practice and risky behaviour.”
HEALTH & SAFETY EXECUTIVE
