Henderson. Hmm. That name rang a bell for us. Sure enough, it was Henderson Global Investors who wrote to every FTSE-350 company chairman in February 2005 asking them about their tax strategy. The results of the survey were published in a survey entitled Tax, Risk and Corporate Governance.
The funny thing is, Henderson didn't write to the FTSE-350 bosses telling them to minimise tax. On the contrary, it said, "Arrangements that minimise the amount of tax paid in the short term may be detrimental in the longer term if there is a significant likelihood that they will be challenged by tax authorities."
Presumably, then, Henderson opposed the scheme that saw retailers reduce their tax bill by a fraction of a penny for every £100 of high street revenue - an artificial tax structure that channeled revenue through "card handling" service company subsidiaries and which was eventually ruled illegal - but has no problem with completely upping sticks and moving the whole corporate entity across the Irish Sea, well out of reach of Alisair Darling.
We wrote about Henderson's survey in our October 2005 Financial Director Guide to Global Tax Strategy. Get hold of the whole publication here or just the article here.
The ONS revealed today that Q2 GDP was, er, zero. It had thought that growth was 0.2%, but has "downward revisions" to the numbers relating to production, construction and services industries have knocked the plus sign off the aggregate GDP figure.
Have a nice weekend.
]]>Most people would say market conditions are the reason behind the dip - fears of global recession leading to a fall in demand, sudden outbreak of peace in Georgia, that sort of thing.
But there is a prayer group in Washington, DC, that's taking full credit for the petrol price fall. Rocky Twyman, a veteran community campaigner, said, "We don't have anybody else to turn to but God."
He added: "We have to turn these problems over to God and not to man".
Does God really encourage the continued use of a product that involves mining the earth's natural resource to the brink of depletion while at the same time creating a by-product that has the power to destroy the planet with (amongst other things) another flood?
But then again "Pray at the pump" does have a certain ring to it - though we doubt very much that this is what Adam Smith meant when he wrote about the "invisible hand".
]]>£5.6m - Fine levied by the FSA against Credit Suisse for mis-pricing asset-backed securities (source: BDO Stoy Hayward)
£5.7m - Take-home pay of John Connolly, Deloitte's UK senior partner and global chairman - and now Britain's highest-paid accountant (source: Accountancy Age)
]]>On a completely different point, the paper reproduces a recent interview with Aleksandr Solzhenitsyn, who said in relation to the pre-revolutionary leadership of Russia, "Who if not the captain is to blame for a shipwreck?"
- The Independent, 5th August 2008, Extra page 3
This for me is pretty momentous (the admission of being in a recession, not the loss of a post-lunch lull) since no one has quite had the courage (or the brass neck) to say it out loud this year. People have pussy-footed round the idea, taking refuge from impending doom in whatever random positive stats or news stories they could find to legitimise their upbeatness, while others just clung to conventional wisdom, waiting for the two quarters of negative growth to pass before opening their gob either way. I really can't recall anyone saying out loud until today, we are in a recession. Once it's said out loud, it's just a matter of accepting the situation, watching and waiting - while companies gird their loins for the 'strategic reviews' and the bums disappearing from seats.
Certainly the news headlines today preceding the two recession comments sounded pretty bad: for example, pre-tax profits in the first quarter (before restructuring and redundancy charges) at BT fell by 7 per cent to £613m, and large half-year losses at the UK's biggest mortgage lender HBOS have hit at a time when fears over the strength of UK banks (and their potential to hurt the overall economy if another one reveals dire circumstances) are running high.
I think we can deceive ourselves no longer: here we stand, it seems, in recession. Recession. Let the word roll around in your mouth. Get up close and personal with the idea. Take it to your bosom. Just don't shoot the messenger...
Melanie Stern, deputy editor
A year ago they were both several pennies under a pound.
The government has just announced it's going to delay the introduction of a tuppence increase in fuel duty that was to have come into effect in October - to "help motorists and businesses get through what is a difficult time for everyone".
So now my tank and yours will cost a paltry £74 to fill up instead of an exhorbitant £75. Could someone explain to me how politics works, please? I just don't get it....
]]>Though a popular way of trying to increase shareholder value, Michael wrote that often the motivation for buy-backs results in capital-reduction schemes that can destroy value.
He's just reminded us that the banks were big buy-back junkies not so long ago and yet now they're busily digesting the proceeds of their rights issues.
HBOS, for example, was a buyer of its own shares in 2006 when they were as high as £11 a share. The rights issue price was 275p.
Barclays bought its own stock last year at between £4.30 and £7.00, before offering shareholders the chance to buy it back again via a rights issue priced at 282p.
And RBS bought RBS shares at up to £6.60 (adjusted for a bonus issue). Its rights price was just £2.
"Selling £10 notes for £5," he calls it.
Should we need to remind the banks to "Buy low, sell high"?
]]>It's interesting to find out exactly what FDs think the government should be doing to incentivise companies to go above and beyond the usual easy route of just recycling paper. 'Money' springs to mind, but apparently only just under a quarter felt that financial incentives would encourage greener behaviour.
Surprisingly, perhaps, more believed that a 'green education' programme would be the best way forward to entice companies to drop their harmful ways as some 28% preferred this option. Just 8% felt legislation could do the job alone while 15% felt a mixture of legislation, financial incentives and green education would get the green ball rolling.
It's refreshing to find that finance directors are starting to make headway with the environmental agenda but disheartening to hear that they don't think the government is giving the business community enough solid ground to work on.
"any of the following games, that is to say, baccarat, punto banco, big six, blackjack, boule, casino stud poker, chemin de fer, chuck-a-luck, craps, crown and anchor, faro, faro bank, hazard, poker dice, pontoon, French roulette, American roulette, super pan 9, trente et quarante, vingt-et-un, and wheel of fortune."
Firstly, we're starting to get an inkling as to why UK tax laws are so voluminous. Secondly, what the hell is chuck-a-luck???
But on a slightly more serious note, we see that there's yet another new effort being made to drive complexity out of tax legislation. The latest was unveiled by former Tory Chancellor Lord Howe. Speaking at the headquarters of the ICAEW - an organisation whose members make quite a lot of money helping people to deal with our complex tax laws - he unveiled Conservative party proposals entitled "Making Taxes Simpler".
Good luck to him - but don't hold your breath. Lord Howe himself admitted that the simplication process is 'going to be a very long haul.'
]]>The LSE was once regarded as little more than an EBay for stocks and shares, and seemed destined to fall into foreign hands - be they Swedish, German or American.
Dame Clara has breathed new life into the market, attracting foreign companies to London. As a result of her efforts, a London listing still means something to the companies traded on it - and certainly much more than if the LSE were just a subsidiary of some foreign bourse.
]]>Version One has not only reduced its carbon footprint by as much as it can reasonably afford, but also offsets more than it emits. The company estimates that by 2010 it will have offset all the emissions the company has ever produced. The Co-Operative Bank also takes part in historical offsetting.
It made me wonder: would this be something that would get big business excited? The Co-Operative Bank markets itself on its environmental credentials and Version One is a document management systems for accounting and ERP systems, which will enable them to become paperless.
But would Bank of Scotland, for example, want to offset its historical carbon emissions as well as its current? The Governor and Company of Scotland's first bank got together way back in in 1695. That's a lot of emissions to account for!
Call me a cynic but I don't see this as a trend many of the larger corporates will be moving towards.
]]>Ms Callan, who was only appointed to the role in December - was emphatically not an accountant and had no finance function experience. New man Lowitt has been the bank's co-CAO - chief administrative officer - responsible (says Lehmans) "for the global oversight of corporate real estate, expense and sourcing services, finance, operations, productivity and process improvement, risk management, and technology". He's been CAO of Lehmans Europe and was also global treasurer and global head of tax. He's got a clutch of university degrees - four at the last count - and is ex-McKinsey.
So he's no dumb bunny - mind you, no one ever said Callan was, either - but to what extent it adds up to more solid beancounting experience than his short-lived, flashy, but now embarrassingly-demoted predecessor remains to be seen. It ain't over till it's over.
]]>Coincidentally, just the other day we met a finance director from a small, Aim-listed company who explained that he was training a new member of his finance team and asked him to start getting to work on the Form 42. This was a particularly challenging exercise, this FD told us, not least because the guidance notes for this single form are 52 pages long. And oh, by the way, if you're late or you mess it up, it's the director responsible who is liable to HMRC penalties, not the company.
Other examples of bonkers bureaucracy are very welcome...
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