EU proposes new tax for tech giants
An EU commissioner has announced plans for a new tax on technology giants, which could be implemented by Christmas.
Pierre Moscovici, the head of tax for the European Commission, has said the tech tax across Europe could raise £4.4 billion a year.
Moscovici said that good progress was being made, however, if it did not come into action this year – it could be until the end of next year before it could be reconsidered.
The technology tax would have less time to be considered next year when the dominant topic will be Brexit.
“We can lead by example,” he said. “Let’s do it now.”
Moscovici needs agreement from all EU members, including the UK. Earlier this month, UK chancellor Philip Hammond laid downs plans for a new technology tax.
Moscovici’s announcement comes just after social media giant Facebook faced criticism after announcing it was paying £15.8 million tax in the UK, where total sales reached £1.3 billion.
“Those companies, those internet giants, they pay little or no tax in the EU,” said Moscovici.
“Why? Because our corporate tax system is old. It is not their fault. It is our fault. We have a tax system based on physical presence.”
“We need to reflect on digital presence. If you compare all businesses, 23% is the average corporate tax rate. For the internet, it is something like 9%. This is a problem of a level playing field.”
In terms of Brexit, it is not known how the UK will come into the new tech tax and it will have to be “improvised”.
“Clearly we need to look for a solution that is close, co-operative and friendly,” he said.
Firms like Google (NASDAQ: GOOG), Amazon (NASDAQ: AMZN) and Facebook (NASDAQ: FB) traditionally pay the highest taxes where they have headquarters, which is often in the US.
Advanced Oncotherapy shares soar after cancer treatment milestone
Shares in Advanced Oncotherapy (LON:AVO) soared on Wednesday morning, after the company announced it had reached a milestone in the development of its LIGHT cancer treatment system.
The company, which specialises in proton-beam cancer treatment, announced that it had successfully integrated four sections of the light accelerator.
During testing, the proton beam accelerated through all units at ‘the design-anticipated energy of 52MeV’.
The firm said that this was almost double the output energy referred to in the previous case study milestone announcement, revealed back in September.
Advanced Oncotherapy now said they would turn their efforts to add 13 more CCL modules to increase energy levels to 230MeV, which represents the level required to treat deep-seated tumours.
Commenting, Nicolas Sérandour, CEO of Advanced Oncotherapy, said: “We are delighted to have successfully achieved a further acceleration of the proton beam through the four sections of the LIGHT system and have accordingly validated the designs of the all the accelerating structures. Having fully integrated all key components of the LIGHT system, we have already achieved the most challenging aspect of constructing a new linear accelerator.”
He added: “Discussions with potential customers are now multiplying and we expect them to accelerate as we are getting closer to the next phases of our journey. We look forward to having all our accelerating units manufactured to generate a beam at full energy by the middle of next year and start the installation of the system in Harley Street when the building is ready by mid next year.”
Shares in Advanced Oncotherapy are currently trading +35.02 percent as of 14.08AM (GMT).
Google appeals €4.3bn Android penalty
Google (NASDAQ:GOOGL) is appealing a record €4.3 billion fine after it was accused of utilising its Android system to “cement its dominance”.
The tech giant announced the appeal on Tuesday and it could take up several years to be resolved.
The European Commission found that the company had illegally forced phone manufacturers to pre-install its Android apps, disadvantaging its competitors.
Google also ensured Android manufacturers pre-installed its search engine and Chrome browser, in order to use Google’s app store.
Google was dealt the record fine back in July.
At the time of the announcement, EU Commissioner Margrethe Vestager, who heads the competition policy department, said:
“Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. ”
She continued: “These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules.”
Earlier this month, the tech company was named the second-most valuable brand in the world according to a ranking by Interbrand.
Elsewhere across the tech industry, Paypal (NASDAQ:PYPL) recently agreed to pay an additional £2.7 million in UK taxes.
Similarly, it was also revealed this week that Facebook’s (NASDAQ:FB) UK tax bill had also tripled.
Brexit: 5,000 City jobs could leave UK
A City minister was warned that up to 5,000 jobs could be moved from the City of London by the time of Brexit.
John Glen has agreed with the Bank of England that thousands of financial services jobs could move to the EU by March 2019, when the UK officially leaves the EU.
“My sole objective in respect of the City is to ensure as much continuation as possible in respect of economic value able to be generated by the City,” he told a committee in the House of Lords.
“We have not seen wholesale moves of large institutions to other cities in continental EU,” Glen added.
The warning has come as the Financial Conduct Authority (FCA) published over 900 pages of preparatory work for a ‘no deal’ Brexit, consulting with two financial firms in the run-up to the UK’s departure from the EU.
Glen added that there have been no calculations yet on how much in tax will be lost from financial services institutions.
“It would be pretty impossible, laden with so many assumptions, to do some meaningful calculations on that, in terms of what the different sectors’ response would be, because there’s so many live issues with respect to the deal and the regulatory certainty that we would seek to bring through the deal,” he said.
The financial sector currently generates over £70 billion in tax revenues.
Nausicaa Delfas, the executive director of international at the FCA, said: “The FCA is planning to be ready for a range of scenarios.”
“Today we are publishing two consultation papers to ensure that in the event the UK leaves the EU in March 2019 without an implementation period, we have a robust regulatory regime from day one, and to ensure a smooth transition for EEA firms and funds currently passporting into the UK.”
Telford Homes warns on Brexit uncertainty, shares fall
Telford Homes (LON:TEF) warned of the impact of Brexit uncertainty upon housing demand on Wednesday.
The house builder said that an increasingly stagnating London property prices, alongside continued Brexit-related uncertainty had been having a negative impact upon the housing market.
Specifically, house prices in the capital have fallen sharply compared to the rest of the UK.
Average London house prices fell 0.7 per cent in the year to July, marking the third month of decline according to figures from the Office for National Statistics (ONS).
According to the trading update, Telford Homes said its interim results would show will fewer completions in the first half of the year to 31 March 2019 than in the following six months.
Pre-tax profits for the first-half of 2019 will therefore be lower than the second quarter.
Nevertheless, the company said it expects to ‘exceed the £8.7 million achieved in the six months to 30 September 2017.’
The interim dividend is also set to increase in response to growth.
Jon Di-Stefano, Chief Executive of Telford Homes commented: “Our key objective is to fulfil the ongoing demand for the homes that London needs. Notwithstanding the uncertainty surrounding the outcome of Brexit, the Group continues to perform well and is focused on increasing the scale of the business driven by the need for homes at affordable price points, in particular in the rental sector.”
Looking ahead, Di-Stefano remained optimistic. He added: “We remain confident that our approach to forward sales with increased visibility over profit recognition enhanced by our success in build to rent will enable us to deliver strong long term returns to our shareholders.”
The warning sent Telford shares down more than 13 percent.
The company was founded back in 2000, and is currently listed upon the AIM-market of the London Stock Exchange.
The company specialises in developing housing in the capital.
Shares in Telford Homes are currently trading -7.62 percent as of 12.43PM (GMT).
Sosander expects 407pc increase in revenues, shares rise
Sosander expects to announce a 407 percent increase in first-half revenues compared to the same period last year.
The online fashion retailer revenues for the year up to September 30 to reach £1.84 million thanks to growth in orders and customers.
“The business has made substantial progress over the first six months of the year, and we are delighted to have delivered such strong growth in revenues, orders and new customers. We have successfully raised £3 million following strong institutional investor interest in the company,” said joint CEO’s, Ali Hall and Julie Lavington in a statement.
Sosander has bucked the retail trend, where many retailers including French Connection have reported a fall in sales and profits leading to widespread store closures.
The fashion retailer has driven customer base by focusing primarily on brand appeal and brand awareness through social media platforms including Instagram and Facebook, which have seen a growth in following by 193% and 129% respectively.
The last six months have seen more frequent orders and a higher basket size, highlighting the growing customer loyalty to the fashion retailer.
Hall and Lavington added:
“Pleasingly, this has been accompanied by a growing number of repeat customers and an increased average order value, as those customers already recruited become brand ambassadors. Our clothes have become a mainstay in our customers’ wardrobes – including celebrities – and we are proud that our garments are being worn by high profile actresses, TV presenters, sports stars and social media influencers.”
“At the same time, we have been able to make key operational progress that will further enhance the customer experience and have increased the efficiency of our marketing spend. Momentum has continued into the important Autumn/Winter period and we look forward to the rest of the year confidently.”
Shares in the group (LON: SOS) are trading up 6.95 percent at 38,93 (1056GMT).Patisserie Valerie shares suspended on potential fraud
Shares in Patisserie Valerie (LON: CAKE) have been suspended after the discovery of potential fraud.
The owner of Patisserie Valerie has been notified of “significant, and potentially fraudulent, accounting irregularities and therefore a potential material mis-statement of the company’s accounts”.
Luke Johnson, the chairman and owner of a 37% stake in the group, said on Wednesday: “We are all deeply concerned about this news and the potential impact on the business. We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible.”
The finance chief of the business, Chris Marsh, has been suspended from his role.
Shares will continue to be suspended while a full investigation is conducted.
Patisserie Valerie released its last trading update in May. The group said that half-year profits were 14.2% higher at £11.1 million.
The first store was opened in 1926 and now has over 150 stores in the UK, whilst also trading in Sainsbury’s supermarkets.
The group was listed on the stock market in 2014, with shares at 170p a share. When trading was suspended, shares were trading at 429p.
The businesses also include Druckers, Philpotts, Baker & Spice and the Flour Power City Bakery.
The statement released ahead of Wednesday trading read:
“During the course of 9 October 2018, the board of directors of the company has been notified of significant, and potentially fraudulent, accounting irregularities and therefore a potential material misstatement of the company’s accounts.”
“This has significantly impacted the company’s cash position and may lead to a material change in its overall financial position.”
“As a result the company has requested that its shares be suspended from trading on AIM while it conducts a full investigation with its legal and professional advisers into its true financial position.”
“In the meantime Chris Marsh, the chief financial officer, has been suspended from his role.”
“The company will make further announcements in due course as the results of the investigation become known.”
IMF: UK public finances are ‘vulnerable to recession’
An assessment from the International Monetary Fund (IMF) has found that the UK’s public finances are among the weakest in the world.
The UK was in the second weakest position in the health check on the wealth of 31 nations, with only Portugal in a worse state.
According to the assessment, which includes wealth and stress tests, the UK did poorly largely thanks to the bailout of UK banks after the financial crisis.
“The United Kingdom balance sheet expanded massively during the crisis. Most of the expansion in the balance sheet was the result of large-scale financial sector rescue operations that resulted in reclassification of the rescued private banks into the public sector. [This] increased (non–central bank) public financial corporation liabilities from zero in 2007 to 189% of GDP in 2008, with similar [falls] in financial assets,” said the report.
Top of the list was Norway, who holds most of its wealth in oil. Countries including the Gambia, Uganda and Kenya also ranked above the UK due to their higher net wealth relative to GDP.
Italy, Barbados and Greece were excluded from the broader tests and therefore would have had a lower rating than the UK.
The IMF said: “Better balance sheet management enables countries to increase revenues, reduce risks and improve fiscal policymaking. Countries with stronger balance sheets pay lower interest on their debt. Evidence also shows that countries with strong balance sheets experience shallower and shorter recessions.”
The IMF added that publishing a public sector balance sheet will help to “avoid the fiscal illusion that arises when governments on face value improve the fiscal position by lowering the immediate debt and deficits, but reduce net worth over time”.
ITV to sell South Bank studio
ITV has put its South Bank studios up for sale, axing plans to move back after its five-year development.
The site in South Bank has previously been the broadcaster’s headquarters for over 40 years and is home to the show Upstairs Downstairs.
ITV vacated the building last year in what was supposed to be a temporary move and relocated in offices in Holborn.
The move comes after plans unveiled in July by the new chief executive Carolyn McCall, who planned to cut costs as part of a strategy overhaul in July.
“ITV needs to ensure that its property portfolio in London supports the new strategy by giving flexibility to continue to grow, while supporting our ambition to be an agile and increasingly digital organisation,” said a spokesperson.
“By remaining in our current London office and studio spaces we can focus more time and resource on the areas of the business which will deliver greatest value.”
Analysts at Liberum have estimated that the sale of the South Bank location could net ITV as much as £245 million. ITV bought the South Bank studios for £56 million in 2013 from Coal Pension Nominees.
Shares in the group (LON: ITV) are trading at 159,30 (0911GMT).
MySale shares plunge on CFO resignation
Shares in MySale tumbled 16% this morning on the news of the chief financial officer’s resignation.
Andrew Dingle announced his resignation on Tuesday and said he will leave the group in October following a handover process.
Loss before tax grew from A$1.6 million to A$1.7 million as the online retailer was hit with an A$1.4 million charge regarding the purchase and reorganisation of personalised product retailer Identity Direct.
The group was also faced with an A$20million hit for abandoned acquisitions.
MySale said: “Whilst it is disappointing to incur costs on projects which do not conclude the group has identified key strategic and commercial benefits that can be derived from increasing the scale of the business and continues to evaluate acquisition opportunities.”
The group’s CEO, Carl Jackson, remained confident in the retailer’s future and said:
“While it is early in the current year, and our peak trading period lies ahead, trading to date has been in line with expectations and the board expects that underlying earnings before interest, taxation, depreciation, and amortization for the year will be in line with market forecast.”
Tuesday also saw the resignation of Aviva’s CEO, Mark Wilson.
Wilson left Britain’s biggest insurance company and said it was “time for new leadership to take the group to the next phase of its development”.
Shares in MySale (LON: MYSL) are currently trading down 15.47% at 41,80 (1541GMT).