Starbucks pays corporation tax in UK for first time in five years

Starbucks says customers 'should not have to wait for us to become profitable' before corporation tax is paid

Starbucks, one of the companies exhorted by the prime minister to "wake up and smell the coffee" over tax, has handed over £5m to HM Revenue and Customs – its first payment in five years.

But the cash has only gone some way towards assuaging critics, one of whom complained that companies should not be able to "pick and choose" how much tax they wanted to pay.

The coffee shop chain said on Sunday it had made the contribution to please its customers and would be paying a second £5m instalment in the last half of the year despite claiming the business overall continued to make a financial loss in Britain.

"Six months ago, we felt that our customers should not have to wait for us to become profitable before we started paying UK corporation tax," the company explained in a written statement.

"We listened to our customers in December and so decided to forgo certain deductions which would make us liable to pay £10m in corporation tax this year and a further £10m in 2014. We have now paid £5m and will pay the remaining £5m later this year," Starbucks added.

Starbucks has paid £5m corporation tax this year with a further £5m to come. It says it will pay another £10m in 2014  The move follows a barrage of criticism, including a comment from David Cameron at the World Economic Forum in Davos in January when he attacked low tax payers using the coffee reference – though not specifically naming Starbucks, Google or Amazon .

A spokeswoman for Starbucks declined to say how many customers it had lost following the high profile row which started with demonstrations outside some of the outlets by the campaign group, UK Uncut and ended with scorching criticism from parliament's public accounts committee.

Margaret Hodge, MP and chair of the PAC, said on Sunday she welcomed the first payment by Starbucks but added: "Companies should not be able to pick and choose how much tax they pay. We need a system which ensures that everybody pays a fair share of tax on the profits they gain from the economic activity they undertake."

The initial row followed revelations that Starbucks had paid £8.6m in corporation tax in its 15 years of trading in Britain, and nothing in the last three years despite overall sales of £3bn.

Amazon, which had book and CD sales in Britain of £3.35bn in 2011, only reported a "tax expense" of £1.8m while Google's British business paid £6m to the Treasury in 2011 on UK sales of £395m.

During a period of austerity, the issue has turned into a major political storm with the prime minister making tax avoidance one of the key issues at last week's G8 summit of leading economies at Lough Erne, Northern Ireland.

Campaigners claimed that various licensing and supply agreements with Dutch and Swiss arms of the Starbucks empire were being used to allow it to switch profits from Britain to other countries.

UK shops are able to buy their coffee from Switzerland at a 20% premium and yet the foreign business is charged corporation tax there of 12% compared with Britain's level of 25%.

Kris Engskov, managing director of Starbucks UK, responded last December by promising to pay £20m within two years.

Accounts filed by Starbucks UK with Companies House this week will show the British side of the business still not formally profitable. Starbucks is expected to close up to 30 of its shops around the country this year. A similar number were shut last year amid tough competition from Costa and other brands.

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Article Source : http://www.guardian.co.uk

Shell chief Peter Voser stands down as oil company posts profit rise

Voser announces plan to leave Anglo-Dutch oil giant next year, alongside small rise in first-quarter profits to $8bn

Peter Voser, the chief executive and architect of Shell's recent financial success, has unexpectedly announced plans to stand down, less than four years into the job.

The move came as the Anglo-Dutch oil group unveiled a 4% increase, to $8bn (£5bn), in its first quarter profits and raised the dividend a further 5% to 45 cents per share.

54-year old Voser said he wanted a "change of lifestyle" and to spend more time with his family. He is scheduled to retire from Shell in the first half of next year with a pension pot worth almost $20m.

There was immediate speculation he may be lined up for the job of chairman at Swiss pharmacuetical group Roche, where he is already a non-executive director.

Meanwhile current chief financial officer, Simon Henry, said it would be "inappropriate" to comment on whether he would try to follow Voser's path from finance to the top job.

Peter Voser has been chief executive of Royal Dutch Shell for four years.

 If Henry takes over he would be the first British boss of Shell since Philip Watts left in 2004 in the wake of a scandal over the wrong booking of oil reserves.

Voser, 54, has spent almost 25 years in total at Royal Dutch Shell, having left in the middle of his career there only to return later.

On Thursday he said: "After such an exciting executive career I feel it is time for a change in my lifestyle and I am looking forward to have more time available for my family and private life," he said.

Shell's chairman, Jorma Ollila, said Voser's reign over the past four years had been "impressive", reorganising the company, delivering growth, and developing a clear forward strategy with a strong portfolio of new options.

Analysts generally agreed. Peter Hutton, energy analyst with RBC Capital Markets, said in a research note that the quarerly results were "solid" and he was full of praise for the outgoing chief executive.

"Peter Voser leaves Shell in a much stronger position than when he arrived. The company still needs to steer through LNG optionality to bring greater clarity, in our view, but he has brought real focus to the business. The testament to a strong legacy will be a smooth transition to his successor.

Neill Morton at Investec Securities added that Voser's exit was a surprise: "He is only 54 years old and Shell is portraying this is as a lifestyle choice."

Shell also reported revenues of $115bn in the first three months of 2013, roughly as much as the cost of running the NHS until the end of the year.

The $115bn revenues recorded by Shell were lower than the almost $120bn for the same quarter of 2012, although that was restated for accounting reasons.

Oil and gas production rose 2% to 3.5m barrels of oil equivalents – but that was excluding the impact of divestments, production sharing agreements and security problems onshore Nigeria.

Voser said the company had also spent $1.2bn buying back its shares in the last quarter.

The company has benefited from strong crude prices, although the global price of oil has in recent days fallen through the $100 a barrel level. This was exacerbated by weak manufacturing data from the US and China, prompting fears of a downturn in the global economy.

On a media conference call, Henry said the company was well placed for the recent fall in prices.

"We also think there are quite few players in the market, quite a few companies, who actually have bet the farm on 64.2 pounds-plus oil prices. We don't," he said. "We're structured around a lower oil price so it is not bad for us," he added.

Henry indicated that the lower oil prices might drive down asset values and give opportunities for takeovers. Shell has periodically been linked with a purchase of BP whose share price has continued to lag because of fallout from the US Gulf oil blowout.

But Simon said: "We dont look at larger companies because they come with a smorgasbord of assets that we don't want ... [we are] more focused on smaller companies."

Shell said it was pressing ahead with shale drilling from China to Argentina but was not currently thinking about fracking in Britain or Europe.

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Article source : http://www.guardian.co.uk

Universal credit: Major benefits shake-up begins

A massive shake-up in the UK benefits system starts on Monday, with the first claims being made for a new universal credit payment.

Universal credit will merge several benefits and tax credits into one monthly payout.

It begins with a very small number of new claimants in Ashton-under-Lyne in Greater Manchester, but will eventually affect nearly six million people.

Those who are looking for work will receive the new universal credit

 The system relies on a complex computer system, with claims made online.

  Simplification

The benefit is for working age people looking for work, and will replace income-based jobseeker's allowance, income-related employment and support allowance, income support, child tax credit, working tax credit, and housing benefit.

It is the central plank of a benefits overhaul, championed by Work and Pensions Secretary Iain Duncan Smith, which the government says will mean people are always better off in work than on benefits.

It is also designed to simplify the welfare system by bringing a number of benefits together and reducing fraud and error.

However, some groups have raised concerns that the system is entirely dependent on a complex computer network which may not be ready or able to cope with millions of claims. They are also concerned that many potential claimants do not have access to the internet.

Online claims

The key features of universal credit include:

• A single, monthly payment which the government says mirrors the world of work, but charities say could create problems for personal money management
• The inclusion of financial help to pay rent, which is currently paid directly to landlords
• An online-only claiming process, with accounts also managed online
• The benefit paid to households, rather than individuals, and put straight into bank accounts
• Benefits automatically adjusted depending on earnings, which employers enter into a computer system called real-time information

This means that there will no longer be a ceiling of 16 hours of work a week, below which people can sign on and above which claims are cancelled.

This is set to benefit people like Darren Bailey, an agency worker, whose working hours fluctuate, meaning he has to keep making claims under the current system.

"I have five kids so I can't afford to mess about," he said. "Any system has got to be better than this system."

Budgeting

The government estimates 3.1 million households will be entitled to more benefits as a result of universal credit, while 2.8 million households will be entitled to less.

Across all households, ministers say there will be an average gain of £16 per month. The long-term cost to the government is £100m in current prices.

The only claimants to receive universal credit in the initial stages will be single, new claimants at a jobcentre in Ashton-under-Lyne.

Three other pilot projects - in Warrington, Oldham, and Wigan - have been delayed until July.

From October, newly unemployed people will make claims under the new system. Current benefits and tax credits will gradually be shifted to universal credit from spring 2014, with the whole process completed by 2017.

Iain Duncan Smith said at the weekend that universal credit was being introduced over a four-year period because "I want to get these things right".

He added: "We want to say to people, you're claiming unemployment benefit but you're actually in work paid for by the state: you're in work to find work. That's your job from now on: to find work."

All claims for universal credit will need to be made online

 Labour's Shadow Work and Pensions Secretary Laim Bryne said that universal credit was "a fine idea that builds on Labour's tax credits revolution".

Yet he added: "The truth is the scheme is late, over budget, the IT system appears to be falling apart and even DWP [Department of Work and Pensions] ministers admit they haven't got a clue what is going on."

Benefits and grants charity Turn2us said that 43% of people whose benefits would be replaced by universal credit were not aware of the change.

"Once you look at the nuts and bolts, budgeting is not going to be easy especially for those with a small amount of money," said Alban Hawksworth, welfare benefits specialist at the charity.

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Article Source : http://www.bbc.co.uk

Banks unclear over bond withdrawal penalties

Taking money out of fixed-rate savings can mean your original investment will be hit

A number of Britain's biggest high-street banking institutions tend to be unable to inform you to consumers having out fixed-rate bonds that they might lose some of their authentic cost savings in addition to interest earned should they near their company accounts early.

Fixed-rate savings company accounts and Isas lock people's financial savings aside for up to 5 years as well as assure to cover exactly the same interest over this point. The majority of do not let savers usage of their funds at all because time, however some enable partial or even total revulsion regarding cash ahead of the end with the term.

Anna Bowes of the savings champion website: information 'unclear and hard to find'Those that do permit entry demand penalties up to the equivalent of a year's interest. Vitally, for an individual who may have not accrued adequate attention, thing about this penalty can sometimes be obtained from the money initially spent, however, not almost all suppliers get this to apparent.

Ould - Bowes, any overseer of financial savings winner, states the knowledge concerning penalties had not been clear on NatWest's web site even though the lady sought out this. Your woman only think it is right after contacting the financial institution to ask in which it absolutely was. "Even then a info does not inform you your capital might be impacted,Inch she states.
The actual NatWest charges terms states that concluding the fixed-rate relationship early will certainly get "an curiosity demand equal to Ninety days' gross interest".

Bowes mentioned the knowledge coming from HSBC has been similarly unclear and difficult to find.
This kind of discrepancies together with BM Savings, which Bowes supports like a excellent illustration of obvious info. That claims earlier withdrawal penalties "will be taken from the balance and also, according to once the revulsion is manufactured, may result in an individual returning lower than at first deposited".

"This the possible relation to capital] is definitely some thing folks ought to be created aware and also why they ought to be sure that they can link the cash, otherwise they may obtain a nasty surprise should they carry out need entry,Inch she additional. Leeds building society will be uncommon in supplying savers early on usage of some of their money without charges. The other day that launched a selection of fixed rate ties spending as much as Two.5% each year and also access to 25% of the funds, without notice or perhaps fee, whenever you want. Other banking institutions, including Santander, perform charge comparable to be able to 90 days as well as 120 days interest, determined by expression but, crucially, where attention gathered doesn't adequately cover the particular cost the particular charges will not be taken from the original savings.
The particular Financial Ombudsman Service says: "We would urge any kind of buyers who have been struck through these penalties and also really feel they were not clarified to make all of us.

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