Wednesday, 1 October 2014

Totally gratuitous and unnecessary

"'Raised middle finger' Tokyo trader makes £381bn shares gaffe"

From The Evening Standard:

Share trades worth more than the size of Sweden’s economy had to be cancelled in Tokyo today after what are believed to be the biggest “raised middle finger” trades on record. It is thought to be the most extreme example of a trader in financial markets inputting hopelessly wrong figures as way of telling his employer to f- off.

The identity of the trader is not yet known, although Ms Shitikaka and Mr Fukuoke are both likely suspects.

Orders for shares in 42 major Japanese companies, including household names such as Toyota, Honda, Canon and Sony, totalling 67.78 trillion yen (£381 billion), were overturned, according to the Japan Securities Dealers Association. The biggest single order was for 1.96 billion shares in Toyota, the world’s biggest carmaker, worth 12.68 trillion yen (£71.4 billion).

Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank, told the Bloomberg financial news service: “I’ve never heard of orders this big being placed just for the sheer heck of it before.”

Gavin Parry, managing director at Hong Kong-based brokerage Parry International Trading, said: "It’s not rocket science that there was a raised middle finger here, but it reopens the questions of how much he'll have to put in the company swear box."

Unlikely Land Value Taxers: Boris Johnson

From The Evening Standard:

The proposed £3 billion extension to the Bakerloo Line can be built without cash handouts from the government, City Hall today as a public consultation on the route was launched. The Elephant & Castle-to-Lewisham link could be funded by local businesses and housebuilders who would benefit from the first major extension to the Tube in South London for a generation...

Isabel Dedring, Deputy Mayor for Transport, told the Standard:

"You want infrastructure to have a big impact in terms of building homes and the increase in land value will help you fund it. You want to find a route that is going to generate maximum revenue in order to cover the cost of building it.

“This is how we did the Northern Line extension where there isn’t grant funding per se, it is in the form of a guarantee..."

Mayor Boris Johnson described it as "one of my top priorities", adding “it would provide a vital new transport link for the people of south London and help to spur jobs, new homes and regeneration in this part of the capital."

Deputy headmaster lived in fairly nice house: shock

The Daily Mail, on top form:

* Martin Goldberg taught at Thorpe Hall School in Great Wakering, Essex
* Officers spoke to him at his home in Shoeburyness but he was not arrested
* Next day police were alerted over concerns for him and he was found dead
* Mr Goldberg, 46, was single and lived alone in a £360,000 detached house

"Ladies and gentlemen, thank you for smoking."

From The Daily Mail:

"Ladies and gentleman, thank you for smoking..." said [Australian Liberal Democrat Senator David Leyonhjelm], "Your generosity to the nation's treasury is truly staggering."

"The government collects around $8 billion in tobacco excise each year. That's a lot of cash. Last year, smokers imposed $318.4 million in net costs on Australia's healthcare system. Depending on rainfall, smokers also cost the taxpayer about $150 million a year in bushfire control.

"If you do even basic arithmetic, these figures disclose that you wonderful, generous smokers, pay 17 times as much as you cost."

He argued that the true intention of smoking taxes was for the government to raise money, not to help people improve their health.

Mr Leyonhjelm, we salute you!

Seven Day GP Access

From the BBC

Everyone in England will have access to GP services seven days a week by 2020, Prime Minister David Cameron has promised.

The government has also promised to bring back "named GPs" - to take charge of care outside hospital.

And Health Secretary Jeremy Hunt told the Conservative Party conference people would be able to access their medical records online by next April.

Labour accused the prime minister of "broken promises" on the NHS.

Mr Cameron said: "People need to be able to see their GP at a time that suits them and their family. That's why we will ensure everyone can see a GP seven days a week by 2020.

"We will also support thousands more GP practices to stay open longer - giving millions of patients better access to their doctor."

You have a certain amount of GP capacity (let's say 40 hours/week). If a GP is working Saturday and Sunday, he isn't going to be working Monday and Tuesday. Making it 7 days a week doesn't increase the amount of capacity. It actually makes GPs less suitable for families as people will be pushed out of Monday to Friday appointments in favour of say, mid-Sunday afternoon, which means that you won't be going to see the football/zoo/whatever that day. Plus, you've now got to hire more receptionists as the surgery is open longer. And pay them at time and a half for weekend work.

As for medical records online, what's the point of that? How often do you need your medical records? Answer: rarely enough that a GP can print them off for you. Sounds like a massive bung being chucked at the large Fred Karno's Army software consultancies, probably the one that couldn't capacity plan the DVLA website for yesterday

Tuesday, 30 September 2014

Johnson takes aim.

 "Boris Johnson takes aim at Miliband and the mansion tax at Tory conference"

From today's Evening Standard

Mr Johnson made housing the centre of his speech, in particular laying into Labour’s plans for a mansion tax on homes worth more than £2 million.

He said: “What is the real answer to our housing problem? To put a new tax on housing, hammering those who find themselves living in a property whose value inflates through no fault of their own, punishing those who have worked hard for years to pay their mortgages and those who hope to pass something on to their children?

[Actually, simple calculations, real life examples or a little logic shows property taxes do indeed make housing more affordable.]

Boris says it's not the fault of homeowners that property values have risen, then he says they are due the full capital gains increase from rising house prices because of their hard work!

Make up you mind, you thick twat. It can't be both can it?

"Private schools benefit everyone"

You can't argue with the numbers.

From The Evening Standard:

Richard Harman, chairman of the Headmasters’ and Headmistresses’ Conference of leading private schools, said [private] schools add nearly £12 billion to the UK’s GDP every year.

"More than £4.7 billion in tax revenue flows annually into the Exchequer from the direct activity of independent schools. And by educating our pupils we save the taxpayer £3.9 billion a year, equivalent to building more than 590 new free schools annually."

Mr Harman said: “We have solutions to offer. But too often those in power are embarrassed to be seen talking with us, preferring instead to threaten us with loss of charitable status or more state control."

You can quibble with them though. If anything I think his £3.9 billion saving to the taxpayer is understated and expressing the total figure in terms of the number of "free schools" which could be built is a bit meaningless.

And to earn the £12 billion which parents pay in private school fees, they have to pay as much again in taxes on income.

But his general point stands.

"Duncan Smith outlines plans for pre-paid pension cards"

From the BBC:

The government is to introduce pre-paid cards to stop pensioners spending all their money on alcohol, tobacco or Lottery tickets.

Work and Pensions Secretary Iain Duncan Smith said it would help those "on the margins break the cycle of poverty". The cards could only be used for some items in some stores, and would not be valid in betting shops or off licences.

The scheme will be initially piloted on a voluntary basis and will be targeted on those with spending problems. The BBC's assistant political editor Norman Smith said government sources said the move was aimed at helping pensioners who smoked or drank and protecting their spouses.

An estimated one in 5 pension claimants in England suffer from addiction to tobacco products, such as cigarettes or cigars, while an estimated one in 4 pension claimants consumes more than the recommended maximum daily intake of alcohol.

Monday, 29 September 2014

Arcane musings about tax

Lola said, here:

Or, you levy LVT on their landlords and scrap all the awful things like VAT, CT NI Withholding Tax etc. etc. and therefore any need for double taxation agreements and off we go to the races.

I was thinking about that recently and it's not that simple.

In UK domestic terms, that's the best thing we could possibly do, but having a zero % corporation tax rate is not necessarily of interest to foreign investors.

This is because foreign countries have two ways of dealing with profits from UK-based subsidiaries in the hands of holding companies based in their country:

1. Some of them simply exempt profits earned by subsidiaries in non-tax haven countries which are then paid to the holding company as dividends.

2. Others tax those dividends again, but give a credit for UK corporation tax paid. So if the corporation tax rate in the other country is 20% or higher, the UK corporation tax is not a net cost.

Basically, any country which charges much less than 20% is probably on the tax haven/CFC/naughty list and gets looked at very closely. But companies don't get any sort of credit for LVT (i.e. Business Rates) paid in the UK.

So, it would make the UK relatively more attractive (for a given amount of tax revenue) if businesses (whether tenant or not) continued to pay the higher of
a) 20% corporation tax and
b) the LVT on its premises,
but the total tax would be expressed as a % of that businesses' earnings. Or they are charged 20% with a full reduction for any LVT already paid.

So if Starbucks has £50 million UK profits and an LVT bill of £15 million, its profits are taxed at nominal 30% (with credit for LVT already paid; net corporation tax £nil); if its LVT bill is £5 million, its profits are taxed at flat 20% (with credit for LVT already paid, so another £5 million UK corp tax to pay).

Or something like that.

Now, these businesses and their tax advisors aren't stupid, they know that their sweet spot is to declare UK taxable profits which are equal to their UK LVT bill x 5; there's no incentive to declare anything more or less than that.

In other words, in reality, the business is paying LVT in the UK (for which it would not get a credit abroad) but to the outside world, the company is paying UK corporation tax at around 20%, (for which it gets a credit against foreign tax, or which means that the other country treats dividends from the UK as tax exempt in their country).