July 27, 2010Intel sweeteners made up 76% of Dell’s income

Court documents released after a $100 million antitrust settlement have shown how Dell’s operating income was propped up by Intel for years.
Dell is one of a few PC makers that received pay outs from Intel to keep them from using chips from AMD. Intel has since offered its smaller rival $1.25 billion, after being fined $1.45 billion by the European Union.
According to documents from the US Security and Exchange Commission, Dell received payments to “remain monogamous” with Intel. Part of its so-called Meet Competition Programme (MCP), those payments were used to set up “cookie jar” reserves and make up for shortfalls in quarterly results.
“Dell would often seek additional rebates from Intel in order to close a gap between its forecasted results and its earnings targets,” the SEC said. “Dell was quite open with Intel about the reasons it was requesting additional money.”
Over 20 quarters starting with the financial year 2003, Dell met or exceeded its earnings per share expectations every time. Without the Intel payments, it would have missed every one. “Dell’s apparent success was hostage to Intel’s willingness to continue paying Dell hundreds of millions of dollars,” the SEC report said.
Story from:
pcpro.co.uk

July 15, 2010HOW TO AVOID TAX USING INTER-SPOUSE TRANSFERS!

In this article we discuss family tax planning involving the transfer of property between spouses.

Family tax planning exercises involving the transfer of assets between spouses (or civil partners) is often necessary to enable each spouse to fully utilise the various tax exemptions available to an individual. If one spouse owns all the family assets this would not be possible. The ability to make such transfers tax effectively is thus important.

Equalisation of Estates
As a general rule so-called "equalisation of estates" is desirable. This means that ideally each spouse should own assets amounting to at least the value of the inheritance tax (IHT) nil rate band (£325,000 for tax year 2010/11); own assets which, on sale, enables full use of the capital gains tax (CGT) annual exempt amount (£10,100 for tax year 2010/11) and own assets generating income sufficient to mitigate any exposure to higher rate income tax.

The transfers between spouses must be "real" transfers and effected as if to a third party. This means all relevant documentation must be correctly completed.

Inheritance Tax
For IHT purposes inter-spouse transfers are "exempt" transfers and thus not subject to IHT if the spouses are married, although not necessarily living together. As indicated above, transfers from one spouse to the other to ensure each spouse’s estate is at least £325,000 can thus be made without attracting any inheritance tax charges.
Story from:
Tax Insider

July 12, 2010"Dash for Cash" policy sees HMRC favour negotiation over litigation

Reports emerge of revenue changing to embrace negotiated settlements even when the taxman believes it has a strong legal case.
Advisers and tax investigations insurers expect HM Revenue & Customs to relax its stance on litigation in a major policy change to bring money into the government’s coffers through negotiated settlements rather than aggressive legal action.
Investigation consultants from Abbey Tax Protection, flagged up the new initiative within HMRC which has been dubbed the ‘Dash for Cash’.
Unlike previously, the taxman will not necessarily take court action even if it believes it has a strong legal case.
Abbey Tax Protection which provides insurance for customers dealing with HMRC probes said tax inspectors were being told to change tack and use their discretion to settle cases at an accelerated pace.
"We understand there will be pressure to settle long running full enquiry cases and inspectors will be encouraged to take up aspect cases which are likely to be settled more quickly to optimise the tax yield in the current fiscal year, " Abbey Tax Protection said.

Story from:
Accountancy Age

July 9, 2010Taxman rakes in £92.3m haul from carousel fraud victory

Taxman lays claim to tower blocks in Dubai worth £80m, supercars and properties in Knightsbridge and Buckinghamshire in clawing back record haul from carousel fraudsters.

Two members of a 21-strong carousel fraud gang have been told to hand over £92.3m in the biggest ever confiscation order secured by HM Revenue & Customs.

Syed Ahmed of Buckinghamshire and Shakeel Ahmad of Middlesex, both currently serving seven-year jail terms, were each ordered to repay £92.3m within two months or face an additional ten years in jail in addition to repaying the money.

Carousel, or Missing Trader Intra-Community fraud sees companies inside the EU buy small high- value goods such as mobile phones VAT free before selling the goods on with VAT included.

However, fraudsters keep the VAT instead of passing it on to the taxman. This process is repeated as the goods pass between traders, earning it the term ” carousel” fraud.

In this case the gang made £37.5m through the MTIC fraud.The money was then used to bankroll the development of luxury flats in Dubai, the taxman said.

In laying down the confiscation order, the taxman has ring-fenced, or ” restrained” two apartment tower blocks in Dubai worth £80m, luxury properties in Knightsbridge and Buckinghamshire collectively worth £6m and a fleet of supercars including a Ferrari 360 Modena convertible.

Richard Meadows, assistant director of criminal investigation for HMRC, said:

“This is the largest ever confiscation order secured by Revenue & Customs at the end of one of our most complicated investigations. I believe it to be one of the largest confiscation orders in the UK to date.”
Story from:

Accountancy Age

July 8, 2010Treasury steps up anti-avoidance plans

HMRC and Treasury plans for General Anti-avoidance Rule (GAAR) draws criticism from businesses, advisers and MPs

The Treasury and taxman are ploughing on with plans for a one-size-fits-all anti-avoidance rule, despite opposition from individuals, businesses, advisers and even an accountant MP.

Ever since the idea of a General Anti-Avoidance Rule (GAAR) was unveiled by the Labour government there have been warnings from the profession about the ramifications of such a plan - namely that it would it raise significant uncertainty as to whether activities seen as legitimate planning will be treated as tax avoidance. It could leave accountants potentially being taken to task by HM Revenue & Customs for advice honestly given, but treated as helping their clients sidestep their tax obligations.

In efforts to preserve the UK’s tax take, this further blurring of the lines will not only affect the 4.8m SMEs which form the foundation of the UK economy but also any individuals or new businesses thinking about a move to the UK, advisers say.

In kicking off the informal consultation this month, HMRC said it will be exploring whether there is a case for developing a general anti-avoidance rule. This will be part of wider work on improvements to the tax policy making process. However, advisers maintain the GAAR will lead to uncertainty for individuals and businesses.

Even MPs have been at loggerheads over the prospect of the GAAR. One claimed that top accountants’ primary objective was to help clients sidestep their tax obligations.

However, Conservative MP Nigel Mills, an accountant, hit back at the claims, warning that it would damage efforts to spur inward investment to the UK and keeping entrepreneurs and businesses within our borders. A general anti-avoidance rule in principle may not be a brilliant way of doing that, Mills warned.
Story from:
Accountancy Age

July 5, 2010Cardiff City FC battling PAYE winding up

Cardiff City chief executive Gethin Jenkins says the club are confident they will see off a new winding-up petition over a PAYE tax debt.
Jenkins confirmed a petition is to be lodged against City by Her Majesty’s Revenue and Customs on 11 August.
But in a statement on the club’s website Jenkins says Cardiff fully expect to pay monies owed in the following week.
Jenkins says he would then expect the petition to be withdrawn.
The chief executive, who joined the Bluebirds at the end of last season from Newport Gwent Dragons, said the hurdle formed part of the process of getting the club on a sound business and financial footing.
“As is normal procedure, if PAYE isn’t paid then HMRC are fully entitled to lodge a petition,” said Jenkins.
“Cardiff City Football Club fully expect to pay monies owed in the forthcoming week, following which the petition will naturally be withdrawn.
“This hurdle all forms part of the ongoing process of getting the club on a sound business and financial footing.”
Story from:
BBC