Tax Office Warns Football Clubs Over Low Pay

By Enda Brady, Sky News Correspondent

Dozens of top-flight English football clubs are to receive a letter from tax inspectors warning them that they must pay staff the minimum wage or face a fine of up to £5,000 and potential prosecution.

HM Revenue and Customs (HMRC) says it will soon begin "targeted checks" amid claims that some club mascots are not paid at all for their match-day work.

National minimum wage laws make it illegal not to pay people classed as workers.

"Paying the National Minimum Wage (NMW) is not a choice, it's the law," said Michelle Wyer, assistant director of HMRC's minimum wage team.

"It can't be right that as some players are paid millions of pounds, other members of staff are paid below the legal limit.

"HMRC enforces the rules, protecting workers from rogue employers and ensuring they get at least the wage to which they are legally entitled.

"Where an employer ignores these rules, we will take steps to ensure arrears are paid out in full and the employer fined. In the most serious cases, criminal prosecution can follow."

The move is being described as "pre-emptive" ahead of a "series of targeted checks" within football after HMRC received complaints about non-payment from at least one current club mascot.

In April Swansea City and Reading advertised for unpaid interns, including one position which lasted for a year.

Many people will be surprised that this happens within football - where some players can earn as much as £250,000 per week - but given the high profile nature of the English game clubs will always have a ready supply of young people keen to break into what they see as a glamorous, attractive industry.

Last year HMRC enforcement action resulted in 708 employers receiving automatic penalty charges of up to £5,000 and 26,519 employees receiving back pay totalling over £4m, topping up wages that had previously been below the legal minimum rate.

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Gary Bolton Jailed Over Fake Bomb Detectors

A businessman has been sentenced to seven years in prison for making and selling fake bomb detectors.

Gary Bolton, 47, made millions of pounds selling the devices around the world, boasting they could detect explosives, drugs, ivory, tobacco and even money.

In actual fact they consisted of nothing more than empty boxes with handles and antennae which he made at home and at his Global Technology Ltd offices in Kent.

He denied two counts of fraud as a judge at the Old Bailey described the equipment as "useless" and "dross".

Bolton had background in research or security

Sky's crime correspondent Martin Brunt, at the court, said Bolton spent £1.82, plus the glue and antennae, on each product and then sold them for up to £15,000 each.

The court was told Bolton's company had a turnover of almost £3m, with up to 5,000 devices made.

Prosecutor Richard Whittam QC said tests proved the detectors, first called the Mole and later remarketed as the GT200, performed no better than random searches for explosives.

Bolton claimed they worked with a range of 700 metres at ground level and 2.5 miles (4km) in the air and said they were effective through lead-lined and metal walls, water, containers and earth.

But "double-blind" tests on a Mole device as far back as 2001 showed it had a successful detection rate of just 9%.

Sentencing the father-of-three, judge Richard Hone QC said Bolton had maintained the "little plastic box" was a piece of working equipment, and that he continued to "peddle" it to scores of international clients - including for use by armed forces - despite evidence proving it was "useless".

He added: "You were determined to bolster the illusion that the devices worked and you knew there was a spurious science to produce that end.

"They had a random detection rate. They were useless.

Bolton's company had a turnover of almost £3m

"Soldiers, police officers, customs officers and many others put their trust in a device which worked no better than random chance.

"The jury found you knew this but you carried on. Your profits were enormous."

Mr Whittam said Bolton admitted in interview to having no background in science, research, training or security, the court heard.

Around 1,200 devices were sold to Mexico, while orders were also shipped to parts of Asia and the Middle East.

The devices are still being used in Thailand.

Detective Inspector Roger Cook, from the City of London Police's Overseas Anti-Corruption Unit, said Bolton put "people's lives and livelihoods at serious risk, but his sole consideration was how much money he could make".

"Bringing Bolton to justice is the result of a long, complex and far reaching international investigation and his seven-year prison sentence should act as a warning to others who seek to act corruptly overseas with the belief that they will go undetected," he added.

In May James McCormick was jailed for 10 years for also selling fake bomb detectors. He made £50m selling his devices for up to £27,000 each to groups including the Iraqi military and police in Kenya.

Prosecutors in the case said British officers in Iraq believed the detectors may have cost dozens of lives.

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PlayStation 4: Europe Release Date Revealed

Sony's new PlayStation console will be released in Europe on November 29 and the US on November 15, the company has confirmed.

More than one million pre-orders have already been received for the next-generation PlayStation 4.

"The response we have received is nothing short of incredible," said Andrew House, head of Sony Computer Entertainment.

Speaking at a news conference at Gamescom, Europe's biggest videogames fair, he said the console would be on sale in 32 countries by Christmas.

One million pre-orders have already been received for PlayStation 4

Microsoft's new Xbox One will be going head to head with the Playstation 4 and is also slated for a November release, although the exact dates have not yet been revealed.

The new consoles were announced earlier this year and Sony already has the edge on pricing, according to games industry experts.

The PlayStation 4 will cost £350 in the UK and $399 in the US, whereas the Xbox One system comes in at £429 in the UK and $499 stateside.

Microsoft Europe's Vice President of Interactive Entertainment Chris Lewis said on Tuesday that pre-orders for the Xbox One were "unprecedented" but did not give any more detail.

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Sale Of Businesses Generates £500m For Lloyds

Lloyds Banking Group has sold off more than £500m of non-core assets as it seeks to strengthen its financial position and meet regulatory capital requirements.

The bank, which is 39% owned by the taxpayer following a financial bailout in 2008, has sold its loss-making German life insurance business Heidelberger Lebensversicherung AG for £250m and a portfolio of loans for £254m.

In June, the Bank of England told Lloyds it must find a further £8.6bn in provision funds against potential future losses.

Heidelberger Lebensversicherung AG, which has been bought subject to regulatory approval by a Cinven Partners and Hannover Ruck joint partnership, underwrites policies worth some £7.2bn.

The loan portfolio, which has been bought by Goldman Sachs subsidiary ELQ Investors II, has assets of £283m and generated a profit of £11m in 2012.

A Lloyds statement on the sale of the insurance business said: "The sale is in line with the Group's strategy of rationalising its international presence and ensuring value for shareholders."

In recent weeks Lloyds' share price has surged, prompting speculation that the government may seek to sell its stake in the bank, generating some £20bn for taxpayers.

In the first six months of this year, the bank announced a £2.1bn profit compared to a £456m loss during the same period last year.

Lloyds recently sold off its $5 billion US mortgage book, Spanish retail banking operations and international private banking business.

Lloyds says it aims to halve its non-core loan book by the end of 2014 from 141 billion at the end of 2011.

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Court Approves Plan To End Kodak Bankruptcy

Fallen photography giant Kodak could emerge from bankruptcy after a court in the US approved a plan to reorganise the iconic company.

The plan permits Kodak to reduce its debt and divest its film and printing business, among other steps, to reemerge as a player in the commercial printing business.

Kodak also plans to continue to sell film for movie productions.

"Today, the court confirmed Kodak's plan of reorganisation. This critically important milestone marks the final step in the court process," said Kodak chairman and chief executive Antonio Perez.

"Next, we move on to emergence as a technology leader serving large and growing commercial imaging markets - such as commercial printing, packaging, functional printing and professional services, with a leaner structure and a stronger balance sheet."

Kodak still has some final steps to take, such as completing an agreement over the pensions of retirees and ex-employees. The company expects to clear these hurdles in time to resume business on September 3. 

Kodak filed for bankruptcy protection from its creditors in January 2012, after 131 years in business, as the company fell behind rivals in digital photography.

Kodak, founded in 1892, had led the way in popularising photography around the world.

Kodak was among the early developers of digital imaging, but lost ground to rivals as the company failed to adapt its business lines.

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Surprise Deficit In July A Blow To Osborne

Official figures have revealed a surprise deficit in the UK's finances for July as the Government struggles to rein in spending.

The Office for National Statistics (ONS) showed a £62m shortfall for July this year, compared to a £823m surplus in the same month of 2012.

An increase in central government spending outstripped a rise in tax receipts - a blow during a month when the state is typically in the black because of company tax payments.

It is the first time there has been net borrowing in July since 2010.

Public sector net debt as a proportion of the UK's gross domestic product (GDP) also hit a record for July at 74.5%.

Once a transfer of around £400m for quantitative easing (QE) cash was included, public sector net borrowing was £885m higher than a year earlier.

The ONS said higher central government spending was spread across departments and that the Treasury expects the figure to be revised down in the coming months.

The Office for Budget Responsibility (OBR) expects the deficit to come in at around £120bn for the year to the end of next March, up on last year's £116.5bn.

Total tax receipts excluding QE cash were 3.4% higher year-on-year at £54.1bn in July, helped by increases in VAT sales tax, income tax, National Insurance contributions and stamp duty on home purchases.

But corporation tax receipts dipped to £7bn from £7.1bn a year earlier, despite increasing signs of growth in the economy.

Central government spending rose by 4% to £51.2bn.

Martin Beck, UK economist at consultancy Capital Economics, said the figures show the public purse has "yet to benefit from the economic upturn".

He said: "While signs of economic recovery should eventually feed through into an improvement in the public finances, it looks like the Chancellor will have to wait a while yet."

Recent figures showed the economy expanded by 0.6% in the second quarter, double the 0.3% in the first three months of the year.

Economists increasingly believe the UK is on course to match or beat second quarter growth in the July to September quarter.

A Treasury spokesman said: "Strong tax receipts in July confirm that the economy is moving from rescue to recover.

"There is still a long way to go as the UK recovers from the biggest economic crisis in living memory, and the Government is sticking to the economic plan that has already cut the deficit by a third and enabled the private sector to create over 1.3 million new jobs."

Shadow financial secretary to the Treasury Chris Leslie accused Chancellor George Osborne of complacency.

"Another month of disappointing figures raises very serious concerns that borrowing continues to be way off track," he said.

"He's borrowing billions more than planned simply to pay for the costs of his economic failure and his promise to balance the books by 2015 is now in tatters."

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Top Taxman Takes Foxtons' Estate Agency Role

By Mark Kleinman, City Editor

Britain's top taxman is joining the board of Foxtons as the estate agency chain seeks to exploit the buoyant housing market with a £500m-plus flotation.

Sky News understands that Ian Barlow, the lead non-executive director at HM Revenue & Customs (HMRC), will be among a crop of new board members unveiled alongside Foxtons' intention to list on the stock market next week.

Mr Barlow, who spent 37 years with KPMG, will join the resurgent company alongside Annette Court, a former boss of Direct Line Group and Zurich Financial Services, and Garry Watts, the one-time chief executive of SSL International, the consumer products group.

News of the appointments comes on the day that figures from the Council of Mortgage Lenders (CML) showed that borrowing by homebuyers soared last month to its highest level since the 2008 financial crisis.

The CML said gross mortgage lending rose to £16.6bn in July, with Caroline Purdey, an analyst at the trade body, adding that the data "reinforces a growing evidence base of a strengthening in the housing and mortgage markets".

Part of the housing market revival is down to Government stimulus packages such as Help to Buy, George Osborne's initiative to offer assistance to first-time buyers. The scheme will be extended to a wider pool of buyers early next year.

Mr Barlow also serves as a director of companies including Smith & Nephew, the medical devices maker, but his appointment at Foxtons will be intriguing because of the importance attached to efficient tax-planning by private equity-backed companies.

Foxtons' owner, BC Partners, is expected to announce the flotation plan next week.

The estate agency chain, known for its garish shops and fleet of cars, rode the property boom under its founder, Jon Hunt, before selling to BC for £375m in 2007 - a deal which catapulted him into the ranks of Britain's super-rich.

The subsequent financial crisis and recession-hit UK economy, however, led to a sharp downturn in the property market, and left estate agents such as Foxtons unable to service their debts.

The company was taken over by its lenders before BC bought them out in 2012. Foxtons' profits have surged during the last two years, buoyed by the booming London housing market, which has increasingly diverged from much of the rest of the country.

The rival chain Countrywide took advantage of buoyant equity markets to go public, while Romans, a smaller estate agents based in Berkshire, is on the verge of being sold to Bowmark Capital, another private equity firm, for about £50m.

A BC Partners spokesman declined to comment on the appointment of the new board members.

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Facebook Plans Cheap Web For Poorer Countries

Some of the world's biggest technology companies have joined forces to provide cheaper internet access for people in developing countries.

Led by Facebook, the project aims to get more of the world's seven billion people online by providing low-cost smartphones.

It hopes to cut the cost of providing mobile internet services to 1% of its current level within the next decade.

Developers will also make apps that use less data, allowing networks to run more efficiently with a greater number of users.

Facebook, for example, hopes to reduce the amount of data its Android app consumes from an average of 12MB per user per day to 1MB.

Mark Zuckerburg, founder and CEO of the social networking site, said: "Connecting the world is one of the greatest challenges of our generation.

"There are huge barriers in developing countries to connecting and joining the knowledge economy.

"Internet.org brings together a global partnership that will work to overcome these challenges, including making internet access available to those who cannot currently afford it."

An estimated two-thirds of the world's population is still without internet access, with the number of people using websites and email growing at around 9% a year.

Internet.org, which is backed by mobile phone manufacturers Samsung, Nokia and Ericsson, as well as engineering companies Qualcomm and Mediatek and software provider Opera, is one of a number of projects aimed at increasing internet usage.

Google recently announced Project Loon, which uses balloons to provide internet access in remote parts of the world, while Twitter has made its service free on some mobile phone networks.

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Threat To 250 Jobs At Heinz UK And Ireland

Food giant Heinz has warned that almost 250 jobs could be cut in the UK and Ireland.

The firm said it had developed a new "streamlined structure", which could include the loss of 248 office jobs, adding it regretted the impact it would have on its employees.

Earlier this month, Heinz laid off 600 employees in the United States. 

Heinz said in a statement: "As part of our transition to a private company, the senior leadership team has examined every part of our global business to better position Heinz for accelerated growth in a very competitive global market.

"The proposal is subject to a consultation process with employees and their representatives, and Heinz is committed to ensuring all employees are treated with the utmost respect and compassion."

It added that if a decision is made to proceed with the proposals, the company would offer enhanced severance benefits and help affected employees to pursue new career opportunities.

"The difficult actions we are proposing to take will, if implemented, better position the company to support and fund our next chapter of growth while further strengthening our world-leading brands," it added.

"Our new organisational structure will simplify, strengthen and leverage the company's global scale, while enabling faster decision-making, increased accountability, and accelerated growth."

In June, Berkshire Hathaway, the private equity firm operated by former richest man in the world Warren Buffet, and 3G Capital, which owns Burger King, acquired Heinz for £14.85bn. 

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Banks Hit By £1.5bn ID Theft Mis-Selling Bill

By Mark Kleinman, City Editor

Britain's banks will face up to another major mis-selling scandal on Thursday when the City regulator announces details of a compensation scheme for insurance customers that could cost the culpable lenders up to £1.5bn.

Sky News has learnt that the Financial Conduct Authority (FCA) is finalising a statement that will set out the terms of a redress scheme for consumers who bought identity theft and credit card protection from CPP, a York-based company, over a period of several years.

The FCA is to announce that about a dozen financial institutions – including all the major high street names, such as Barclays, Lloyds Banking Group, HSBC and Royal Bank of Scotland – have signed up to the deal.

Insiders said the figure contained in the FCA statement, which will be timed to coincide with the credit card insurer's half-year results announcement, would fall between £1bn and £1.5bn – slightly lower than some recent estimates.

Some of the banks involved will make separate announcements detailing their individual financial exposure.

Under the terms of the agreement, the banks which sold CPP products will write to customers to inform them that they may be eligible for compensation.

The industry along with CPP and the FCA will then administer a mechanism called a solvent scheme of arrangement, sanctioned by the courts, to deliver the funds.

The initiative will be unusual because CPP customers will be asked to vote in favour of it before it can get underway.

Although the £1.5bn payout pot is significant, it is tiny by comparison with the deluge of funds that banks have had to set aside for compensating customers who were mis-sold payment protection insurance.

Recent additions to the provisions by the biggest banks have taken the total to more than £15bn, while they are also confronting a multibillion pound bill for mis-selling products designed to protect against sharp movements in interest rates.

Details of the CPP compensation scheme will emerge almost a month after it secured its immediate future by negotiating a new financing deal with its lending banks.

The agreement involves deferring £23m of commission payments due to be paid to the banks over the next year, and a £13m borrowing facility.

The agreement with Barclays, HSBC, Royal Bank of Scotland and Santander UK came as a relief to hundreds of CPP staff employed who have faced an uncertain future during on-off talks about a takeover of the company.

Under the terms of the new financing deal, however, CPP would be in default if more than 25% of its customer base successfully applies for compensation as part of the redress scheme.

CPP, which calls itself an "international life assistance provider", operates across more than a dozen countries and expanded rapidly after listing on the London Stock Exchange in 2010.

It was accused by the regulator of overstating the risks of identity theft, and of providing expensive insurance policies which were effectively already provided automatically by the banks.

The company sold more than four million policies to customers, many of which were the result of introductions by the major high street banks.

It recently disposed of its US business in an attempt to raise funds following a £10.5m mis-selling fine imposed by the City regulator last year.

CPP is one of several specialist insurers to have fallen foul of regulators in recent times. Homeserve, which provides insurance against household mishaps, was also the subject of mis-selling allegations in 2011.

CPP, the FCA and the major banks all declined to comment on Wednesday.

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