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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