Should shamed former bank chief Michael Fingleton be forced to return a watch received as a retirement gift? What if that watch, valued at £10,000, was bought and paid for courtesy of taxpayers? That's what has blood boiling throughout Dublin and if Mike Aynsley, the one charged with bringing to a halt the operations for both Irish Nationwide and Anglo Irish banks, has his way, Fingleton will be forwarding that expensive watch or the funds to pay
for it straightaway. He sent a "hand delivered" letter to Fingleton's home this week and is now awaiting for a response from the former bank leader.
Backing Aynsley is the Department of Finance. It's quoted as having said, "It's a disgrace...funds were spent in this manner, especially considering the cost to the taxpayer...from the bank's failure".
Irish Nationwide has been deemed by many as the "worst bank on the planet" and estimates suggest loans totaling £9.6bn have been written off while approximately £4bn was needed just to bail it out. Making things even more disconcerting is the fact Fingleton accepted the watch less than three months after the bank's huge losses were revealed for 2008 and after the government had already stepped in to guarantee the whopping debts.
Now, it seems as though Aynsley is hell-bent on recouping as much taxpayer money as possible, so it comes as little surprise that he's put Fingleton in his crosshairs. Accountancy experts throughout the country are shaking their heads, as well. Calling the actions of Fingleton "disgraceful", among others, it seems as though there won't be much peace for the embattled former financial leader in the near future.
In recent days, Fingleton was accused of personally setting interest rates while also determining the loan conditions set for many borrowers. According to many reports, Fingleton was able to bypass the bank's credit committee as he moved forward playing by his own rules.
Fingleton, at one time, pledged to return the bonus he was paid for 2008. He's yet to do so.
Proven programs for today's young people are in jeopardy today after significant budget cuts will halt many of those programs. At least one professor is issuing a warning that inner city youth could very well prove problematic to communities if these cuts are made. Professor John Pitts isn't saying inner city youth are troublemakers, but he's reiterating the importance of keeping kids busy, especially during the summer holiday, so that they don't become bored with so much time on their hands. That's when young people get into trouble. To drive his point home, London is already reporting an increase of serious youth violence. Specifically, it's increased by 4%, but the alarming number is the one associated with knife crimes, which are up 9.6% in this year alone. Scotland Yard says between February and April, knife crimes went from around 940 to more than 1,070.
So what happened?
Drastic budget cuts are in place, lending to a lack of activities associated with various youth services, especially those that prevent gang violence. More than £100m was cut in March. So far this year, different agencies are reporting an average of 28% of their available funding has been eliminated, though it's also being reported some local cities and communities are facing zero funding, effectively eliminating any kind of resources. Buckinghamshire, Manchester and Suffolk are all eliminating their youth services in their entirities.
The solutions aren't clear, though many are hoping volunteerism will increase as well as monetary donations to specific programs. Those monetary funds will have to be significant if any of these agencies are to maintain their programs.
The Youth Justice Board is in jeopardy, too. This executive public body oversees the youth justice system in Wales and England as it works to ensure teens don't offend or reoffend. They work to be sure these kids have a safe place to call home and seeks to provide counseling to those struggling with any number of problems.
Unless accounting professionals can define a better solution, it looks as though young people may find themselves struggling as they seek to find their way into adulthood.
In 2010, law enforcement throughout Britain was able to reclaim a whopping £161m in stolen goods from bandits who believe they're untouchable. The Guardian is reporting everything from "sports cars, watches, diamond earrings, designer clothing and fine china" has been located. Organised crime in the UK is big business.
Officials say they believe there are close to 40,000 criminals throughout the country who are part of various organised circles, or, as they're known in the U.S., "organized crime families". And if you're wondering just how much these outlaws are costing the UK, steel yourself: The official numbers place the loss anywhere between £20 and £40bn each and every year. Law enforcement and the Home Office are gearing up to tackle new strategies and these criminals aren't concerned about it, they will be. The will be sooner rather than later, say some sources close to the huge change efforts being made.
This week, a new organised crime strategy will be made public. The goal is to provide a better coordination of national law enforcement, along with various security and intelligence agencies. Read more about the legal aspects on our sister site, Solicitor.info.
For now, the numbers are still being tallied and stolen goods are being reunited with their owners whenever possible. The goal, from an accounting perspective, is to eliminate the costly processes of locating these criminals only to have them not be able to tell law enforcement where the stolen goods are so that they can be entered into evidence and hopefully, returned to their rightful owners.
Insurance companies, naturally, are taking a big hit as residents typically file claims to offset the financial losses. Ultimately, there simply isn't a process that will keep these efforts flowing seamlessly. Anytime you combine financial loss with theft, it quickly becomes convoluted. Tax returns are filed, insurance claims are filed, accountants in the UK work with their clients to paint a picture on what those thefts really cost in the long run.
If News Corp. was hoping to maintain its legal problems within the UK borders, it now has new worries to contend with. It must now face the possibility that both the U.S. Justice Department, along with the Securities and Exchange Commission could begin a new round of investigations. The New York based media corporation may soon have to answer a new round of questions about allegations of bribes paid to UK police.
These probes are separate from the FBI investigation that's ongoing and is seeking to find out if News Corp. employees attempted to hack into the voice mails of 9/11 victims and their families. One spokesperson with the media company said, "We have not seen any evidence to suggest there was any hacking of 9/11 victim's phones, nor has anybody corroborated what are clearly very serious allegations. The story arose when an unidentified person speculated to the Daily Mirror about whether it happened. That paper printed the anonymous speculation, which has since mushroomed in the broader media with no substantiation."
An unnamed member of the legal team that represents News Corp. says the allegations are a "fishing expedition" with no merit and expects nothing to come of it.
Meanwhile, the SEC is considering whether it should seek documentation that proves the company alerted investors regarding any possible lawsuits or other business problems within a certain timeframe. While the SEC isn't commenting on potential monetary bribes, News Corp. has hired an accounting expert who's familiar with FCPA guidelines. Mark Mendelsohn is looking into the agency's financial disclosures. He's a partner with the Washington, DC law office of Paul, Weiss, Rifkind, Wharton and Garrison and he too has declined to comment on any potential lawsuits associated with the SEC investigation.
On Friday, new reports suggest auditors could be searching in "the company's books and records" for payments that were improperly paid for unnamed reasons. It's expected new information will emerge in coming days.
Good news on the work front. July is proving to be quite reassuring in terms of the job market. June was stable and now, data from mysalarychecker.com reports more than 160,000 new jobs were added and advertised in June. Interestingly, and this is also more good news for accountants in the UK, the fastest growing sectors are in the financial and insurance fields. Perspective is key, however: many of those jobs were temporary positions. That's more likely due to business owners taking a very cautious approach as the economy begins to improve and opting to deem their new positions as temporary in the short term so that they can better plan for the additional headcounts as their concerns over financial uncertainty eases.
And there's more. The accountancy field was rated the second highest in terms of new job vacancies advertised, coming in only behind construction. Engineering is also looking good, according to many in the know, and it's directly related to the imminent Olympics, slated to begin next year. Various major construction and infrastructure projects are required to accommodate the surge of visitors the Olympics will ultimately bring. Additions to buildings, widening roadways and a multitude of other construction projects are well under way. London will be receiving several facelifts before the games begin in 2012. Not only that, but hotels are undergoing not only cosmetic, but other improvements that increase property values, too.
Once those major construction projects are completed, there will be a huge surge of temporary positions. They're likely to run the gamut: hospitality, media relations, tourism and food and beverage. After all, with the numbers expected to travel to the city, there is definitely a need for food servers, hotel maids and booking agents. This is definitely going to be a powerful financial jolt for the city and from the looks of things, it's already well underway.
For now, business remain hopeful, though cautious, and most certainly they remain optimistic about the excitement 2012 promises.
Even as News Corps. chairman Rupert Murdoch agrees to testify at a hearing next week, the FBI in the U.S. is also looking into the scandalous phone hacking brouhaha. The federal investigation is reportedly being conducted on the request of one U.S. senator.
On late Thursday, it was announced that not only would Murdoch meet with the panel on Tuesday, but his son, James, would also appear with his father. The younger Murdoch was the COO of News Corp. Rebekah Brooks, the CEO of News International of UK divisions, had already been beckoned to testify. It should also be noted they won't be under oath.
This scandal only continues to worsen with the FBI giving assurances it will uncover every stone to ensure no American federal laws had been violated in a most distasteful way: it's been suggested the phone records of family members from the 9/11 terrorist attack could have been left vulnerable.
In an about face, Murdoch told The Wall Street Journal he wished to address different accusations made "in Parliament, some of which are total lies". He reiterated his goal of providing transparent testimony that would put to rest various rumors.
These problems have now cost the billionaire a multi billion dollar effort to overtake British Sky Broadcasting Group, PLC. Still, Murdoch insists he's dealt with the crisis with grace, aplomb and accuracy. Admitting only to "minor mistakes" he lays the blame at the feet of former solicitors, Hartbottle & Lewis, LLP. When asked for comment, the law firm's partner declined to comment and cited the ongoing investigation. The FBI investigation only adds additional stress to an already overwhelmed dynamic. The American investigation will specifically attempt to determine whether voice mail, call records or even live investigations had been compromised. For its part, the FBI is also declining to comment. Finally, along with the FBI, the Justice Department and Securities and Exchange Commission has also been asked to intervene. No word yet on whether it's focusing on any kind of financial angles.
There are few things that can cause us to lose sleep at night; concerns over our family, of course- but also, our financial outlook is enough to keep many folks wide awake with worry. Even worse is trying to determine who in the accountancy field you can trust. Enter Accountant.info.
In recent years, a new trend in the UK legal field has carved a niche that empowers citizens who need a reliable solicitor; one who's fair, ethical and affordable. It stands to reason an independent website focused on accountants and their business practices is one ideal way for consumers to take control. Our directory of accounting firms allows you an advantage as you begin your search.
It might be that you'd like to see a few recommendations before contacting a business accountant. If previous clients have left feedback and ratings on Accountant.info, you're more likely to approach the firm with confidence. This was created for one reason: to provide help for individuals and businesses alike as they begin the time consuming and sometimes overwhelming process of finding an accountant who will advise and manage their finances responsibly.
How does it work?
Accountant.info offers an easy way for you to leave feedback on your recent experience with any accountant in the UK. The simple form takes only a few minutes to complete and you're able to provide your opinion, good or bad, of how well your needs were met.
The other side of the dynamic is that when you leave feedback, you're helping others make their own decisions.
You don't have to submit your name or any other identifying information – ever! The goal is provide transparency in the field as a whole without compromising your identity.
If you're an accountant, we encourage you to send your clients to Accountant.info to leave feedback. The more feedback received, the stronger your profile will be and that's sure to lend to even more clients. Think of it as "electronic referrals". If you receive a less than ideal comment, this also gives you an opportunity to take the constructive criticism and use it to your advantage.
Does your business turn £73,000 or more? Have you registered for VAT? If not, now's the time to do so. HMRC estimates it will be sending out at least 40,000 notices between now and mid-August to those businesses it believes meet the compliance guidelines, but have yet to register. And if you receive one, you'll discover a 10% penalty fine – but that's only if you register by the September 30 deadline.
If you're concerned about other tax payments, you will also be afforded the opportunity to come clean and avoid the 100% rate you're sure to face if HMRC finds it before you disclose it.
Most business owners who haven't registered likely are under the assumption they don't qualify and the confusion is likely due to the way the £73,000 is calculated. It's not based on one's profits, but rather, his total turnover. Many have voiced concerns over the lack of seeming transparency in the laws. Others say these misunderstandings could easily jeopardize an otherwise healthy business. Also, it's believed many aren't aware of the option for a payment plan offered by HMRC.
Of course, those non-profit agencies and other charities are waived, though there are considerations one must keep in mind – some of which have yet to be worked out. One particular confusing area, many say, are the cost sharing exemption and who's actually qualified to claim it. Another report, due later this fall, will be released and in it, various views from those organizations are expected to be a part of that report. It's unclear whether the September 30 deadline or the report's release will occur first.
Businesses with concerns are encouraged to consult with their accountants if they receive one of these letters. The sooner clarifications are made, the better for the business. For more information on taxes in the UK, visit our Accountancy Advice page.
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Henry W. Longfellow