Barclays Reject Small Business Loans Target

The head of Barclays’ head of small business unit Steve Cooper has said that the bank will not be joining any government schemes that set targets for small business lending, in fact they will “refuse”.

Mr Cooper told the Financial Times that he felt any targets implemented would result in a repeat of the irresponsible lending that saw Britain spiral into the current situation.

He added that it may mean banks will start dishing out loans to meet figures rather than on the merits of the application.

The coalition government is currently looking at implementing nationwide business targets for all banks, nothing has been approved as yet but as the government had pledged to increase the cash flow for all small and medium sized businesses it is expected that something will be implemented soon.

Business Secretary Vince Cable has said that the targets could be implemented but with dividends and bonuses used as an incentive for banks in what was described my Dr Cable as a “carrot and stick” approach.

Recent figures suggest that a total of £598m in new loans had been authorised in June, £70m more than in May.

A new business has been launched to try and help smaller business and is called Funding Circle, it acts as an online market place allowing private lenders to offer money directly to smaller companies.

Funding Circle has estimated that typical interest rates charged on the loans will be between 6% and 9%, borrowers will pay the website a £50 fee to register and also 2% of the amount borrowed, but if this happens then the £50 joining fee will be refunded.

Police in South Korea have raided the headquarters of Google based in Seoul.

Police believed that the corporation was collecting and storing data from internet users that have been using Wi-Fi networks.

Google recently admitted that its ‘Street View’ cars had been collecting information from unencrypted Wi-Fi networks but later called this a “mistake".

Despite this the North American based company faces legal investigations in a number of countries to see if it did indeed break any privacy or data protection laws as a result of the street view cars.

A spokesperson for the Korean National Police Agency (KNPA) said:

"[We] have been investigating Google Korea on suspicion of unauthorised collection and storage of data on unspecified Internet users from Wi-Fi networks."

The spokesperson also confirmed that the raid was indeed based on the Street View investigation and not a fresh allegation.

Google responded saying:

"We will co-operate with the investigation and answer any questions the police may have."

Whilst investigations in other countries are still ongoing the UK’s Information Commissions Office found that Google had not broken any laws as it had failed to grab “significant” personal details.

The administrators of Portsmouth FC have today revealed that they will face no more challenges from HMRC in regards to the company voluntary agreement (CVA) that has been agreed upon.

A spokesperson for HMRC confirmed this announcement adding that they were ‘disappointed’ with the courts decision but would not be appealing and had no intention of launching further legal action.

The CVA needed an approval rating of 75% from all creditors but received a unanimous vote of 80.3%, HMRC were opposed to the CVA as they felt that it favoured the football creditors over everyone else – meaning that players and other clubs owed money to would receive 100% of monies owed and the rest would need to be divided amongst creditors.

The last football club to be made to pay 100p of every £1 they owed was Middlesbrough FC in 1986, a ruling which has since been changed and now clubs are only expected to pay the 100% back to football related creditors.

Portsmouth FC were the first top tier club in England to go into administration and received a nine point deduction as such. They began a crucial season in the N-Power Championship on Saturday with a 2-0 defeat away to Coventry City.

Civil Service Unions have said that all the measures being put forward against Civil Service pensions are useless as they believe that they are affordable.

The government is currently renewing all public service pension schemes in a bid to try and find a way to make them more affordable to the taxpayer. But unions say that cuts made back in 2007 were enough to make the schemes affordable and any more cuts would have huge implications on workers pay.

The review which is being lead by former Labour Pensions Minister is due to report back before Christmas.

The unions have put forward evidence to the panel of investigators taken from the Treasury and National Audit Office showing, they say, that “the civil service pension scheme is both affordable and sustainable in the short, medium and long term.”

Despite the evidence the Coalition government seem set on their views that the pensions are far too expensive to keep in their present from and that they should not be exempt from current cuts that are taking place.

Figures compiled independently suggest that the pension schemes cost as little as 0.3% of the UK’s gross domestic product a figure that they believe will be the same for the next 50 years.

3 has beaten 02 in the bid to create the affinity partnership with the Institute of Chartered Accountants in England and Wales (ICAEW).

The deal will allow the 100,000 members of the ICAEW to get 3 business packages at a discounted rate.

The institute have said that 3’s innovative proposition won them the contract and hope that this will be the beginning of a long partnership.

3 will now begin a 12 month marketing plan with the ICAEW to promote awareness of the partnership.

Experts also believe that the deal was helped by the mobile phone operators recent dealing with the Orange and T-mobile partnership (Anywhere,Everywhere) which is thought to have given 3 some network bandwidth, leading to more reliability.

The network has also recently created a package for businesses that receive funding from The Prince’s Trust, offering them a 24 month mobile package at a discounted rate and free mobile data. The reason for the venture 3 say is the rewards the company will get from helping the disadvantaged youths the trust works with.

3’s head of sales Paul Foley said:

‘Three Business is uniquely focussed on providing the best possible deals for small businesses, so working with The Prince’s Trust to benefit the young entrepreneurs they support makes sense.’

As looked at in an earlier blog HSBC announced massive profits for the first quarter yesterday and today is the turn of Lloyds.

The bank which is owned by the UK tax payer has logged profits of around £1.6bn which is up massively on the loss of £4bn for the same period last year.

Experts suggest the reason behind this is the dropping rate of funds set aside to cover ‘bad loans’, the amount has gone from 13.4bn of last quarter down to £6.5bn.

A statement released by Lloyds described the announcement as “ a significant milestone for the Lloyds Banking Group,” adding that it was “well positioned” to deliver strong financial over the coming years.

The large majority of losses made by Lloyds was as a result of the HBOS takeover, which it has since been criticised for as many experts feel the group underestimated the extent of bad loans on the HBOS books.

As a result of this the government has to issue a bail out to the bank to the tune of around £20bn.

Lloyds reported earlier in the year that they were on course to make a profit for the first time in over 2 years but declined to give exact details, behind the scenes though the news allowed the company to increase borrowing rates. Making them odds on to hit lending targets this year.

Lloyds boss Eric Daniels added:

We are ahead of our lending commitments, but what we can’t do is prevent our customers from paying back. Our customers are behaving very prudently. Credit is available."

Other reports are due from remaining banks on Thursday and RBS on Friday, which will be the one financial experts will be looking at as Northern Rock have also reported a profit of £350m.

HSBC the UK’s biggest bank has today announced that it has made pre-tax profits of around £7bn.

The bank also reported that they were profitable in every other other region in the World except North America where they saw a loss of around $80m.

The rise in profits in the UK is up around 26% from last year and gives other banks who will be releasing their figures later this week a benchmark.

Shareholders in the bank will receive dividends of around $1.4bn, this is on top of the announcement earlier this year.

Other encouraging news is that monies set aside to cover bad loans has fallen to its lowest since the financial crisis began.

Investors hailed the news from the bank as shares went up across the board, Lloyds and RBS both reported a rise of more than 5%.

Despite this many have warned for the bank to make a complete recovery in the US market would depend on the recovery of the US housing market.

Also lending in the UK is still down at £500m a month compared to £900m two years ago.

BP have revealed that they are chasing a tax credit of around $9.7 billion (£6.3bn).

The oil giants who have recently found themselves having to pay out billions as a result of the Gulf of Mexico spill and are now hoping to reclaim some of that amount from the US government.

A income statement from the BP group shows a pre-tax charge of around $32.2bn which is presumably linked to the oil spill and a tax credit of $9.79bn.

According to US law BP can offset a proportion of its losses against US tax but given the current relationships between the two it could make for a frosty reception.

Current estimates on the costs of the disaster amount to around $4,300 per barrel spilt which BP will have to pay, on top of any civil or private payouts they need to make.

Accountancy firm Upton & Co have been told they must pay back over £4 million to investors after it was discovered they have been running unauthorised schemes.

The firm were running a program know as a ‘collective currency scheme’, this allowed investors to pool monies and invest in foreign exchange markets. However the FSA claimed that limited trading actually occurred meaning little cash was returned to investors.

Margaret Cole, Director of Enforcement and Financial Crime said:

"Operating a collective investment scheme is a serious business involving the management of a number of investments and requiring FSA authorisation.”

Adding:

"Upton had no business running one of these schemes and the firm risked millions of pounds of investors’ money – something you’d expect a firm of accountants to know better.”

Upton & Co started as in Wakefield 11 Years ago and offer business consultation alongside accountancy services, saying it prides itself on “delivering an unparalleled service to all clients, whatever their size or sector.”

The High Court also ordered Upton & Co to pay a further £840,000 in monthly instalments of £10,000.

Orange and T-Mobile completed their merger today as both companies started work in the same offices.

The company now called ‘Everything Everywhere’ will run alongside both companies current brands but will make the company the biggest communication company in the UK with over 30 million customers and a 37% market share.

The original merger took place back in September 2009 but had to be finalised and approved by European governing bodies.

Chief Executive Tom Alexander said:

“The formal integration of our new company, Everything Everywhere Limited, is another major milestone and reflects the rapid progress we have made over the past nine months.”

The deal was in doubt back in March as the Office Of Fair Trading wished to investigate the deal, based on an agreement T-Mobile held with 3 but withdrew its complaint and left it to the EU to approve the merger.

As part of the consultancy stage a deal was agreed that  the companies would give up 25% of the radio spectrum that they own and it would then be auctioned off by regulator Ofcom with ‘Everything Everywhere’ receiving some form of restitution, of which the amount remains unseen.

A deal was also agreed with 3 technically making this merger a three way deal but no details have been released about this deal, though it is thought the deal was signed as a way of assuring 3 that they would still have access to networks despite the other two suppliers  network sharing.

The announcement has had a mixed reaction with many hoping the combined network resources will allow for cheaper deals and savings whereas others believe that the decision to allow the merger has effectively ruled out all competition meaning that prices could increase.

Effective consultation and good financial management has put both of these companies at the forefront of communication service within the UK, whatever your business why not have a look at Accountant Now to see if they can help your business.

Bob Humphreys recently left practice accountancy and made the move into the charity sector and says that HMRC don’t think when applying criteria to charities.

Upon leaving his practice firm PwC he described his time as “fantastic” but also felt that it was all “relatively one dimensional” as he was never the one on the spot making decisions. For his last four years at PwC’s he headed up the charity portfolio, representing the likes of Cancer Research and The British Heart Foundation which he says showed him how is work could benefit others.

  Aside from the visits to Africa and helping out within Oxfam’s huge remit he also says he has realised how hard charities get hit by the government saying:

“HMRC appears to try its best to make things more difficult for charities. It introduced a reverse charging regime, which increased the cost of irrecoverable VAT for many charities.”

Charities were also one of the first companies hit when HMRC changed their legislation regarding format of which accounts can be submitted. What was once Excel or other spreadsheet software has now been changed to XBRL (eXtensible Business Reporting Software) a type of computer tagging language which allows all claims to be submitted online, another change that is due to occur from April 2011.

When asked about this Mr Humphreys said:

“We just cannot for the life of us see any benefit for the charities sector and it’s going to result in an additional cost to have our accounts put into XBRL format.”

Adding that he would just like HMRC to consider the impact changes have on charities or consult with charities to see what their views would be.

Charities can benefit massively from accountancy consultation no matter how big and they may not realise what they can and can’t be penalised for with regards to account filing.

Business Consultation can also benefit all business for more information have a look at Business Service Finder

(Source – Accountancy Age)

Accountants Clients Should Benefit From Legal Clients Privilege
The Institute Of Chartered Accountants (ICAEW) has demanded that Tax advice from accountants be kept confidential, as it for tax advice from solicitors.

The ICAEW were appearing in court to argue the case for legal privileges, Charles Flint QC, representing ICAEW said:

“You can’t distinguish between the two; they are performing the same function in the same context.”

Flint also argued that you cannot distinguish the quality of advice apart from what is set apart in training, the case is part of an appeal against a judgement that was passed to the Prudential Insurance Company over advice given to them by their accounting team.

The case continued Today when the court was expected to hear from the Law Society who will put forward their argument that privacy should be retained by the legal profession.

Need help starting up with your business or for more infomation and advice you can visit BusinessConsultNow

The UK financial watchdog has announced that it is planning to introduce a system that will require all mortgage applicants to provide detailed proof of their income before any lending can be authorised.

The Financial Services Authority (FSA) is trying to prevent people from being able to borrow by just writing down how much they earn and not having to prove it as self-certified lending is accounting for nearly 45% of all mortgages in the UK.

The FSA believe this has caused problems due to people have overestimated how much they earn by not taking into account taxation and living expenses but it is not just mortgage applicants that are at fault, the FSA added:

“Lenders need to get back to the basics of responsible lending.”

The announcement comes after the FSA have compiled a report on the reasons behind repossession and other circumstance difficulties over the past five years. Lesley Titcomb of The FSA commented:

“There is a clear link between financial overstretch and mortgage arrears and repossessions, and we are determined to protect vulnerable consumers by making sure that everyone who takes on a mortgage can afford it.”

But the announcement has been met with strong criticism as many people believe that the FSA cannot treat everyone under the same conditions, home-owners who may have had a mortgage for 30 years and never missed a payment will be under the same obligations as first time buyers . Other concerns are that of people with month – month or even week-week incomes who may not know what they will earn and prove it.
The FSA hopes to have the new legislation in place by early 2011 after feedback is received from mortgage lenders and other industry officials.

A recent interview with music legend and Rolling Stones frontman Sir Mick Jagger revealed that it was more than just his musical ability that made him his fortune.

In an interview with the BBC Sir Mick admitted that it was more a case of timing and managing his finances saying:

“"There was a small period from 1970 to 1997 where people did get paid and they got paid very handsomely."

The Sunday Times UK Rich List supports this, with the surviving members of The Beatles and Jaggers’ fellow Stones all in the top 20.

But with the sales of CD’s and recorded music declining where is the money and status now going to come from?

Booking Agent Nick Matthews thinks festivals such as Glastonbury and T in the park are the next progression saying:

"A really good set time or good slot proves you are one of the top calibre artists of that time, it’s something agents and artists very tactically work towards, making sure they have a good presence at festivals.”

But one thing is obvious, no matter how much you make you need to keep hold of it.

(Source – BBC)

Employment statistics from BRUSSELS in June 2010 showed that unemployment in the 16-nation euro zone held stable at 10 percent in May 2010, which indicates that the progressive increase in laying off of staff may have peaked. As we all know the economic outlook for the Eurozone and the UK looks bleak as across the region European governments have united in delivering austere public spending programmes and the precise impact is unknown, but certainly does not bode well for economic recovery.

In the UK the Labour Party, now in opposition, has argued fiercely for the UK Government spending package to continue unabated. However it is now perceived wisdom that this is financial suicide. This lack of judgement on the Labour Party’s behalf may have been one of the deciding factors as to their loss of power in the May 2010 UK National Elections.

The European Union’s (EU) statistical office reflects as expected that movements in producer prices have remained subdued during the month of May 2010. Thankfully this means inflationary pressure remains low. Euro stat reported said almost 16m jobless in the euro zone in May, an increase of just 35,000 more than April 2010.

The New York Times reports Reuters’ survey of analysts had anticipated unemployment to peak at 10.1 percent, – the largest volume of adults out of work for nearly 12 years. NY Times also quote Howard Archer, chief European economist at IHS Global Insight, who indicates that he sees economic recovery as contributing to the unemployment slowdown.

Europe’s biggest economies did well (considering). The leading European economy, Germany’s unemployment changed negatively by just 0.1 percent, and France and Italy managed to stay constant. This is a fantastic achievement but we will have to see the real impact of the austerity measures. However unemployment has now reached 20% in crisis-hit Spain, almost the same as Latvia. Spain is now a threat to the stability of the Eurozone like Greece, and Portugal and Ireland may be next. The instability of the Euro may have a further negative impact on the UK. The Eurozone represents 16% of UK Trade, but this figure does not include the invisible earnings of tourism etc. I suspect full 27-nation European Union looks on enviously at Austria whose unemployment is running at below 5 percent.

The German economy has been stimulated by German federal industrial subsidies which had kept many workers employed. In 2011 these subsidies will be withdrawn.

Unemployment is an financial indicator but it always lags behind recovery and growth.

Business Analysts and Finance Experts all understand economies need strong consumer demand to make economic recovery self-sustaining.

What is the likely impact on UK Small and Medium Sized Enterprises? Review strategy is the best first step. Get outside business assistance to check and make sure your business is getting the ‘good orderly direction’ it needs. Business Strategists can provide exceptional value for money through key business advice and assistance to help your business set realistic goals for market share, competitive advantage and profit growth.

Do the new settings answer privacy concerns according to Mark Zuckerberg.

Facebook was launched in 2004 on a simple concept – ‘to find and be found’ by allowing people to share information and connect with friends and business colleagues and associates connected with their work. 

Mark Zuckerberg stated:

If we give people control over what they share, they will want to share more. If people share more, the world will become more open and connected. And a world that’s more open and connected is a better world. These are still our core principles today.

Facebook has grown rapidly, and by 2010 broke through the 500 million visitors a day barrier. I’m not sure if this was a record at the time. Despite facing a challenge to keep the concept fresh, valid, up-to-date and a satisfying experience for all visitors over time, it continues to thrive.

A Social Web experience is obviously a core value, but it appears to be replacing email as a more efficient means of communicating between people. Like Twitter is has managed to attract serious business personalities, drawing from many nationalities.

Zuckerberg admits one major problem Facebook has it permits information to be shared. Users desire freedom of control over their personal information, and Zuckerberg claims there has been criticism that Facebook is has complex controls. However the immediate challenge is one of personal privacy, and Facebook needs to provide much easier controls which are simpler to understand.

Facebook is aware that many users do not understand how their personal information is processed and used, and this creates unnecessary anxiety and fear that it is shared in ways they might not like.

Zuckerberg has highlighted a summary of the Facebook modus operandi:

1. Consumers/Users maintain control over how their information is shared.
2. Facebook does not share personal data with people or businesses one has not granted permission, including advertisers, and never sells data.
3. Zuckerberg states that Facebook’s objective is to offer a free service for everyone.
4. Facebook evolves all the time. It started as a college project, it is now a global social network platform, connecting many millions of people.

In conclusion, the message to all UK Internet businesses, marketers, ecommerce sites, eBusinesses and all SMEs is that interaction with consumers on the net has consequences, sometimes far reaching.

If one’s business has potential, is substantial,  or has a considerable revenue stream form the internet then it is highly recommended to use external internet strategists and ecommerce consultants or Business internet marketing Specialist Consultants to advise you on the best internet strategy regarding privacy, data protection, financial transactions, website security, firewalls, anti-virus and eBusiness (search engine optimisation, competitor intelligence, and consumer satisfaction management online.

What are the greatest challenges facing business in the 21st century?  New legal, accounting regulations or tax mitigation restrictions, pressure on operating margins, the volatility of leading currencies or the emergence meteoric rise of China, India or Brazil are new world economic super-powers?

At the end of his ‘watch’ Peter F Drucker, perhaps the greatest thinker in management yet born, saw the challenges facing businesses today as much more dramatic than anything he had seen in his sixty years as a management expert (1940-2000).

What changes did he see as having the most impact?

1. Consumers have the controlling power.
2. Global competition is rising to cosmic proportions, largely though the internet.
3. Innovative companies develop not merely new products but new human wants and behaviours e.g. the iPod – the facility to have 10,000 tunes and 5 movies in your pocket.
4. Some of the most successful companies in the past 5 years, in terms of share value, did not exist 10 years ago.

Drucker made some suggestions to succeed in this new marketplace and corporate landscape:

 

• partnering with "rivals"
• collaborating with customers to view one’s business from "outside in";
• Source new resources of talent, making better use of retired executives and workforce
• Narrow core competencies, implying greater outsourcing. "If it’s not in your front room, then make it someone else’s front room," he liked to say.
• Individuals now take full responsibility for their own career progress as ‘knowledge workers’ for one is neither boss nor member of the work force, rather more a hybrid. This helps people face the latest changes in organisations contracting employees, which has seen an end to ‘jobs for life’. The responsibility for developing their most important resource, brainpower, is now theirs, commonly referred to as ‘continual professional development’ (CPD).

Wooldridge, in his Wall Street Journal article (28 Feb 07), refers to Drucker as a model, as well as a business analyst, pointing out that he continually reinvented himself:

• 1940’s – a prophet of big organizations
• 1970’s – fan of entrepreneurship
• 1980’s – not-for-profit sector

He kept his mind fresh by taking up a new subject every few years. Drucker will probably be remember best for his contribution to Non Profit Organisations. It was one of Drucker’s biggest contributions to management theory. Drucker was able to successfully have his management principles adapted by non profit organisations, with far reaching consequences. It is now an integral part of any respectable business school’s Master of Business administration (MBA) program, including Harvard Business School’s Social Enterprise in the US, and the UK’s Cranfield School of Management.. A good example of his influence can be seen in the British National Health service (NHS) which now describes patients as clients, despite mostly being government funded.

William Clement Stone was just 3 when his father died.

Tragedy made worse because he also left gambling debts, consigning his son and widow to a life of poverty. They shared a Chicago apartment with relatives in the rough South Side district yet at just 6-year-old W.Clement Stone sold newspapers to help support the family. How sweet did I hear you say? Not quite. In this dog-eat-dog atmosphere of the start of the 20c America William had to hustle older boys for territorial space at the street-corner, not easy at this tender age. However  W.Clement Stone proved flexible and more importantly resourceful, and instead of using force, not a strength of his at this time, he focused on restaurants to sell his newspapers.

Reflecting on his youth he described selling newspapers on Chicago’s South Side as “turning a disadvantage into an advantage.” Each time Stone returned to the restaurant he was thrown out by the owner; but being audacious and tenacious, Stone finally won over the restaurateur to allow him set up a more permanent kiosk. Incredibly the owner went on to became a great friend, and this success encouraged W.Clement Stone to continue to grow his humble newspaper business. At 13 Stone was the proud owner of his own newsstand.

This was the start of an incredible career which lasted almost a hundred years, and W.Clement Stone eventually became a multi-millionaire in insurance, going on to becoming a philanthropist, publisher, best-selling author, and a pioneer in the field of personal development. W. Clement Stone earned the name “Mr. Positive Mental Attitude (popular with business coaches)”.

What made him so focused on success? What spirit empowered W.Clement Stone to uncover
business opportunities in many circumstances, in the face of opposition, adversity and even failure? The secret is quite simple, he rejected negativity.

Incredibly, his personal life was also successful. At his death he had been married for
79 years to his childhood love and sweetheart, bringing up 3 children and 12 grandchildren.

W.Clement Stone describes himself as a ‘Self-Builder’ in his autobiography, The Success System That Never Fails. He modelled himself on Horatio Alger stories. These tales told of poor boys overcoming every adversity and succeeding to reach fulfilled and wealthy lives.

At 16, he left college and went to work for in Detroit for his mother in medical insurance
business. He was already a superb salesman and had developed a thoroughly positive attitude.
Like a duck to water, W.Clement Stone quickly thrived in the insurance business. Young and fearless cold calling held no fear, his prospects were “gold calls.” He sold huge volumes of
modest and inexpensive policies, and on one single day W.Clement Stone sold more than 100.

W. Clement Stone returned to Chicago in 1922, he returned to Chicago with an investment of $100 (a respectable sum perhaps in those days) established what would become
Combined Insurance Company of America (now part of ACE Corporation). The rest is history.