Daily Mail - 07.08.2019

Daily Mail, Wednesday, August 7, 2019

Bitcoin bets

targeted by

the taxman

THOUSANDS of punters who prof-

ited from the boom in bitcoin may

be stung with a surprise tax bill.

Tax collector HMRC is reportedly

pressuring trading websites for

digital currencies for information

about customers and their

transactions.

The authority, chasing unpaid

charges, is understood to have

written to exchanges, including

Coinbase and Etoro, to try to find

bitcoin winners who owe money.

The currency surged to almost

$20,000 in 2018, before dropping

sharply. Such exchanges and dig-

ital currencies, including bitcoin

traded on them, are not regu-

lated in the UK but users may have

to pay capital gains tax, which is

charged on profits made from the

sale of assets. There is a tax-free

allowance of £12,000 for these.

HMRC is said to be interested in

people who have been buying and

selling crypto-currencies, amid

concerns they are not reporting

tax liabilities properly. It refused

to respond to a freedom of infor-

mation request about its inquir-

ies, but said: ‘These transactions

may result in potential tax charges

and HMRC has the power to issue

notices requiring exchanges to

provide this information.’

Eight blue-chips top

pay shame league

by Tom Witherow

Micro Focus

Segro

Standard Life Aberdeen

JD Sports

Barclays

Ocado

Kingfisher

Aveva

Kevin Loosemore

David Sleath

Keith Skeoch

Peter Cowgill

Jes Staley

Tim Steiner

Veronique Laury, left

Craig Hayman

THE FTSE 100 OFFENDERS

Company Boss

£3.1m

£3.6m

£1.1m

£2.6m

£3.4m

£3.1m

£1.8m

£7.3m

Pay

last year

50.3pc

46.7pc

42pc

30.5pc

29.2pc

25.4pc

24.2pc

21pc

Shareholder

revolt

A STAKE in Taylor Swift’s record

label Universal Music Group is

being bought by the Chinese in a

£2.8bn deal.

The tie-up will see 10pc of UMG

bought by Shenzhen-based tech

company Tencent, with the rest

retained by French firm Vivendi.

As well as Swift (pictured), who

has sold more than 50m albums,

UMG’s stable also includes hit art-

ists Drake and Lady Gaga.

UMG is the world’s biggest music

label, ahead of Sony and Warner

Music. Tencent is the world’s larg-

est gaming company and China’s

second-biggest tech company.

The deal values UMG at £27.6bn.

Tencent has an option to buy a

further 10pc of UMG and the sale

will boost UMG’s presence in the

tightly controlled Chinese market,

where it wants to expand.

It comes as Vivendi seeks to cash

in on the thirst for subscription

and advert-based music stream-

ing services such as Spotify.

ALMOST £1bn was wiped off the value of Rolls-
Royce after it warned it faces £100m in extra costs
related to its troubled flagship jet engine.
The British engineer’s Trent 1,000 programme
has been beset by problems, forcing airlines to
ground planes while repairs are made.
Rolls said the debacle will cost it up to £500m
this year, more than expected. That sent shares
down 6.9pc and knocked £995m off the business’s
value.
Trent will cost a further £50m to £100m in 2020,
with the total cost now set to reach around £1.6bn,
chief executive Warren East said.
Used in Boeing 787 Dreamliners, the engines’
issues with compressors and turbine blades have
left them with a shorter-than-expected shelf life –
forcing Rolls to dole out compensation.
Overall, it has caused hundreds of planes to be
grounded.
The blow came as the company revealed reve-
nues of £7.4bn in the first half of 2019, up from
£7bn a year earlier.
Rolls said it is on track to generate £700m in
cash this year, and £1bn in 2020.

Rolls reels from

more engine woe

A PAYMENTS firm backed by rapper Snoop Dogg

has become Europe’s most valuable privately-

owned financial tech business.

Klarna is valued at £4.5bn after raising £379m

from investors. The Swedish business works with

retailers such as Asos and Michael Kors to allow

customers who cannot afford products they

purchase to ‘buy now, pay later’.

Buyers can pay via Klarna, which will pay the

retailer and take the money from the buyer’s

bank account in 30 days, or in monthly instal-

ments. But it has been criticised for encourag-

ing millennials to take on debt.

Its marketing is targeted at younger shoppers,

and earlier this year it launched a so-called pop-

up shop in London’s Covent Garden featuring

brands such as Finery, Schuh and Swoon.

Klarna, which is used by 60m people, wants to

grow further in the US. The latest funding round

was led by San Francisco-based investor Drag-

oneer Investment Group, and the Common-

wealth Bank of Australia also contributed.

Snoop Dogg’s firm

is valued at £4. 5bn

TENCENT BUYS STAKE IN UNIVERSAL

EIGHT blue-chip firms have
earned a place on an official
list of shame after suffering
shareholder revolts on execu-
tive pay.
Companies in the FTSE 100 to
have suffered a bloody nose
include a DIY chain, a bank and a
tech firm, in a damning indict-
ment of how widespread corpo-
rate excess has become.
And it reveals growing pressure
from investors after years of fury
over the massive sums on offer.
Former prime minister Theresa
May introduced a register of the
worst offenders on executive pay,
maintained by The Investment
Association trade body. It lists
firms where 20pc or more share-
holders oppose bosses’ earnings
at their annual meeting.
This year’s biggest offender was
tech company Micro Focus,
where half its investors voted
down its pay deal.
It gave top bosses an extra year
to hit targets, allowing them to
share in a £286m bonus bonanza
when a botched takeover caused
the share price to slide. Investors

judged that the move was a ruse

to allow directors – including

executive chairman Kevin Loose-

more, who has been paid £27.9m

since 2011 – to cash in.

Savings and investment firm

Standard Life and warehouse

company Segro each suffered

revolts of more than 40pc.

At Ocado, a quarter of share-

holders voted against boss Tim

Steiner’s bonus of up to £100m

over five years, which he will

receive if the share price triples.

JD Sports had a pay revolt of

over 30pc as shareholders voiced

their fury at Peter Cowgill’s £2.6m

package. Others hit by rebellions

include Barclays, where boss Jes

Staley suffered a 29.2pc vote

against due to sky-high contribu-

tions towards his pension.

At DIY chain Kingfisher, Vero-

nique Laury – who is set to leave

the business – was hit by a 24.2pc

opposition vote. And IT firm Ave-

va’s boss Craig Hayman endured

a 21pc revolt over his £7.3m pay.

Luke Hildyard, of the High Pay

Centre, said: ‘Even investors are

now losing patience with the

vastly disproportionate pay-

ments. Boards should heed this

warning from shareholders.’

Nick Dawson, of shareholder

advice firm Proxy Insight, said:

‘While many public companies

have heeded the warning from

investors on pay there are clearly

others who are underestimating

shareholder sentiment.’

The number of FTSE 100 com-

panies facing revolts of more than

20pc has doubled in the past five

years, data from Proxy Insight

showed, despite average pay

packets for the bosses of Britain’s

biggest firms falling to £4.6m last

year, from £5.7m in 2017.

Shareholders have been urged

by politicians and campaigners

to be more assertive on pay, say-

ing massive bonanzas undermine

companies’ public image and

trust in business.

Across the FTSE all-share index

of around 600 companies, 40 firms

experienced pay revolts of more

than 20pc this year to date. In

2018 the number was 47.

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