Here are this week’s headlines:
- Owners of Monarch Airlines may receive profit at the expense of the company’s pensioners.
Reported by Megan Kearns
Frank Field, the chair of parliament’s work and pensions committee, has requested a change in the law following allegations that the owners of Monarch airline – which recently collapsed – may profit whilst the company’s pension fund loses out. Field raises concerns that Greybull Capital, the private equity group who own Monarch airlines, may leave the carriers pension fund among creditors who are to receive nothing. The pension fund is already owed 7.5 million.
Field and his committee have now written to Alan Rubenstein – chief executive of the Pension Protection Fund (PPF) – enquiring into the payments relating to the 7.5 million. The role of PPF involves recovering the pension funds associated with failed companies and Field aims to establish the position of the pension fund in Monarch’s creditor preference. In a statement, Field commented “How can it be that, once again, mega-rich individuals could walk away from a collapsed company with a bumper profit while ordinary people pick up the bill?” He goes on to suggest this instance involving Monarch “massively supports the case for the law to change, to robustly protect pension schemes.”
Read more here.
- Homes are no longer assets to be passed on to Dementia patients, MP says.
Reported by Jutha Cheewat
In new footage recorded at one of the Conservative Conferences and released by the Labour party, Jackie Doyle-Price who is MP for Thurrock, said that the party is looking to make reforms on funding for social care. In particular, “Dementia Tax”.
She said, “The reality is that the taxpayer shouldn’t necessarily be propping up people to keep their property and hand it on to their children when they are generating massive care needs”. She added that the younger generation should not be expected to fund pensioners’ care whilst already suffering financially.
The Conservative party leader, Theresa May, was also accused of a “manifesto meltdown” and was struggling to answer the questions in regard to the tax earlier this year. Despite her U-turn promise to establish an absolute limit on the amount patients with dementia have to pay, it has not been implemented.
Jeremy Corbyn, the Labour leader, responded that such action was appalling as the Conservative still expected dementia patients to sell their home to pay for their care. Labour has set out a plan to establish a national care service and invest an extra £8 billion solely to social care.
He also mentioned that the idea of “Dementia tax” was rejected by the public during the last general election and that it is unfair for patients with dementia to be treated unjustly.
- Amazon fined for illegal deal with Luxembourg and receiving tax benefits
Reported by Spence Yap
Following last year’s order from the Commission to Ireland for the recovery of €13 billion from Apple in back taxes, Margrethe Vestager, the European Union’s competition commissioner, now turns her focus onto Amazon. The online giant now faces €250 million fine for what the Commission deems to be an illegal deal with Luxembourg. Similar to last year’s case surrounding Apple, the online retailer is accused of receiving tax benefits from the Luxembourg through “comfort letters”.
Following the comfort letter, Amazon then “accordingly moved intellectual property of various types into a Luxembourg partnership that served as an intermediary between Amazon’s European operations – whose headquarters were a separate Luxembourg entity – and its American parent.” Being a partnership, it was not required to pay taxes under Luxembourgish law, which sits at a standard 29.22%.
Furthermore, the issues surrounding the case revolves around payment to the partnership for significant royalties, one of which being the right to use Amazon’s name, hence increasing profits earned onto the untaxed entity. Vestager argues that the royalty payments were hugely inflated and does properly mirror the economic facts of the company. Rather, the Commission argues that this was done merely for tax avoidance.
Both the land locked country and the internet giant disagree. Arguing that this was done for several reasons, and tax not being one of the considerations. Furthermore, it is argued that the company has operations in Luxembourg, with over 1,500 employees. The firm’s CEO, called Vestager’s actions as “total political crap”, stating that it is the result of tech-envy rather than economics.
- Facebook wants one billion people using VR despite disappointing sales.
Reported by Anna Flaherty
Facebook has been attempting to make virtual reality mainstream, recently announcing Oculus Go. However, sales have been slow since the last announcement of Oculus Rift in March 2016. The device is being sold at $199. John Delaney, an analyst with IDC, has essentially said that it is make or break with this technology. The device needs to reach mass market, and so far it has had little success and has even had IP lawsuits in the process. Mark Zuckerberg has admitted that the technology has been slow with its progress towards becoming a mainstream product, but nevertheless has a goal for it to be used by a billion people. They are not only trying to introduce VR into social media and gaming, but they are also attempting to adapt the technology to be useful for businesses.
This week Zuckerberg demonstrated some of the uses of VR on Wednesday, taking a virtual trip to Puerto Rico where they have recently been struggling to recover from the destruction of Hurricane Maria. This demonstration was intended to show empathy for those affected by the disaster. However the use of Zuckerberg’s VR cartoon amidst flooded streets, which has been extremely expensive to create, was not received well. Some say that whilst Zuckerberg may understand business, he does not consider the political aspect of these stunts.