AAT news review: 4G auction results leave £1bn hole in UK government finances

The 4G auction results generated £1bn less revenue for the Treasury than it predicted in the Autumn Statement

The 4G auction results generated £1bn less revenue for the Treasury than it predicted in the Autumn Statement

George Osborne turning into Mystic Meg over the 4G auction results, SMEs still in the dark about real time information (RTI) and interior designer Kelly Hoppen joining Dragons’ Den all made the headlines this week. Steven Perryman is in

4G auction results leave Osborne with egg on his face

It feels like it was yesterday. In December when the Chancellor delivered his Autumn Statement, gleefully mocking Ed Balls as he did, he was like a cat that had got the cream. Or the Chancellor that got the 4G auction, anyway.

Back then he predicted a windfall of £3.5bn from the 4G auction. How his smile must’ve dropped with the news this week the auction has raised a mere £2.5bn – a full £1bn short of his December prediction. On this evidence, Osborne is as prescient as Mystic Meg.

The 3G auction of 2000 remains the elephant in the room. The auction – which raised £22.5bn for the coffers in the dot.com boom – clearly sold Osborne a dummy so spectacular Lionel Messi is seeking royalties. Good luck in spinning that one in a months’ time when you deliver this year’s Budget, George.

Despite the financial hole the auction has blown in the Government’s finances (or, more likely, made bigger), the auction means two things:

Knowledge of the auction result must’ve dripped through to Number 10 nice and early in the week, with David Cameron using his tour of India as an opportunity to challenge the distinction between legal tax avoidance and illegal tax evasion. Or perhaps he wanted headlines to avoid the inevitable turban shots getting too much coverage?

Water companies to fight a tax avoidance fire

It wouldn’t be a week in the news without tax avoidance, of course, and this week it was the water companies who have been accused of using tax havens to exploit a legal loophole in order to avoid paying tax. One can only hope their defence is, ahem, watertight.

Never one to shy away from some headlines Margaret Hodge was back on the offensive, telling HMRC to publicly ‘name and shame’ those who sell or use tax avoidance schemes, saying the department must develop a more robust approach to combat losses of £5bn annually. The self-styled ‘defender of the public purse’ is beginning to sound like a record stuck on repeat, isn’t she?

Not that the Big 4 accountancy firms will care. Fresh from their stellar performance in front of Hodge’s Public Accounts Committee (PAC), they were back in the news this week with the Competition Commission circling with its provisional findings into the firms monopoly of the large company audit market.

SMEs in the dark about real time information

SMEs, meanwhile, also made headlines with AAT reporting that only a third of small companies are aware of HMRC’s proposed changes to PAYE. The findings led AAT’s Adam Harper to rightly argue that the government department should communicate the changes better.

Although it’s hard to know which of its emails to believe, with reports that 80,000 phishing messages about tax rebates were reported last year. Ever thought a tax rebate was too good to be true? Looks like for 80,000 people it was.

Over in retail, the supermarkets have been suffering mixed fortunes. Morrisons has announced it will buy 49 stores from the failed Blockbuster film rental chain to build a new convenience store franchise, primarily in London and the South East. A move which will give them much-needed cash to cover the appearance fees of Ant and Dec for its new adverts.

Tesco fortunes continue to fall amid online fraud

Fresh from the PR disaster surrounding horsemeat in its frozen ready meals, Tesco is investigating reports that dozens of its customers’ Clubcard accounts may have fallen victim to an online fraud. The series of scandals are clearly not helping public perception or confidence either, with a poll of 11,000 shoppers by Which? this week finding it’s the UK’s worst supermarket. Oh dear.

It is not alone though. Remember that wonderful news story a few weeks back of HMV staff overtaking its corporate Twitter account to provide a running commentary of staff being sacked? Well, this week it has been Burger King’s turn.

Rather embarrassingly, hackers quickly took over its official Twitter account this week, rebranding it with rival McDonald’s logo and name, before using it to tweet McDonald’s special offers.

Interior designer Kelly Hoppen is in on Dragons’ Den

Over in entertainment, news that interior designer Kelly Hoppen is to join the panel on Dragons’ Den led Professional Manager to ponder how her appointment might inspire more creative entrepreneurs. For us the prospect of seeing Peter Jones bamboozled by fabric swatches and mood boards is just as enticing a prospect.

It’s the Oscar’s this Sunday. What’s your favourite film? Life of Pi? Lincoln, perhaps? Worthy contenders, both of them, but with real-life drama Argo the favourite for the Best Film statue, another potential blockbuster based on real life events has surfaced.

This week it was reported that Hollywood star Tom Cruise’s visit to a Hertfordshire curry house has been turned into a film. The film ends dramatically when a friend of the actor has to settle the bill after the restaurant informs Cruise it does not accept American Express. As endings go, it’s hardly The Shawshank Redemption, is it?

Over in music, meanwhile, rock ‘n’ roll singer Chubby Checker is to sue HP over its app that used his name as a euphemism for penis size. The Chubby Checker app – which appeared on websites for Palm OS devices – claimed to guess the intimate measurement based on shoe size.

Reports that Checker has size four feet are as yet unconfirmed.

Steven Perryman is AAT‘s Editorial Manager

Steven Perryman is AAT Comment's former Content Editor.

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