"I have been the Wild Rover!!"

Last month Accountancy Age reported that the cost of the investigation into
the 2005 collapse of British car manufacturer Rover has already cost £9.6m.
In 2006 the Public Accounts Committee calculated the British taxpayer was being
hit by a £270m bill for Rover's operations between 2000 and 2005. It is great
to be British but perhaps we could get to the European Union to pay for a bit
of this mess.
Gervase MacGregor of BDO Stoy Hayward was appointed in the summer of
2005 after finishing a three year investigation in another vehicle manufacturer.
MacGregor is working with Guy Newey QC of Maitland Chambers.I am
not too sure how they will treat the Blair/Brown government's objective of
keeping Rover going as long as possible for electoral reasons.

Gordon Brown emphasises British values?

In his Labour Party conference speech yesterday UK prime minister Gordon Brown
emphasised British values. For most people being British is just something on the
passport. The only British institutions seem to be the Royal Family and the Armed Forces. One thing in favour of Scottish independence is that the country is almost
there already with different legal and educational systems. It has been a long
time since Scotland has been referred to as North Britain.
Apparently, the prime minister wants to fight the next election on health. However,
the NHS is not a British institution. In Scotland and Wales there are different
spending levels. If you actually go into a NHS hospital does it feel British? How very
British for the English National Health Service to face claims of £4.5bn for alleged
blunders by doctors and nurses in maternity services. In fact, maternity services
are close to collapse in my part of England because of "reconfiguration" and of
non-British demand.

Northern Rock yet again!!

Sorry to revisit Northern Rock yet again but the weekend press has got me
thinking. It looks like a lot of people are guilty of 20-20 hindsight similar
to the collapse of Polly Peck, where one factor was the probing of the published
accounts by a Swiss German investor. If it was not for the credit crunch,
Northern Rock would still be around. If it was not for the Bank of England refusing
liquidity to help the interbank market, in constrast to the U.S Federal Reserve
and to the European Central Bank (ECB), then again the Newcastle-based institution
would be still with us. It looks like Northern Rock was hit by a perfect
storm.
However, Alistair Blair writes a perceptive piece in the Investors Chronicle, which
questions the famed low costs of Northern Rock and notes that its financial
strength was compromised by its reliance on short term borrowings rather than
customer deposits. Blair says the audit report could have been complemented by
a validation report, which would have pointed out its future financial
problems.
In the blame game nobody comes out very well but I thought Chancellor Alistair
Darling did put his head over the parapet in a media blitz. Some commentators
say Northern Rock depositors ignoring Darling's calls reflected the loss of trust
in politicians. Perhaps more of a factor was scrutiny of the deposit compensation
scheme. This led to a realisation with its lack of protection for relatively
minor sums.

Thank God it's Friday!! Mourinho and Northern Rock

I suppose the ramifications of Jose Mourinho leaving Chelsea and of Northern Rock
closing down will go on for a while yet.
If Chelsea are serious about winning the European Champions League then it would
have made sense to retain Mourinho this season, since he has the expertise and experience.
However, I got a sense that Chelsea's tactics were falling short and
other teams were getting better at facing them. A loss to Aston Villa and
a nil-nil draw to Blackburn Rovers contrast with performances in the previous title winning seasons.

I know that Northern Rock is still open to business as stated by its CEO
Adam Applegarth but the possible solutions do not look very palatable.
A competitor could make a low-ball bid but I am sure that the European Commission
is itching to get involved in investigating any possible solution.
In the blame game Bank of England and FSA board member Sir John Gieve is getting
a bit of a kicking. He had the temerity apparently not to read the Northern Rock
interim statement in July and to go on holiday to France when he knew about
the crisis.

Roger Wood and Co latest newsletter!!

I have received the September newsletter of the English accountancy firm
Roger Wood and Co. It says if you receive a dividend from running a small limited
company, you need to have the right paperwork in place otherwise the HMRC could decide it is part of your pay and charge national insurance on it.
The HM Revenue and Customs might view the dividend payment as a loan payment
and charge 25 pct tax on it. The accountants firm Roger Wood, which is based in
Dorchester,Dorset, says you need the appropriate minutes approving the
dividend payment. In addition, there should be a tax voucher proving the amount
of the dividend and that tax is deducted at source.

This view is not in the September newsletter of Roger Wood but I believe
the Gordon Brown government uses small companies as instruments of its
social policies. The role of small companies does not seem to be to
generate employment but to pay as much as tax as possible. The HMRC is
very attentive on dividend payments.

Changing the subject, in Dorchester, there is a very nice museum with a
diverse collection. I would really recommend a visit. The Dorset County Museum
is trying to raise a quarter of million pounds to save three paintings for
Dorset by George Romney.

Banking regulation has failed in UK!

It looks like banking regulation has failed in the UK with Northern Rock (NRK.L)
hitting the rocks. It looks like Bank of England governor Mervyn King has not
played his hand very well. He is looking isolated but he had problems with the
tripartite regulation of the Treasury, the FSA (which monitors banks) and the
Bank of England, which spends its time spouting on about inflation (CPI or RPI
anyone). Gordon Brown was responsible both for the tripartite regulation framework
and the adoption of the CPI, which excludes interesting things like mortgage
costs.
I think Mervyn is an Aston Villa fan, which makes him a romantic. In an imaginary
world one could make the case for letting banks fail to punish them for
irresponsible lending but practising the theory does not make a lot of sense.
The Europeans and Yanks must be laughing their heads off. They can't wait
for Gordon's next lecture on economic stability.

Northern Rock part two.

The appeals for calm have gone unheeded by Northern Rock savers, who today
(Monday) have queued up outside branches to get their money out. It has been
estimated that £2bn has already been withdrawn. The blame game is now being
played out with Bank of England governor Mervyn King apparently one of the
culprits.

Northern Rock?

It is a crying shame that Northern Rock has run into difficulties given its
commitment to the North-East with its foundation. I bought a few shares as a
high-risk punt and it was very high risk. I suppose I should just have to
sit and wait.
It is a very sad sight if you see queues of people scrambling for their
deposits. I remember a small building society called Southdown in East Sussex,
which was subject to a few rumours in August 1991 and that was that. There was
a scramble by depositors to get their money out and Southdown had to be rescued by
another building society. I would urge Northern Rock customers to be calm
and hopefully the weekend will give the bank much needed time.
Lloyds TSB has been viewed as a possible bidder but any predator might prefer
to buy the assets in a future distress sale. It depends on what the Bank of England
comes up with. What is clear is that the board and top management of Northern Rock
are looking at alternative career options.

VAT registration delays!!

I suppose VAT registration delays are the the price to pay for HMRC's increased
vigilance against missing-trader fraud and carousel fraud. However, it is hitting
the cashflow of new companies with the inability to invoice properly.

http://www.contractoruk.com/news/003334.html
"HMRC has said there is a temporary worsening of the VAT backlog due to 20,000 applications received from newly-incorporated companies, as a result of the managed service companies rules in the Finance Bill 2007."

I wish I was a non-dom!!

I wish I was a non-domiciled resident of the United Kingdom. Think of all the tax I could not pay!! UK Financial secretary Jane Kennedy has not really stepped on the gas in
terms of revealing details of the review on the tax rules for non-domiciled
people.
Let's hope the former NUPE union area organiser shows a bit of backbone about the
fat cats. If it means a few less Russian oligarchs in London, then we won't have
to worry about their security problems when they fall out with Putin.