Sherie Griffiths

July 18, 2011

The News of the World R.I.P – Rest In Pieces

So, a British institution, which has been a part of Sunday for a hundred and sixty-eight years, is dead. I doubt it’ll be buried just yet – the post mortem will take a while.

Last Sunday saw the final edition of The News of the World and yesterday, its millions of readers would have had to find an alternative.

Now, I should say before I go any further, I haven’t read the paper in two decades – so quite frankly, I don’t miss it; but millions no doubt will. Could it have been saved? Maybe. Should it have been? Well, in my view (for what it’s worth), no.

I recently finished an audio-visual series on customer service, which included an episode on ‘Brand Brilliance – or Brand Suicide’. When this story first broke, I thought: ‘If ever there was a case of brand suicide, this is it!’ Although ‘brand execution’ is probably more accurate. Among all the pledges of support for senior executives – closely followed by the exit of said execs stage-left – closely followed by the announcement that the paper was to close and the ads taken out in other publications to apologize for the phone-hacking mess (or for being found out…?), the images that kept coming into my mind were of some dodgy paramilitary group disposing of someone who isn’t terribly important in the great scheme of things, but could pose a threat ‘to the greater good’ if left at large; or that same group, looking for mainstream acceptance, making sure that they’re seen to be taking swift and decisive action to rid the organization of ‘undesirables’. The question in both cases, of course, is: have they really tackled the problem from the roots, or just lopped off a rotten branch?

The News of the World may or may not have been a big part of your Sunday morning, but it was a shrinking element of News Corp’s operation – up against the same threats as the rest of the print media – changing consumer behaviour, falling ad revenues, shrinking market share etc. So, morality aside, it made perfect business sense to cut it loose now, for the sake of the wider organization – not least the BSkyB bid (which was still alive when the paper was killed off).

The week before last, before the execution was announced, advertisers were dropping out right, left and centre. At the time, some commentators were slightly scornful. Everyone is entitled to their opinion, of course, but I didn’t get it. As an individual, I don’t like putting money into organizations whose principles I don’t agree with – and I’m very suspicious of those who proclaim a principle, then align themselves with someone who doesn’t uphold it. Contrary to popular belief, businesspeople have moral standpoints too – and then there’s the business case. Mud sticks, as they say – and if you happen to be standing close to someone it’s being thrown at, some of it is quite likely to stick to you. Most of us don’t have the luxury of being able to dispose of a tainted brand to save something more valuable.

I’ve had to smile at some of the TV ads for the other Sunday papers this week. Call me synical, but I can’t help wondering how many of them are heaving a corporate sigh of relief and thinking: ‘PFEW! So glad it was Murdoch’s lot who got caught! While the heat’s on them, we’ve got time to tidy up here!’

The most important thing to come out of this whole sorry business for me is the reinforcement of the idea that however wealthy, successful and powerful an individual or corporation may be, actions have consequences. Cash and influence might talk – sometimes they shout – but there are some things they can’t drown out.

March 18, 2010

Business Groups call for ‘Decisive Action’ on UK Deficit

From Branston Adams (Chartered & Certified Accountants), Surrey.

 

Two of the UK’s leading business groups are calling on the Government to set out clear and credible plans for tackling the UK’s £178bn deficit.  In its Budget submission to Chancellor Alistair Darling, the Confederation of British Industry (CBI) has urged the Government to set out more details of its departmental spending plans, and to bring forward its targets for balancing the books, in order to obtain the critical objectives of boosting confidence in the public finances and fostering economic stability.

The CBI believes that the Government’s target date for achieving budget balance in 2017/18 is too far off, and that the bulk of the deficit should be addressed by 2015/16.  This would be achieved by adjusting expenditure plans, rather than increasing taxes.  Richard Lambert, CBI Director-General, said, ‘The UK’s deficit, though worryingly large, is still manageable, but the Government must act now to set out a convincing, credible pathway for balancing the books’.

He added, ‘The Budget should do whatever is necessary and possible to maintain and strengthen this country’s reputation as an attractive place for investment.  The planned rise in National Insurance Contributions is particularly ill-judged.  It is a direct tax on jobs and should be reversed’.

Meanwhile, the Institute of Directors (IoD) is calling for an incoming Government to act on the deficit as soon as it takes office.

Publishing its Business Manifesto 2010, the organisation echoes the CBI’s views that fiscal tightening should be based on lower public spending rather than higher taxation.  Miles Templeman, IoD Director-General, said, ‘We are convinced that we need swift action to tackle the budget deficit. The argument that early cuts would jeopardise the recovery is mistaken.  We believe that lower spending is likely to trigger a whole series of positive developments that will assist growth’.

Planning for the 50% Income Tax Rate

Higher earners should take action now to help minimise the effect of the new 50% top rate of income tax.  If you are likely to have income in excess of £100,000 for 2010/11, you could use the following strategies to reduce your total taxable income.

Accelerating Income

Consider accelerating income into the 2009/10 tax year by bringing forward bonus and dividend payments, and possibly the realisation of gains on unapproved share schemes, ahead of 6 April 2010 so that income is taxed at 40% (32.5% for dividends).

Changing Your Accounting Date

If you are self-employed and have an accounting year end of 6 April or later, you will be paying tax at the higher rate of 50% on income over £150,000. You may wish to consider changing your accounting date in order to shift profits into 2009/10.

Incorporation

While incorporating a business currently run as a sole trade or partnership is not always advantageous, there may be some potential benefits.  A change of accounting date or incorporation requires careful thought; we can review your figures and expectations for your business, to help you to decide if either of these options is right for you.

Restricting Income

If you run your business through your own company, you may wish to consider restricting your income to below either of the two key thresholds of £100,000 or £150,000 byreducing your salary and dividends and leaving any surplus cash in the company.

Transferring Income

If your spouse or civil partner has a lower marginal tax rate, you could consider either transferring ownership of income generating assets such as shares, let property or bank deposits to your spouse, or changing them to joint ownership.  Where your spouse is involved in your business, care must be taken to ensure that you comply with all of the necessary legalities.

Remuneration Options

Salary sacrifice schemes may allow a saving to be made, by replacing taxable income with certain benefits-in-kind.  The benefits may themselves be taxable, so it is important to factor this in when considering the savings.  The new restrictions on pension savings may make share based reward schemes more attractive forms of remuneration, allowing income to be taken as a capital return.  Approved share schemes could result in a capital gains tax liability of 18%, compared with a potential income tax liability of up to 50%.

Pension Payments

Pensions are a complex area for those whose income reaches (or has reached) more than £130,000 per annum, but maximising pension savings could reduce your marginal rate. Please contact us for further advice.

For further information and details of more strategies to minimise the effect of the new rates, such as deferring tax relief, tax-efficient investments, and making charitable donations, please visit the Hot Topics section of our websitePlease contact us for advice on your individual situation before taking any action.

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