FT : HMRC makes six loan charge arrests

HMRC makes six loan charge arrests
UK tax authority swoops on promoters of ‘fraudulent’ schemes

The UK tax authority has arrested five men and a woman for promoting fraudulent schemes designed to evade paying the loan charge, in its most serious intervention over the controversial levy.

HM Revenue & Customs said it arrested two individuals on May 10 on suspicion of promoting a scheme “designed to get around the loan charge, allowing individuals to evade paying taxes”.

In a separate criminal investigation, on Tuesday four other people were arrested on suspicion of “using fraudulent methods to circumvent the loan charge and the taxes due” and are “suspected of enabling others to do the same”.

All six have been released pending investigation.

Announced in 2016, the loan charge cracked down on loan-based tax avoidance schemes used by tens of thousands of contractors, which HMRC regards as “disguised remuneration” to reduce income tax and national insurance contributions.

People were given until April 2019 to either settle with HMRC, repay the loans or face paying tax on up to 20 years of income in a single tax year. Many are facing six-figure tax bills and fear bankruptcy.

HMRC warned two years ago that some promoters claimed to have created schemes that enabled users to get out of the loan arrangements and avoid the loan charge, in return for a fee.

One example highlighted by the tax authority involved promoters asking individuals to enter into a “bet” with the trust that granted them the loan. The terms of the bet meant the individual was almost certain to win, using the winnings to repay the loan. The tax authority stressed on Friday that such schemes did not work, and that tax evasion was illegal.

“We strongly encourage people not to use loan-busting schemes and methods,” an HMRC spokesman said. “They clearly don’t work and people run the risk of losing more money and being involved in fraud. As we always say — if it looks too good to be true, then it undoubtedly is.”

The arrested include a 54-year-old man from Guildford, a 58-year-old man from Stevenage, a 50-year-old man from Stratford-upon-Avon, a 78-year-old man from south London, a 45-year-old woman from Tonbridge and a 50-year-old man from Sevenoaks.

HMRC officers also seized personal records from business and residential properties in London, Guildford, Stevenage, Stratford-upon-Avon, Sevenoaks and Tonbridge, it said.

The interventions are the latest action in HMRC’s investigation of fraud related to disguised remuneration schemes.

FT : Lilium/electric aviation: wing and a prayer

Lilium/electric aviation: wing and a prayer
A commercial air taxi service will require better batteries

Aircraft as cheap and convenient as cars are a recurring vision. German start-up Lilium is the latest to dream it, with electric propulsion an added challenge. The best batteries have about 1.7 per cent of the power-to-weight oomph of kerosene. Whipped cream stores energy better.

Lilium has unveiled a flying vehicle it hopes will operate as a commercial taxi service by 2025. The craft is already capable of carrying five people 300km in an hour, it says. This feat does not feature in a video clip. Only a brief hover is demonstrated.

The best lithium-ion packs achieve 200 watt hours per kilogramme. That is about 7 per cent of the figure for whipped cream, according to aerospace experts in Germany. Even accounting for energy wastage in a combustion engine, electric vehicles have poor power to weight ratios. A quadcopter design with current battery technology might get four people 100km, say academics t UCL.

The range anxiety of electric motorists is nothing to that of electric aviators, even if they own parachutes. But Lilium says lift from its vehicle’s wing improves its reach.

Better batteries would help too. Energy density has risen about 4 per cent a year over 20 years. Tesla’s Elon Musk thinks density of 400 Wh/kg will do for flying taxis. UCL believes at least 750 Wh/kg is required to replace short range commercial jets; those will be available in 2050.

Lex is betting on a cream-powered flyer — the Schlagsahnehubschrauber, as it might be known in Germany. If you do not fancy flying, you can use the fuel as a topping for apple strudel.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

  • PINS -17.3%, BIDU -11.3%, IQ -6.6%, DE -4.8%, ENS -3.1%, LX -1.2%, NVDA -1%

Select semiconductor stocks trading lower after NVDA's earnings:

  • XLNX -1.4%, MU -1.2%, AMD -1%, SMH -1%, SOXX -1%, LRCX -0.8%

Other news:

  • WTRH -9.1% (announces launch of follow-on public offering of common stock)
  • GRUB -3.5% (reports that Amazon plans to buy stake in UK food delivery app Deliveroo)
  • ADMA -1.9% (prices 11.25 mln common stock offering at $4.00/share)
  • VALE -1% (after seeing afternoon weakness in response to headlines that Brazilian prosecutors are warning the company's Gongo Soco mine could break later this month)
  • PHM -0.9% (approves increase of $500 mln to share repurchase authorization; announces cash tender offer for $300 mln of its 4.250% senior notes due 2021)

Analyst comments:

  • NPTN -6.8% (downgraded to Hold at Needham; downgraded to Neutral from Buy at MKM Partners)
  • CWH -2.2% (downgraded to Sector Weight from Overweight at KeyBanc Capital Markets)
  • MTDR -1% (downgraded to Neutral from Buy at MKM Partners)
  • CPRT -0.8% (downgraded to Neutral from Buy at Guggenheim)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:

  • BOOT +12.1%, AMAT +4.4%, HUYA +1.8%, SMCI +1%

M&A news:

  • CRAY +16.6% (to be acquired by Hewlett Packard Enterprise (HPE) for $35.00 per share in cash)

Other news:

  • ACHN +7.2% (reports interim data from a Phase 2 paroxysmal nocturnal hemoglobinuria trial assessing the safety and effectiveness of its oral small molecule factor D inhibitor ACH-4471 in combination with intravenous eculizumab)
  • LGF.A +2.9% (light volume; scheduled to report earnings next week)
  • MNKD +2.4% (entered into exclusive marketing and distribution agreement with the AMSL Diabetes division of Australasian Medical & Scientific for the commercialization of Afrezza Inhalation Powder in Australia)
  • NOG +2.1% (Pres disclosed the purchase of 200K shares)
  • INO +1.5% (Inovio and QIAGEN establish collaboration to develop diagnostic test for VGX-3100, Inovio's novel immunotherapy targeting advanced cervical pre-cancer)
  • ENDP +1.5% (to present clinical data from Phase 3 investigational study of collagenase clostridium histolyticum for the treatment of cellulite)
  • EIX +1.3% (established an $1.5 bln common stock at-the-market equity distribution program and forward sales agreements)
  • HROW +1% (discloses conclusion of Allergan (AGN) lawsuit)

Analyst comments:

  • UAA +4.2% (upgraded to Overweight from Neutral at JP Morgan)
  • CONE +0.8% (upgraded to Buy from Hold at Deutsche Bank)
  • FL +0.8% (upgraded to Buy from Neutral at B. Riley FBR)

>>> US Early premarket gappers

Early premarket gappers

Gapping up:

  • CRAY +16.6%, HROW +15%, BOOT +12.1%, AMAT +5.5%, IOVA +3.1%, LGF.A +2.9%, HUYA +2.5%, MNKD +2.4%, NOG +2.1%, PHM +1.8%, INO +1.5%, NVDA +1.4%, EIX +1.3%, SMCI +1%, LRCX +0.8%, MFA +0.7%

Gapping down:

  • PINS -15.9%, BIDU -11.2%, IQ -7.8%, LX -5%, WTRH -4.6%, DE -4.2%, ENS -3.1%, GRUB -2.1%, MU -0.6%, BA -0.5%, SOXX -0.5%, QQQ -0.5

TrchCrunch : Daimler and BMW-backed Kapten rides into London with anti-Uber ad c

Daimler and BMW-backed Kapten rides into London with anti-Uber ad campaign

Kapten, the French ride-hailing app backed by Daimler and BMW, has today launched in London, coupled with a feisty ad campaign taking a swipe at Uber’s tax arrangements.

It follows Kapten (formerly called “Chauffeur Prive”) obtaining a license from TfL, London’s transport regulator, to operate its private-hire vehicle (PHV) service in the U.K. capital city. The company first launched in France in 2012, growing quickly in Paris, and has since expanded to Lisbon and Geneva.

Specifically, Kapten’s new billboard ad campaign calls out Uber for avoiding local sales tax: “Others avoid paying VAT in the UK – that’s not uber cool.” In contrast, Kapten says it pay taxes locally in every market in which it operates. The ad then goes on to tell Londoners that using Kapten “might just be your best decision today.”

In a press release driving home the point, Kapten notes that Uber has faced criticism in the U.K. for paying little tax to the U.K. government and avoiding VAT on top of its service fee due to the U.S. company’s Dutch tax location.

“Uber had an estimated £1bn of ride bookings in the U.K. in 2018. If 20 percent VAT was added to its 25 percent commission, the U.K. Exchequer would get an additional £50m per year,” says Kapten.

Meanwhile, Kapten’s newly launched London service should be available in zones 1 to 5 as of today. The ride-hailing app is also launching with a 50%-off offer on rides. After launch, Kapten claims that its low pricing will still mean fares are on average 20% cheaper than competitors.

“Trips in the congestion charge zone will be at least £2 cheaper than Uber due to congestion and clean-air fees,” says the French company, promising to cover the congestion charge on behalf of its drivers for the rest of 2019.

Adds Mariusz Zabrocki, London general manager of Kapten, in a statement: “There has been one dominant, over-confident ride-hailing player in London and it’s time to shake things up. We believe London’s private-hire drivers, commuters and residents deserve better. Each time a Londoner takes an Uber ride, 60p is lost that could finance the NHS, schools and other parts of the U.K.” economy.

Reuters - Carrefour considers sale of stake in China business: sources

Carrefour considers sale of stake in China business: sources

PARIS/FRANKFURT/BEIJING (Reuters) - Carrefour, Europe largest retailer, is exploring the sale of a minority stake in its loss-making business in China and has started sounding out potential buyers, people familiar with the matter said.

Carrefour’s China business is valued at around $1 billion and the retailer is working with BNP Paribas on the deal, the sources said.

They also said the French company is waiting to see the outcome of an auction for German retail group Metro’s China operations to assess the level of interest.

A Carrefour spokeswoman said on Friday: “There is nothing particularly new to say about the matter”, when asked about China.

Last week, a Carrefour spokeswoman had said a sale of the business in China was not on the agenda, in answer to market rumors that had sent the shares higher.

BNP Paribas had no immediate comment.

Carrefour, which has been in China since 1995, has spent years trying to fix a business where 2018 sales fell 5.9% on like-for-like basis to 4.1 billion euros ($4.58 billion), amid fierce competition from local players and a buoyant online market.

In January 2018, Carrefour announced a partnership with Tencent, which led to the opening of a high-tech store in Shanghai.

Carrefour also said at the time that Tencent and Yonghui, a retailer specialized in fresh food and small formats, could take a stake Carrefour China.

This investment has yet to be finalised.

The Tencent partnership was the latest step in Carrefour’s attempts to stem a decline in sales in China where its main focus is large hypermarkets.

Carrefour has been expanding into e-commerce and convenience stores in China and has modernized its hypermarket ranges with more fresh products and opened logistics centers to cut costs.

Recently Carrefour reallocated space in its Chinese hypermarkets through a partnership with Chinese electronics retailer Gome for 11 shop-in-shops.

Carrefour’s rivals in China have also faced problems with their businesses there.

In 2013, Britain’s Tesco gave up on going it alone in China, folding its business there into a state run company as a minority partner.

In 2016, Wal-Mart sold its Chinese online grocery store in return for a stake in JD.com, China’s No. 2 e-commerce firm.

Last year, Alibaba bought a stake in Sun Art, China’s top hypermarket operator, in which French retailer Auchan is the main shareholder.