Today in the press

Monday 14 January 2013 12.57
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

GOLDMAN ETES TAX DELAY ON UK BONUSES - Goldman Sachs is among a handful of banks considering delaying UK bonus payouts until after April 6 when the top rate of income tax falls from 50 to 45%, says today's Financial Times. The bank’s plan, which relates to bonuses paid for performance in 2009, 2010 and 2011, rather than new awards, is expected to prove controversial despite being perfectly legal. Up until recently many banks and other large companies had been toying with the idea of delaying bonuses from their traditional payout dates in January, February and March until after the April 6 step-down in the tax rate. But the vast majority of banks have concluded in recent weeks that amid a hostile attitude towards anything that looks like tax avoidance, it would be reputationally damaging to press ahead with such a plan. About half of the top 20 banks in the City had considered delaying UK payouts, in line with Goldman’s move, according to bank insiders and pay consultants. Moving bonus dates forward and back by a few weeks to optimise tax liabilities saved individuals - and cost the government - at least £16 billion in 2010, when payouts were brought forward to avoid the new 50% rate, introduced in April of that year, according to the Office for Budget Responsibility.

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IRISH LIFE SELLS €20m BOND PRODUCT TO DEFINED BENEFIT PENSION SCHEME - Irish Life has sold a sovereign annuity bond with a value of roughly €20m to a defined benefit pension scheme. This is the first time Irish Life has completed the sale of a sovereign annuity product, reports the Irish Examiner. Last summer, the National Treasury Management Agency said it would issue up to €5 billion of amortising and inflation linked bonds to attract Irish pension funds to Irish debt. Linked to Irish government bonds, these products offer higher yields than are available from the German and French bonds, which traditionally underpin annuity products, said Irish Life. This €20m investment is being used to enhance the funds available to a defined benefit pension scheme and for existing users of the scheme who are being transferred to a defined contribution scheme.

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CALL FOR 80% TAX ON WINDFALL CEMENT PROFITS - The cement industry is getting tens of millions of euro annually in windfall profits, at the exchequer's expense, because of anomalies in the EU Emissions Trading Systems (ETS), according to a senior figure in the sector writes today's Irish Times. The anomalies could cost the exchequer more than €250 million over the coming seven years and has already cost in the region €120 million since 2005, according to Donal O'Riain, chief executive and founder of Ecocem. Ecocem is a majority Irish-owned "green" cement producer with plants in Ireland, the Netherlands and France. Mr O'Riain said the anomaly arose from the fact that the Irish cement sector had lost 75% of its demand since the peak of the Celtic Tiger years, yet the allocation of ETS credits to the sector was based on its historical sales levels. The over-allocation of credits to the sector represents a windfall gain as the credits can be sold. It also represented a loss to the exchequer as the credits could be sold by the State instead of being given to the sector, he said. The Department of Finance has increased the tax being paid on profits from the sale of the credits, from 12.5% to 30%, by ruling that they have to be taxed as a capital gain rather than at the corporation tax rate, but Mr O'Riain said they should be taxed at up to 80%.

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LISNEY MD 'HAPPY' DESPITE FALL IN PROFITS - The managing director of one of the country's largest property firms, Lisney, says he is "happy enough" with last year's performance, in spite of pre-tax profits decreasing by 79% to €117,872. The Irish Examiner says that new figures lodged with the Companies Office show that pre-tax profits at Lisney Ltd declined sharply from €560,132 to €117,872 in the 12 months to the end of March last year. This followed the firm's gross profit decreasing by 13% from €8.5m to €7.4m. James Nugent pointed out that non-cash items, including a provision of €432,144 for an impairment on an inter-company loan and a €150,000 property write-down, contributed to the loss. "The performance last year was in line with expectations. I am particularly pleased that we managed to increase our cash balance from €355,382 to €581,452 and reduced the amount owed to the firm from €2.5m to €1.8m." Mr Nugent said: "Any business hopes for better profits, but last year was not a bad result in the current climate." He said Lisney recorded double-digit percentage growth in the value of residential property sales in the 12 months to the end of December 2012. "My sense is we are through the worst of it and people in the company here are a lot more comfortable than they were this time last year. With our costs reduced, we are much more optimistic about the future ." He said there was evidence of a marginal increase in Dublin property prices, due in part to a reduced supply of residential property.

Keywords: presswatch