Cyber Monday – The Next Black Friday?

As promised in Thursday’s post, today we’ll be walking through the meaning of ‘Cyber Monday’ and what this means for your festive shopping. As we described on Thursday, ‘Black Friday’ originates from the USA and represents the first Friday after Thanksgiving. It’s associated with huge discounts and massive retail profits and, because of this success, has found its way to Britain. ‘Cyber Monday’ represents the Monday following ‘Black Friday’ and is an event slowly gaining support. It concentrates on increasing sales of online retailers and is pushed by discounts and promotion in an attempt to cause a second wave of sales success following Black Friday. Amazon.com’s 2013 UK Cyber Monday sales figures prove the relevance of ‘Cyber Monday’ as a major retail event. The online store took £4.1 million of orders on Monday December 2^nd 2013, £100,000 more than the previous Black Friday. Other online stores taking part this year include Tesco, Currys and Dorothy Perkins who are offering deals throughout this weekend and into Monday.

Black Friday and Cyber Monday create a major opportunity for consumers to take advantage of great offers on the run up to Christmas but their success in the UK market is perhaps a surprise. Given the lack of history surrounding Black Friday in the UK, it is perhaps surprising that retailers are committing to the event with such enthusiasm. In the US, the price cuts serve a purpose – they get Americans back into stores after Thanksgiving and officially launch the Christmas shopping season. But there are no similar pressures in the UK. So, while the promotions are great for consumers, retailers are arguably giving away Christmas sales and risk fostering a culture among shoppers that they will only buy products in the run-up to the festive season if they are discounted.

With Cyber Monday only 3 days away, will you be taking advantage of any Cyber Monday deals this year?

Black Friday to Bring Britain Big Business!

Tomorrow, Friday 28^th of November sees the return of Black Friday, a date on the calendars of all retailers, on and offline. The idea of ‘Black Friday’ originated from the USA, where it signifies the Friday after Thanksgiving and the start of Christmas shopping period but in the past few years has exploded into the UK. Traditionally, retailers in the USA have offered large discounts on Black Friday to encourage consumers, filled with Christmas spirit, to begin buying gifts for the festive period. The price reductions have brought thousands of customers into stores and massively boosted profits. The term ‘Black Friday’ refers to stores moving from the ‘red’ to the ‘black’ as Christmas spending increasing.

UK retailers have now adopted the idea in order to boost Christmas sales and improve in store footfall, meaning you can expect major discounts on the high street this Friday. Almost every retailer is planning some form of discount activity which, the Mintel Research expect, will generate sales of around £200 million in 24 hours. That’s over £2,300 per second! Argos, ASDA, John Lewis and Currys are just a few big names planning massive discounts this Friday. Online retailers Amazon are also looking to profit from this year’s Black Friday by making it a weekly event and increasing the amount of discounts offered to 3000 throughout the week, meaning the predicted figures may well be underestimations.

Will you be taking advantage of tomorrow’s Black Friday deals? Or will you be waiting for the upcoming Cyber Monday? We’ll cover this topic later in the week.

Lewis Hamilton – Winning the Race and the Tax System

British driver Lewis Hamilton won his second Formula 1 world title over the weekend, describing it as the “greatest day of my life”. The 29-year old has the prestigious honour of being able to call himself a double winner but also winning tax-free.

Unfortunately we’re all not like Lewis Hamilton and currently live in Monaco where the city levies no income tax on individuals. The absence of this personal income tax system has attracted a considerable number of wealthy “Tax refugee” residents from European countries. However there are some exceptions to the system:

·      Companies earning more than 25% of their turnover outside of the Principality and companies whose activities consist of earning revenues from patents and literary or artistic property rights, are subject to a tax of 33.33% on profits.

·      French nationals who are unable to prove that they resided in the Principality for 5 years before October 31, 1962.

Furthermore, Assets located in Monaco are subject to the following inheritance tax rates:

·      In direct line of descendance: 0%

·      Between brothers and sisters: 8%

·      Between uncles and nephews: 10%

·      Between relatives: 13%

·      Between non-relatives: 16%

So there you have it! It’s a shame we’re not all in Lewis Hamilton’s shoes, so if you need some tax advice feel free to call the office on 01482 861919.

Breaking News (Part 2) – The Collapse of Phones 4U

September saw the announcement of the retail company Phones 4U going into administration, after its last remaining mobile operator partner, EE, cut ties with retailer. Since then, it has been revealed that the company collapsed with £168 million of unsecured debt, which means taxpayers stand to lose £78 million from the company’s demise. We’ve got the latest information on this controversial topic.

About Phones 4U

Phones 4U currently has 720 outlets, including 550 stand-alone stores, with over 5,000 people employed. Since opening in 1996, the company has suppliers with EE, Vodafone, Orange and O2. Since going into administration, it has been revealed that the company owes millions of pounds in debt, which breaks down as follows:

·      £69.2 million in VAT

·      £8.8 million in Corporation Tax

·      £168 million to HMRC

·      £4.8 million to Phones 4U customers

·      £42 million to suppliers

·      £25.9 million to employees

·      £17.2 million in unpaid bills.

It has been revealed that as well as the £168m of unsecured debts, Phones 4U owed £450 in secured debt to banks and bondholders. PwC said £19.8m owed from a revolving credit facility will be repaid in full to banks, but only 10pc to 20pc will be paid out to bondholders owed £430m.

That’s the loss, what about the profit?

The only money that Phones 4U has raised is from the sale of company shops to the mobile phone networks. Vodafone and EE bought a total of 198 stores for £15 million, while Dixons Carphone hired staff working at Phones 4U concessions in its Curry PC World stores. This has saved more than 2,000 jobs, but 365 shops were still closed.

What does all this mean for Phones 4U Customers?

The company has announced that mobile contracts signed through the retailer will be unaffected by the administration. Similarly, if you recently purchased a phone before the administration process you should still receive it.

The company have published a page with several frequently asked questions surrounding the issues, so more information you can click here.

Money Matters (Part 9) – Military Pension Changes

There has long been a loophole in the pension system meaning military widows lose their pension if and when they remarry. However, this rule is to be changed from April 2015, meaning those who remarry will be entitled to the pension for life. We’ve provided you with as much information as possible on this news below.

What does this mean?

Thousands of war widows who remarry will no longer face an effective financial penalty under new plans to be set out by David Cameron, the prime minister, on Saturday. The current system, which applies to anyone whose partner started claiming a military pension between 1973 and 2005, will be scrapped from April next year.

As of April 2015, those who already receive a survivor's pension will be allowed to keep their pension for life if they do remarry, cohabit or form a civil partnership. Around 4,000 people - mostly widows - will benefit from the changes. They are those who lost loved ones serving between 1973 and 2005 - women whose partners died or were killed during the Troubles in Northern Ireland, or the wars in the Falklands and Iraq.

One noteworthy point is that the policy is not retrospective and it will only apply to those who remarry on or after April 1 next year. The cost of service pensions to those who remarry or find new partners will be about £120m over the next 40 years.