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SBD Global/July 8, 2014/FinancePrint All
Nike paid just £1M in tax over the past five years on £100M sales of its ManU replica kits, according to Simon Neville of the London EVENING STANDARD. The company funnelled nearly £40M over the period to its Dutch business "despite making most of its money on sales to football fans in the UK, according to accounts filed with Companies House." The legal loophole saw the total tax bill in the U.K. for ManU Merchandising, which is jointly run by Nike and the football club, reduced to just £255,000 last year after an £8.3M royalty fee "was paid to its Dutch subsidiary." Similar payments "have been made for at least the past five years." It means the taxman "missed out" on a potential £9.1M over the period from the England football kit makers (EVENING STANDARD, 7/7). In London, Simon Duke reported the accounting ruse "highlights the increasingly complex methods that American multinationals are using to minimise tax bills in large overseas markets, such as Britain." After seeing tax receipts ravaged during the financial crisis, European governments "have escalated their efforts to stamp out avoidance." The European Commission "is also investigating Ireland and Holland amid accusations that the countries offered 'sweetheart' tax deals to spur inward investment." Dublin and the Hague "deny that they broke EU rules." Holland "has become a popular destination for multinationals looking to slash tax liabilities." The country operates an “innovation box,” where profits from patents and other intellectual property "are taxed at just 5%" (SUNDAY TIMES, 7/6).
Australia's Paralympic football team "faces the axe" after all of its funding was cut by the Australian Sports Commission, according to ABC. As part of Australia's Winning Edge policy, funding is "directed to sports which have a higher chance of winning a medal at the Olympics or Paralympics." The Australian Sports Commission has decided the Pararoos' team world ranking of 10th "is not successful enough," and cut the team's A$175,000 ($164,000) funding. Pararoos head coach Paul Brown "says he is devastated." Brown: "We have state programs all round the country, but the national program is going to be no more because they just won't continue with our funding." Brown, who has coached the team since '06, "has been told not to talk about the cuts." Brown: "I was told to keep quiet about the situation, but the program is more important than me." Brown said that the Pararoos "had a good chance of achieving a ranking in the top five." But Australian Institute of Sport Dir Matt Favier said the performance of "para-football" has been unconvincing, and that he "does not believe the team will quality" for the 2016 Rio Paralympics (ABC, 7/7).
The New Zealand Government is set to slash NZ$17M ($14.9M) from Sport New Zealand's budget, according to Simon Plumb of the SUNDAY STAR TIMES. Documents released by Parliament reveal a government committee has "recommended a 17% cut in funds for the sport and recreation sector managed by Sport NZ." That will result in a NZ$17M budget decrease for the '14-15 financial year, "bringing funding back towards the level of two years ago -- and down from an increased estimated actual spend" of NZ$100M-plus in the last financial year. The recommended decrease is the result of the ending of "extra funding in 2013/14 for high performance facilities, the ICC Cricket World Cup and the establishment of the 2015 World Cup Office in Sport New Zealand" (SUNDAY STAR TIMES, 7/6).
EPL side West Brom Chair Jeremy Peace "has increased his majority stake in the club" to 76.4% with the purchase of a further 905 shares, according to Mike Dawes of the London DAILY MAIL. Peace, through his company West Bromwich Albion Holdings Ltd., last month made an offer of £3,000 ($5,100) per share to shareholders "in the hope of taking his holding over the legally-significant 75 percent-mark." The club has now announced that Peace, who had held 67%, has "surpassed that figure and he could yet increase his stake further." The initial deadline of July 3 for shareholders to respond to the tender offer "has been extended by two weeks." By owning more than three-quarters of the company, Peace "now has greater powers at The Hawthorns." Notably, he now "has the authority to call an extraordinary general meeting to make changes whereas he previously had to wait for an annual general meeting" (DAILY MAIL, 7/7).