Business News (November 2018)

Netflix and Disney go head to head

Netflix are ready for battle once the new online streaming channel Disney Plus launches next year. With Netflix already providing 130 million customers across the globe, they are ready for Disney Plus to give them a run for their money. Netflix believe that due to competing with Amazon for over 10 years, they are already used to competition against strong contenders, which helps them continue to raise their game.

Disney Plus is expected to dislodge their competitors, and has been dubbed the “Netflix Killer”, with their streaming services offering content that includes the Star Wars and Marvel rights. However, Netflix are determined to stay strong.
In their bid to “win the game”, Netflix are in the process of offering viewers in Asia more viewing opportunities by offering 17 new programmes that are made in Asia to be released in 2019.

Subscriptions based in India are expected to rise following the launch of new crime thriller Sacred Games, the first local production based in India. Another target for Netflix will be South Korea. China will prove their strongest challenge, due to licencing and government regulations.

Netflix has seen its popularity grow substantially since 2002, when it had less that one million subscribers. Figures in 2018 show a massive 137 million subscribers across the globe, with 7 million new customers between July to September 2018 alone.

The success behind the figures is due to the number of original programmes that Netflix are offering, including shows such as Orange Is The New Black and BoJack Horseman.

Critics strongly believe that Netflix has amassed “unsustainable levels of debt” due to the money it has spent on increasing its viewership with producing original content and making new investments into these new productions. The company showed $690 million of debt during July to September; the firm have squashed rumours of financial troubles by announcing that their debts levels are “sustainable”, and that its success is proven with their investments and their ever expanding success across the globe.

PC wholesaler feels the wrath of the VAT man

PC wholesaler and retailer Aria PC, owned by Aria Taheri, has lost its fight in its appeal against a £750,000 VAT fraud case. The attempted appeal was thrown out of court by Mr Justice Roth and Judge Richards at the Tribunal’s Tax and Chancery Chamber.  ATL (Aria Trading Limited), trading as Aria PC is believed to employ approximately 120 people.

In 2006, ATL were involved with many wholesale deals with small suppliers and new business connections. Items such as Intel CPU’s and TFT monitors were amongst the new deals. Due to the unfamiliar transactions, HMRC grew suspicious and believed that a proportion of the goods involved were part of a VAT “Carousel fraud scheme” – where goods are resold between traders recurrently with one business reclaiming the VAT from HMRC.

Reports of ATL’s dealings were disclosed ahead of the hearing earlier this year. Taheri attempted to stop the details being released, which then backfired. The attempts led to a change of law in favour of open justice.

Justice Roth said in his judgement, “Aria accepted in its appeal before the FTT that there was a tax loss to HMRC which resulted from fraudulent evasion of VAT, and that its transactions were connected with that fraudulent evasion.”  A total of 36 condemnations were made by Barrister Michael Firth, who acted on behalf of ATL for the “First-Tier Tribunals”. Nearly all of these were dismissed on appeal by the Upper Tribunal (UT), in additional to the dismissals, Firths points were largely criticised.

Taheri claimed he knew nothing about the carousel scheme, however the UT ruled that as a company all parties would have known of the misdealings, not just the company director. ATL had received letters advising them to ensure that diligent checks were undertaken in line with HMRC expectations. In contrast, the FTT described their checks as “woefully inadequate”. Taheri produced checklists internally, however, these checklists did not include the information or the deals that the HMRC had queries on.

Taheri was cross examined in connection with the purchase of large quantities of goods from Supreme, a company that Taheri has previously made purchases from for much smaller amounts, with other purchases being made by Ashtec. It was following these purchases that Aria then sold the goods to three separate companies, Mona, Mitz and Silver Pound – companies that Aria had no previous business dealings with.

The UT said in a statement, “We consider that the FTT was entitled to regard the fact that Aria’s Managing Director was not able to give a clear answer to questions as fundamental as when Aria expected to be paid in these very substantial transactions, in particular when it was dependent on such payment in order to pay its suppliers, as an indicator that the disputed transactions were lacking in commerciality.”

When asked if Aria wanted to comment on the ruling, Taheri made a statement that “both of the suppliers that ATL bought the goods from were fully audited by HMRC”. It was also stated that the findings of the FTT regarding Aria PC’s diligent checks were insufficient and that the upholding of the finding was incorrect. It was also noted that ATL had not received any financial benefit surrounding the fraud case.

ATL’s next step has been reported to be to take the case to the Court of Appeal.

Energy caps promise further savings

Up to 11 million energy customers will save money following the price cap on gas and electricity that is due to come into force from 1st January 2019. Ofgem have confirmed that a saving up to £1 billion will be made. Ofgem has set its price cap at £1,137 for a typical duel fuel household, where the customers pay by direct debit. The cap is just £1.00 more than the amount announced in September this year.

The regulator has announced that each household should be making a saving of approximately £76 per annum, with higher tariffs seeing savings of up to £120. The price cap amount is due to be updated annually in April and October. These updates will reflect up to date estimated supply costs of electricity and gas, including wholesale costings.

Chief Executive of Ofgem, Dermot Nolan believes that the price cap will stop suppliers “feathering their nests”, adding that consumers should look to cut their bills and shop around for improved deals whilst the price cap is in place. Ofgem will continue to ensure that swapping suppliers will remain a simple transition.

Claire Petty, the Energy and Clean Growth Minister commented on the cap, “In the past few months loyal energy customers have continued to be hit by unjustified price rises on their already ripoff tariffs”…”This government has delivered on time its promise to protect 11 million households from poor value deals this winter. Today’s final cap level brings greater fairness to energy prices and puts consumers at the heart of the energy market.”

Consumer groups have warned that only some households will reap the rewards of cheaper bills. According to Which?, 30% of dual fuel customers will see no difference in their fuel costs. Which? Managing Director, Alex Neill has described the price cap as a ‘temporary fix’, and lulling energy customers into a “false sense of security”. Neill firmly believes that the only way to save money on energy bills is to switch suppliers and search for the best deals available.

The head of Regulation at uSwitch.com, Richard Neudegg also commented on the announcement. “As Ofgem themselves suggest, initial savings could be wiped out as early as April when rising wholesale costs may force the cap to increase, so standard tariff energy customers can only rely on three months of savings – averaging around £19 – before the cap potentially goes up. It’s possible the same could happen in October, too”.

“With the cheapest deal on the market a staggering £216 cheaper than the capped tariff, customers may well be questioning why they are leaving their bills in the hands of the regulator.”

High Street failing to recover from the doldrums

Figures released earlier this month showed that an intensifying crisis continues to hit our high streets following confirmation that up to 14 shops per day have ceased training during the first half of 2018. As new stores opened, more stores closed or sought emergency resolutions to stay afloat.

500 high streets saw 2,692 stores closing between January 2018 and June 2018 according to an analysis made by Price Waterhouse Coopers (PwC) the accountancy specialists and the Local Data Company. A new low number of startup ventures was recorded with just 1,569 new stores opening across the UK in a time where confidences and faith within the markets have plummeted.

Town centres have witnessed their worst trading periods for five years. Traders have suffered higher rises in rent, and business rates and new working conditions have been affected, by many factors including the new minimum pay legislations. Shops are closing during a time when consumers are struggling to cover everyday costs in the run-up to the finalisation of Brexit next year.

High street struggles have affected independent retailers as well as larger chain stores. Earlier this year we witnessed the closures of Toys R Us and Maplins. Since then Poundland and Coast have also slowly exited our town centres. More recently, House of Fraser has been successfully saved from closures by Sports Direct and Newcastle United Chairman Mike Ashley. Stores such as Marks and Spencer, Mothercare, Debenhams and Carpetright have been forced to make changes and save funds to ensure future trading.

Empty shop fronts show that new shops are not replacing those that are closing, and the pace of newer retailers adding to our streets has slowed significantly. The so-called “Experimental” chains and pop up shops, including ice cream parlours, beauty salons and vape shops are simply are not enough to counterbalance the closures by more traditional high street stores.  Coffee shops it appears remain a constant.

The situation does not look like changing anytime soon. Stores will continue to close during the second half of the year, and some businesses have already announced their intention to fall into administration and arrange CVAs (Company Voluntary Arrangements), which no doubt intensify concerns with already concerned consumers.

The Starjammer Bulletin

After nearly five years, the Starjammer Bulletin is to produce its final bulletin on Friday, 28th December 2018. The Bulletin originally started off as a newsletter to Starjammer’s customers and prospective clients back in January 2014. Originally entitled The Starjammer Group Times, it was sent to customers as a PDF link, and released online simultaneously via the Starjammer Group and 21st Century Thinking websites, and all of the company social media feeds as and when it was published.

The initial twelve month experiment was deemed such a success, it prompted the Group to develop the idea into what is now the Starjammer Bulletin, initially producing fortnightly business and internet news articles, and special articles for its clients and the world at large.

Staff have been actively contributing articles and advice over almost half a decade, on subjects ranging from Brexit to business law, office tips and tricks, to what to do with the children in the school holidays. It also showcased what our customers were doing, how we have worked with them, and how they could also work for you.

One of the aims of the Bulletin was to produce interesting business synergies, with our customers also benefitting from the added free advertising.

The Bulletin has proved popular, and has many fans worldwide, but owing to the way that social media works these days in terms of reliable sources, in an age of fake news, and at a time when legislation and predatory media firms exaggerate the impact of copyright laws on businesses, the Starjammer Group has reluctantly decided to stop producing the Bulletin at the end of 2018 after careful consideration.

Articles will still appear on the company blogs occasionally which we hope will still be useful and informative – but as the focus for the Group changes in the next few years as part of its long term plans, we have decided to focus on customers that we have gained and indeed receive organically rather than through solid advertising which was the original remit of the Bulletin. In terms of the advantages of advertising this way, they are sadly no longer cost effective.

We have enjoyed bringing you the bulletin over the past few years, and the site itself will stay online as an archive for the next year or so. Thanks for reading, and we hope that you enjoy the last bulletins from this website over the next few weeks.

 

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Business News (October 2018)

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More about The Starjammer Bulletin

The Starjammer Bulletin is the official newsletter for The Starjammer Group, its customers, clients, affiliates and subscribers. With over ten years under our belt, we are proud of our commitment to our clients, and of our assurance that we provide them with the best level of service and help that they have come to know and respect us for. The Starjammer Group is proud of its track record to date, and strives to improve its products, services and standing on all fronts. Our mantra has always been '21st century thinking'. Why? Simple: we love doing what we do, enjoy our work, and work on the principle that our customers, clients and associates should share in the fun. Business shouldn't be a chore: we spend on average 8 hours per working day in the office, or factory, behind a desk, stall or wheel. We employ people who are not only competent and good at their job, but people who have that something; that little spark that grabs our attention. It can't be defined, and it's not always obvious. Nethertheless, we have been lucky to attract and keep the right people. Something we are proud of.