United Airlines Sued Over Alleged Tax Dodge

One of America's largest airlines is accused of falsely claiming to buy huge amounts of jet fuel out of a small, rural Illinois office to avoid tens of millions of dollars in taxes.

Chicago's Regional Transportation Authority (RTA) alleges United Aviation Fuels Corp., a subsidiary of United Airlines, has operated a "sham" office in the DeKalb County community of Sycamore since 2001.

It claims the fuel company set up the office after reaching an agreement to pay the town more than $300,000 a year - a fraction of what it would have owed in sales taxes in Chicago and Cook County.

"The only reason that United Fuels has an office in Sycamore is to attempt to create a sham tax situs (location) for fuel sales in a lower taxing jurisdiction," the RTA states in court papers filed on Monday.

United officials said they have not received a copy of the complaint, but "believe that any such suit would be without merit".

"We buy fuel in Sycamore," spokeswoman Megan McCarthy said in an email.

"In fact, the operation of our fuel subsidiary in Sycamore has been examined by tax authorities in the past and has been determined to comply with all applicable laws," she added.

The RTA, which insists the office has no computer and is staffed by one person who only works part time, said consultants visited the site on a recent weekday and found it locked with nobody inside.

The agency said that judging from the few chairs and empty desks seen through a window, there is little, if any, business occurring in the office.

"Whoever is out there is not negotiating hundreds of millions of dollars worth of jet fuel," said Jordan Matyas, the RTA's chief of staff.

He said any negotiations for fuel - as well as delivery scheduling, accounting, credit approval and administrative decisions - are being done in the Willis Tower in downtown Chicago, where United is headquartered.

The RTA alleges that American Airlines is engaged in a similar "sham" business out of an office it rents in Sycamore's City Hall.

But Mr Matyas said American Airlines was not included in the legal action because the airline remains in bankruptcy, and that suing the airline would require litigating the case both in federal bankruptcy court in New York and in Cook County Circuit Court.

He added that the RTA does plan to pursue legal action against American Airlines at some point.

American Airlines spokeswoman Mary Frances Fagan said in an email that the airline does not comment on pending litigation but added: "What American is doing is permitted under Illinois law."

Sycamore's city manager, Brian Gregory, declined comment.

The RTA said in a statement that "sales tax dodges" have cost the city of Chicago $133m (£83m) in lost sales tax revenue since 2005.

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Burberry Boosted By Late Christmas Shopping

Burberry has reported a rise in revenue of almost 10% as its wealthiest customers continue to spend despite the economic downturn.

The luxury brand said revenue was £613m in the three months to December 31 - up 9% on an underlying basis.

The 157-year-old British retailer reported comparable sales up 6%, driven by the popularity of its iconic trench coat and accessories.

But wholesale revenue at Burberry fell an underlying 5% as a result of lower sales to some accounts across Europe.

The company's chief executive, Angela Ahrendts, said it had benefited from a "particularly strong week" in the run up to Christmas.

"In an otherwise difficult quarter, core outerwear, men's and digital all outperformed," she said.

The pre-Christmas rush also helped online grocer Ocado's performance

"We expect the external global environment to remain challenging, but see continued opportunities to drive productivity in our existing business, while investing for growth in under-penetrated regions, product categories, channels and mediums."

Burberry, which has over 200 stores across the world, said sales growth remained low across America and Europe - but was especially weak in Italy.

The brand's popularity in Hong Kong and China helped boost sales growth in Asia, which saw double-digit growth.

Meanwhile, online grocer Ocado also reported strong Christmas trading.

Total sales in the six weeks to January 6 were up over 14% to £91.6m - and were 17% higher in the week before Christmas.

Tim Steiner, Ocado's chief executive, said it had been "a very good festive season" for the company.

"We are pleased to have helped record numbers of customers enjoy Christmas without the stresses and strains of visiting a physical supermarket," he said.

"Christmas has amplified the fact that shopping online for groceries is of increasing importance for consumers.

"In 2013, we will substantially increase our capacity with the opening of our second fulfilment centre, and so we hope to make it possible for many more customers to escape crowded aisles, checkouts and car parks."

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Europe: Referendum Risks 'Chilling' Economy

Uncertainty over the UK's position in the European Union will threaten the British economy, Nick Clegg has claimed in a stark warning to David Cameron.

The Deputy Prime Minister suggested the ongoing question about the UK's relationship with the EU could have a "chilling effect" on business and growth.

Highlighting the faultlines in the coalition over Europe, Mr Clegg urged the Prime Minister to be "very careful" to avoid deterring investors and jeopardising jobs.

His comments come days before Mr Cameron is due to deliver a key speech on Britain's place in Europe in Amsterdam on Friday.

Mr Clegg said: "I do not think we should do anything to jeopardise our leadership (in Europe) and we certainly should not do anything which would have a chilling effect on jobs in this country.

"We should be very careful at a time when the British economy is still haltingly recovering from the worst economic shock in a generation to create a very high degree and a prolonged period of uncertainty because in my view uncertainty is the enemy of growth and jobs."

On Friday, Mr Cameron is expected to unveil plans for a referendum on a new settlement with Brussels, although he has already ruled out a straight in-out question.

He insists he is not "blackmailing" European allies by demanding the repatriation of some powers and says he is "optimistic" about achieving change from within.

But Mr Clegg, a renowned europhile, warned that the Prime Minister's stance could stop businesses putting money into the UK.

"If you are an investor investing in the United Kingdom to create jobs here, it is unnecessary to create a high degree of uncertainty which might actually chase away that investment and might diminish the number of jobs in this country," he told the BBC.

"I don't think it is wise to add to that with a degree of uncertainty which I believe would have a chilling effect on jobs and growth in this country.

"For me the priority remains jobs and growth, not an arcane debate that will go on for years and years and years."

He added: "I obviously do not agree with the premise that we can, on our own, unilaterally, simply rewrite the terms of our membership of this European club."

The Deputy Prime Minister said the public should only get a say if there was a transfer of powers to Brussels - and denied breaking a pre-election promise to hold a popular vote.

"If there is a new treaty and if that new treaty asks new things of the United Kingdom - in other words a transfer of powers from Westminster to Brussels - then of course we would have a referendum at that point," he said.

During the election campaign, Mr Clegg declared that he remained "unambiguously committed" to a plebiscite on the question of Britain's membership of the EU when the issue next arose.

"When that comes back on the agenda then I think the only honest question to ask is the fundamental question: are you in or are you out?" he said in April 2010. "I would argue fervently that we should be in there to lead."

Mr Cameron has said he wants Britain to stay in the EU but is seeking a fresh settlement which he plans to put to a public vote after 2015.

Business leaders have echoed Mr Clegg's concerns and are keen to retain access to the EU's single market where Britain does around half its trade.

The Deputy Prime Minister said he had not seen a copy of Mr Cameron's speech but insisted he too would set out plans for a referendum on any new treaty.

No one was asking for "a referendum out of nowhere", he insisted.

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Facebook Tipped To Boost Search Functions

Facebook is holding a mystery "press event", triggering a guessing game about what it could unveil - with suggestions ranging from a smartphone to a search engine.

The company has not said what it plans to announce at the media briefing at its headquarters in Menlo Park in California.

Last week, it merely invited bloggers and journalists to "come see what we're building".

"There's a lot of speculation. Nothing to me seems to be that certain," said Jefferies & Co analyst Brian Pitz.

"If I were to bet, I'd think it was something that was ad-platform related. I'm not convinced on the phone."

Mr Pitz pointed out that Facebook officials, including CEO Mark Zuckerberg, had previously said making a smartphone would be the "wrong strategy".

Since the company's current search functions are limited, users would most likely welcome a better way to search Facebook.

Mark and the mobile - Zuckerberg thinks phone users are the future

Yesterday, Facebook's stock opened above $32 (£19.90) for the first time since July as anticipation about its upcoming products and financial results underscored Wall Street's renewed confidence in the social network.

Its shares are up roughly 17% since the start of the year, and some analysts believe the recent gains may have more to do with the company's upcoming fourth-quarter financial results, which are due out on January 30.

"The stock is up because they have driven a dramatic increase in the ad load of their mobile app which is giving investors hope that they exceeded expectations," said BTIG analyst Richard Greenfield.

Facebook, the world's number one social network with one billion users, became the first US company to debut on the stock market with a value of more than $100bn (£62bn).

Its value subsequently plunged by more than 50% amid mounting concerns about slowing revenue growth and the challenges of making money as users shift from personal computers to mobile devices.

Facebook surprised Wall Street in the third quarter by announcing that mobile ads accounted for 14% of its total ad revenue.

Some analysts expect the company to report further growth in its mobile ad business for the fourth quarter.

Mr Zuckerberg, who founded Facebook while studying at Harvard, has said mobile is the "most misunderstood aspect" of Facebook.

But he has repeatedly poured cold water on rumours that Facebook would build its own smartphone to compete against Apple's iPhone and others based on Google's Android operating system.

However, at a conference in September, he said he believed search could be a ripe area of growth for his company.

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Energy Bill Rises Keep Inflation At 2.7%

Rises in home energy bills kept the headline measure of inflation steady at 2.7% in December.

The Office for National Statistics (ONS) confirmed that the annual rate of inflation, as measured by the Consumer Prices Index (CPI), was static for the third month in a row.

Housing and household costs, which includes gas and electricity, rose 2% between November and December.

But the rate of transport cost increases declined, with petrol prices falling by 2.8p per litre between November and December, compared with a fall of 1.1p a year earlier. Diesel prices fell by 1.4p per litre, compared with a year ago, the ONS said.

The 2.7% CPI figure was in line with forecasts by economists though some believe it will top 3% by the summer.

Stubborn inflation, above the Bank of England's 2% target since November 2009, is likely to have been a key argument against more quantitative easing to support economic growth at the bank's monthly policy meeting last month.

High inflation has also put pressure on consumer spending, which accounts for almost two thirds of the UK economy.

The Bank has forecast that inflation will peak in the third quarter of 2013.

According to separate data published by the ONS, factory gate inflation edged up in December - signalling that wider prices could edge up in coming months.

The developments were seized upon by union organisation the TUC as evidence the squeeze on households showed little sign of easing.

Its General Secretary Frances O'Grady said: "Inflation has been outstripping wage rises for three years now, which has already cost the average worker £4,000.

"Unless inflation falls are matched by stronger pay growth, 2013 will be the fourth year in a row that people have suffered real wage cuts. We won't have a sustainable economic recovery without healthier pay rises.

"The hike in energy bills is particularly tough on the poorest households, who spend over a quarter of their income on utility payments."

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BA Employee Nadia Eweida Wins Cross Case

A British Airways employee has won a landmark legal battle over her right to wear a cross at work.

The European Court of Human Rights (ECHR) ruled that Nadia Eweida, a Coptic Christian, had been discriminated against under freedom of religion laws.

But three other Christian claimants, who launched similar action, lost their cases.

Miss Eweida, 60, took her case against the UK government to the ECHR after she was sent home for wearing a small silver cross around her neck in 2006 in breach of BA uniform codes.

Registrar Lillian Ladele lost her case

She said she was "jumping for joy" at the ruling and was pleased it recognised the "anxiety, frustration and distress" she suffered.

"I'm very happy and very pleased that Christian rights have been vindicated in the UK and Europe," she added.

The British government was ordered to pay her £1,600 in damages and £25,000 to cover costs.

Prime Minister David Cameron tweeted: "Delighted that principle of wearing religious symbols at work has been upheld - ppl shouldn't suffer discrimination due to religious beliefs."

Counsellor Gary McFarlane refused sex therapy to homosexuals

An employment tribunal in Britain had ruled Miss Eweida, who lives in Twickenham, southwest London, but is originally from Egypt, did not suffer religious discrimination.

The decision was upheld by the Court of Appeal and the Supreme Court before Miss Eweida took her fight to the ECHR.

The European judges ruled there had been a violation of article nine (freedom of religion) of the European Convention on Human Rights.

They found a fair balance was not struck between Miss Eweida's desire to demonstrate her religious belief and BA's wish to "project a certain corporate image".

It said Miss Eweida's cross was discreet and cannot have detracted from her professional appearance.

Nurse Shirley Chaplin refused to remove a crucifix

"The court therefore concludes that, in these circumstances where there is no evidence of any real encroachment on the interests of others, the domestic authorities failed sufficiently to protect the first applicant's right to manifest her religion."

Miss Eweida returned to work in customer services at Heathrow Airport's Terminal 5 in February 2007, after BA changed its uniform policy on visible items of jewellery.

In a statement, the airline said it was not a party to this legal action, which was pursued against the UK government.

"Our own uniform policy was changed in 2007 to allow Miss Eweida and others to wear symbols of faith and she and other employees have been working under these arrangements for the last six years," the statement said.

Director of Liberty, Shami Chakrabarti, welcomed the judgement

"Miss Eweida has worked continuously for British Airways for 13 years."

Judges rejected the case of nurse Shirley Chaplin, 57, after they found she was asked to remove her cross for health and safety purposes.

The ruling also found against marriage counsellor Gary McFarlane, 51, who was sacked for saying he might object to offering sex therapy to homosexuals.

The judgement said Mr McFarlane took the role at counselling service Relate in the knowledge that clients could not be divided in up in accordance with their sexual orientation.

Registrar Lillian Ladele, who was disciplined when she refused to conduct same-sex civil partnership ceremonies, also lost her legal action.

Dr John Sentamu

The court decided Islington Council's action was "legitimate" given it was also obliged to consider the rights of same-sex couples.

All three plan to appeal the decision.

In reaction to the verdict, the Archbishop of York, Dr John Sentamu, said: "Christians and those of other faiths should be free to wear the symbols of their own religion without discrimination.

"Whether people can wear a cross or pray with someone should not be something about which courts and tribunals have to rule."

Shami Chakrabarti, director of human rights group Liberty, said: "Today's judgement is an excellent result for equal treatment, religious freedom and common sense.

"Nadia Eweida wasn't hurting anyone and was perfectly capable of doing her job whilst wearing a small cross.

"British courts lost their way in her case and Strasbourg has actually acted more in keeping with our traditions of tolerance."

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HMV Collapse: Gift Cards And Vouchers Invalid

HMV has confirmed it will not be accepting gift cards or vouchers from customers as the retailer prepared to collapse into administration.

The company confirmed its intentions after a board meeting, as exclusively revealed by Sky's City Editor Mark Kleinman.

The chief executive of HMV - which employs 4,350 people - said it was "business as usual" at the chain's 238 stores, which will remain open while administrators Deloitte attempt to find a buyer.

Trevor Moore told Sky News he was "absolutely confident" about the future of the business, but added: "It does require a number of significant changes in the business, and those changes we're very clear about."

He said: "We would hope to find a prospective buyer that could work with us to enable me to deliver those changes and ensure that HMV – which is one of the consumer's 10 most favourite stores in the UK remains on the high streets that we operate in."

HMV was late to the online shopping revolution and suffered as a result

A company statement said it had ultimately failed to meet the conditions of its bank loans, and trading in HMV's ordinary shares had ceased.

It said the business "faced material uncertainties" and would probably "not comply with its banking covenants" at the end of January.

Confirming the appointment of administrators "with immediate effect", the statement added: "The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection."

Mr Moore urged staff at the chain to support each other despite being faced with an uncertain future.

"My message is that it's critically important – even more now than ever before – that we remain focussed on the job at hand," he said.

"That we engage with our customers, we look after each other, support each other, and engage ... to ensure the business continues to trade successfully."

He added: "As far as I'm concerned, right now it's business as usual - HMV's doors are wide open, we have stock to sell, we have teams to staff our stores and we have a business to run."

Celebrities have been among those sharing their memories of the iconic chain.

BBC 6Music DJ Lauren Laverne tweeted: "Long time since i was in #HMV, but I remember it well… RIP."

Also on Twitter, rapper Professor Green posted: "hmv bankrupt. we may as well just give up on any medium that involves hard copy and get on with it. #sadtimes."

And fellow artist Sway added: "Just a thought. If all of the artists and labels in the UK all made a small donation do you think it would be enough to save #HMV?"

Retail expert Mary Portas posted: "HMV was a brilliant business that was a great part of our Highstreets. So sad to see this one go."

The retailer, which has struggled for several years in the face of online competition, had announced last week an additional sale at its stores in a last ditch effort to raise cash but its £176.1m debt pile was too great for the move to have much impact.

Last year, the company sold off its most profitable arm, its live music business, as it attempted to slash what it owed.

In January 2011, suppliers including Universal Music came to HMV's rescue with a deal that helped the retailer shed some of its debt, but they are understood to have dismissed requests for more financial help earlier this month.

Analysts suggest the business model was already doomed - squeezed by internet retailers and supermarkets whose scale enables them to offer CDs and DVDs at cheaper prices.

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Bonuses: Goldman Bankers To Pay Top Tax Rate

Goldman Sachs has become the first of the major banks operating in the UK to confirm it will not delay bonus payments so staff avoid paying the 50p tax rate.

The 50p top rate of income tax is replaced by a new higher rate of 45p on April 6 under reforms outlined by the Chancellor.

Goldman's decision was announced amid growing pressure on the wider banking industry to ensure bonus awards for 2012 were paid at the highest rate and that the awards were lower than those seen the previous year.

The development emerged just hours after Bank of England Governor Sir Mervyn King delivered a broadside at anyone planning to defer their bonus until after April 6, which he said would be "depressing" and "lacking in care and attention" to the rest of society.

He warned banks that they risk losing public goodwill if they deferred payments to exploit the cut in the top rate.

Over the past few days, it became known that Goldman Sachs was considering holding back bonuses until after April 6, a move which could potentially have cost the Treasury millions of pounds.

The company, which publishes its full-year results on Wednesday and is expected to inform staff of 2012 bonus levels shortly afterwards, has declined to comment publicly on the issue.

But, according to people familiar with the process, the bank's compensation committee decided at a meeting today not to go ahead with the deferral.

Sir Mervyn made no secret of his distaste for the idea, telling MPs: "I find it a bit depressing that people who earn so much seem to think that it is even more exciting to adjust the timing of it to get the benefit of a lower tax rate - which they will benefit from in the long run to a very great extent - knowing that this must have an impact on the rest of society, when even now it is the rest of society which is suffering most from the consequences of the financial crisis.

"I think it would be rather clumsy and lacking in care and attention to how other people might react," he said.

Meanwhile, media reports suggested rival bank Morgan Stanley intended to defer 100% of its top-earning employees' bonuses.

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Power Rangers Owner Eyes Bid For Lee Cooper

By Mark Kleinman, City Editor

The new private equity partner of Topshop and the owner of the Power Rangers are among the bidders vying for control of Lee Cooper, the clothing brand.

I understand that Authentic Brands Group, a company backed by investment firm Leonard Green & Partners, and Saban Brands, have lodged initial bids for Lee Cooper, which is being sold by the private equity firm Sun European Partners.

Authentic calls itself a brand development and licensing company and includes the Prince tennis brand and Marilyn Monroe clothing in its portfolio. Its investors include Leonard Green, which last month acquired a 25% stake in Topshop and Topman from the billionaire retailer Sir Philip Green in a deal valuing the chains at £2bn.

Saban Brands is headed by Haim Saban, the businessman who made part of his fortune from the creation of the Mighty Morphin Power Rangers and is now a prominent dealmaker in the global media industry.

The portfolio of Saban Brands focuses on digital and entertainment franchises such as Digimon and Popples.

Sun bought the Lee Cooper brand, known for its denim products but which no longer manufactures products, in 2005.

It bought Lee Cooper for £30.5m in partnership with The 180 Group and Emerisque Capital, two other investment firms.

Iconix, which recently bought the football kit brand Umbro, is also understood to have signalled its appetite for a deal, which is likely to cost a buyer in the region of £40m, according to insiders.

DC Advisory Partners is handling the auction process on Sun's behalf.

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John Smith's Brewer Denies Tax Saving Claims

Drinkers of John Smith's Extra Smooth may soon find they have to pay more for a pint of the popular bitter - just as its alcohol strength is reduced.

From next month, Heineken - which owns the brand - plans to weaken the beer's alcohol content in a move that would save it millions of pounds in tax under the Government's beer duty escalator.

At the same time, the firm plans to raise the price of a pint to wholesalers by 2.5p to help offset rising energy, duty and ingredient costs.

Heineken insists the decision to reduce the drink's strength from 3.8% to 3.6% alcohol-by-volume (ABV) was aimed at bringing John Smith's Extra Smooth in line with the strength of rival smooth beer brands, including Tetley's, Worthingtons and Boddingtons which already sit at or below 3.6% ABV.

Its statement said: "We will pass on a proportion of the duty savings to our trade customers while re-investing some cost savings in the brewing and marketing of our leading ale brand.

John Smith's Extra Smooth is currently the UK's best-selling smooth brand

"Extensive research conducted with John Smith's retailers and consumers consistently confirmed that a 0.2% reduction in ABV does not compromise on the taste and quality that has made the brand the UK's most popular ale and we are confident that John Smith's Extra Smooth will continue to lead the ale category going forward."

According to the Financial Times, the annual duty saving would top £6.5m a year.

The beer duty escalator, which penalises drinks depending on alcohol strength, has been blamed for falling industry sales by the British Beer and Pub Association (BBPA).

It has added inflation plus 2% to duty bills since its introduction in 2008, meaning the figure has risen by almost 40%.

The BBPA has calculated that the Treasury now raises more than £9bn per year through beer and sale production - a figure it argues is killing off pubs as consumers opt to buy from cheaper supermarkets instead.

According to the lobby group Campaign for Real Ale (Camra), a third of the cost of a stronger pint is now pure tax.

Camra has begun a 'Save Your Pint' petition, while pub operators such as JD Wetherspoon have said they are limiting investment in the UK as a result of what they call the growing tax burden.

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