politicalbetting.com » Blog Archive » New Shadow Chancellor, John McDonnell, could be a tricky on

Cyclefree said:

taffys said:

An economy cannot just be built around selling overpriced terraced houses to each other. Surely?

I don;t know. We have half a dozen hard working young people between 25/35 at our company and they all either live with parents or rent. Not one is a property owner, and the only reason is prices are way above what they can afford. I think that is wrong. THey should at least have a shot at owning something, even if it is a few boxes in Whitechapel or Peckham.

Increasing the supply of housing is key. But the choice should not be between living with your parents and owning. Long-term rental can also be an option. Put it this way, how many of the equivalent group of people in Italy or Germany would be owning their home at that age?

There are assets other than a house. The only reason we think of property as an asset with capital appreciation is because the supply is low and the demand high. Increase the supply and you are affecting the likely price inflation. In many ways this would be a good thing. It might be better - long-term - if people made decisions about home ownership more soberly than just desperation to own a few boxes in Peckham.

I think our attitude to home ownership is different to that which pertains in most other countries, particularly for the middle classes (I couldn't think of a more succinct reference point)

"Mr McDonnell said his speech at the Labour Party conference would look at taxation and economic measures, and that policies would be tested before being introduced.
On the so-called "Robin Hood" tax, Mr McDonnell said it was a policy "on the basis it could be introduced globally".
http://www.bbc.com/news/uk-politics-34377338

Note the weasel words "introduced globally". Ie. When the USA approves it. And China. And Japan.

In other words: never.

MaxPB said:

FPT:

SandyRentool said:

MikeK said:

Teeside Steel has gone kaput. Sad but expected, steel is declining product as new forms of plastics and ultra metals come to the fore. For example, armoured vehicles are now using lighter and stronger means of defence.

We will need huge quantities of steel in the building of HS2. Unfortunately, thanks to GO, it looks like it will all be coming from China.

Thanks to Ed Miliband's stupid energy policies and the idiocy of the coalition in not repealing them it looks like all energy intensive industries are going bankrupt in the UK. We still need the steel and aluminium, and production of both is very energy intensive and has a high level of emissions. All we are doing is shifting the emissions to China and India along with the jobs. Our need for steel and aluminium hasn't gone away now that we don't produce the stuff, just the jobs and skills.

Ed Miliband and Ed Davey need to answer for this, so does Osborne who should have pushed the anti-green agenda harder from 2010-2015.

Didn't the Tories criticise Ed for not going far enough with his climate change legislation? If he had listened to Dave levies might well have been even higher.

madasafish said:

Note the weasel words "introduced globally". Ie. When the USA approves it. And China. And Japan.

In other words: never.

A bit like nuclear disarmament.

Tories edging ahead in Canada?

https://en.wikipedia.org/wiki/Opinion_polling_in_the_Canadian_federal_election,_2015

NickPalmer said:

Tories edging ahead in Canada?

https://en.wikipedia.org/wiki/Opinion_polling_in_the_Canadian_federal_election,_2015

Basil on holiday again! Swingback! Tick Tock!

Did I miss any?

kle4 said:

NickPalmer said:

Tories edging ahead in Canada?

https://en.wikipedia.org/wiki/Opinion_polling_in_the_Canadian_federal_election,_2015

Ooh, that would spice things up a bit. And it was already pretty spicy.

What does it mean in terms of seats (ridings) though?

The poor sods in Canada. They've got nearly another month of the election to endure yet.

I'd vote against the Conservatives just for inflicting that on me if I were Canadian.

surbiton said:

edmundintokyo said:

surbiton said:

MattW said:

Barnesian said:

Scott_P said:

@GdnPolitics: Labour 'will make Google, Starbucks and Amazon pay fair tax share' http://t.co/62EqqT1Cns

Labour will make Internet access, coffee and entertainment more expensive for everyone in the country...

Awesome

If Amazon was forced to pay a fair level of UK Corporation Tax, they would have to put up prices to maintain their current level of after tax profit. That would be great as it would allow UK companies including many independent booksellers to compete on a more level playing field.

Corporation tax is on profit.

Amazon invest rather than make profits, ergo no Corporation Tax is due while the strategy persists.

They make "no" profits after clever transfer pricing. That is where a global agreement is needed . All countries are losers except ultimately, Luxembourg, Liechtenstein, Andorra, Cayman Islands, Bahamas, etc....

That doesn't seem to be true. Amazon genuinely don't make profits. See Yglesias:
http://www.slate.com/articles/business/moneybox/2014/01/amazon_earnings_how_jeff_bezos_gets_investors_to_believe_in_him.html

So who ultimately finances the working capital ? Banks ? Forever ?

err suppliers.

Buy on 30- 90 days credit.Sell for immediate cash.

See all supermarkets.

@surbiton - Amazon also has $12bn of paid-up share capital. This sucker is not going bust any time soon!

There's no scandal here in terms of their tax policy. Amazon are simply continuing to invest in expanding their market. Ironically the biggest legitimate criticism one could make of them is that they are doing so partly by their aggressive pricing policy, ultimately driving out competitors but for the moment benefiting consumers (especially young, mobile, tech-savvy Corbyn-supporting consumers).

surbiton said:

Richard_Nabavi said:

Barnesian said:

Yes - their P&L show very little profit yet their balance sheet shows that cash and short term investments have increased from $8b to $14b in the last 12 months.

https://www.google.co.uk/finance?q=NASDAQ:AMZN&fstype=ii

It is odd that you can increase your liquid assets by $6b in a year while making no profit. I confess I don't understand it.

If you don't understand it, perhaps it would be sensible not to make a fool of yourself by posting on the subject? As it happens, your very own link answers the question if you click on the 'Cash flow' tab.

If you look at the Balance Sheet, in Q4 2014 their long term debt went up by 6bn from 3099m to 9463m. That jacked up Cash & Equivalents. But they had other sources as well.

It seems banks are prepared to finance them based on their revenue growth. 9 months ended 30/09/14 it was 59bn. 9 months ended 30/06/15 it was 85bn.

As long as Amazon make the repayments and pays the interest , the banks will finance them.

Shareholders seem miffed at the lack of profits though, I know a couple of majors who might go on strike if Bezoz can't show a profit sooner rather than later. He is turning a public company into his toy which invests in areas at his behest.

surbiton said:

ReggieCide said:

Cyclefree said:

watford30 said:

taffys said:

An economy cannot just be built around selling overpriced terraced houses to each other. Surely?

I don;t know. We have half a dozen hard working young people between 25/35 at our company and they all either live with parents or rent. Not one is a property owner, and the only reason is prices are way above what they can afford. I think that is wrong. THey should at least have a shot at owning something, even if it is a few boxes in Whitechapel or Peckham.

London is now a Tier 1 global capital. Young people are never going to be able to compete with someone from Shanghai looking to park money from overseas, unless we ban foreign ownership. Sadly, many need to accept that, and move on.

Why do we need to accept that London should be a base for people from Shanghai to park their money in? Maybe London should be more than just a bank for Bigwigs from Richistan. Shouldn't a left-wing party be looking at just these sorts of things? Other countries do impose some limits on foreigners buying property.

There is a difference, after all, between being welcoming and being flat on your back with your legs in the air. (Apologies in advance.....)

I would suggest that looking after someone's money and working with your legs in the air are both profitable occupations.

"There is a difference, after all, between being welcoming and being flat on your back with your legs in the air. (Apologies in advance.....)"

There is no suggestion that Osborne is doing that. Whatever, he may have been doing in China was not gymnastics of that sort. Or, so I believe.

Not even with a pig?

Since when did Fixed assets come below Current assets in a balance sheet ?!!

JEO said:

SouthamObserver said:

The problem is that this is not what happened with mining. Many of the big mining areas continue to be economically depressed. The same thing could well happen in Redcar.

The mining areas continued to be economically depressed because Gordon Brown decided the right way to deal with post-industrial unemployment was to employ them all in the public sector, on wage levels that priced out private firms. Thankfully this is now changing, and entrepreneurship is starting to come back.

The mines closed down and nothing replaced them. The public sector moved in as a result. We handled the decline of heavy industry very badly in the UK, with all the long term social ills that has created.

Amazon does not seem to be a very nice place to work:

http://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html?_r=0

Amazon seems to have bumped it's cash by issuing a shed load of bonds from what I can work out. Investors seem happy to be earning sub 3% on them too... a very cheap financing model !

SouthamObserver said:

The mines closed down and nothing replaced them. The public sector moved in as a result. We handled the decline of heavy industry very badly in the UK, with all the long term social ills that has created.

It's a difficult problem, because heavy industries tended to be dominant employers in their areas and those areas are often ones which are badly-placed for replacement employers. Nationalisation and union militancy didn't help, of course.

All the same, I'm not convinced that the UK handled it any worse than France, Germany or the US - look at the Nord-Pas de Calais region, for example.

OldKingCole said:

JEO said:

SouthamObserver said:

The problem is that this is not what happened with mining. Many of the big mining areas continue to be economically depressed. The same thing could well happen in Redcar.

The mining areas continued to be economically depressed because Gordon Brown decided the right way to deal with post-industrial unemployment was to employ them all in the public sector, on wage levels that priced out private firms. Thankfully this is now changing, and entrepreneurship is starting to come back.

Rubbish. There was a gap of several years between the closures and Brown getting his hands anywhere near the levers of power.

The closest experience I've had was my involvement in retraining workers made redundant when Xerox's plant in Mitcheldean closed down. It's incredibly hard to re-skill people who've spent their lives doing unskilled (or at best, semi-skilled) labour.

I have a lot of sympathy with governments of all stripes who try and deal with de-industrialisation; sometimes just throwing money at a problem doesn't help. We can't just point the finger at politicians - there are other factors, such as this countries poor labour mobility (there are people in Pontypool and Merthyr who are still waiting for the mines to come back, poor sods).

SouthamObserver said:

surbiton said:

Richard_Nabavi said:

@surbiton - Amazon also has $12bn of paid-up share capital. This sucker is not going bust any time soon!

There's no scandal here in terms of their tax policy. Amazon are simply continuing to invest in expanding their market. Ironically the biggest legitimate criticism one could make of them is that they are doing so partly by their aggressive pricing policy, ultimately driving out competitors but for the moment benefiting consumers (especially young, mobile, tech-savvy Corbyn-supporting consumers).

That is true. They also don't want any questions about "thin capitalisation" etc. to arise. But they are soundly based. They do believe in their business model. Profits will come, later.

With such a huge customer base, their risks are well spread.

Who suffers ? High Street shops.

I suffer. I like bookshops and there are far fewer of them than there used to be. However, I realise I am a dinosaur. But I do like to browse, have a flick through etc, before I buy.

Me too.

Richard_Nabavi said:

SouthamObserver said:

The mines closed down and nothing replaced them. The public sector moved in as a result. We handled the decline of heavy industry very badly in the UK, with all the long term social ills that has created.

It's a difficult problem, because heavy industries tended to be dominant employers in their areas and those areas are often ones which are badly-placed for replacement employers. Nationalisation and union militancy didn't help, of course.

All the same, I'm not convinced that the UK handled it any worse than France, Germany or the US - look at the Nord-Pas de Calais region, for example.

We had oil income. The French didn't.

I agree it's tough to do, but I am not convinced that much effort was made, by either the Tories or Labour. Deindustrialisation was inevitable, but its consequences were not.

MaxPB said:

Richard_Nabavi said:

MaxPB said:

Shareholders seem miffed at the lack of profits though, I know a couple of majors who might go on strike if Bezoz can't show a profit sooner rather than later. He is turning a public company into his toy which invests in areas at his behest.

They can't be that unhappy, given that the share price is up 63% in the last year.

I agree that ultimately they will need to start turning more of that humongous market share into profit.

It is a gravity defying rise, to me reminiscent of 1999/2000. Google, Apple, Microsoft, Facebook and Oracle have earned their valuations by showing massive profits and growth in profits for a long time. They also have hit products and have properly monetised business models. Amazon doesn't make money, is constantly "investing" for the future, doesn't pay a dividend and has, IMO, a crazy person as CEO. Other than AWS I can't think of the last Amazon service to be a big success other than the original webstore and marketplace. Kindle is great, but it is a niche product, their phone failed, tablets are already saturated, the set top box failed and they are too late to the market with video and music streaming services.

Their tablet is pretty good, but I have no idea how they make money on it by selling for ~ £100 or so.

I assume they hope users buy lots of apps and make their money that way (With the proprietory store). I can't believe the price I paid for mine was much above cost.

I'd imagine the fees for Amazon Prime are a nice earner too.

Pulpstar said:

MaxPB said:

Richard_Nabavi said:

MaxPB said:

Shareholders seem miffed at the lack of profits though, I know a couple of majors who might go on strike if Bezoz can't show a profit sooner rather than later. He is turning a public company into his toy which invests in areas at his behest.

They can't be that unhappy, given that the share price is up 63% in the last year.

I agree that ultimately they will need to start turning more of that humongous market share into profit.

It is a gravity defying rise, to me reminiscent of 1999/2000. Google, Apple, Microsoft, Facebook and Oracle have earned their valuations by showing massive profits and growth in profits for a long time. They also have hit products and have properly monetised business models. Amazon doesn't make money, is constantly "investing" for the future, doesn't pay a dividend and has, IMO, a crazy person as CEO. Other than AWS I can't think of the last Amazon service to be a big success other than the original webstore and marketplace. Kindle is great, but it is a niche product, their phone failed, tablets are already saturated, the set top box failed and they are too late to the market with video and music streaming services.

Their tablet is pretty good, but I have no idea how they make money on it by selling for ~ £100 or so.

I assume they hope users buy lots of apps and make their money that way (With the proprietory store). I can't believe the price I paid for mine was much above cost.

SouthamObserver said:

surbiton said:

Richard_Nabavi said:

@surbiton - Amazon also has $12bn of paid-up share capital. This sucker is not going bust any time soon!

There's no scandal here in terms of their tax policy. Amazon are simply continuing to invest in expanding their market. Ironically the biggest legitimate criticism one could make of them is that they are doing so partly by their aggressive pricing policy, ultimately driving out competitors but for the moment benefiting consumers (especially young, mobile, tech-savvy Corbyn-supporting consumers).

That is true. They also don't want any questions about "thin capitalisation" etc. to arise. But they are soundly based. They do believe in their business model. Profits will come, later.

With such a huge customer base, their risks are well spread.

Who suffers ? High Street shops.

I suffer. I like bookshops and there are far fewer of them than there used to be. However, I realise I am a dinosaur. But I do like to browse, have a flick through etc, before I buy.

Same here. Amazon is fine if, but only if, you know exactly what you're looking for.

I probably spend about 10 times as much a year in bookshops than I do buying books online.

SouthamObserver said:

Amazon does not seem to be a very nice place to work:

http://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html?_r=0

More evidence of worker abuse at Amazon.
http://www.independent.co.uk/news/world/europe/amazon-ends-contract-of-neo-nazi-security-firm-over-alleged-mistreatment-of-immigrant-workers-8500115.html

Is Amazon's core business still books any more even ?

I see them more as a marketmaker for small businesses, a sort of ebay without the auction button...

The main item to me judging by their accounts is the R&D expenses, how much of that r&d will carry on forever even as the business peaks out it's sales at $120 Bn or w/e.

@MaxPB Yes, well the tablet's appeal for me was the cheap price. And there are enough free apps to keep me amused... as you say I'm not exactly the sort of penny pinching customer a business wants or needs particularly...

Pulpstar said:

Is Amazon's core business still books any more even ?

I see them more as a marketmaker for small businesses, a sort of ebay without the auction button...

The main item to me judging by their accounts is the R&D expenses, how much of that r&d will carry on forever even as the business peaks out it's sales at $120 Bn or w/e.

Amazon also have AWS, probably the biggest cloud out there.
https://en.wikipedia.org/wiki/Amazon_Web_Services

Richard_Nabavi said:

MaxPB said:

It is a gravity defying rise, to me reminiscent of 1999/2000. Google, Apple, Microsoft, Facebook and Oracle have earned their valuations by showing massive profits and growth in profits for a long time. They also have hit products and have properly monetised business models.

Yeah, but they are very different kinds of business. In terms of barriers to entry for competitors, you could argue that Amazon looks more secure than Facebook (a fad which will pass and which in any case is hard to monitise), Microsoft (still stuck in the desktop PC market), or Apple (fine as long as the hype lasts, but reliant on repeatedly producing something newer and shinier).

I agree that at some point Amazon will need to stop chasing market share and entering new fields, and instead concentrate on extracting profit from its core businesses.

Facebook have a net profit margin of around 20%, it was hard to monetise, not any more. People have been saying its a passing fad for ages, but it continues to accumulate users and their M&A team has been securing their future as well, WhatsApp is the number one global messaging service and it works on all platforms. Once they unlock the monetisation of WhatsApp it Facebook will be worth even more. Microsoft is a highly diverse business, Windows is just one aspect of it, Azure and their other B2B services are more profitable and stable than any of Amazon's businesses. Azure competes directly with AWS and is more successful and more profitable. People have said this about Apple for years, I'm still waiting for their value to drop and their phones to stop being popular.

Plato_Says said:

Hmmm

http://www.politico.eu/article/migration-news-political-europe-cost/

Avramopoulos, 62, is the European commissioner in charge of the contentious migration issue, and the man who is steering EU policy to deal with an exodus of refugees from the Middle East and Africa that has reached almost biblical proportions.

The recent months have seen a lot of finger-pointing and name-calling over Europe’s response to the crisis. But in an interview with POLITICO in his Brussels office, Avramopoulos said those who argue that the Commission caused the chaos are misguided.

“The Commission does not take the blame because it does not care about the political cost,” he said. “The Commission is here for five years to do its job and we did it with vision, responsibility and commitment. Because what is driving us is not to be reelected. That is why for us the political cost means nothing.”

Hmm. I don't think I'm overstretching here; he's arguing that politicians should ignore democracy. Christ, I hope we vote to leave.

MaxPB said:

People have said this about Apple for years, I'm still waiting for their value to drop and their phones to stop being popular.

Ahem. Sony. Nokia. Ericsson. Blackberry. Palm.

I'm not saying that they will falter, but the business model is extremely dependent on new-product cycles in a faddish techno-world. They need to get it right, if not every time, at least nearly all the time. And now they don't have Steve Jobs.

Richard_Nabavi said:

MaxPB said:

People have said this about Apple for years, I'm still waiting for their value to drop and their phones to stop being popular.

Ahem. Sony. Nokia. Ericsson. Blackberry. Palm.

I'm not saying that they will falter, but the business model is extremely dependent on new-product cycles in a faddish techno-world. They need to get it right, if not every time, at least nearly all the time. And now they don't have Steve Jobs.

The average Fortune 500 company lasts around fifty years.

SouthamObserver said:

Richard_Nabavi said:

SouthamObserver said:

The mines closed down and nothing replaced them. The public sector moved in as a result. We handled the decline of heavy industry very badly in the UK, with all the long term social ills that has created.

It's a difficult problem, because heavy industries tended to be dominant employers in their areas and those areas are often ones which are badly-placed for replacement employers. Nationalisation and union militancy didn't help, of course.

All the same, I'm not convinced that the UK handled it any worse than France, Germany or the US - look at the Nord-Pas de Calais region, for example.

We had oil income. The French didn't.

I agree it's tough to do, but I am not convinced that much effort was made, by either the Tories or Labour. Deindustrialisation was inevitable, but its consequences were not.

Agree.

I think we've heard this somewhere before

Here’s the official Conservative response to John McDonnell’s speech. It’s from David Gauke, the Treasury minister.

Labour’s tax rises would hurt hardworking people, threatening every family’s security.

And as Mark Carney has said, Labour’s policy to end the Bank of England’s independence and print money would drive up the cost of living.

That’s why Labour are a serious risk to Britain’s economic security.

Richard_Nabavi said:

Barnesian said:

Yes - their P&L show very little profit yet their balance sheet shows that cash and short term investments have increased from $8b to $14b in the last 12 months.

https://www.google.co.uk/finance?q=NASDAQ:AMZN&fstype=ii

It is odd that you can increase your liquid assets by $6b in a year while making no profit. I confess I don't understand it.

If you don't understand it, perhaps it would be sensible not to make a fool of yourself by posting on the subject? As it happens, your very own link answers the question if you click on the 'Cash flow' tab.

There is a $1.7b cash item called unsurprisingly "non-cash items". I dion't understand what that is but I can guess. It is the accounting fudge that writes off non-cash items against the P&L to reduce the profit. Because it is non-cash (amortization or some such) it has to be added back to the profit in the cash flow statement.

I don't know how much you know about accounting for profit for taxation purposes to the latest IFRSs but you probably do know that it is not at all transparent. Cash flow is more difficult to fudge. Perhaps corprate taxation should be based on net cash flow with an appropriate scope.

Anyway - I'm now off to the cinema to see Everest so I can't continue this rather academic conversation.

OldKingCole said:

kle4 said:

NickPalmer said:

Tories edging ahead in Canada?

https://en.wikipedia.org/wiki/Opinion_polling_in_the_Canadian_federal_election,_2015

Ooh, that would spice things up a bit. And it was already pretty spicy.

What does it mean in terms of seats (ridings) though?

128/110/98 according to this:

http://www.cbc.ca/news2/interactives/poll-tracker/2015/index.html

Barnesian said:

Richard_Nabavi said:

Barnesian said:

Yes - their P&L show very little profit yet their balance sheet shows that cash and short term investments have increased from $8b to $14b in the last 12 months.

https://www.google.co.uk/finance?q=NASDAQ:AMZN&fstype=ii

It is odd that you can increase your liquid assets by $6b in a year while making no profit. I confess I don't understand it.

If you don't understand it, perhaps it would be sensible not to make a fool of yourself by posting on the subject? As it happens, your very own link answers the question if you click on the 'Cash flow' tab.

There is a $1.7b cash item called unsurprisingly "non-cash items". I dion't understand what that is but I can guess. It is the accounting fudge that writes off non-cash items against the P&L to reduce the profit. Because it is non-cash (amortization or some such) it has to be added back to the profit in the cash flow statement.

I don't know how much you know about accounting for profit for taxation purposes to the latest IFRSs but you probably do know that it is not at all transparent. Cash flow is more difficult to fudge. Perhaps corprate taxation should be based on net cash flow with an appropriate scope.

Anyway - I'm now off to the cinema to see Everest so I can't continue this rather academic conversation.

Depreciation and amorization are very real and not fudges. To call them such shows your ignorance again.

The way depreciation works actually increases the speed of corporation tax payments being made necessary, rather than decreases it. If you invest £20 million in a plant that will be depreciated flat line over 20 years using a flat line model then you are allowed to write off £1 million in depreciation per annum. Meaning it takes 20 years for your accounts to write off the £20 million that you've spent. If £2 million profit before depreciation is made each year then £1 million depreciation is written off and £1 million in taxes is owed.

If depreciation didn't exist all £20 million would be written off in year one. No accrued profit would be made as all profit for the first ten years would be nullified by the loss of the £20 million investment at the start. Only in year 11 onwards once the investment had been repaid in full would tax become owed.

To call this a fudge shows tremendous ignorance. The government requires ideas like depreciation and amortization to be accounted for as it both makes sense for the company and assists the government in accurate and prompt tax collection. To abolish that would make things worse.

Philip_Thompson said:

Barnesian said:

Richard_Nabavi said:

Barnesian said:

Yes - their P&L show very little profit yet their balance sheet shows that cash and short term investments have increased from $8b to $14b in the last 12 months.

https://www.google.co.uk/finance?q=NASDAQ:AMZN&fstype=ii

It is odd that you can increase your liquid assets by $6b in a year while making no profit. I confess I don't understand it.

If you don't understand it, perhaps it would be sensible not to make a fool of yourself by posting on the subject? As it happens, your very own link answers the question if you click on the 'Cash flow' tab.

There is a $1.7b cash item called unsurprisingly "non-cash items". I dion't understand what that is but I can guess. It is the accounting fudge that writes off non-cash items against the P&L to reduce the profit. Because it is non-cash (amortization or some such) it has to be added back to the profit in the cash flow statement.

I don't know how much you know about accounting for profit for taxation purposes to the latest IFRSs but you probably do know that it is not at all transparent. Cash flow is more difficult to fudge. Perhaps corprate taxation should be based on net cash flow with an appropriate scope.

Anyway - I'm now off to the cinema to see Everest so I can't continue this rather academic conversation.

Depreciation and amorization are very real and not fudges. To call them such shows your ignorance again.

The way depreciation works actually increases the speed of corporation tax payments being made necessary, rather than decreases it. If you invest £20 million in a plant that will be depreciated flat line over 20 years using a flat line model then you are allowed to write off £1 million in depreciation per annum. Meaning it takes 20 years for your accounts to write off the £20 million that you've spent. If £2 million profit before depreciation is made each year then £1 million depreciation is written off and £1 million in taxes is owed.

If depreciation didn't exist all £20 million would be written off in year one. No accrued profit would be made as all profit for the first ten years would be nullified by the loss of the £20 million investment at the start. Only in year 11 onwards once the investment had been repaid in full would tax become owed.

To call this a fudge shows tremendous ignorance. The government requires ideas like depreciation and amortization to be accounted for as it both makes sense for the company and assists the government in accurate and prompt tax collection. To abolish that would make things worse.

Quite correct. You write back depreication, but you gain Capital Allowances.

Twitter spat still ongoing between Iain Dale and Louise Mensch. He told her to f---- right off - charming man! He has just had David Blanchflower on his show and described him as someone we respect on LBC!! lol

Watching President Obama and David Cameron at the UN and then watching the Labour Party conference is like living in a parallel universe.

Morris_Dancer said:

Good evening, everyone.

The potential for water on Mars is very significant news.

Mr Dancer, the moon early this morning looked something like Mars. A deep red colour, during the lunar eclipse.

Sunil_Prasannan said:

Morris_Dancer said:

Good evening, everyone.

The potential for water on Mars is very significant news.

Mr Dancer, the moon early this morning looked something like Mars. A deep red colour, during the lunar eclipse.

MD, best I got was a rusty red

Lady Bucket, quite the hissyfit from Dale.

antifrank said:

Morris_Dancer said:

Good evening, everyone.

The potential for water on Mars is very significant news.

It is arguably the worst news that mankind has ever had.

Ooh, I'm looking forward to that thread header already.

SquareRoot said:

Which of these two is more delusional.. Corbyn and his mob or "The Great Leader" who "saved the world" and his mob..
Difficult call really...

And neither of *them* thought a giant rock with vague promises carved on it would be a really spiffy idea.

Miss Cyclefree, Ice Warriors?