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BUSINESS WITH PERSONALITY SONY’SRISE ANDFALL GRAND NATIONAL MAKER OF THE ICONIC WALKMAN IS FLOUNDERING SWEEPSTAKE KIT See Page 13 See Page 33 ISSUE 1,611 FRIDAY 13 APRIL 2012 www.cityam.com FREE Google plots share split as CHARITYRAIDSET profits surge BY JAMES WATERSON INTERNET giant Google last night announced a two-for-one stock split to ensure co-founders Larry Page TOCOST BILLIONS and Sergey Brin retain control over the company. Investors will receive one share of new stock for each existing City warns of damage to good causes as Cable calls for a rethink Google share that they own. The new stock will be listed on Nasdaq under a separate ticker and will BY PETER EDWARDS have no voting rights, enabling Page and Brin to retain control. GEORGE Osborne’s plan to cap tax The surprise decision came as relief on charitable donations will cost the company announced profits of good causes billions of pounds, the $2.89bn (£1.8bn), a 60 per cent rise City warned last night, as a series of year-on-year that exceeded senior MPs fed a growing political expectations, but also revealed a revolt. worrying 12 per cent drop in Investment manager Brewin search advertising rates – the Dolphin and accounting firm Baker company’s main source of income. Tilly spoke out against the proposal “When we went public, we while business secretary Vince Cable created a dual-class voting said he was “sympathetic” to concerns. structure. Our goal was to Osborne is also under pressure from maintain the freedom to focus on the Arts Council and Universities UK the long term by ensuring the after a survey showed almost nine out management team retained of every 10 charity bosses said gifts control over Google’s destiny,” Page from major donors will be severely hit explained. “By investing in Google, if tax relief is capped at £50,000 a year, you are placing an unusual long or 25 per cent of an individual’s term bet on the team, especially income, whichever is higher. Sergey and me, and on our Brewin, which manages more than innovative approach,” he added. £25bn, said this policy, which is part GETTY Net revenue, excluding fees paid of a drive to close tax loopholes, would Business secretary Vince Cable has again voiced doubts about government economic policy to partner websites, hit $8.14bn in reduce donations by billions of the first three months of 2012, pounds a year. have a lot of unintended effects... It is those concerns.” Danny Alexander was asked if there compared with $6.54bn in the Head of corporate affairs Charlotte wrong to encourage people [to donate] The row has sparked predictions of would be a u-turn on the cap he told same period last year. Britain Black said: “For centuries the founda- on the one hand and then brand gen- another coalition u-turn, after changes the BBC “everyone should pay a accounted for $1.15bn – or 11 per tions and bedrock of the charitable erous donors as tax avoiders.” on policies including sentencing dis- decent proportion of their income in cent – of the company’s income sector has been the generosity of those The political fall-out grew yesterday counts for guilty pleas, the forests sell- tax”. during the quarter. who see needs in society... The promo- as David Davis, the former shadow off and cuts to school sport. He left the door open to a change The news came as Page marked a tion of a ‘Big Society’ and citizenships home secretary and a senior Tory back- Iona Joy, head of charity effectiveness however, saying the coalition would year since he returned as chief runs counter to the financials disin- bencher, called for a re-think while a at think tank New Philanthropy work with charities and philanthro- executive. Since then he has led the centive announced in the Budget.” spokesman for Cable, a Liberal Capital, said: “The government has pists to ensure the cap does not have a $12.5bn takeover of Motorola’s George Bull, senior tax partner at Democrat, said: “Concerns have been made a mistake – don’t confuse phi- “significant impact” on bodies which mobile phone business and Baker Tilly, said: “The restrictions are raised with ministers, including Vince, lanthropists with tax dodgers.” depend on large donations. launched the social network ▲ really ill-thought through and will by universities and he’s sympathetic to When chief Treasury secretary ▲ ALLISTER HEATH: Page 2 Google Plus. Certified Distribution FTSE 100 ▲5,710.46 +75.72 DOW ▲12,986.43 +181.04 NASDAQ ▲3,055.55 +39.09 £/$ 1.59 unc £/€ 1.21 unc €/$ 1.31 unc 30/01/2012 till 26/02/2012 is 98,573 FRIDAY 13 APRIL 2012 2 NEWS To contact the newsdesk email [email protected] Government wrong to demonise generous philanthropists T has become increasingly difficult ous part is that the philanthropist is thought it would be good PR for the Apparently, it feels that some EU- to understand what the coalition not better off – he or she is worse off. government ought to be taken out based charities are dodgy, but that EU Igovernment is up to. Take its EDITOR’S His or her take-home pay is down, not and fired – immediately. rules mean it cannot do anything decision to demonise those who up. That is because he or she is being There is a good case to be made that about this. If so, why doesn’t it say so? donate large amounts to charity, LETTER generous, not engaging in a cynical in a drastically reformed system, with It’s like the pasty tax: The government depicting them in a grossly unfair act to defraud the taxman. Is this gov- much lower tax and spending as a felt that it had to hike taxes on pasties manner as tax avoiders who should ernment financially illiterate? share of GDP, there would be no need to avoid an EU ruling that could have be ashamed of themselves. This is an ALLISTER HEATH Charity relief works differently to for any reliefs. I have long supported a forced it to cut Vat on other warm astonishingly stupid and nasty thing some other tax reliefs: by putting flat tax where – above a generous per- food, such as fish and chips, and hand to imply. The government claims that money in their pension, which sonal allowance – everybody pays the over billions in compensation. But if some charities are dodgy. But if this the 50p tax rate and including remains their property (though they same, low rate on all labour and capi- the EU is the problem why doesn’t it is true then the obvious answer is to employee national insurance) and cannot touch it until they retire) tax- tal income. But that would be dramat- tell anybody? No wonder Ukip is surg- get the Charity Commission to do its keep £480k. But if they gave £100,000 payers end up paying substantially ically different to what is on offer ing in the polls (it is at 11 per cent in job more thoroughly, not demonise of this away, they would be able to less tax than they would otherwise today, and would trigger an explosion one), and Labour is substantially all donors. reclaim £37,500 in tax relief from have paid, and are therefore better in wealth creation and charitable ahead. When it comes to own goals, What really angers me is that the HMRC and end up paying £482,500 in off, post-tax, than if they kept the donations. The government, however, the charity row is even more stagger- coalition is misrepresenting how tax tax and keeping £417,500. In other cash in their bank accounts. But char- is not implementing such a reform – ing than the coalition’s vicious relief works – it is implying that it words, they would lose £62.5k in take- itable donations require a real sacri- it is merely misrepresenting the “green” plan to penalise those seek- helps donors line their own pockets. home pay and be able to allocate fice, regardless of tax relief. These motives of those building the Big ing to build conservatories. What, But the facts are clear. A wealthy indi- some of their tax bill to a cause close attacks on generous folk – including Society it once purported to believe in exactly, is this government up to? vidual who earned a £1m bonus to their heart (the charity would also many who work in business and the in a desperate bid to raise more tax. would ordinarily pay £520k in tax be able to reclaim some extra money City – are truly astonishing. Whoever Another explanation for the coali- [email protected] (assuming the bonus is wholly within from HMRC). But the crucial and obvi- came up with such a strategy and tion’s folly is doing the rounds. Follow me on Twitter: @allisterheath Investor fears IN BRIEF OECD predicts decades of North Korea launches rocket force Italian n North Korea launched a rocket late last night, although it is believed to have crashed into the sea. The launch, debt yields up which took place at 11.39pm UK time, was officially to carry a weather BY TIM WALLACE austerity lie ahead for UK satellite but has drawn international criticism and sabotaged a food aid deal with the United States. Critics say ITALIAN bank stocks dropped BY KATIE HOPE the Unha-3 rocket would enhance sharply yesterday after renewed Pyongyang's ability to build a missile worries about the government’s THE UK faces decades of more aus- capable of delivering a nuclear ability to pay its debts pushed up terity in order to bring its spiralling warhead.