RAGS blame Trump for big loss

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RAGS blame Trump for big loss

Postby john@staustell » Fri Feb 09, 2018 8:19 am

You couldn't make it up :D

http://www.telegraph.co.uk/football/201 ... ax-system/

Manchester United have blamed Donald Trump’s overhaul of the US tax system for their high half-year loss.

United, who are owned by American tycoons the Glazer family, were forced to make an accounting write-off of almost £49 million after the US president’s reforms resulted in the corporate tax rate being cut from 35 per cent to 21 per cent in December.

It led to United reporting losses of £12.87 million in the first half of the financial year after posting a profit of £18.7 million in the six months to Dec 31 2016, although the club stressed the situation would have no impact on their ability to compete financially in the transfer market or meet Uefa’s Financial Fair Play rules.

“The reduction in tax rate has resulted in a non-cash accounting charge of £48.8 million to be recorded in the quarter,” Cliff Baty, United’s chief financial officer, told an investor call yesterday.

“It’s important to reiterate this is a non-cash accounting charge only which has no impact on our financial competitiveness, nor our ability to meet financial fair play regulations.”

United are still forecasting turnover for the year of between £575 million and £585 million, while revenues for the three months to Dec 31 were up four per cent to £163.9 million. Operating profit for the quarter was down 23 per cent on the same period in the previous year to £28.7 million.

Wage costs rose 9.4 per cent to £69.6 million, with the club’s return to the Champions League this season boosting player salaries, although it also helped increase broadcasting revenue by 17 per cent over the quarter to £61.6 million.

Meanwhile, Ed Woodward, United’s executive vice-chairman, said the signing of Alexis Sanchez was already proving a money spinner for the club, despite Manchester City pulling out of a deal over the spiralling cost of the deal. Sanchez is earning £14 million a year after tax at Old Trafford following his move to Arsenal in a swap deal with Henrikh Mkhitaryan.

Sanchez’s arrival set a new record for shirt sales in January – three times the previous highest – and also broke a series of records on social media.

As well as being United’s biggest ever Instagram post with two million likes and comments, the announcement of Sanchez’s signing was the club’s most shared Facebook post and United’s most retweeted post ever. #Alexis7 was also the No 1 trending topic on Twitter worldwide.

“To put all that into context, the announcement posts generated 75 per cent more interactions than the announcement of the sale of the world’s most expensive player last summer, when Neymar moved from Barcelona to PSG,” Woodward told investors.
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Re: RAGS blame Trump for big loss

Postby rosbif cuisson 'bleu' » Fri Feb 09, 2018 10:38 am

are there any accountants out there who can explain , in SIMPLE terms, why a company will make LESS money when corp tax rates are reduced?
Is it because they write off future tax against interest repayments or something?
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Re: RAGS blame Trump for big loss

Postby Scatman » Fri Feb 09, 2018 11:16 am

rosbif cuisson 'bleu' wrote:are there any accountants out there who can explain , in SIMPLE terms, why a company will make LESS money when corp tax rates are reduced?
Is it because they write off future tax against interest repayments or something?


They have stressed that it is a non-cash charge, which means it will be to do with something on the balance sheet reducing in value, therefore creating a "loss" for that reduction. As it relates to the tax rate going down, the thing reducing in value is most likely to be something on their balance sheet known as "deferred tax".

The simplest explanation is that they will be getting tax relief in the future for something they have already had an accounting deduction for. What that is I don't know, but they are able to put the value of the tax relief they will receive onto the balance sheet as an asset. Because the tax rate has fallen, the asset (the amount of relief they will receive) is worth less to them.
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Re: RAGS blame Trump for big loss

Postby john@staustell » Fri Feb 09, 2018 12:59 pm

They will have done everything possible to avoid posting any loss. But couldn't
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Re: RAGS blame Trump for big loss

Postby carolina-blue » Fri Feb 09, 2018 1:20 pm

Trump top man :roll:
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Re: RAGS blame Trump for big loss

Postby Scatman » Fri Feb 09, 2018 1:57 pm

carolina-blue wrote:Trump top man :roll:


They're still paying less tax so will be better off
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Re: RAGS blame Trump for big loss

Postby Peter Doherty (AGAIG) » Sat Feb 10, 2018 7:58 am

Scatman wrote:
carolina-blue wrote:Trump top man :roll:


They're still paying less tax so will be better off

The Glazers will be better off, the rags won't. God bless the Glazers.
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Re: RAGS blame Trump for big loss

Postby Dipstick » Sat Feb 10, 2018 12:01 pm

So, to summarize, they won't be paying less tax than they weren't paying before.
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Re: RAGS blame Trump for big loss

Postby zuricity » Sat Feb 10, 2018 5:04 pm

Peter Doherty (AGAIG) wrote:
Scatman wrote:
carolina-blue wrote:Trump top man :roll:


They're still paying less tax so will be better off

The Glazers will be better off, the rags won't. God bless the Glazers.



Whilst i don’t care about the rags. I do care that those cnuts are taking so much out of the game for their poor debt plagued businesses in the US.
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Re: RAGS blame Trump for big loss

Postby Mikhail Chigorin » Sat Feb 10, 2018 9:07 pm

Scatman wrote:
rosbif cuisson 'bleu' wrote:are there any accountants out there who can explain , in SIMPLE terms, why a company will make LESS money when corp tax rates are reduced?
Is it because they write off future tax against interest repayments or something?


They have stressed that it is a non-cash charge, which means it will be to do with something on the balance sheet reducing in value, therefore creating a "loss" for that reduction. As it relates to the tax rate going down, the thing reducing in value is most likely to be something on their balance sheet known as "deferred tax".

The simplest explanation is that they will be getting tax relief in the future for something they have already had an accounting deduction for. What that is I don't know, but they are able to put the value of the tax relief they will receive onto the balance sheet as an asset. Because the tax rate has fallen, the asset (the amount of relief they will receive) is worth less to them.


A nicely interesting post.

Reading it reminded me of the old definition of an accountant......"an accountant is someone who watches the battle from the safety of a hillside and, when the fighting is over, goes down into the valley to count the dead and bayonet the wounded".

I don't think it's the meek who will inherit the earth, but the hordes of book-keepers and their ilk.
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Re: RAGS blame Trump for big loss

Postby Piccsnumberoneblue » Sun Feb 11, 2018 7:34 am

Dipstick wrote:So, to summarize, they won't be paying less tax than they weren't paying before.

Succinctly described
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Re: RAGS blame Trump for big loss

Postby zuricity » Sun Feb 11, 2018 6:21 pm

Is 1-0 a big loss ?
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Re: RAGS blame Trump for big loss

Postby Mikhail Chigorin » Sun Feb 11, 2018 6:48 pm

zuricity wrote:Is 1-0 a big loss ?


I reckon it must be ZC.

If the SCUM had won by that score instead, all the media far and wide would have proudly proclaimed it as a "huge win".
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