30/08/2016 BBC Business Live

This is Business Live from BBC News, with Sally Bundock and Alice Baxter.

The tech giant Apple could face a multi-billion dollar tax bill

following an investigation by the European Union.

Live from London, that's our top story on Tuesday 30th August.

The United States has already warned the EU over unfair tax treatment

Could Brussels go one step further and take a bite out of Apple?

Is today the day we wave goodbye to the UK's biggest tech company?

Shareholders of the chip-designer ARM are expected to vote in favour

And we will keep you up to speed with all the latest from the market.

In London there was no trading In London there was no trading

yesterday due to a bank holiday. And the battle against

soaring rents in India - we'll be finding out

about a new hotel which is promising to offer affordable accommodation

at just 50 cents a night. And as the EU is set to rule

on Apple's tax affairs, we want to know whether you think

Europe needs a rethink Do businesses get a free ride

or is Brussels being too hands-on? Get in touch, just use

the hashtag #bbcbizlive. American tech giant Apple is facing

a potential tax bill running After a three-year probe

into the tech giant's tax arrangements with the Irish

government the findings of a European Union investigation

are expected to be released today. The Financial Times are reporting

that Ireland has given US company "illegal aid" through a so-called

"sweet heart" deal. That deal meant that Apple would

effectively pay just 2% or less in corporation tax if it

based its operations in Cork The big benefit for Ireland

is significant job creation However, under EU law,

national tax authorities are not allowed to give tax benefits

to selected companies - which the EU would consider to be

illegal state aid. Apple may face a bill of as much

as $19 billion if the Irish government is forced to recoup

taxes from the company. However, some reports say

the figure may not be much But it will be up to Irish

authorities to calculate Apple and the Irish government

are both likely to appeal With me is our business

editor, Simon Jack. Good morning. We have been waiting

for this, we are expected to get the outcome of their investigation

today. It is squaring up to be quite tasty trade war because the US

warned, don't get involved with this, if anyone is owed back taxes

from Apple it is the US government. They said the European Union is

getting too big for its boots, acting like a supranational tax

authority, going round to the member countries and telling them how to

organise their tax deals. They have said this is a sweetheart deal, it

is through advantageous tax systems like this that people are tracked --

We are expecting a figure of about We are expecting a figure of about

$1 billion. It is actually up to the Irish government to pursue those

funds and yet the Irish government is saying, we like this arrangement,

it benefits us and Apple. Exactly, 5500 people work for Apple in

Northern Ireland. By giving this tax deal, lots of companies want to go

there. There are lots of other areas that will be looking into this as

well. It is interesting because we will see a race to the bottom in

terms of corporation tax rates. This deal has a tax rate of less than

two. The UK says we have 15% corporation tax and would like to go

lower. It is very divisive when countries offer much lower tax rate

than in another. From the point of view of the Competition Commission,

they have investigated Tarbox, Amazon, Facebook is said to be in

its sights as well. -- Starbucks. I think the recovered about 13 million

from Starbucks. -- 30 million. So this is the big one. There was a lot

of talk about where they should be taxed and they live in the financial

equivalent of outer space with this money, no one can get their hands on

them and that is the danger. I met Tim Cook a short while ago, and he

said if you took it home he would have to pay a tax rate of 35% on

that. That is the backdrop, they are saying this is crazy. The money is

sitting out there in the financial equivalent of outer space, never

comes home because the tax rate is too high. If they were ever to do

it, the shareholders would sue their chief executive for losing so much

money. It is an interesting situation which will be returned to

again and again but Apple is the test case. There is a lot more

detail on our website and we will update you as soon as we hear the

outcome of that investigation. Later today European regulators

will spell out exactly how the continent's so-called net

neutrality rules will work. Net neutrality is the idea that

all pieces of data moving across the internet should be

treated equally - regardless as to whether it's a web page,

a movie or a video call. There are fears that changes

to existing rules could favour major We'll have more on this

later in the show. The remarkable performance

of Japan's labour market continued in July, with the jobless rate

falling to a two-decade low. The unemployment rate fell

0.1% to 3% last month, and versus economists' expectations

it would hold steady at 3.1%. This is the lowest

reading since May 1995. Kim Dotcom, the German-born

entrepreneur who faces extradition to the US over copyright

infringement charges, has won his request to have his appeal

hearings live streamed Mr Dotcom, who lives in New Zealand,

had said the hearings Shares in Hershey have plunged

about 12% after it rejected a $23 billion takeover offer

by Mondelez International - the snacks giant which makes Oreo

cookies and Cadbury chocolates. The tie-up would have created

the world's biggest candy maker. But Mondelez says it's no longer

pursuing the acquisition. Banks in China have seen

their shares rise ahead of releasing Both ICBC and Bank of China

are due to report earnings. These banks are huge, aren't they?

Some of the biggest in the world? They are indeed, and their earnings

are being closely watched. There are lots of concerns because things are

slowing down, lots of major concerns about the banking system and high

levels of bad debt. As of clay you have seen squeezed profit margins,

mounting bad loans, all of this expected in the report. But shares

are up for both these banks as investors seem to be shrugging off

these concerns alongside warnings from credit rating agencies that the

banking system in China faces a systemic risk. You also have things

like overcapacity in some industries like mining and steel which made

less investment is funded by debt less profitable and analysts have

pointed to several indicators showing how Chinese firms' ability

to pay debt is now also starting to deteriorate. Amongst the most

troubled sectors, we are seeing real estate, manufacturing, steel as well

as mining, so all of this means these earnings results will not be

great. Nevertheless stocks are higher today with ICBC approaching

its highest close since October last year, while Bank of China extended

verse 2/7%. Let's have a look at the impact of that.

Japan's Nikkei is flat. Here in London, the FTSE 100 was closed on

Monday for a bank holiday. Today we can see it is open, just a verso

slightly down. The US dollar backed off a two-day hike, still hovering

under $50 per barrel. Elsewhere in Europe, markets modestly higher.

Michelle has the details about what's ahead on Wall Street today.

Wall Street will have a couple of economic

reports to digest ahead of the

Data due out later this Tuesday is likely to show consumers

are feeling more anxious about their financial situation.

US consumer confidence is expected to have

Better news is anticipated from the housing market.

Case Shillar releases its monthly 20 city housing price index and it's

forecast to have risen 5.2% in the past 12 months to June.

And on the corporate front, struggling teen

clothing retailer, Abercromby and Fitch reports second quarter

Investors will look for comments on the recovery at the

brand and its performance so far in the third quarter.

Now, the company has been investing heavily to

remodel its Hollister stores and is working to try and turn

With me is Simon French, chief economist for Panmure Gordon.

Nice to see you. Michelle mentioned quite a lot going on in the States,

but let's talk about arm Holdings, which is a big success story here in

the UK, and it looks like their shareholders will approve its

takeover by the Japanese company Softbank. It is a huge deal, and

after the announcement of the takeover there was a premium of 43%

of the trading value and that's where shares are trading this

morning. Theresa May has revealed an industrial strategy from the

Government will take a more critical eye at takeovers, the backdrop to

this is Cadbury and Kraft and also the botched takeover of Pfizer and

AstraZeneca seem not to be in the interests of the firms involved. The

first real test was whether the Government would take a closer look

at this. It seems it won't, it seems the investor confidence priority

post-referendum vote has taken priority over industrial strategy

and we expect that by Friday, Arm will delist from the FTSE 100. It is

quite phenomenal really. It is, the huge story. Another big story this

morning is where the negotiations between this free trade deal. We

heard the German economy Minister saying he thinks negotiations will

all but fail, over the weekend. Where are we? Officials have been

negotiating this for about three years now, but actually I think as

we enter into the electoral cycle, most obviously in the US in

November, but also in French and German elections in 2017, the

politicians are looking back at their electorates and saying there

is no support for free trade arrangements. Most of the electorate

look at arrangements that have been brokered over the last 20, 30 years,

and don't see a material benefit for themselves so public support to try

to have common standards and regulatory processes, certainly

controversial in Europe where it is billed as a race to the bottom in

terms of regulation, it means these things will certainly be parked as

we get through the electoral cycle and arguably parked for good.

Interesting given that we will be in the thick of that negotiating

situation as well. Simon will return to look at the

papers and about five minutes. Also still to come...

Building affordable accommodation for low income workers.

We'll be talking to one entrepreneur who's about to open a hotel

You're with Business Live from BBC News

Foreign companies invested a record amount into the UK

The figures don't cover the period after the EU referendum,

but the figures suggest the UK is once again the most

attractive destination in the EU for foreign firms.

Our economics correspondent Andrew Walker can tell us more.

Andrew, walk us through these figures? One of the really striking

ones is the suggestion that there are 116,000 jobs either created or

protected as a result of investment from outside the UK. There is

striking, and in particular the Department of International trade

highlights Britain's status, it says, as the most popular

destination in Europe for investment from emerging economies. We have

some growth in investment from, they mention particularly, China, Hong

Kong and India. One of the central planks in the campaign to leave the

European Union was the idea that Britain could develop its economic

relationship with countries outside of the great emerging economies

outside the EU, like the three that I mentioned, more effectively. These

figures don't cover the period since the referendum, but at the very

least they suggest that any uncertainty created in advance of

the vote does not seem to have had any effect on inward investment,

certainly not as revealed by the Department of International Trade's

new figures. It is interesting, because as we get

more data coming in, it seems fairly positive? The bulk of it has been.

The one major exception to that was the survey data, the purchasing

index, which was what prompted the Bank of England into taking it very

striking action, cutting interest rates and restarting quantitative

easing. But a great deal of the data, particularly on consumer

spending, has been relatively positive. It has certainly suggested

no overwhelming short-term impact on the British economy. Many economists

would say we need to look to the longer term to see just how business

investment decisions respond over a longer period to the vote, and the

uncertainty created by Britain's future relationship with the EU

might have some impact, but much of what we have had so far has been

positive. Our top story - the tech giant Apple

could face a multi-billion dollar tax bill following an investigation

by the European Union. After a three-year probe

into the company's tax arrangements with the Irish government,

the findings of a European Union investigation are expected

to be released today. As soon as we hear, we will update

you. Now let's get the inside track on the global problem of housing.

Many people just can't afford housing.

One young social entrepreneur has launched Chototel,

a hotel start-up chain which seeks to provide the lowest paid

workers with affordable and dignified accommodation.

The first is opening next month in a densely populated industrial

town about 70 miles south of Mumbai, with three others planned

in the same town in the following four months.

Each Chototel will offer clean, digitally connected and carefully

The cheapest accommodation costs roughly 50 cents a night -

around one tenth of the typical $5 a day received by the

Chototel is planning to expand to the UK, UAE and Nigeria

She's the founder of Chototel, a chain of super-budget hotels.

Good morning, thank you for coming in. You are based in Mumbai. You are

just 24, which is very young to be starting up a company, but you are a

third generation entrepreneur all about social provision. Tell us

more? When you start off a business you always ask yourself, what are

your goals, are they clear enough to do? I think the most important

question that we should ask ourselves is our these goals in spy

business like this, it is very hard on the ground. Everything that can

go wrong inevitably goes wrong. Unless you have those inspiring

goals and that purpose in your vision, it does not give you the

motivation to fight another day. What greater joy than two solve the

most under Salt market segments, that is where we innovate from? We

mentioned you are fairly young, but your great-uncle, your father, they

have all been involved in this kind of thing in India, so you grew up in

that environment? I would imagine they have helped you a lot? Most

definitely. I have had more than 20 years of work. -- work experience.

My uncle would come and discuss business at the dining table. Talk

me through the business model, it is a wonderful social enterprise, but

you have -- how have you created a hotel which so undercuts your

competitors? It works similarly to house rentals, where we own the acid

itself, which is appreciating in value, then you also benefit from

the monthly or the daily rents that you get from the residents. It is a

pretty hi-tech operation, talk me through how you work at someone's

bill, utility bill, Internet bill at such a technology plays a very large

part in why we can provide accommodation at $2 a night. We use

technology to build quicker, to run the hotels in an unmanned way. Most

importantly, we use financial technology to make sure money is

moved real-time and information is available anywhere. So you can

monitor usage of utilities like water and lighting, but they are

paying you digitally, the whole thing is running smoothly from that

point of view? If they are not paying you, they literally can't get

in the door? They are locked out? You know, we do use technology, it

is an important part of being able to scale the business. Unless

technology is that every point, it is impossible to run a very large

scale operation. You are planning to roll out the pilot in the by, then

you have plans to expand into the UAE and the UK. That fantastic price

point that we have talked about, how will that vary across these

different territories? Over year, we can afford to pay a little more than

$2 a night, but it is possible that around $5 in the UAE and about $8 in

the UK. How do you vet the people staying, is it first-come,

first-served? In your brief it says that if they were not staying in

your hotel it is likely they would be sleeping in the streets? We are

very firm believers of free markets, whether it is prices... The people

coming in, it has to be market-driven. The minute we give a

subsidy or accept one, our business is not scalable. The model is not

replicable. It is very much driven by the market. The solution to that,

which would be increasing the amount of supply available, but would keep

the prices low. Thank you the coming in, Rhea Silva. Fascinating, we

shall keep an eye on what Europe to Chototel, definitely.

Let's see what other stories are being talked

In a moment we'll take a look through the business pages,

but first here's a quick reminder of how to get in touch with us.

Website is how you can stay ahead. We will keep you up to date with the

latest details, with insight and analysis from the BBC's team of

editors around the world. We want to hear from you, get

involved on the BBC business web page. You can find us on Twitter or

Facebook. Business Live, on TV and online, whenever you need to know.

Simon has returned. You have been getting in touch, Michelle Fleury

has appealed to you, we have had some tweets about Apple.

Our question is whether Apple should have to pay tax apples in Ireland?

One person has said the company is literally richer than many

countries, they should pay every penny.

Another person says taxes should be collected where firms realise their

value is added, the aggressive EU tax policy is getting out of its

scope. It is interesting, Simon? Your thoughts? The corporation tax

regime was designed in a period capital was not able to freely move

across borders. It is wholly unfit for purpose. The OECD nanograms 20

run top of this and looking at base erosion profit shifting, as one as

your Tweet suggested, looking at where the profit is geographically

generated and taxed in that location. That is hard given the

technology systems available to the tax collecting bodies, but it is the

direction of trouble. Simon Jack said earlier, this is

retrospectively looking at quite aggressive Corporation Tax policies

from Ireland. If somebody came to you and said we want to relocate due

to Warsaw, we have a big offer, this is the financial the war sword charm

offensive to woo London bankers. Would you pack your bags? Probably

not. That is not a slight on Poland or Warsaw, but Warsaw is just one

city trying to take advantage of the referendum vote, trying to get by

this -- bankers and businesses to relocate. At -- Paris is another

one. But I think it will fall on deaf ears, because we do not know

which financial plus sporting will be available in the UK, post-Brexit.

Thank you for coming in, and thank you for your company. Goodbye.

Whilst we can look forward to another fine day with warm spells of

such a coming through, you might have heard that out in the Atlantic

there is Hurricanes Gaston Pereiro a category two hurricane, not far off

being category