And the proportion of the workforce that is self-employed is growing. Last year it rose by 2.3 per cent at a time when the overall numbers of those in work – both employed and self-employed – dipped by 0.3 per cent.

Saif Bonar is British manager for freelancer.co.uk, which matches workers to projects.

Head start: Sam and Robert McClements were self-employed when they set up Wonderland Wigs but formed a limited company as their business expanded

He has seen a quadrupling of self-employed users registering on the website in the past year. ‘The cost of working for yourself has fallen over the years and technology has made it easier to set up at home with a laptop and a mobile phone,’ he says.

Some of the fastest growth has come among older people. There are 330,000 self-employed over 65 – more than half of those working beyond the official male State pension age.

Graham Little, 65, is one of those who is not ready to retire. He has set up on his own, training lorry drivers to help them comply with EU laws.

He used to work for a national haulage company as a driver and training others and decided to set up his own business after being made redundant in January.

Graham, who lives with wife Anne, 61, in Stourport-on-Severn, Worcestershire, says: ‘I am passionate about training others and I have all this experience.

‘It is a waste if I don’t do anything with it. At the moment, I feel that I will keep on working at least part time as long as I have my health and my fitness.’

He has hired a local accountancy firm to handle his tax and National Insurance affairs and used freelancer.co.uk to find an internet designer in India to help him build a website.

But Graham found that working for himself was not all plain sailing. ‘I was despondent at the beginning,’ he says. ‘I was making lots of phone calls to potential customers and few people were getting back. But then I started to pick up some work and word spread.’

Graham had a breakthrough last month, signing up to train all the drivers of a local haulage agency.

If you are considering taking the plunge into self-employment, think hard about the money you already have and where the next payment might come from.

Helen Kanolik, who founded HelenK Financial Advice in Wimborne, Dorset, says: ‘Ideally, you should have some sort of emergency reserve savings behind you if you start out alone, so that you can keep on paying the mortgage, the council tax and other essential bills if you have a bad month or two at the beginning.

‘If you are starting after a redundancy payment, think how much of that you want to set aside to back the business and how much, if any, you can afford to put away for the long term.’

Jamie Thomas, 26, is trying to build a career based on the IT skills he developed in his former job as a civil servant. He used to work for the Department for Work and Pensions as an assessor for Pension Credit. Part of his job also involved maintaining the computer systems. But he was made redundant in January and has been trying to make his own way since.

His projects so far include designing websites for local businesses and working as a club DJ.

Jamie, from Swansea, says: ‘So far I have mainly done work through people I know and friends of friends. I’m working to get a portfolio together and have registered with a couple of business networks.

But Jamie, who is single, says it is a tough market out there. ‘I’m applying to university to see if I can back up my skills with some formal qualifications,’ he says. Jamie plans to carry on his freelance work as a way to subsidise his studies.

Whatever way you find yourself self-employed, there are some key financial issues to consider:

DON’T FORGET TO LET THE TAXMAN KNOW

If you start to work for yourself, you must tell the taxman that you have become self-employed by registering through the Revenue & Customs website hmrc.gov.uk.

Tax is collected through the self-assessment process. The self-employed must complete annual tax returns and pay income tax on profits in two annual instalments in January and July. But lots of allowable business costs can be set against your income when it comes to calculating these profits.

The self-employed also pay National Insurance differently. There is a basic weekly sum of ?2.65 in Class 2 NI that maintains your entitlement towards benefits such as the basic State pension. On top of this, Class 4 NI is levied at nine per cent of annual profits between ?7,605 and ?42,475.

Above this level, NI falls to two per cent. Those working beyond State pension age are exempt from paying NI. Both income tax and NI are due at the same time, so the self-employed must be careful to budget for these payments.

Kanolik says: ‘You’ll have to be disciplined about saving a portion of your income for future tax bills rather than having tax and NI deducted at source.’

Revenue & Customs has an essential guide – SE1 Thinking Of Working For Yourself? – available to download.

Another option is to set up a company. There need be only one shareholder, although many couples jointly own their business.

As a company, the business pays corporation tax on any profits, while you as an employee pay income tax and NI on any salary and income tax on any dividends.

Choosing between the two options is not straightforward. The best strategy will depend on the size of a business, the eventual level of profits it makes as well as what it does.

David Bywater, partner at the office of accountant KPMG in Gatwick, West Sussex, says: ‘The paperwork and tax compliance burden involved in being a sole trader is lower and simpler than it is for being a company. But there can be good reasons to trade through a limited company, such as protecting yourself from claims against the business through limited liability.

‘Companies can also access tax allowances and reliefs, such as research and development credits, which are not open to the self-employed.’

Whichever way you work, good record keeping is essential. Bywater says: ‘You have to be precise and thorough. Entrepreneurial-spirited individuals just want to focus on what they are good at, not on the paperwork.’

Sam and Robert McClements have found that battling through the paperwork is a price worth paying to enjoy the flexibility of being their own boss.

The couple set up Wonderland Wigs two years ago, selling wigs and hair extensions through the post. They trade online through eBay and Amazon as well as on wonderlandwigs.co.uk.

Rob, 36, a former rail maintenance contractor, and Sam, 29, who worked in marketing, launched the business after she saw a niche in the market for hair extensions.

The couple, from Paddock Wood, Kent, started off as self-employed. But as the business grew they formed a limited company and have also registered for VAT.

Sam and Robert get a lot of their wigs made overseas, as well as selling them internationally, which adds to the complexity of the business’s paperwork.

Sam, 29, says: ‘If you are not organised, it can unravel quickly. Doing the accounts and record-keeping is the worst part of the job, but I am motivated and can knuckle down and do it.’

Working for yourself can also give more flexibility to balance work and family life. Sam and Rob have an 18-month-old daughter, Daisy, as well as 11-week-old twins Hugo and Max.

Sam says: ‘It is fantastic being able to structure your own day and being able to do something you enjoy and are passionate about.’

Take-home pay is often low in the first year or two of working for yourself as you invest time in building the business, winning customers and covering lots of extra start-up expenses.

But a lower income may mean you become entitled to working or family tax credits. Check your entitlement by calling 0345 300 3900.

KISS GOODBYE TO BENEFITS SAFETY NET

A salaried job often comes with a safety net of workplace benefits such as life insurance and sickness cover if you cannot work because of a long-term illness. Many employers also pay into a pension on your behalf.

Going it alone can mean losing this safety net. The self-employed must think about which benefits they can afford to replace.

Kanolik says: ‘There may be circumstances where a former employer can continue to extend some of these benefits after you stop working for them, or where their insurer is willing to continue coverage if you pay yourself. It is always worth asking.’

But if not, those working for themselves can be left with tough choices. Sam McClements says: ‘When you are employed, you take all the benefits for granted. But when you are working for yourself, if you take too much money from the business to pay for benefits you can choke business growth.’

With a young family, she and Rob have been keen to ensure they have comprehensive life insurance. However, so far neither of them has a pension, preferring to reinvest the profits into growing their business.

YOUR HOME INSURANCE MIGHT DISAPPROVE

If the kitchen table is your office desk and the spare room your warehouse, you must be aware of the pitfalls of working from home.

Mortgage lenders and insurers can take a dim view if a home gradually evolves into business premises.

David Hollingworth of mortgage broker London & Country in Bath, Somerset, recommends keeping your mortgage company informed about what is going on.

‘Many lenders won’t be comfortable with part-commercial properties,’ he says. ‘They are concerned about anything that will put off a potential buyer should they have to repossess, especially if there are structural changes.’

Jazz Gakhal, who heads the business division at insurer Direct Line, says: ‘Your average home insurance policy may have a limited amount of cover for business equipment at home. But that tends to be restricted to paper-based work and certainly won’t cover any business money or any stock kept at home.’

The other key insurance risks for the self-employed relate to liability – the danger that customers come to harm when they visit your premises, or that work you do or a product you sell contributes to loss, damage or injury elsewhere. Again, none of these risks will be picked up by standard home cover.

Small business insurance, typically costing from about ?150 a year, can help plug the gaps.

Also, check the small print of motor insurance if you are using a private car for work. For example, if you load up with business stock for deliveries or carry customers, you may need commercial cover.

By Stephen Womack


The millions who have never used the internet need more help to avoid the financial penalties of not having a computer.

Good deals can still be found by using the phone or face-to-face, but the best rates for products, including savings and insurance, are increasingly reserved for online customers.

More than eight million adults have never used the internet, according to the Office for National Statistics. Of these, 5.4million are 65 or over. Almost a quarter of British households have no internet access.

Help: Entrepreneur behind the launch of Lastminute.com Martha Lane Fox backs training courses for internet beginners

The ‘digitally excluded’ are at risk of missing out on State benefits and paying unnecessary tax as the Government increasingly moves services and information online.

A report published last week by The Low Incomes Reform Group of the Chartered Institute of Taxation says people who are older, disabled or self-employed are most likely to be disadvantaged by the rush online.

Half those looking for help with tax and benefits have no computer, it says.
Anthony Thomas, president of the institute, says: ‘Government policies must plan for groups who won’t ever be able to cope with digital services.’

The Go ON UK campaign launched this month is trying to encourage more volunteers to help others take their first steps online. It is backed by partners including Age UK, Lloyds and the Post Office.

Martha Lane Fox, the Government’s digital champion who chairs Go ON UK, says: ‘Many individuals and organisations still struggle to exploit the broader benefits of technology.’

For details of free internet training, call the UK Online Centres 0800 77 1234. In key areas, such as savings and energy bills, those with no computer have to work to ensure they do not lose out.

Insurance

Popular comparison websites such as confused.com and gocompare.com are strictly internet-only. The website moneysupermarket.com will arrange motor insurance by phone at the same rates as you would get online (call 0845 345 5708, 9am-5.30pm Monday to Friday) but does not offer household cover by phone.

Even traditional providers reward their online customers – Direct Line offers a 15 per cent discount for online home insurance bookings compared with the price by phone.

But there are others that do not penalise customers who want to speak to a human being. Broker Swinton has 550 High Street branches as well as a call centre and website. It aims to offer the same price to customers face-to-face, online and by phone.

And for more difficult needs, such as travel cover if you have an existing medical condition, it is always worth speaking to a specialist broker. Call the British Insurance Brokers’ Association helpline on 0870 950 1790.

Savings

The internet has allowed regional banks and building societies to offer savings accounts nationwide. To keep costs down, many reserve the best rates for their online customers.

Andrew Hagger of moneynet.co.uk says: ‘Six out of ten top instant-access deals are online only, as are four out of the ten best easy-access cash Isas.’

But there are examples where banks strive to offer the same deal to all types of savers. Saga has an online instant-access savings account paying 2.75 per cent and also has a Telephone Saver (0800 111 4935) paying the same rate. Virgin Money offers an online Easy Access Saver 2 paying 2.6 per cent, but also pays the same rate in branch and by post.

Energy and utility deals

Some of the cheapest deals are internet-only tariffs. Customers save suppliers the cost of administration by managing their account online. The regulator Ofgem runs an energy-switching campaign with Citizens Advice, which tries to help consumers overcome the barriers to finding a better price.

The Energy Best Deal initiative has helped more than 94,000 customers to move to a different tariff. Contact details for your nearest Citizens Advice office are in the phone book.

Moneysupermarket has a phone switching service for energy. Call 0845 345 1296.

I’d rather pick up the phone, or speak to someone face to face

‘Waste of time’: Derek Murphy has never felt the need to buy a computer

Derek Murphy has never been online and at the age of 78 he feels it is too late for him to start, even though he feels like a second-class citizen. Derek, a retired furniture store manager, belongs to a generation that never encountered computers in the workplace.

‘I have never felt the need to have a computer in the home,’ he says. ‘It would be a waste of time buying one because I have no idea how to use it.’

Derek, from Clifton, Nottingham, is vice-chairman of the Nottingham Elders’ Forum, a pensioner group with more than 2,000 members.

He says: ‘I think a lot of firms and organisations are using the internet as a buffer to keep customers at arm’s length.

‘If I need to sort something out, I am a firm believer in picking up the phone or going to speak with someone face-to-face.’

Derek, who is divorced, has four children, but none of them lives close enough to home to be able to help him with computers. He says: ‘When I talk about this issue with fellow members of the forum, we definitely feel as if we’re second-class citizens.

‘It is very difficult to convince people of our generation to get started with something that is completely new to us.’

By Colin Fernandez

Ebay and Amazon have been ordered to surrender tens of thousands of members’ details to the taxman as part of a crackdown on online trading.

HM Revenue and Customs has issued legal notices asking for the data, including names and email addresses.

Companies that do not comply promptly could be fined ?300, with an additional ?60 per day if they fail to respond by the end of the month.

Nowhere to hide: HMRC has issued legal notices asking for the details of thousands of Amazon and Ebay sellers (posed by model)

HMRC has already written to thousands of people who may not have declared all the tax they owe relating to internet sales. It hopes to raise millions of pounds by targeting online traders, who have until June 14 to come forward and benefit from a reduced penalty of 20 per cent of the tax owed. The penalty will then rise to 100 per cent, but in the worst cases traders could face prosecution.

Last year Greg Allnutt, 40, an eBay user from Croydon, was jailed for 20 months for evading ?430,000 of tax while selling electrical goods on eBay between 2007 and 2010.

Guy Smith, of tax consultancy firm Abbey Tax, said HMRC’s campaign would be ‘a hammer blow to those who have traded without detection so far’. Previous targets of HMRC crackdowns include Avon ladies, Ann Summers party hosts, doctors, dentists, plumbers and those with off-shore bank accounts.

The initiatives are said to have helped the taxman claw back ?500million so far.

 

A spokesman for HMRC said: ‘If you are an online seller with undeclared income, you should come forward and put your tax affairs in order before HMRC catches up with you.’

They stressed that the focus would be the sites’ 32,500 biggest traders.

Ebay said it works ‘hard to ensure that businesses that trade on the platform are aware of their tax obligations’.

It added: ‘We do not hesitate to share information with government agencies should there be evidence of wrongdoing. We require all sellers trading as a business on eBay to register for a business account.’

Launched in the UK in October 1999, eBay is the country’s largest online marketplace, with more than 14million active users – although only around 178,000 of these run a business or use eBay as their primary or secondary source of income.

Its rival Amazon Marketplace was launched in 2000, and allows individuals and other businesses to sell items through the main Amazon website. Amazon did not respond for comment.

It is thought to be the final stage in a controversy over a fake computer science college degree on his biography, although the company is expected to claim he is leaving for ‘personal reasons’.

Thompson will reportedly cite a recently discovered illness as the main cause for his departure, less than six months after he took the role in January.

Replacement: Scott Thompson (left) is stepping down and will be replaced by Ross Levinsohn (right)

Thompson’s interim replacement, effective immediately, will be Yahoo’s global media head Ross Levinsohn, a source told Reuters.

Prior to the posting he was president of PayPal, the Jose-based eBay subsidiary, taking over from Carol Bartz who was dismissed in September.

Yahoo has said that Thompson did not have a computer science degree, despite what was stated in his official company biography and in regulatory filings with the U.S. Securities and Exchange Commission.

Levinsohn most recently also ran its Americas unit, including its advertising sales.

The move is a victory for hedge fund manager Daniel Loeb of Third Point LLC, which is Yahoo’s largest outside shareholder and brought the discrepancy in Thompson’s educational background to light.

It was Loeb and Daniel Levinsohn, head of Third Point, which owns 5.8 per cent of the company, who discovered Thompson’s misstep and told the world of his phoney degree claim.

Loeb has been waging a bitter proxy battle to install a slate of four directors on the Internet company’s board, which he has accused of being dismissive of investors’ input and in need of restructuring capabilities and media strategies. According to the All ThingsD blog, which reported Thompson’s departure earlier on Sunday, Yahoo’s board is closing in on a settlement with Loeb that will give Third Point three board seats.

The blog said Yahoo’s recently added director Fred Amoroso will be named chairman of the board.

Yahoo was not immediately available for comment.

Emails sent to Thompson’s official Yahoo email address were already bouncing back on Sunday morning.

Yahoo is in the midst of trying to revive revenue growth and its popularity with consumers, facing fierce competition from Google, Facebook and other online companies.

The pair will apparently say he is departing for “personal reasons.” Sources said that Thompson will be claiming to be leaving due to a serious illness that he recently discovered he had.

But the evolving crisis — which is just over a week old — centered on his botched resume and how he handled the thorny issue is the key reason for the abrupt end to his tenure as a CEO.

Thompson’s likely replacement on an interim basis will be Yahoo’s global media head Ross Levinsohn, who most recently also ran its Americas unit, including its advertising sales.

In addition to the management upheaval, Yahoo’s board is closing in on a settlement with the man who discovered Thompson’s misstep, activist shareholder Daniel Loeb of Third Point, said sources.

The situation could change, since Yahoo’s full board still has to meet this morning to officially approve the sweeping changes at the long-troubled company.

But, if it is, this development goes a long way toward fixing some of what has been ailing Yahoo recently.

And it’ll also be a stunning victory for Loeb (pictured here), since the pugnacious hedge fund investor is set to get three board seats from a slate proposed by him as part of a proxy fight aimed at Yahoo. The new Yahoo directors will be media exec Michael Wolf and turnaround specialist Harry Wilson. Loeb’s fourth selection — former NBC head Jeff Zucker — will withdraw.

The five current Yahoo directors — who were to step down at the company’s annual meeting this summer — will leave the board effective immediately, sources said, to make way for the Third Point selections.

Finally, Yahoo’s recently added director Fred Amoroso will be named chairman of the board.

Amoroso is the director who has been conducting the investigation into the issues raised by Loeb about how the fake academic credentials got in Thompson’s public bios, as well as in Yahoo’s regulatory filings, and also the hurried circumstances around his hiring in January.

Those mysteries — read, screw-ups — might never be solved now, although Thompson made a convoluted attempt to explain it all in two awkward employee meetings at the end of last week. In those gatherings, according to numerous sources, he blamed a headhunting firm for introducing the mistake when he was being hired for a job at eBay in the mid-2000 timeframe.

That company, Heidrick and Struggles, slapped back last week with an internal memo, noting that Thompson’s claim was “verifiably not true.” Sources said that Heidrick told Yahoo’s board that it was in possession of a resume that Thompson had apparently submitted showing the inaccurate CS degree on it.

That memo, impugning Thompson’s credibility, was one of many that piled on to create an impossible situation for the Yahoo board, related to his leadership ability going forward.

Thompson had also previously issued a Yahoo statement, in which he apologized for the “distraction” caused by the problematic resume, but not for the mistake itself.

And, initially, Yahoo — under his direction — had called the borked resume an “inadvertent error.”

Such fumbling to fix the situation was among the many other issues that the board has been considering relating the ability of Thompson to remain in his job. Also of importance was the sinking morale of Yahoo employees, who had largely rejected Thompson’s excuses in the ResuMess scandal.

Internal message boards at Yahoo lit up all last week, with staffers largely rejecting his explanations. In addition, a number of top execs and engineers approached the board calling for Thompson’s firing.

While that’s not precisely what happened here, it’s close enough to describe Thompson’s departure as inevitable.

All this change comes in the wake of a massive restructuring he was in the midst of at Yahoo, after 2,000 employee layoffs.

Thompson was pushing forward a vision of adding a much more significant data and commerce element to Yahoo’s largely ad-based business.

That is likely to be less stressed under media-focused Levinsohn, who will be essentially trying out to be the permanent CEO.

Well known in the media and advertising communities, he has worked at a number of big online efforts over many years.

According to his bio at Yahoo, where he arrived in 2010:

He previously served as the President of News Corporation’s Fox Interactive Media, where he was responsible for the day-to-day operations, strategy and acquisitions that helped transformed the company into a leader in digital media. He also held senior management positions with AltaVista, an early pioneer and leader in search, CBS Sportsline where he oversaw all content and development for the top rated sports site, and HBO where he launched and oversaw a unit developing new programming and revenue streams. Levinsohn also was the co-founder and managing director of Fuse Capital, an investment and strategic equity management firm focused on investing in and building digital media and communications companies.

Levinsohn sits on the board of Freedom Communications and the Bogart Pediatric Cancer Research Program. He holds a Bachelor of Arts in Communications from The American University.

So far in my checking, Levinsohn’s resume is accurate.

More to come, obviously.

I have emails and texts and calls into everyone for comment, but apparently they are all out at a Mother’s Day brunch (except me).

The mystery of the Old Harrovian murdered in China took an intriguing twist last night when MPs demanded to know if he was a spy.

They called on Foreign Secretary William Hague to come clean about whether Neil Heywood tipped off MI6 about his secretive activities as an adviser to a disgraced Chinese power broker.

The Daily Mail has been told that Mr Heywood passed information to MI6 as an ‘agent of influence’, though officials insist he was not on the Secret Intelligence Service payroll.

Suspicions: Police believe Gu Kailai, left, had businessman Neil Heywood, right, poisoned after he threatened to expose her plan to move millions of dollars abroad

The Chinese authorities are investigating whether Mr Heywood, 41, was poisoned with cyanide last November after falling out with Bo Xilai, who was ousted as the Communist boss of the city of Chongqing.

Officials in China told the Mail Mr Heywood died after helping Mr Bo and his wife Gu Kailai, with whom the Briton is alleged to have had an affair, funnel ?1billion of Chinese state assets into foreign bank accounts.

Mrs Gu is suspected of murdering the British businessman after he demanded a larger cut of the cash and threatened to expose the money trail.

Mr Heywood also worked with the secretive Mayfair business intelligence firm Hakluyt, which was founded by two retired M16 officers and also employs a number of former MI6 officers.

Last night Richard Ottaway, the Tory chairman of the Foreign Affairs Select Committee, wrote to Mr Hague asking him to clarify Mr Heywood’s relationship with the British Consulate in Chongqing and the British Embassy in Beijing.

He said: ‘For instance, did he supply the British Consulate or Embassy with information, either on a formal or informal basis?’

Torn apart: Gu Kailai with her husband and former Chongqinq leader Bo Xilai with their son Bo Guagua

Mr Heywood lived a James Bond lifestyle and acted as an adviser to Aston Martin, the favoured car brand of the fictional British secret service agent.

Often dressed in a crumpled cream linen suit and bathed in an almost permanent cloud of cigar smoke, he was something of a throwback to a bygone colonial era.

The Old Harrovian made the most of his privileged background to promote himself in China as a well-connected fixer, earning a comfortable living.

The ‘quiet Englishman’, as Mr Heywood was sometimes known, ran a business consultancy, bringing British and Chinese firms together, and various luxury car franchises. He drove a Jaguar with a Union Jack bumper sticker.

Mr Heywood knew the former ‘golden couple’ of the Bos for more than a decade and helped their son Bo Guagua, whom he had taught English, win a place at Harrow before studying at Oxford.

Questions over how the Bos could afford a foreign education for their son, who is currently studying at Harvard, have been circulating in China for years.

The Mail understands that Mr Heywood was an ‘agent of influence’, a well-placed figure whose work made him of use to the intelligence services, though not a full-time officer or undercover operative.

‘Someone in his position will always be asked what he knows and who he has seen and what gossip he has picked up,’ a well-placed source said.

‘He was in bed with a very big fish.

‘Hakluyt is packed with ex-SIS people and you know what they say: once MI6, always MI6.’

A source close to Mr Hague, who has ministerial responsibility for MI6, said: ‘He was not on our payroll. He was not an employee.’

Questions remain: It is thought that Mr Heywood was killed in one of the mountain-top hotel’s ?600-a-night villas, but details of his demise are sketchy

The Foreign Office refused to confirm or deny whether Mr Heywood was an MI6 informer.

‘We don’t ever get into saying one way or the other,’ an official said. ‘If you deny it when it’s not true you’d have to confirm it when it was.’

But a senior Whitehall source confirmed: ‘It is not unusual for people like that to pop in for a quiet coffee from time to time.’

Hakluyt issued a statement last week saying: ‘Neil had a long history of advising Western companies on China and we were among those who sought his advice. We are greatly saddened by his death.’

The chairman of the British Chamber of Commerce in Chongqing, Richard Cao, told the Mail it was likely that Mr Heywood helped the corrupt couple smuggle from China at least ?1billion, which they had accumulated during two decades of abusing their power and influence.

He said: ‘It will be hard to trace the money because it will be hard to prove it is illegal funds.

‘Even it if was gained from state-owned assets, it must have been washed very clean by the Bos and Mr Heywood.’

The Chinese government is now attempting to follow the paper trail and recover the illegal funds, with an unnamed official claiming that greed and money ultimately led to Mr Heywood’s murder.

A government source said: ‘It’s highly likely Heywood was involved in transferring Bo’s money out of the country, and we believe this is the impetus behind his killing.

‘This British guy must have done something the Bos did not want to be publicised.’

Private: Mr Heywood’s body was found at the three-star resort – the same hotel where Mr Bo’s wife, Gu Kailai, the prime suspect in his murder is said to have shown her power by getting the local police chief to subdue rowdy diners

The British Government is under growing pressure to explain why Mr Hague was informed about the significance of Mr Heywood’s death only in February, three months after he was killed and a month after Chinese authorities told the Foreign Office Mr Heywood’s death was suspicious.

David Cameron has also demanded answers from MI6 officers and diplomats about how the Government ended up blindsided by the murder.

A report in the Hong Kong media yesterday claimed that Mrs Gu has terminal bone cancer and only has ‘a year or two’ to live.

It was alleged that since she became ill, she has undergone a sudden change in character, becoming increasingly flirtatious and ‘promiscuous’.
Mr Bo is now under virtual house arrest, while Mrs Gu is being held in police custody.

Police investigating the murder have made dozens of arrests, according to reports, including that of billionaire Xu Ming, one of China’s richest men.

Mr Heywood’s Chinese wife, Wang Lulu, remains at the family’s exclusive gated villa compound in Beijing with their children aged seven and 11, who hold British passports.

It is understood the British Embassy has granted Mrs Heywood a visa which would enable her to come to this country.

Marble-clad hotel where Old Harrovian was killed

Perched on a hillside on the outskirts of China’s fastest growing city is the secluded Nanshan Lijing Hotel.

Also known as the Lucky Holiday Hotel, it was here, in one of its ten private villas, that the body of Neil Heywood was found last November.

The Old Harrovian was allegedly lured to the three-star resort by a representative of Bo Xilai and Gu Kailai – one of China’s most powerful political families.

Suspicious: The reception area of the Nanshan Lijing Holiday Hotel in Chongqing, China, where British businessman Neil Heywood was found dead

Police believe he was murdered for daring to threaten to expose the couple’s crooked business dealings.

The ?600-a-night villas, which boast marble floors and chandeliers, and an eccentric mix of Chinese and European furniture, were the favoured location from which Mrs Gu ruthlessly wielded her power.

It was here that she struck multi-million pound deals with shady generals and corrupt Chinese officials, and hosted exclusive dinner parties and private lunches.

Richard Cao, chairman of the British Chambers of Commerce in China, said: ‘It was at the Nanshan Hotel that a deputy police chief tried to gatecrash a private dinner party Gu was holding.

‘He arrived drunk and got upset because Gu’s bodyguards would not allow him in the restaurant. Despite his rank, she had him sacked.’

In another incident, a group of off-duty police officers eating in the restaurant ignored Mrs Gu’s request to quieten down. All were sacked.

By Rob Waugh

The rich ‘few’ do more damage to societies than simply siphoning off wealth.

Creating a gap between rich and poor causes violence that affects every level of society.

Men are more likely to be violent if the country they live in is unequal, researchers have found.

A feeling of unfairness seems to fan flames of violence.

Those who live in a society where there is huge gap between the rich and the poor will be more inclined to start fights and brawl with other people.

Although traditional factors like competition between men do play a part, how unfair men perceive the world to be is also a factor.

The study from professor John Archer of the University of Central Lancashire found that, as one would expect, men are in general far more likely than women to be aggressive.

This difference peaks in their 20s when men are more likely to be arrested for assault or using weapons than any other time in their life.

Men are also more likely to engage in risky behaviour at massively higher rates than women.

Professor Archer says that hormonal changes in men can explain such behaviour, notably strength, weight and height differences.

But another important factor he identified was unequal wealth which apparently may also lead to men becoming violent and physically aggressive.

In his report Professor Archer said: ‘The research evidence highlights that societal issues such as inequality of wealth and competition between males may contribute to the violence we see in today’s society.’

Recent figures appear to back up his theory – Britain is growing ever more unequal and remains violent compared to other nations.

Does inequality breed violence? The top 10 per cent of working age people earn 12 times more than the bottom 10 per cent, the figures show

According to a report released in December by thinktank the OECD, income inequality is rising faster in Britain than any other rich country.

The top 10 per cent of working age people earn 12 times more than the bottom 10 per cent, the figures show.

That is up from a comparable figure of eight times in 1985 – the the average income gap in developed nations is less at nine to one.

A new class of ‘Super Rich’ has developed in Britain in recent times too.
Before the global recession of 2008, the OECD said that the very wealthiest in society, or the top 0.1 per cent of earners, held a staggering five per cent of all pre-tax income.

At the same time crime in Britain is still relatively high.

Demonstrator wears pig mask in the UK: The top 0.1% of the super-rich earn 5% of the country’s income

Statistics from the European Commission and United Nations from 2009 showed that Britain’s violent crime record is worse than any other country in the European union.

The figures showed that the UK also has a worse rate for all types of violence than the U.S. and even South Africa – widely considered one of the world’s most dangerous countries.

Professor Archer’s findings were presented at the British Psychological Society Annual Conference in London.

By Rob Waugh

After Mark Zuckerberg’s billion-dollar purchase of photo-sharing website Instagram, start-ups are vying to become ‘Instagram for video’.

Effects-heavy video-sharing app Viddy pulled into pole position this week as it became the top free app for iPhone this week.

The service, which lets users share short videos is described as a ‘Twitter’ for video.

It’s aimed at sharing short videos rapidly, and adding the same sort of ‘hip’ effects that have made Instagram a cult web hit.

‘Since launching its Timeline app in February, Viddy has seen over 15 million interactions with its content on Facebook, with over 1.7 million users signing on,’ says TechCrunch, which reported on the success of the new start-up.

‘Viddy also says that it’s averaging 300K new registered users per day, an average that has seen a significant bump since February.’

‘Turn everyday moments into perfect little movies with Viddy on iPhone,’ say the app’s creators. ‘So next time you catch that pristine sunset over the Pacific, make it more than a memory. Then share it with your Viddy community and upload them to Facebook, Twitter, and YouTube.’

Users can ‘follow’, ‘like’ and share videos as easily as via Instagram – and the service already has eight million users

The service, which lets users share short videos is described as a ‘Twitter’ for video

The app has seen a huge increase in traffic after launching a Facebook Timeline app which allowed users to showcase videos via their Timelines

A Facebook Timeline app has added to the service’s popularity – allowing users to record their life in short video clips, much in the same way as ordinary ‘Timelines’

Clips recorded and shared via the service are limited to 15 seconds in length.

‘If you’ve seen what Instagram has done for phone-shot photos, you can imagine that Viddy may soon do the same for videos,’ the New York Times said in a review of the app

As with Instagram, the app includes effects such as vintage film styles, retro-style camera hues and advanced effect such as transitions and music tracks.

Viddy also allows users to share videos instantly via Facebook, Twitter, YouTube and Tumblr.

Videos can be shared publicly or with friends, and can be tagged and commented on, just as with posts on Facebook or Instagram.

Celebrities such as Jamie Oliver use the app to share their images with fans

While Instagram is just one of many photo-editing and photo-filter suites available for either platform, users give it a top rating for the ease of applying filters and the very simple way of sharing images via sites like Facebook and Twitter.

Instanram also allows users to share images through its own sharing website, which has proved immensely popular with fans.

Many celebrities, from Jamie Oliver to Jessica Alba, also take advantage of the app

By Rob Waugh

Facebook is to go public on May 17th, according to multiple sources close to the company.

The world’s biggest social network is expected to seek a $100 billion valuation in its IPO, the most anticipated stock offering from Silicon Valley since Google Inc went public in 2004.

Some sources say that Facebook will seek to raise $10 billion from an initial public offering of shares – others say that the social network will seek a smaller sum.

Multiple sources close to the company have said that Mark Zuckerberg’s social network will seek an Initial Public Offering of shares on May 17th

Facebook’s recent ‘new look’ helps commercial partners create apps that bring music, film and food into people’s profile pages

Love it or hate it: Facebook’s new ‘timeline’ look became mandatory in a few weeks after a test version launched in New Zealand

The IPO is dependent on approval by America’s Securities and Exchange Commission.

The flotation will vault Facebook into the ranks of the largest public companies in the world, on par with the likes of McDonald’s, Amazon.com and Visa.

The valuation would price the company at around $40 per share.

An initial public offering is the launch of a company on the stock market where shares in the company are offered for the first time, resulting in a share price being set and the company being valued.

‘Investors want as high a price as possible so that the secondary market won’t look like a problem,’ said a source speaking to TechCrunch, which reported the leaks.

Already a billionaire on paper, Mark Zuckerberg could cash in a fortune on the open market

The date, and valuation, are in line with previous rumours about Facebook’s upcoming Initial Public Offering.

The world’s largest social network, a dorm room project for Harvard dropout Mark Zuckerberg that exploded in popularity and vaulted to Silicon Valley’s top tier within 8 years, said in its preliminary filing that its net income rose 65 per cent to $1billion in 2011, off revenue of $3.71billion.

At $100 billion valuation, the company started by Zuckerberg in a Harvard dorm room would have double the valuation of Hewlett-Packard.

Facebook’s IPO would dwarf that of any other dotcom waiting to go public.

Facebook has become one of the world’s most popular Web destinations, challenging established companies such as Google Inc and Yahoo Inc for consumers’ online time and for advertising dollars.