The number of businesses in the UK which are suffering from ‘significant’ or ‘critical’ financial problems on the first quarter of 2011 has risen to 186,000, according to a report by insolvency specialists Begbies Traynor. This is an increase of 26 per cent over the figure for the third quarter of 2010 and is 15 per cent more than the same quarter in 2010.
Another report shows a 4 per cent jump in the number of retail businesses at ‘high risk’ of insolvency and there has also been a 15 per cent increase in the number of retails using company voluntary arrangements compared with 2010.A
report by accountants PwC also revealed an increase of more than 12 per cent in corporate insolvencies with retailing the worst-hit sector.
Things are tough in retailing and the building industry was recently identified as having had a particularly bad winter.
For advice on managing your trade risk, contact us.
Posted May 16th, 2011 in Uncategorized |
Redundancies involving senior staff often involve a compromise agreement under which the employee agrees to compromise their right to take a case to the Employment Tribunal in exchange for a payment. When a compromise agreement is being negotiated, it is very important to take legal advice, which raises the question of the allowability of legal fees.
In the past, HM Revenue and Customs (HMRC) have dealt with this by way of an extra-statutory concession, which allows the employer to pay the employee’s professional fees and claim a tax deduction for the expenditure and the employee is not deemed to have received a benefit in kind for tax purposes, provided certain formalities are observed.
HMRC have now sought to regularise the position, but the draft regulations that have been published do not appear to extend the concession to compromise agreements which cover the compromise of certain types of potential claims, such as those under the Equality Act or those undertaken following a successful conciliation by ACAS.
Representations have been made to HMRC and it is to be hoped that the revised regulations will cover all forms of compromised claims.
Posted May 15th, 2011 in Uncategorized |
Twitter, social media and privacy
There is a plethora of articles about this topic all over the news this week, so we will be brief. Lawmakers are urgently looking at the position whereby social media sites seem to be immune from the law. Twitter has stated it will not censor it’s members that breach injunctions, even if their tweets are in contempt of court and this is making a mockery of the law, whatever you think of the underlying issue of “super injunctions” material being potentially considered to be in contempt of court. Part of the problem for legal enforcement is jurisdictional issues. Twitter is not based in the Uk, so technically is not bound by an injunction under English law. This is becoming a political issue and don’t be surprised if Governments get together to ensure cross jurisdictional application of laws and/or ISP’s may be forced to disclose the identity of users. Watch this space, interesting times !
Tags: injunctions, legal disputes, solicitors newcastle
Posted May 13th, 2011 in Legal News |
Possible important changes to employment law
A major further review of employment laws remains ongoing with the current Government determined to reduce the cost of civil courts, including the Employment tribunal, as a drain on taxpayers resource. The number of Tribunal cases has continued to rise and it appears the balance on employment law, a highly political area, is being titled in favour of employers. The press are suggesting that the new Government plans will include :-
- reducing the amount of time employers have to consult staff before making them redundant.
- Cap maximum awards for discrimination cases
- the right to request flexible working and shared parental leave will be brought forward to 2015, earlier than previously mooted and possibly a counterbalance to the other pro-employer changes
We stress that at the time of writing, these are not confirmed. We will update on this issue further.
Tags: Employment law, employment lawyers Newcastle, solicitors newcastle
Posted May 13th, 2011 in Employment law, Legal News |
The laws against corrupt practice in the USA are both strong and pervasive, as a recent case illustrates.
It involved a London solicitor who is a US citizen and who was charged in the USA in connection with corrupt practices with regard to contracts worth more than £4 billion that had been awarded in Nigeria to a consortium represented by the solicitor. He paid bribes to high-ranking Nigerian officials between 1996 and 2004.
He fought extradition to the USA on the grounds that the time-lag between the offences and the case coming to trial prevented a fair trial and that the offences were too distant from the US for the courts there to have authority.
Despite that fact that only one of the member firms of the consortium was American, he was extradited to the USA and negotiated a plea bargain with the US authorities. This involved him agreeing to forfeit nearly $150 million.
He is scheduled for sentencing in June and could face a maximum prison sentence of five years for each of to two offences.
Posted May 12th, 2011 in Uncategorized |
The new ‘mediation first’ rule applicable to divorce and separation have been well publicised, but moves to make the process more jargon-free have not received much attention.
The following changes have been made which will, it is hoped, help the participants in family proceedings better understand the process.
Old legal term New legal term
Ancillary relief Financial order
Divorce decree Matrimonial orders
People without mental capacity Protected parties
Guardian ad litem Children’s guardian
Next friend Litigation friend
Posted May 11th, 2011 in Uncategorized |
The ban on using cookies where ‘explicit consent’ is not given, due to come in on the 25th, is likely to be postponed until the autumn pending the development of a ‘browser based’ solution to the issue.
Owners of websites are advised to understand how their websites use cookies and to consult with their webmasters to ensure that when the regulations are in place, they are able to comply.
Posted May 10th, 2011 in Uncategorized |
Avoiding penalties for under-declarations of output VAT is a tricky business, even when the mistakes are innocently made. The VAT legislation allows penalties to be forgiven when there is a ‘reasonable excuse’, but HM Revenue and Customs (HMRC) are well-known for their singular view of what is and what is not ‘reasonable’.
On the plus side, this means that there is a regular flow of cases testing the boundaries of reasonableness.
Two recent cases illustrate the point. The first involved a private members’ club that had received supplies of water from a VAT-registered supplier. HMRC had told the club that VAT-registered businesses are generally required to chargeVAT on their supplies. Theclub made attempts to find out if the water it purchased carried VAT and was told by another water supplier that VAT was charged on such supplies.
The club incorrectly reclaimed VAT on bills totalling more than £200,000. HMRC subsequently levied a surcharge of more than £4,000 for the error.
The club appealed against the decision – and won. It had made a reasonable effort to ascertain the correct VAT position and had made an honest mistake in completing the return.
In the second case, a supplier of food products took on a temporary employee in an accounting capacity while the accounts administrator was on holiday. A batch of zero-rated purchase invoices was wrongly coded as being VAT-inclusive. In addition, some sales invoices were miscoded into the subsequent VAT period.
HMRC levied a misdeclaration penalty and this was upheld by the Tribunal.
This may seem harsh, but HMRC would clearly be in a difficult position if merely having incompetent or improperly trained staff proved to be a sufficient excuse for failing to pay VAT due.
Posted May 10th, 2011 in Uncategorized |
Late payment is a persistent problem for many traders and legislation to tackle the problem has been largely ineffective thus far.
To combat the problem, the European Parliament recently published a Directive aimed at reducing the problem in ‘business-to-business’ transactions. At the moment, the necessary transposition into national law is scheduled for 2013.
The Directive proposes that in normal circumstances:
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‘provision should be made for business-to-business contractual payment periods to be limited, as a general rule, to 60 calendar days…’ (para 13);
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statutory interest due for late payment should be calculated on a daily basis as simple interest (para 15);
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a creditor should be allowed to resort to charging interest for late payment without giving any prior notice of non-performance or giving other similar notice reminding the debtor of his obligation to pay (para 16);
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creditors should be able to claim compensation for recovery costs, including administrative costs connected with late payment (paras 19 and 20); and
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the abuse of freedom of contract to the disadvantage of the creditor should be prohibited.
There are numerous more detailed provisions.
Posted May 9th, 2011 in Uncategorized |
The Department for Business, Innovation and Skills has published guidance for employers and those in the recruitment sector on the Agency Workers Regulations 2010 (AWR), which come into force on 1 October 2011.
The AWR will give agency workers the same basic terms and conditions of employment as if they had been recruited directly by the hirer, once they have completed a qualifying period of 12 calendar weeks in a particular jobs, but will not fundamentally affect employment status or how agency staff are placed and managed.
The 50-page guidance covers:
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the scope of the AWR;
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qualifying for equal treatment;
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how to identify basic working and employment conditions and the relevance of a ‘comparator’;
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pay;
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working time and holiday entitlement;
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pregnant workers and new mothers;
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pay between assignments;
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information, liability and remedies;
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information a Temporary Work Agency (TWA) must have before supplying an agency worker; and
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compliance information required by a TWA from a hirer.
Employers are advised to consider how the AWR will affect them and have procedures in place by 1 October to ensure compliance. For individual advice, contact us.
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Posted May 9th, 2011 in Uncategorized |
