COMPANY LAW
THE COMPANIES ACT AND LIMITED LIABILITY PARTNERSHIPS
Proposals for the application of certain provisions of the Companies Act 2006 -including those relating to execution of documents, business names and residential address - to limited liability partnerships, have been published for consultation by the Dept for Business, Enterprise ft Regulatory Reform. At present, detailed provisions in the Limited Liability Partnerships Act 2000 are based largely upon the Companies Act 1985, which was amended and re-stated by the 2006 Act.
The DBERR consulted in February 2007 on a general approach that would ensure LLPs remained an attractive corporate vehicle with an identity distinct from companies. These resulting proposals aim to create a regime that is coherent and strikes the right balance between the interests of LLPs and those who do business with them. The intention is to publish draft regulations in February 2008.
'Proposals for the application of the Companies Act 2006 to LLPs' (Urn 07/1476) is available at http://tinyurl.com/2e997s - pdf (DBERR Publications Orderline; tel: 0845 015 0010). Responses by 6 February, 2008.
IMPLEMENTING THE 2006 COMPANIES ACT
Doubts that Companies House can adjust its systems and processes in time to deal with the mass of changes to company law introduced by the Companies Act 2006 has caused the Dept for Business, Enterprise & Regulatory Reform to announce a 12 month postponement of the commencement date for most of the final tranche of provisions originally scheduled for commencement on 1 October 2008.
Those provisions which do not necessitate systems changes could still be implemented on schedule, although DBERR recognises the complexity of phased implementation. They include objection to company names, trading disclosures and provisions relating to corporate and under-age directors. DBERR is consulting with stakeholders on the implementation dates of these and other provisions.
Commencement of the first tranche of provisions went ahead on 1 October 2007 and the second tranche will come into force on schedule in April, 2008.
The Act represents a massive update of company law designed to reflect modern needs and technologies and make it easier to set up and run a company. 'Companies Act 2006 - a summary of what it means for private companies' and a more detailed document,
'Companies Act 2006 - private company information' are among a range of information and guidance available at http://tinyurl.com/ 38sqqa (DBERR Public Enquiries; tel: 020 7215 5000).
CONSUMER LAW
LOW AWARENESS OF LEGAL EXPENSES INSURANCE
Despite the increasing market penetration of Legal Expenses Insurance (LEI), with 28m adults currently owning the product, new research published by the Ministry of Justice reveals that less than one in four consumers have heard of either 'before the event' (BTE) or 'after the event' (ATE) LEI. Many more appear not to know how to use it.
LEI, which provides the policyholder with a relatively inexpensive mechanism for resolving a range of legal problems or disputes, is usually sold as an add-on to motor or household insurance. BTE insurance is important because it provides people with a means of getting advice and assistance when trying to resolve disputes. Among a number of steps recommended in the report are that:- insurance groups and consumer bodies should agree ways of promoting the product; the name should be changed to one consumers are more likely to understand; employers should provide LEI for employees and housing associations should provide it for tenants.
The market for BTE legal expenses insurance: prepared on behalf of the Ministry of Justice' is available at http://tinyurl.com/32buxr - pdf (Ministry of Justice General Enquiries; tel: 020 7210 8500).
INSOLVENCY SERVICE INVESTIGATION ENDS PUBLISHING SCAM
A Manchester-based company selling advertising space in a business-to-business crime prevention booklet has been wound up in the High Court, following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service. In addition to finding that the company, Push Solutions Limited, was merely a continuation of other businesses closed down in the public interest, the investigation revealed there appeared to have been threats to collect debts incurred for non-existent services.
From evidence collected by the CIB, the secretary of state was able to present a winding-up petition, as a result of which a provisional liquidator was appointed and £58,000 held in the company's bank account was secured.
Public enquiries about the affairs of Push Solutions Limited should be made to the Official Receiver on 0161 934 4182.
CREDIT CARD COVER FOR OVERSEAS PURCHASES
Customers who use their credit cards to purchase goods overseas will continue to be protected, following a landmark House of Lords ruling that confirmed section 75 of the Consumer Credit Act 1974 applies to overseas, as well as domestic, purchases. The ruling rejects an appeal by high street banks against a similar ruling by the court of appeal and confirms that credit card issuers are jointly and severally liable with suppliers, if the consumer has a valid claim against the supplier for misrepresentation or breach of contract. Section 75 covers foreign transactions where:-
A consumer uses a UK credit card to buy goods or services while abroad.
A consumer orders goods or services from a foreign supplier while abroad for delivery into the UK.
A consumer in the UK buys goods or services from overseas by telephone, mail order or over the Internet.
There are face-to-face pre-contract dealings with a foreign supplier temporarily in the UK, or with a UK agent of a foreign suppler, but the contract is not completed in the UK.
Office of Fair Trading v Lloyds TSB Bank pic and Others, House of Lords, Judgment 31 October 2007 (http://tinyurl.com/3apobx).
MONEY IN DORMANT ACCOUNTS TO BE INVESTED IN THE COMMUNITY
Money that has laid dormant, without any customer activity, in bank or building society accounts for 15 years may be reinvested in the community, under the Dormant Bank and Building Society Accounts Bill, which has commenced its journey through parliament.
If the account-holder cannot be traced, the money would be transferred to a Financial Services Authority regulated central reclaim fund. Consumers will be able to reclaim their money at any time by continuing to deal with the bank where it was deposited. The rest of the money will be invested in the community, with the focus in England on youth services, financial inclusion and - resources permitting -social investment. Ministers in the devolved governments will determine their own priorities.
The Dormant Bank and Building Society Accounts Bill (HoL2), ISBN 0 10 843657 4, TSO, £5 is available at http://tinyurl.com/35qvcc -pdf. Explanatory notes are available at http://tinyurl.com/3dt6lh - pdf (The Stationery Office; tel: 0870 600 5522).
INTERNET AUCTION SITES AGREE TO HIGHLIGHT CONSUMER RIGHTS
Following talks with the Office of Fair Trading, the online auction sites eBay, eBid, CQout, QXL and Tazbar have agreed to include advice to consumers and links to other sites that explain their rights under The Consumer Protection(Distance Selling) Regulations 2000 / 2334 (http://tinyurl.com/76p6x) (amended by Regulation 2005 / 689 - http://tinyurl.com/ yvmrvm). An OFT Internet shopping market study recently found that some businesses trading on online auction sites were failing to identify themselves as businesses.
The DSR oblige businesses to give potential customers certain information, send an order confirmation and allow a cooling-off period of seven working days. Guidance from OFT for businesses selling online or at a distance is available at http://tinyurl.com/26fn5z. Tips for consumers are available at http://tinyurl.com/24jxft (Office of Fair Trading Public Enquiries; tel: 0845 722 4499).
HELPING CONSUMERS MAKE INFORMED CHOICES
More than 50 safety warnings for a toaster, 17 recycling symbols which few people recognise and store card agreements that take an hour to read are cited as examples in a joint Dept for Business, Enterprise ft Regulatory Reform and National Consumer Council report, which highlights how much consumer information is never read because it is too long or too complicated.
DBERR has accepted the report and its recommendations and announced a series of measures that include:-
Reviewing the information provided on consumer credit agreements to make it clear, simple and useful for consumers.
Testing information on consumers before applying it to goods and services and ensuring it is regularly reviewed.
Greater emphasis on the desired outcome of the information but greater freedom to businesses on the way it is provided.
A small print award to recognise best practice.
The report, 'Consumer information and regulation', DBERR's response and a consumer document, 'Warning: too much information can harm1, are available at http://tinyurl.com/3asse6 (DBERR Public Enquiries; tel: 020 7215 5000).
EMPLOYMENT
GUIDE TO NEW HOLIDAY ENTITLEMENT
Guidance on holiday rights for full and part-time workers and help with calculating holiday pay are available from a free guide, 'Holidays and holiday pay', which has been published by Acas following the increase of the statutory holiday entitlement by 4 days from 1 October 2007 for those who work a five-day week. There will be a further 4 day increase from 1 April 2009. The guide is available at http://tinyurl.com/3yf4vb - pdf(Acas Publications Orderline; tel: 08702 429 090).
A GUIDE TO THE RIGHTS OF EMPLOYEES AND WORKERS
The Dept for Business, Enterprise Et Regulatory Reform guide to the rights and responsibilities of employees and workers, and to the corresponding rights and responsibilities of employers, has been updated to reflect changes in the employment regulations which came into force in October, 2007.
The guide, which carries the warning that developments in case law could affect the rights it describes, includes sections covering the rights that apply to: pay; dismissal and notice periods; parental legislation; other time off; anti-discrimination; and other statutory
employment rights. A section also explains how employees can make complaints and the remedies available.
'Individual rights and responsibilities of employees: a guide for employers and employees: October 2007' (Urn 07/1416) is available at http://tinyurl.com/2mc498 - pdf (DBERR Publications Orderline; tel: 0845 015 0010).
INTRODUCING ADDITIONAL PATERNITY LEAVE AND PAY
HM Revenue ft Customs has confirmed that measures extending Statutory Maternity Leave, Maternity Allowance and Statutory Adoption Pay from 39 to 52 weeks and introducing additional Statutory Paternity Leave and Pay of up to 26 weeks will not be implemented for babies due on or after April 2009.
The government's goal remains to implement the changes by the end of this parliament and the announcement is intended to give employers some clarity and further time to make their preparations. HMRC has now started planning implementation for babies due on or after April 2010 (see http://tinyurl.com/2jbud6, or contact your local tax office).
EARLY ADVICE AVERTS TRIBUNALS, CLAIMS ACAS
Independent research commissioned by Acas suggests that 16,000 employment tribunals in 2006 were averted because employers or employees sought advice on workplace problems from the Acas helpline at an early stage, saving businesses some £120m. The research, carried out by the Institute of Employment with employers, employees and third parties, showed discipline, dismissal and grievance are the key issues to have resulted in 23% of employees considering making a tribunal claim. 30% of these subsequently decided against pursuing their claims as a result of information provided through the helpline. Almost 50°/o of employers said they had been prompted by information provided by Acas to f update or improve their policies, while 45°/o had been motivated to introduce new policies. ~
'Research Paper: Acas helpline survey 2007' (Ref 03/07) is available at http://tinyurl.com/ 2rqc7v - pdf (Acas Publications; tel: 08702 429090).
EXTENDING RIGHTS TO FLEXIBLE WORKING
Sainsbury's Human Resources director, Imelda Walsh, has been commissioned by the Dept for Business, Enterprise & Regulatory Reform (DBERR) to lead an independent review to determine how the current rights of parents of children under 6 and disabled children can be extended to parents of older children. A formal consultation will be held after the review is published to gauge the views of employers, unions and other stakeholders - although their views will also be canvassed for the review.
Part-time working is now available in 92% of workplaces, compared with 81% in 2003, according to the Work-Life Balance Employer Review 2007. 92% of employers also believed that people work best when they can balance their work with other aspects of their lives. 60% of employers reported an improvement in staff retention, while 58% reported some, or a significant, increase in productivity.
However, 67% reported that it was not easy trying to accommodate employees with different patterns of working and 45% reported that it caused resentment when workers took up flexible working practices.
The third work-life balance employer survey: executive summary1 (DBERR Employment Relations Research Series No 86: Urn 07/1586) is available at http://tinyurl.com/2fj3ms - pdf (DBERR Publications Orderline; tel: 0845 015 0010).
COMPULSORY RETIREMENT CAN BE JUSTIFIED, RULES ECJ
Even though a domestic law providing for compulsory retirement at a set age constituted direct discrimination under European age discrimination legislation, it could still be justified if it pursued a legitimate aim of national employment policy.
In a ruling that is relevant to the UK, the European Court of Justice has held that a Spanish law, which allowed collective agreements permitting the termination of employment contracts when workers reached a specified age, was justified because it helped to regulate unemployment.
While collective agreements are less common in the UK than in the rest of Europe, the ruling also applies to individual contracts. Nevertheless, it has not deterred Age Concern, which is supporting its offshoot, Heyday, in challenging the get-out in UK age discrimination legislation that allows employers to impose compulsory retirement on their workers, so long as they follow certain procedures.
Age Concern believes there are significant differences between the Spanish and UK cases and that the ECJ has 'an appetite' to test such exemptions on a case by case basis. It intends to press ahead with its case, which has been on hold pending the Spanish ruling.
Palacios de la Villa v Cortefiel Servicios SA, Case C-411/05, European Court of Justice, Judgment 16 October, 2007 (http://tinyurl.com/ 23yg4n).
ENVIRONMENT
HOMEOWNERS GET GREEN BOILER RATING
From 2 October, homeowners have been entitled to ask their maintenance engineers to give their boilers an A-G energy rating, together with a checklist of energy improvements to cut fuel bills. The free energy ratings were introduced in time for people to carry out their annual maintenance check before winter set in as part of the Dept for Communities 6t Local Govt's wider drive to help consumers make their homes more environmentally efficient.
Concurrently new DCLG guidance has been published to help those responsible for business premises think about how to monitor energy efficiency and streamline their expenditure. The guidance complements the energy assessment rating for office heating systems and the four year energy efficiency loans of up to £100,000, which are available to help eligible small and medium sized businesses make changes sooner rather than later. Businesses can also apply for tax relief via enhanced capital allowances that allow them to write off the whole cost of energy saving machinery against taxable profits in the year of purchase.
Further information on the energy efficiency scheme for boilers campaign is available at http://tinyurl.com/38pdea (DCLG Public Enquiries; tel: 020 7944 4400). Information on the interest free energy-efficiency loans is available at http://www.carfaontrust.co.uk/loans (Carbon Trust Enquiries: tel: 0800 085 2005).
ONLINE TOOL TO REDUCE THE CARBON FOOTPRINT OF CONSTRUCTION SITES
All construction companies now have access to the spreadsheet-based, online carbon footprint reduction tool, which, from November, has been mandatory to use during the planning stage on all Environment Agency construction projects.
Designed originally to calculate the carbon footprint of new flood defence schemes, the tool provides a way to identify where significant carbon savings can be achieved during the planning and design process. Its features take into account:- estimating the C02 in the raw materials used; direct emissions from personal travel by employees and the transportation of materials; emissions from site activities; comparison of waste management options.
The EA Carbon Calculator is available at http://tinyurl.com/3yj5vm (Environmental Agency General Enquiries: tel: 08708 506 506).
CHANGES TO THE ENVIRONMENTAL IMPACT ASSESSMENT REGULATIONS
Two related European Court of Justice rulings on 4 May 2006 (C-290/03 R v London Borough of Bromley ex parte Barker -http://tinyurl.com/2rhz23; and C-508/03 Commission v UK - http://tinyurl.com/2sa2j8) have established that, where development consent requires a multi-stage process, it must be possible to allow for an Environmental Impact Assessment (EIA) at the later stage if it has not been possible for it to be carried out or completed at the initial stage. For example, in an application for outline planning permission where, following outline consent, application has to be made to the local planning authority for the approval of certain reserved matters. Proposals to amend The Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999 / 293 (http://tinyurl.com/2dercl) in England to take account of these rulings have been published for consultation by the Dept for Communities Et Local Govt. As well as enabling EIA to be carried out at reserved matters stage for outline planning applications, the draft regulations enable EIA to be applied to conditions attached to full planning permissions for all types of developments, including minerals developments, which require the submission of certain detailed matters and their approval by the planning authority before the development may proceed.
The consultation, The Town and Country Planning (Environmental Impact Assessment) (England) (Amendment) Regulations 2007' is available at http://tinyurl.com/2qdbmv - pdf (DCLG Publications; tel: 0870 1226 236). Responses by 11 January, 2008.
CALL FOR CRACKDOWN ON EXCESSIVE PACKAGING
The Local Government Association is calling for tougher laws and serious fines to ensure firms cannot justify excess packaging on 'consumer acceptance' and 'marketing', following the publication of new figures that show no firms have been prosecuted for using excessive packaging for 18 months. It describes the current legislation - The Packaging (Essential Requirements) Regulations 1998 / 1165' (http://tinyurl.com/295o7m), updated by the 2003 / 1941 Regulations (http://tinyurl.com/huh7f) - as a 'toothless tiger' and argues the current maximum fine of £5,000 is a 'drop in the ocean' for big companies.
The LGA calls on supermarkets in particular to take urgent action to reduce packaging, following new research that shows local retailers and market stalls produce much less packaging and that the packaging they do use is more recyclable. Marks ft Spencer was the worst performing supermarket, with only 60°/o of a regular household shopping basket being recyclable. Asda performed best, with 70%.
A report of the LGA research, 'War on waste: food packaging study: wave V, is available at http://tinyurl.com/2t7qav - pdf (LGA Enquiries; tel: 020 7664 3131).
TACKLING CAR WASH POLLUTION
New Pollution Prevention Guidelines (PPG13) from polluting waterways have been published jointly by the Environment Agency for England and Wales, the Scottish Environment Protection Agency and Northern Ireland's Environment and Heritage Service. The guidelines provide advice in areas such as where vehicles should and should not be cleaned, obligations relating to discharges to public sewers, and options if public foul sewers are not available.
PPG13, 'Pollution prevention guidelines: Vehicle washing and cleaning', is available at http://tinyurl.com/33aqvw - pdf (Environmental Agency General Enquiries: tel: 08708 506 506).
CLIMATE CHANGE BILL STRENGHTHENED
The draft Climate Change Bill's original target of reducing carbon dioxide emissions by at least 60% by 2050 and 26-32% by 2020 is to be reviewed by an independent committee on climate change to assess whether it should be made stronger still and whether other greenhouse gas emissions from shipping and aviation should be included in it.
Other changes designed to strengthen the Bill and make it more transparent are detailed in a Command Paper published following a three month consultation and pre-legislative scrutiny by three parliamentary committees.
They include:-
o Strengthening the role of the independent committee and increasing its independence from government.
o Increasing transparency by requiring the committee to publish its analysis and advice to government on setting five-yearly carbon budgets.
o Strengthening parliament's ability to hold government to account.
o Providing better information and more streamlined reports.
o Strengthening the country's preparedness for climate change by requiring the government to regularly assess the risks and report to parliament on its proposals and policies.
The Bill will also:-
o Introduce the Carbon Reduction Commitment.
o Help ensure the Renewable Transport Fuel Obligation delivers environmental benefits.
o Empower local authorities to pilot incentives for household waste minimisation and recycling, if they so desire.
Command Paper, Taking forward the UK Climate Change Bill', and a summary of the consultation responses are available at http://tinyurl.com/25j33o (Defra Public Enquiries; tel: 0845 933 5577).
FARMING, FISHING & FOOD
IMPACT OF MANURES GUIDANCE
The Food Standards Agency is seeking the views of the fresh produce industry and other interested parties on the regulatory impact of new guidance aimed at providing growers with practical advice on reducing the risk of contamination when using farm manures. The guidance has already been revised following earlier consultation with stakeholders and the formal assessment of the regulatory impact is necessary before the revised version is published. Some 90m tonnes of farm manures, which may contain bugs such as E.coli, salmonella or listeria, are applied each year to 4m hectares of agricultural land in Britain. 'Managing farm manures for food safety: 2005' is available at http://tinyurl.com/yrlbvm (pdf) and the consultation letter requesting comments on this guidance is available at http://tinyurl.com/28bkjl - pdf (Food Standards Agency Publications; tel: 0845 606 0667). (Although the consultation closed on 20 December please refer to the information on 'Consultation Documents'.)
ANIMAL WELFARE STRATEGY
Five key goals are set out in a new strategy developed by Defra to improve animal welfare in England by building new relationships between government and its key partners:-
o Improving the skills and knowledge of animal keepers.
o Developing more robust welfare standards monitoring systems.
o Providing clear and simple information to consumers on the welfare history of animal products.
o Enforcing rules effectively, while minimising burdens on animal keepers.
o Working towards internationally agreed standards for animal welfare.
Defra will work with stakeholders over the coming months to agree an implementation action plan.
'Animal welfare delivery strategy' is available at http://tinyurl.com/2toeza - pdf (Defra Publications; tel: 0845 955 6000).
20-YEAR VISION FOR SUSTAINABLE FISHERIES
A 20-year vision for sustainable fisheries has been published by Defra as a guide for future fisheries policy and to provide direction for everyone with an interest in marine fisheries. 'Fisheries 2027 - a long-term vision for sustainable fisheries' aims to:-
o Explain the changes in fisheries and fisheries management over the past 30 years and what Defra has been trying to achieve.
o Set out the balance that will be struck between economic, social and environmental priorities.
o Clarify, through nine vision statements, what Defra thinks is needed to deliver sustainability.
o Summarise the economic, social and environmental costs and benefits of delivering the vision.
'Fisheries 2027' has been published with 'Delivering Fisheries 2027 - towards an implementation plan', which is to be developed between October 2007 and April 2008 into a shared contract. Both documents are available at http://tinyurl.com/2eljds (Defra Publications; tel: 0845 955 6000).
GUIDANCE ON IMPORTED FOOD REGULATIONS
Responsibility for the enforcement of imported food regulations is the shared responsibility of the Food Standards Agency and its inland enforcement partners, as well as authorities at ports and airports, stresses new guidance produced by the FSA for local authorities. A recent FSA questionnaire revealed that only one in three local and port health authorities carried out sampling in 2006/07, while the FSA considers imported food should account for 10°/o of the total samples taken by inland enforcement agencies as well as port authorities.
'Working together on imported food1, available at http://tinyurl.com/25vnsg (pdf), explains the responsibilities of the authorities and the support available to them from the FSA. It also details future targets for imported food work.
Additional guidance for the food industry is available from the 'Imported Food' section of the FSA website, available at http://tinyurl.com/ 365oy2 (Food Standards Agency Publications; tel: 0845 606 0667).
FIRE RISK ASSESSMENT OF ANIMAL PREMISES
Advice for employers, managers, occupiers and owners of animal premises and stables on how to comply with the Regulatory Reform (Fire Safety) Order 2005 has been published by the Dept for Communities 8t Local Govt. It explains how to carry out a fire risk assessment and identify general precautions that should be put in place.
'Fire safety risk assessment - animal premises and stables' (ISBN 978 1 85112 884 6, £12) is available at http://tinyurl.com/2nyxvg (DCLG Publications; tel: 0870 1226 236).
FSA GUIDANCE ON THE USE OF CERTAIN TERMS
Guidance first issued in 2002 by the Food Standards Agency to advise food manufacturers, retailers, producers and caterers when marketing terms such as 'fresh', 'pure', 'natural' etc should and should not be used has been revised to take account of how consumer understanding of such terms has changed.
The draft guidance - 'Criteria for the use of the terms fresh, pure, natural etc in food labelling' - has been published for consultation at http://tinyurl.com/2k5hjq - pdf (Food Standards Agency Publications; tel: 0845 606 0667). Responses by 21 January, 2008.
HYGIENE GUIDE FOR FOOD WHOLESALERS
Designed to help food wholesalers meet their regulatory obligations, the publication 'Food industry guide to good hygiene practice: wholesale distributors' (ISBN 10 011243 1011,
Code DJL) covers EC Regulation No 852/2004 on the hygiene of foodstuffs and the temperature control requirements of The Food Hygiene (England) Regulations 2006 / 14 (http://tinyurl.com/23pgmy - pdf). It also helps food business operators comply with the relevant microbiological criteria set out in EC regulation 2073/2005.
Produced by the Federation of Food Wholesalers, the guide - which has been officially recognised by the Food Standards Agency - costs £10 in bound paperback format, with bulk discounts available. It can be ordered online at http://tinyurl.com/2s93ye (The Stationery Office; tel: 0870 243 0123 / 0870 600 5522).
UPDATED TECHNICAL GUIDANCE ON SIGNPOST LABELLING
Criteria for breakfast cereals and a modification to the red criteria for high sugars are included in the second issue of the Food Standards Agency's technical guidance for the front-of-pack nutritional signpost labelling approach.
The FSA requires the signpost labelling logo to incorporate each of four core elements:-
o Separate information on fat, saturated fat, sugars and salt.
o Red, amber or green colour coding to provide at-a-glance information on the level of individual nutrients.
o Additional information on the levels of nutrients present in a single portion.
o Use of the specified nutritional criteria to determine the colour banding.
'Front-of-pack traffic light signpost labelling: technical guidance' is available at http://tinyurl.com/yo5y4m - pdf (Food Standards Agency Publications; tel: 0845 606 0667).
FINANCIAL AND LEGAL
PREVENTING UNAUTHORISED DEVELOPMENT OF CARAVAN SITES
Guidance for planning enforcement officers, members of local planning authorities and others on how the planning enforcement system can be used to prevent the unauthorised development of caravan sites has been published by the Dept for Communities Et Local Govt. It provides advice on selecting the most appropriate power, how to take enforcement action and working with the courts, as well as covering human rights and race relations. 'Guide to effective use of enforcement powers - Part 2: unauthorised development of caravan sites' is available at http://tinyurl.com/ 2wt59k - pdf (DCLG Publications; tel: 0870 1226 236).
LATEST REVIEW OF PAYMENT PROTECTION INSURANCE
While the sales practices of firms selling single-premium Payment Protection Insurance (PPI) alongside unsecured personal loans have improved significantly in two key areas, there has been little or no improvement in three others, concludes the latest review of PPI selling standards carried out by the Financial Services Authority.
The vast majority of firms are now making it clear to customers that PPI is optional and cancellation rights are being offered on virtually all single-premium PPI policies. However, many firms are still not giving customers clear information about the product and what it will cost, not telling them the extent to which they are eligible for PPI cover and not telling them why, when advice is given, the recommended policy meets their demands and needs.
Of the 150 firms looked at during the review, four will be subject to further investigation and 20 more cases may also be investigated. In addition, 11 firms have stopped selling PPI, three have cancelled their FSA authorisation to sell PPI and four large firms are reviewing past PPI sales to ensure they were appropriate.
Among other actions, the FSA is now seeking to increase the level of fines on firms whose standards fall below the required level and has published a specific communication for small firms.
The Sale of Payment Protection Insurance: Thematic update' is available at http://tinyurl.com/2h67gh (pdf).
The sale of payment protection insurance -phase III mystery shopping results (Consumer Research 61)' is available at http://tinyurl.com/2bnmmh - pdf (Financial Services Authority Switchboard; tel: 020 7066 1000).
SIMPLIFIED TRADE MARK REGISTRATION
Where the UK Intellectual Property Office's examination of a trade mark application reveals potentially conflicting marks have been registered earlier, the applicant can now opt to proceed to publication and it will be up to the holder of the earlier mark to seek to block the application. The simpler system has been established through amendments to Section 5 of the Trade Marks Acts 1994, which came into force on 1 October. Information about the changes, and two related Statutory Instruments, are available at http://tinyurl.com/2sbwqe (UKIPO Switchboard; tel: 01633 814000).
HALVING THE COST OF PATENT TRANSLATION
The translation costs of a typical patent granted by the European Patent Office could be reduced by some 45°/o when an agreement initiated by the French government in 1999 and approved by the French President in October this year comes into effect in early 2008. Called the London Agreement, it means that patents will be recognised in one of three languages (French, German or English) by all the states that ratify it, saving businesses more than £2,000 translation costs for a typical European patent. It has now been approved by 12 European states and will be implemented in the UK by The Patents (Translation) Rules 2005 / 687 (http://tinyurl.com/3yyyo7 - pdf : Explanatory Memo, http://tinyurl.com/2mlcln - pdf).
Further information is available at http://tinyurl.com/34p5zz (UK Intellectual Property Office Switchboard; tel: 01633 814000).
REVISING THE MACHINERY DIRECTIVE
The machinery directive (2006/42/EC), which is at the heart of the 'new approach' to the introduction of common health and safety standards and CE marking ('Conformite Europeene' = European Conformity) across the European Community, has been revised to provide greater clarity in the core concept of what is a machine and in the dividing lines between itself and the lifts and low voltage directives.
While the new directive in general follows the same principles as the old one, significant changes include a lighter procedure for manufacturers using harmonised standards to produce hazardous products (listed in Annex IV of the directive), who are no longer required to deposit technical documentation for safe keeping by a notified body.
Builders' goods hoists and cartridge operated tools are brought into the scope of the directive and it also seeks to remove previous uncertainties regarding 'partly completed machinery1 by addressing the respective duties of operators at various stages of complex production chains.
Draft regulations are included in the Dept for Business, Enterprise ft Regulatory Reform consultation paper, 'Implementing the new machinery directive 2006/42/EC in the UK' (Urn 07/1215), which is available at http://tinyurl.com/2vojvm - pdf (DBERR Publications Orderline; tel: 0845 015 0010). (Although the consultation closed on 18 December please refer to the information on 'Consultation Documents'.)
ELECTRONIC COMMUNICATION OF BUILDING CONTROL DOCUMENTS
The electronic communication of building control documents will be permitted under a new regime created by proposals by the Dept for Communities ft Local Govt for amendments to three sets of regulations.
Electronic communication of building control, the communication of specified transactions without signatures and the use of electronic transactions on specified documents will all be enabled by proposed changes to the Building Act 1984, Building Regulations 2000 and the Building (Approved Inspectors etc) Regulations 2000. The amendments, which will be made using powers in the Electronic Communications Act 2000, would bring building control legislation in line with industry practice and expectations, claims the DCLG.
'Enabling electronic communication of building control documents - consultation1 is available at http://tinyurl.com/2g354j - pdf (DCLG Publications; tel: 0870 1226 236). Responses by 7 January, 2008.
NEW DATA PROTECTION GUIDANCE FOR SMALL BUSINESSES
New guidance to help SMEs (small and medium sized businesses) understand their obligations under the Data Protection Act 1998 has been published by the Information Commissioner's Office, following research that found just over half recognised the importance of keeping customers' personal information secure and only 22°/o were aware the Act required them to keep it accurate and up-to-date.
'Data Protection Good Practice Note: training checklist for SMEs' provides a basic training framework to help staff understand their data
protection requirements. It is available at http://tinyurl.com/yt9npq - pdf (Information Commissioner's Office Helpline: tel: 01625 54 57 45).
BUSINESS RATE SUPPLEMENTS
Local authorities in England and the Greater London Authority will be given the power, from April 2010, to raise and retain local supplements on the national business rate to spend on infrastructure and other economic developments that have been clearly specified in advance. The duration of the supplement and the specific projects on which they will be spent will be entirely determined locally.
A national upper limit of 2p in the pound will be set on the level of permitted supplements, while the government proposes protecting smaller businesses from disproportionate burdens by exempting companies with business rates of £50,000 or less from paying supplements.
Only the highest tier local authorities in any area will be able to levy supplements and these authorities will be able to co-operate in funding joint projects. In London the power will rest with the Greater London Authority and shire counties will need to consult district authorities on new supplement proposals.
'Business rate supplements - a White Paper' (Cm 7230), ISBN 010 172302 2, £13.50 (The Stationery Office; tel: 0870 600 5522), is available at http://tinyurl.com/yr55ml - pdf.
CORPORATE MANSLAUGHTER
Proposals for companies found guilty of the new offence of Corporate Manslaughter -which will be introduced when the Corporate Manslaughter and Corporate Homicide Act 2007 comes into force across the UK on 6 April,
2008 - to face significant fines based on their turnover and a publicity order, have been published for consultation by the Sentencing Advisory Panel, an independent advisory body sponsored by the Ministry of Justice.
The new sanction of publicity orders is designed to bring the failings of the offending organisation to the attention of the public, and the Panel proposes that, in principle, it should be imposed on all organisations convicted of corporate manslaughter.
The Act makes companies and limited liability partnerships, whose gross failures in the management of health and safety cause death, liable to prosecution for the new offence of corporate manslaughter but does not increase the liability of individual directors or managers. An organisation may still be prosecuted for breaches of health and safety law as an alternative to, or in addition to, corporate manslaughter. To achieve consistency in sentencing, the consultation also covers sentences for breaches of health and safety law that result in death.
'Consultation paper on sentencing for corporate manslaughter' is available at http://tinyurl.com/2ccg87 (pdf). Responses by 7 February, 2008. 'A guide to the Corporate Manslaughter and Corporate Homicide Act 2007', published by the Ministry of Justice, is available at http://tinyurl.com/ynpfls - pdf. A brief general introduction to the act is available at http://tinyurl.com/244q76 - pdf (MoJ General Enquiries: tel: 020 7210 8500).
RESTRICTIONS ON PACKAGING SIZES TO BE REMOVED
UK companies will have the freedom to pack foods in different sizes and develop innovative packaging after April 2008, when a new European Directive * replaces 1960s legislation requiring some 30 foods to be packaged in specified quantities. Foods for which packaging will be deregulated as a result include butter, cereal, potatoes, sugar, pasta, dried fruit and rice.
(* 2007/45/EC, available at http://tinyurl.com/2qx7sz - pdf : Official EU and Council of Europe Publications and Documents; tel: 020 7873 8372.)
Guidance from the Local Authority Co-ordinators of Regulatory Services (LACORS) states that no new prosecutions should be undertaken against manufacturers who introduce new package sizes from a date three months after the directive comes into force. This will enable them to adjust to the changes within their normal business and labelling cycles. They will also be free to continue with the sizes they now use.
COMPETITION IN THE OPEN POSTAL SERVICES MARKET
While smaller businesses are starting to gain some of the benefits that larger mailers have experienced since the postal services market was first opened for competition, much more progress is still needed, concludes research commissioned by Postcomm, the independent regulator for postal services. The challenge posed by alternatives to mail also confirms the need for mail operators to be more innovative. Key findings of the research are:-
o One fifth small and medium sized mailers and more than one third of large mailers are using more than one mail provider.
o One fifth mailers have explored alternatives to mail in the past 12 months.
o More than half of respondents agreed that competition has improved choice and more than one third believe it has
improved the quality of Royal Mail's service. '2007 competitive market review and business customer survey: summary document' is available at http://tinyurl.com/2vns32 -pdf (Postcomm Enquiries; tel: 020 7593 2100).
ESTATE AGENTS REDRESS SCHEMES
New powers for the secretary of state to define the scope of estate agents' redress schemes, set the penalty payable by estate agents for non-membership of such schemes and prescribe their record-keeping requirements have been proposed by the Dept for Business, Enterprise ft Regulatory Reform under the Consumers, Estate Agents and Redress Act 2007 (Ch 17) (http://tinyurl.com/27f6pe - pdf : Explanatory Notes, http://tinyurl.com/yu2bur - pdf) (The Stationery Office; tel: 0870 600 5522).
A DBERR consultation also includes proposals requiring estate agents to forward details of all offers from prospective buyers to sellers, alternative forms of the statutory terms used in estate agents' contracts and a reduction in the fee paid by banned estate agents applying to have their prohibition orders revoked or varied. These changes would be introduced by amending secondary legislation.
'Estate agents: a consultation on proposals for exercising powers in the Consumers, Estate Agents and Redress Act 2007 and other changes to secondary legislation relating to estate agents' (Urn 07/1377) is available at http://tinyurl.com/29dz3c - pdf (DBERR Publications Orderline; tel: 0845 015 0010). Responses by 1 February, 2008.
EU SERVICES DIRECTIVE
Small and medium sized firms will be the main beneficiaries of the EU Services Directive (2006/123/EC), which aims to make it easier for service providers to expand into other EU markets by obliging member states to cut red tape and provide practical help.
The Dept for Business, Enterprise ft Regulatory Reform (DBERR) is seeking views on proposals to implement the directive in the UK, which are intended to:-
o Increase co-operation between regulatory and supervisory bodies in the UK and other member states.
o Improve the quality of services and the rights of customers.
o Establish an online point of single contact to provide essential information for service providers wanting to set up in the UK. Activities covered by the directive include: management consultancy; facilities and office management; advertising; legal advice; estate agency and letting; architects; distributive trades; y tourism, including tour guides and travel agents; amusement parks; leisure services; plumbers; electricians. Other activities, including financial services and gambling, are covered, or will be covered, by other EU laws.
'Consultation document on implementing the EU Services Directive in the UK' (Urn 07/1485) is available at http://tinyurl.com/2ansce -pdf (DBERR Publications Orderline; tel: 0845 015 0010). Responses by 11 February, 2008.
'REGULATING THE REGULATORS' COULD SAVE BUSINESSES £100m PA
Provisions to set up a Local Better Regulation Office to co-ordinate regulatory enforcement by local regulators so laws are enforced equally all over the country are included in the Regulatory Enforcement and Sanctions Bill (HL 7), ISBN 0 10 843662 8, TSO, £7. Other provisions in the Bill, which went
to consultation earlier this year, create civil sanctions for regulatory offences and reduce and remove regulatory burdens on business. The Dept for Business, Enterprise Et Regulatory Reform claims that it will save businesses some £100m pa by reducing red tape and delivering better regulation. At the same time, it will toughen sanctions against those business who undercut their competitors by flouting regulations.
The Bill and Explanatory Notes (HL 7-EN) (ISBN 0 10 860089 0, TSO, £5) are both available at http://tinyurl.com/2hkqss (The Stationery Office; tel: 0870 600 5522).
NEW LAND REGISTRATION TRIGGERS
Proposals to introduce two new triggers that would lead to compulsory registration of title have been published by the Land Registry as part of its drive to achieve a comprehensive land register for England and Wales. The proposed new triggers are:-
o Appointment of a new trustee of unregistered land held in trust, where the land vests in the new trustee by deed or other instrument in writing, or by vesting by the court.
o Partitioning of unregistered land held in trust among the beneficiaries of the trust.
The consultation, 'Comprehensive land register', is available at http://tinyurl.com/yvhaph - pdf (Land Registry General Enquiries; tel: 020 7917 8888). Responses by 29 February, 2008.
REGISTERING UNDER MONEY LAUNDERING REGULATIONS
As many as 10,000 businesses in a range of sectors have been brought under the supervision of HM Revenue & Customs by the Money Laundering Regulations, which come into force across the UK on 15 December. This means they must register with HMRC and any person who owns or runs the company, and any nominated officer or money laundering reporting officer, will need to apply for a new 'fit and proper' test.
The regulations require businesses to be able to:-
o carry out checks on their customers' identity;
o identify the risk of money laundering posed by a customer;
o report suspicious activity to the Serious Organised Crime Agency;
o keep records of customer identity and business relationships for five years.
New types of businesses brought within the scope of the regulations are so-called Trust or Company Service Providers (TCSPs), which are not regulated by the Financial Services Authority or by a professional body specified in the regulations. TCSPs include: recruitment agencies (involved in arranging for permanent or interim directors, shadow directors, company directors or partners); company formation agents; suppliers of accommodation or correspondence addresses; telephone answering services for businesses other than sole proprietors; people acting or arranging for others to act as professional trustees, including will writers and family offices.
Information on registration with HMRC is available at http://tinyurl.com/2uruhr. Latest information is published at http://tinyurl.com/3ykk5k (Customs and Excise National Advice Service; tel: 0845 010 9000).
The Office of Fair Trading becomes the supervisory authority for consumer credit lenders and estate agents from 15 December and has published 'Money Laundering Regulations 2007: core guidance' (Oft 954). It is available athttp://tinyurl.com/2d9xb6 - pdf (Office of Fair Trading Publications; tel: 0800 389 3158).
HEALTH AND SAFETY
GUIDANCE ON MIGRANT WORKING FOR HSE
The Health & Safety Executive has published advice and guidance on the issues that it's staff need consider when inspecting health and safety dutyholders who directly employ or use migrant workers supplied by independent labor providers. It covers the issues - such as partnership working with other agencies, enforcement and the key health and safety issues in specific industries - that apply to the employment of both legal and illegal migrant workers.
'Migrant working topic inspection pack' is available at http://tinyurl.com/2moavg - pdf (HSE Books; tel: 01787 881165).
FALLS FROM VEHICLES IN THE WORKPLACE
Last year, four workers died after falling from their truck or lorry and the cost to industry of death and serious injury arising from falls from workplace vehicles is in excess of £35m pa. The Health ft Safety Executive has launched a campaign to raise awareness of the simple steps that should be taken to improve safety:-
o Vehicles should be well-maintained and checked regularly;
o Loading and unloading procedures should avoid the need to work at height where possible, or platforms, steps and other safety equipment should be provided;
o Floor surfaces should be anti-slip when possible or slip resistant footwear should be provided.
Guidance and advice, including safety checklists, are available at http://tinyurl.com/2jcphu (HSE Infoline; tel: 0845 345 0055).
STORAGE OF FLAMMABLE LIQUIDS IN WORKING AREAS
Advice on the requirements of employers/dutyholders under The Dangerous Substances and Explosives Atmospheres Regulations 2002 / 2776 (DSEAR) (http://tinyurl.com/33ngf9 - pdf) to control risks from the indoor storage of flammable liquids has been published by the Health Et Safety Executive.
DSEAR recognises that elimination of such substances may not be possible and that, for practical purposes, there is likely to be need for a limited quantity to be stored in the working area. The advice explains the responsibility of the dutyholder when carrying out the risk assessment to justify the need to store any particular quantity within the working area and the organisational requirements for controlling fire risks.
'Storage of flammable liquids in process areas, workrooms, laboratories and similar working areas' is available at http://tinyurl.com/3ay9zw (HSE Books; tel: 01787 881165).
TAXATION
CONSTRUCTION INDUSTRY SCHEME (CIS) PENALTIES
Commencing on 19 October, HM Revenue ft Customs has started charging penalties for all Construction Industry Scheme (CIS) returns not
received by the due date - which is the 19th of every month. The fixed penalty of £100 and a further £100 for every additional month that the return remains outstanding applies to returns, including nil returns, due from the start of the scheme between May and September, when the penalty scheme was deferred. An additional £100 penalty for every 50 sub-contractors over the first 50 is also charged. Further information on the Contractor Monthly Return is available at http://tinyurl.com/2rxlm9 (CIS Helpline; tel: 0845 366 7899).
MANAGED SERVICE COMPANIES (MSCs) AND SERVICE PROVIDERS
HM Revenue ft Customs is 'actively considering' the development of an online Managed Service Company (MSC) Audit Standard to help provide legal certainty in determining whether a service providers' client companies are MSCs or not. A suitably qualified person not associated with the provider would use the standard to review the provider's business model. If the review concluded the clients were not MSCs, the provider would be able to state that publicly.
HMRC has also sought to clarify the MSC legislation (Chapter 9 ITEPA) for the recruitment industry. Where an employment business has not, since 6 April 2007, been directly or indirectly involved in the workseeker obtaining his company, then the employment business will not be liable for any PAYE or Nl debt under the transfer of debt provision should it subsequently transpire that the workseeker's company is a MSC. If the employment business has been directly or indirectly involved - eg by virtue of referral of the workseeker to a service provider (a Preferred Supplier) - then it could be liable for any PAYE or Nl debt under the transfer of debt provision.
In a further clarification, HMRC has stated it will automatically consider agencies who are approached by contractors with existing limited liability companies to be outside the scope of the debt transfer rules. This means in practice that the agencies do not need to ask questions of such contractors once they have supplied their company name. In welcoming the clarification, the Professional Contractors Group said it should "ease the barrage of requests for information that agencies currently send to our members."
HMRC has also warned about misleading claims that Chapter 9 (MSCs) and Chapter 8 (IR35) do not apply in offshore locations. Where a worker is resident in the UK and the work is carried out in the UK, Chapter 8 and Chapter 9 do apply.
Further information, 'MSCs and the recruitment industry', is available at http://tinyurl.com/3cvthx, or contact your local Tax Office.
EMPLOYER-PROVIDED MEDICAL CHECK-UPS
New regulations* which came into force on 14 August in the UK exempting businesses that provide health screening and medical check-ups from tax are inadvertently affecting some existing health screening schemes that were exempt under the previous non-statutory regime. HM Revenue ft Customs intends discussing a number of issues with employers in order to find a mutually acceptable way forward. In the meantime, for 2007/08, it will not seek to collect tax and NICs in respect of health screening and/or medical check-ups where it would not have been payable before the regulations came into force on 14 August. * The Income Tax (Exemption of Minor
Benefits) (Amendment) Regulations 2007 / 2090, ISBN 0 11 078125 9, TSO, £3 (http://tinyurl.com/3aexxm - pdf) (The Stationery Office; tel: 0870 600 5522). An explanatory memorandum is available at http://tinyurl.com/3aov3a (pdf).
NEW TWO-TIER TRIBUNALS SYSTEM
On overview of a new tax appeals system, which will, for the first time, allow all appeals against HM Revenue ft Customs decisions to be considered within the same independent tribunal, is set out by HMRC in a consultation paper which explores the options for a more consistent framework for internal reviews.
At present, HMRC deals with appeals through a range of independent bodies that reflect the different approaches of the former revenue departments, the requirements of particular taxes or schemes and the independent appeals bodies that hear appeals against HMRC decisions. The latter bodies include:- the General Commissioners and Special Commissioners; the Vat and Duties Tribunal; the Section 706 Tribunal; the Social Security and Child Support Appeals Tribunal.
The legal framework for a new two-tier tribunal system was established by the Tribunal Courts and Enforcement Act 2007. The Act creates a first-tier tribunal, into which most existing tribunal appeal functions will be transferred, including tax appeals. It will be organised into chambers, which each focus on different subject areas. An Upper Tribunal will hear appeals against decisions of the first-tier Tribunal.
The HMRC consultation paper looks at administrative matters relating to appeals and also covers the transitional arrangements. Tax appeals against decisions made by HMRC1 is available online only, at http://tinyurl.com/355z73 (pdf). (Although the consultation closed on 31 December please refer to the information on 'Consultation Documents'.)
TRANSPORT
CLAMPDOWN ON DRIVING OFFENCES
Unconscious drivers who have a blood test can be prosecuted in the same way as those drivers who refuse a test while conscious, under one of a number of provisions in The Road Safety Act2006 (Commencement No 2) Order 2007 / 2472, ISBN 011 078685 8, ISO, E3 (http://tinyurl.com/35lay9 - pdf) (The Stationery Office; tel: 0870 600 5522), which came into force in GB on 24 September.
Other new provisions aimed at tightening up legislation and ensuring offenders do not escape justice include:- unsuccessful manslaughter or culpable homicide cases can be prosecuted for offences such as death by dangerous driving or careless driving under the influence of drink or drugs; an increased maximum fine of £5,000 for drivers who refuse to stop when requested by police.
Other changes include an increase in the maximum fine for dangerous driving from £2,500 to £5,000, making all seat belt wearing offences subject to the existing £500 maximum fine and increasing the penalty points from three to six for those convicted of failing to provide information on the identity of a driver.
TRIAL FOR SMART CARD PROVISIONAL LICENCES
Proposals to trial smart card provisional licences to combat the increase in the number of experienced drivers taking tests on behalf of learners have been published by the Driver and Vehicle Licensing Agency. The cards will incorporate an embedded read-only electronic chip containing the data currently shown on the photocard licence and include an improved quality coloured photograph.
The trial will be restricted to Wales, with 30,000 bi-lingual licences involved. It will commence early in 2008 and run for 12 months. The DVLA proposals are set out in a consultation that also seeks to establish public opinion on potential wider uses of smart card driving licences. 'Trial of smart card provisional driving licences' is available at http://tinyurl.com/2xmb5y - pdf (DVLA Drivers Enquiries; tel: 0870 240 0009). Responses by 11 January, 2008.
NATIONAL PARKS BAN ON OFF-ROAD VEHICLES
National Park authorities can now make traffic regulation orders on rights of way and unsurfaced roads within their boundaries as part of a package of new measures designed to curb excessive or inappropriate use of vehicles away from ordinary roads. The new powers are set out in section 72 of The National Park Authorities' Traffic Orders (Procedure) (England) Regulations 2007 / 2542, ISBN 0 11 078719 0, TSO, £3 (http://tinyurl.com/2ax2ns - pdf), which came into force on 1 October. An explanatory memorandum is available at http://tinyurl.com/yoh2h4 (pdf) (The Stationery Office; tel: 0870 600 5522).
'Public rights of way: guidance for national park authorities making traffic regulation orders under section 22BB Road Traffic Regulation Act 1984', is available at http://tinyurl.com/38ak9v - pdf (Defra Publications; tel: 0845 955 6000).
BIOFUELS - RISKS AND OPPORTUNITIES
With recent media coverage calling the benefits of biofuels into question and linking biofuels to increasing food prices, deforestation, destruction of peat bogs and other negative impacts on biodiversity, the Dept for Transport has published a paper setting out the key issues in the debate in the context of current UK government policy.
The paper reiterates that 5°/o of the UK's road transport fuel is expected to come from renewable sources by 2010, while a conditional target of 10°/o has been set for 2020 for the EU
as a whole. This target is subject to biofuels being sustainable and second generation technology being available. It goes on to consider issues such as the size of the contribution biofuels can make to carbon reduction, the impact on food prices and deforestation and whether or not we should wait for second generation technology. It also explains what is meant by first and second generation biodiesel and bioethanol technology.
'Biofuels - risks and opportunities' is available at http://tinyurl.com/36bsab - pdf (DfT Publications; tel: 0870 1226 236).
THE IMPACT OF TRANSPORT SCHEMES ON HISTORIC LANDSCAPES
Guidance to help engineers, planners and environmental experts assess the impact of transport schemes on historic landscapes in GB has been included for the first time in the latest version of the 'Design manual for roads and bridges'. Developed by the Highways Agency in collaboration with other landscape and cultural heritage government and non-government bodies, the guidance covers the assessment of historic landscape character and the effects of road schemes using the analysis of topography, archaeological remains, historic buildings and the natural world.
'The Design Manual for Roads and Bridges, Vol 11, Sec 3, Part 2 - Cultural Heritage Assessment (DMRB11 Cultural heritage)' is available at http://tinyurl.com/2739uu - pdf (Highways Agency Information Line; tel: 08457 50 40 30).
VAT ON GOODS AND SERVICES USED FOR BUSINESS AND NON-BUSINESS PURPOSES
HM Revenue ft Customs has published detailed guidance on measures that, from 1 November, implemented a new method of calculating the value for Vat purposes of goods, land or services purchased by a business and used for joint business and non-business uses.
The measures cover issues in the Lennartz Vat Accounting Mechanism, which became available to taxpayers in 1991 when the ECJ (* Case C-97/90) ruled that a German called Lennartz had a right to a full and immediate input tax deduction in respect of Vat incurred in the purchase of a car for business and private use. He was then obliged to account for output tax on any private or non-business use.
While the Lennartz mechanism is not available in the UK for cars and other goods which are subject to input tax restriction or 'block', it is available for a range of other goods, services and land.
The main effects of the new measures are to:-
o Repeal legislation introduced in 2003, which became ineffective following the ECJ judgment in Charles and Charles-Tijmens ** that prevents EU member states from legislating against the use of Lennartz accounting.
o Enable the UK to implement the ECJ decision in Wollny ***, which confirmed that the period over which a deemed supply of land or buildings should be made could be determined by reference to the adjustment period used for the capital goods scheme - which for the UK is 10 years.
o Require non-business use charges accounting for use of assets to which
Lennartz accounting has already been applied to be calculated on the new basis after 1 September 2007.
o Address the loophole as to whether or not the rules that deem a supply of land to arise when an interest is disposed of for no consideration apply where there is (in law terms) a 'surrender' of an interest in land.
The measures were brought into force in the UK by The Value Added Tax (Amendment) (No 6) Regulations 2007 / 2922, ISBN 011 078847 0, TSO, £3 (http://tinyurl.com/2lwhva - pdf) and The Value Added Tax (Special Provisions) (Amendment) Order 2007 / 2923, ISBN 0 11 0078858 6, TSO, £3 (http://tinyurl.com/2pnskf -pdf).
'HMRC Guidance - assets used partly for non-business purposes - implementation of 'Lennartz Accounting' Regulations' (Vat Information Sheet 14/07) is available at http://tinyurl.com/2g4sh2 (pdf).
BN56 - Vat 'Amendments to Vat legislation following recent judgments of the ECJ' is available at http://tinyurl.com/2wua9z.
* Hansgeorg Lennartz v Finanzamt Munchen III, European Court of Justice, Judgment 11 July, 1991 (http://tinyurl.com/2gn3af).
** P Charles and TS Charles-Tijmens v Staatssecretaris van Financien, European Court of Justice, Judgment 14 July, 2005 (http://tinyurl.com/38za3r).
*** Wollny v Finanzamt Landshut, ECJ, Judgment 14 September, 2006 (http://tinyurl.com/yt9onf).
VAT CHANGES IN THE TREATMENT OF SERVICED BUILDING PLOTS
HM Revenue & Customs has accepted the Vat Tribunal decision in Douglas Virtue & Sonia Virtue T/A Lammermuir Game Services * that the supply of a building plot to which essential services, such as gas, electricity, water, etc, have been added, is a single, zero-rated, exempt supply of land. HMRC had previously treated the supply of a serviced plot as comprising two supplies by the landowner - an exempt supply of land and a standard-rated supply of civil engineering.
The supply of civil engineering works to the landowner to provide access to essential services will continue to be standard-rated in most cases. However, they will be zero-rated where the landowner can demonstrate that these services are being received in the course of the construction of a building designed as dwellings or buildings intended solely for use for a relevant charitable or residential purpose.
As a result of HMRC's new policy:-
o Landowners will now be making an exempt supply of land and will therefore not be able to register for Vat unless they have other taxable activities.
o If the supply of engineering works to them is standard-rated, they will not be able to recover this Vat and it will become a cost to the landowner.
Developers and DIY housebuilders will not be charged Vat by landowners in this situation.
Further information is available in Revenue ft Customs Brief 64/07 ('Vat: Change in the Vat treatment of serviced building plots'), which is available at http://tinyurl.com/2jfjsm (Customs and Excise National Advice Service; tel: 0845 010 9000).
Douglas Virtue ft Sonia Virtue T/A Lammermuir Game Services v HMRC (V20259), UK Vat ft Duties Tribunals Decision, 19 July 2007 (http://tinyurl.com/2sepdj).