Archive for the ‘General’ Category

No-Shows – ECJ Rules No Vat Due

A recent decision of the European Court of Justice will come as good news for hard-pressed hoteliers and has led to HM Revenue and Customs issuing new guidance on deposits.

hotel 1
The decision confirms that there is no relationship between a deposit taken and the supply of a standard-rated service. Accordingly, therefore, where a deposit has been taken for a hotel booking and retained because the person making the booking is a ‘no-show’, there is no need to account for VAT on the deposit.
 
However, if the deposit is made for a specific room which is therefore kept vacant, the supply remains one on which VAT is due.
 
Hotel owners can reclaim VAT overpaid as a result for the past four years only. In addition, hoteliers will want to consider their terms and conditions to ensure they are VAT efficient.

Posted May 24th, 2011 in General |

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Two Flats are Not a Residence

When a family is being housed, the provision of separate, self-contFlats and dangerained flats with no common living areas does not mean that accommodation had been made available such that the members of the applicant’s family could ‘reside together’ in the ordinary meaning of the phrase. 

Posted May 19th, 2011 in General |

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First Company Convicted of Corporate Manslaughter Loses Appeal

diggerCotswold Geotechnical Holdings Ltd., which became the first company to be convicted of corporate manslaughter (under the Corporate Manslaughter and Corporate Homicide Act 2007) in February of this year, has lost an appeal against its conviction.
 
The company was convicted following the 2008 death of geologist, Alexander Wright, 27, who died when a trench he was working in collapsed. 

Posted May 19th, 2011 in General |

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Who is a Member of a Company?

Keeping company records up to date is not always a top priority for the directors of smaller companies. However, failing to keep the shareholders’ register up to date can have a downside if a share transfer has occurred but the new owner’s name is not entered into the register of members.

 
The problem is that under the Companies Act 2006, except in very limited circumstances, the person shown as a member in the register of members is a member and a person not shown isn’t – until the register is rectified.
 
This can have practical effects such as making notices of meetings invalid, invalidating votes of shareholders and so on and can affect, as it did in a recent case in the Supreme Court, whether or not one retains the rights attaching to shares transferred for financial purposes into the names of nominees.
 
Contact us for advice on company secretarial and company law matters.
 

Posted May 17th, 2011 in General |

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More Businesses ‘Critical’

SaleThe 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 General |

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New Guidance on Transferable Nil-Rate Bands

Cruise Ship 1There has, since its inception, been a great deal of confusion regarding the ‘double Inheritance Tax (IHT) nil rate band’ legislation – whereby the unused proportion of the IHT nil rate band of the first of a couple to die is passed to the second: this is termed the ‘transferable nil rate band’ (TRNB).

 
One of the problems stems from those cases in which the estate of the first deceased merely passed across to their spouse and the formal documentation relating to the estate was either not prepared or not retained.
 
HM Revenue and Customs have attempted to make the use of the TRNB simpler by issuing a new code of practice which allows an estate making use of a transferred TRNB to be an ‘excepted estate’ provided certain conditions are met.
 
In practice, this will simplify the administration of many estates. However, there are still conditions which may cause difficulties for many people, such as the conditions that the first deceased must have:
 
  • been domiciled for IHT purposes in the UK at the date of death; and
  • not have owned foreign assets (i.e. a holiday home) worth more than £100,000 at the date of death.
 
The guidance can be found at
http://www.hmrc.gov.uk/manuals/ihtmanual/ihtm06024.htm
 

Posted May 13th, 2011 in General |

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Unfair Trading Legislation Stops Bogus Prize Draws

Not many prosecutions are brought under the Consumer Protection From Unfair Trading Regulations 2008, which are designed to protect consumers form the activities of unscrupulous traders.

 
Recently several companies were taken to court by the Office of Fair Trading for breaches of the regulations.
 
One of the companies offered invitations to claim ‘prizes’ by sending unsolicited letters to people. The ‘prizes’ which were the subject of the prosecution were either an LCD TV (allocated to less than 1 per cent of the applicants) or a ‘Zurich watch’ which was allocated to more than 99 per cent of the respondents. The Zurich watch actually contained a movement made in Japan.
 
To obtain the prize, it was necessary to obtain a ‘prize code’. This was done by the ‘prize’ recipient telephoning a premium-rate number – which cost £8.95. They then had to send a further £8.50 because the watch was an ‘electrical item’. The total cost to the consumer was therefore £17.45 and the supplier made a profit of approximately £7 on each ‘prize’.
 
The court concluded that there was in reality, no prize: the claimant had bought the watch.
 
In each case, the OFT found that the Regulations had been breached and that the ‘prize’ element of the promotion was a sham.
 
There are many unscrupulous traders in the market and promotions that offer ‘free prizes’ are seldom genuine. There are also examples of companies that target vulnerable people (i.e. the recently bereaved).
 
If something looks too good to be true, it is almost certainly because it is. Do not commit yourself without thinking through your options.

Posted May 12th, 2011 in General |

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Bribery Leads to $150 Million Settlement

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.
Dollars
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 General |

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Squatters’ Rights

terraced housingUnder UK law, anyone who is allowed unopposed occupation of a piece of land for more than twelve years (10 years for registered land if appropriate procedures are followed) can acquire legal title to the land. Although numerous safeguards were introduced in the Land Registration Act 2002, which introduced a system of notices before the title could be transferred, this continues to be the case.
 
The UK's approach to 'squatters' rights' (known in legal circles as adverse possession) has been ruled to be lawful according to a ruling by the European Court.
 
If you allow people to make use of land you own without taking measures to protect your rights you run the danger of giving them permanent legal rights over your land or even losing legal title to it. Contact us for advice.

Posted May 9th, 2011 in General |

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Guidance on the Agency Workers Regulations

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:
 
  • the scope of the AWR;
  • qualifying for equal treatment;
  • how to identify basic working and employment conditions and the relevance of a ‘comparator’;
  • pay;
  • working time and holiday entitlement;
  • pregnant workers and new mothers;
  • pay between assignments;
  • information, liability and remedies;
  • information a Temporary Work Agency (TWA) must have before supplying an agency worker; and
  • compliance information required by a TWA from a hirer.
 
It can be found here.
 
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 General |

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