What To Consider When Looking For The Best Inheritance Tax Solicitors

For some people, it is hard to think about what will happen to their assets after they die. Others want to ensure that their legacy is passed on in the most efficient way so their heirs can benefit from what they have worked hard to accumulate during their lifetimes. Whichever camp you fall into, pertinent, up-to-date advice from an inheritance tax solicitor can be invaluable. Everyone needs to consider making a will to ensure their estate is dealt with smoothly and in accordance with their wishes after their demise. But if your estate looks set to be valued at over £325,000, you will especially benefit from guidance from inheritance solicitors.

Inheritance tax (commonly abbreviated to IHT) is the tax that’s payable after the death of an individual on the money, property, and possessions they leave behind – their estate. It’s based on the value of the estate at the time of death, but can also include gifts given by the individual in the seven years preceding their demise. The value of the estate is calculated after any outstanding debts and funeral expenses have been deducted.

At present, the IHT threshold is £325,000, though changes to the whole framework are imminent. Currently, there’s no tax payable on the first £325,000 – this is known as the nil-rate band or NRB. If you have a spouse or civil partner, then you can pass the entirety of your estate to them tax-free, and they then benefit from an increased IHT allowance of up to double (i.e., £650,000) on their own death.

But otherwise, any value of the estate over £325,000 is taxed at a rate of 40%. This is usually settled by the executor of your will, if you have one, or administrator of the estate if there’s no will in place.

Other considerations are many, but include the recent Transferable Main Residence Allowance (TMRA), which came into force in April 2017. This allows the deceased to pass on a property in which they have been living to descendants, raising the tax-free allowance to £500,000 in total (£1 million for those who are married or have civil partners).

Reducing Liabilities Through Inheritance Tax Planning

what services do inheritance tax solicitors offerOf course, no-one likes paying more tax than they have to, and this is often where consulting inheritance tax specialists in the UK can be beneficial. It’s important that you do this at an early stage if you think your estate will be liable for IHT.

The above description of IHT and associated matters is the briefest of summaries and only scratches the surface of the complex framework surrounding inheritance tax. The landscape is likely to change in the near future too, so it’s vital that you seek legal advice from qualified and experienced experts before taking any action yourself. HMRC imposes severe penalties on breaches of tax legislation and you or your heirs could end up in trouble if you inadvertently break the rules.

Inheritance tax planning solicitors will first gain an overview and more detailed information about your specific circumstances. They will then detail options for ways in which you can manage your affairs now and at the time of your death to limit tax liabilities and benefit your heirs as much as possible.

Among these will be consideration of making a will; of giving tax-free gifts; of making charitable donations; establishing a family trust; making specialist investments; taking out insurance to cover the costs of IHT; gifting property to children or a loved one, and more, all of which can be tailored to your own unique circumstances.

Expert Legal Advice From Specialists

As noted above, IHT can be a minefield and the costs of getting your affairs wrong can be huge in financial terms, not to mention costly in terms of the emotional distress on your heirs that can result from dealing with HMRC at an already difficult time.

However, the cost of an investment in sound legal advice at an early stage can be more than offset by the savings you’ll make in tax liabilities in the future.

Come to OGR Stock Denton, where we have been advising on legal matters for personal and business clients for over 50 years. Our consultants will assess your situation and offer the best legal advice for your circumstances, explaining everything simply and clearly without blinding you with legal jargon.

Remember, while a difficult subject to contemplate, the sooner you start putting your affairs in order, the easier it will be for your loved ones after your demise. Call 020 8349 0321 today to make an appointment to speak to one of our experienced inheritance solicitors.

FREQUENTLY ASKED QUESTIONS

Can solicitor’s fees be offset against inheritance tax?

which inheritance tax solicitors to hireLiabilities and debts incurred prior to the deceased’s demise, such as mortgages, credit card, and household bills, can be deducted from the chargeable estate, as can funeral expenses. However, other costs that have been incurred after death, like probate and fees for solicitors or death tax lawyer services cannot reduce the value of the estate for Inheritance Tax (IHT) purposes.

How much do solicitors charge for being executors of a will?

When sourcing a lawyer to act as executor of an estate, ask how they will charge for carrying out the service. Some charge an hourly rate, while others will base their fee on a percentage of the value of the estate, usually between 1% and 5%, plus VAT.

How do you calculate inheritance tax?

The threshold for IHT is £325,000. If your estate is worth less, it’s classed as being in the Nil Rate Band (NRB). You’ll typically pay 40% tax on any amount above £325,000, unless the entirety is left to a spouse or civil partner, or an exempt beneficiary like a registered charity. Inheritance tax solicitors can advise further.

What is the UK inheritance tax threshold?

At present, the inheritance tax (IHT) threshold is £325,000 per individual, but the government is planning some changes in 2021. Currently, if you have a spouse or civil partner, any unused NRB on the death of the first person can be transferred to the survivor, increasing the amount of NRB available to up to £650,000.

Will my children have to pay inheritance tax?

Your children pay inheritance tax at 40% on any amount you have left them above the £325,000 personal inheritance tax-free allowance. You can establish a trust before death to reduce the percentage paid to 20%, but if you die within seven years, an additional 20% is charged. The law is complex, so seek advice from a family tax planning attorney.

how can inheritance tax solicitors help youA Guide To Inheritance Tax

Inheritance tax is a highly complex area. Broadly speaking, only a small percentage of estates are large enough to attract IHT – those with a value of over £325,000. Assets that count towards this sum include money in a bank, property and land, jewellery, cars, shares, pay-outs from insurance policies, and jointly owned assets. If your estate falls below the £325,000 threshold; you leave everything above the threshold to your spouse or civil partner; or you leave everything above the threshold to a charity or other exempt beneficiary, then there is normally no tax to be paid.

The recently-introduced Residence Nil Rate Band, aka home allowance, may also apply. If your main home or a share of it is passed to children or grandchildren, that can increase the amount that can be passed down tax-free. Planning ahead with the help of inheritance tax solicitors in London can mitigate tax paid.

Overview Of Inheritance Tax

The deceased’s estate usually pays 40% inheritance tax on any amount held over £325,000. If you’re a beneficiary, you don’t generally have to pay tax on an inheritance unless the estate hasn’t or can’t do so. If you inherit assets, you may have to pay income tax in future years – on dividends from shares or on rental income from an inherited property, for instance.

If you later sell inherited assets like shares or property, you may have to pay Capital Gains Tax. Assets. And if the deceased gifted you money, property, or possessions within seven years of their death, you may have to pay IHT on that.

What An Inheritance Tax Solicitor Can Do For You

An IHT attorney can help ensure:

  • There’s no conflict between your heirs after your death.
  • Your will is legally valid before your death.
  • You have a chance to organise your affairs with the help and advice of a qualified solicitor, to ensure your beneficiaries gain most value from your life’s work and their inheritance.

Inheritance Tax is a highly complicated area and is constantly changing. It’s easy to fall foul of the complexities of the law and that can mean your heirs and dependants receive less than they might otherwise have done. Make an appointment with our team at OGR Stock Denton LLP for help, advice and assistance in planning what will happen to your assets after your death.

Uber loses in the Supreme Court – Uber BV v Aslam & Ors

Earlier this month, Uber, the largest player in the gig economy ran out of appeals in its long battle to retain the right to classify its drivers as self-employed rather than workers.  The Supreme Court dismissed Uber’s appeal, meaning thousands of drivers became entitled to minimum wage and holiday pay.

For employers, the decision has far-reaching consequences in cases where the relationship between the organisation and self-employed people may blur into the realms of ‘worker’.  To help you understand what the decision means for you, our Employment Law Solicitors in London have answered some of the most frequently asked questions related to the Supreme Court’s ruling.

What was the background to the decision?

In 2016, two former Uber drivers took the ride-hailing company to the Employment Tribunal arguing that they were workers and were therefore entitled to be paid the minimum wage and holiday pay.  Uber argued that all its drivers were self-employed.

The Employment Tribunal found in favour of the drivers.  Uber appealed to the Employment Appeal Tribunal and the Court of Appeal, both of whom upheld the decision in the first instance.

Why did the Supreme Court rule that Uber drivers were not self-employed?

The Supreme Court upheld the employment tribunal’s decision in Uber BV v Aslam & Ors, that Uber drivers are “workers” for the purposes of the rights mentioned above. It held that worker status was a question of statutory interpretation rather than contractual interpretation and therefore the written documentation between Uber and its drivers was not the correct starting point.  Instead, it was necessary to consider the purpose of the relevant legislation, which was to protect vulnerable individuals in a position of subordination and dependence in relation to another person who controls their work.  The greater the degree of control, the more likely the individual is a worker.

Delivering the unanimous decision, Lord Leggatt emphasised five aspects of the findings made by the Employment Tribunal which justified the Supreme Court’s conclusion that the drivers were working for and under contracts with Uber.

  1. Uber set the fare and drivers were not permitted to charge more, meaning that Uber dictated how much the drivers were paid.
  2. All drivers had to sign a contract and were not permitted to negotiate the terms.
  3. Once a driver had logged onto the Uber app, their right to turn down requests for rides was constrained by Uber.
  4. Uber exercised considerable control over how the drivers did their work; for example, passengers were encouraged to rate drivers on a scale of 1 to 5 and warnings were given for low scores. If the driver’s average score did not improve, Uber would end its relationship with them.
  5. Uber took active steps to prevent passengers from developing a relationship with its drivers beyond a particular ride.

Taking these factors together, it was clear that the services provided by the drivers were very tightly defined and controlled by Uber and that, accordingly, they were workers.

In addition, the Court held that the drivers’ working time under the Working Time Regulations was not limited to the time spent driving passengers to their destinations but started from the moment they logged in to the Uber app, within the territory in which they were licenced to operate, and were ready and willing to accept rides. 

Lord Leggatt concluded:

“Taking these factors together, it can be seen that the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber. Furthermore, it is designed and organised in such a way as to provide a standardised service to passengers in which drivers are perceived as substantially interchangeable and from which Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill. From the drivers’ point of view, the same factors – in particular, the inability to offer a distinctive service or to set their own prices and Uber’s control over all aspects of their interaction with passengers – mean that they have little or no ability to improve their economic position through professional or entrepreneurial skill. In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.”

What is the difference between a worker, employee, and self-employed person?

The Supreme Court upheld that Uber drivers were ‘workers’ as opposed to ‘employees’.  A worker includes an individual who works under a contract, whether written or oral, whereby the individual undertakes to perform personally work for the other party to the contract, provided that the other party is not, in reality a client or customer of the individual.

An employee is defined under section 230(1) of the Employment Rights Act 1996, as a person who has entered into or works under a contract of employment.  The contract can be in writing or implied by the structure of the working relationship.

A self-employed person is someone who runs their own business and takes responsibility for its success.  An employer has no responsibility in terms of employment rights and, subject to any commercial contract which is negotiated by both parties, a self-employed person is in charge of how and when their work is undertaken.

In determining whether an individual is self-employed or a worker, the courts will look at the reality of the working relationship rather than the label that the parties may have stated in the contract between them.

What advice do employment lawyers say to take in light of the Uber decision?

This decision leaves Uber vulnerable to claims from its workers for up to two years’ back pay or £25,000 (whichever is larger) in an employment tribunal, or up to six years’ back pay in the county court. They will also be able to claim 5.6 weeks’ annual leave each year.  However, they will not have employee rights, such as a right to a statutory redundancy payment or protection from unfair dismissal.

Many linked cases have been stayed pending the outcome of this case in the Supreme Court and the floodgate may open for many more.  That said, the Court’s finding that the Uber drivers were workers was fact specific and it may be that a different decision could be reached on a different set of facts.

If you are unsure as to whether certain members of your team are employees, workers, or self-employed, speak to one of our Employment Law Solicitors in London who can quickly advise you.

To make an appointment to discuss employment law matters please email us or phone 020 8349 0321.

Webinar – Cohabitation TOLATA property disputes and the Dispute Resolution Toolkit

OGR Stock Denton LLP would like to invite you to join our live webinar – Cohabitation TOLATA property disputes and the Dispute Resolution Toolkit

4.30pm, Thursday 8th April 2021

Zoom webinars

Join our live webinar, where our family law experts use case studies to analyse the benefits and drawbacks for our clients of Dispute Resolution in solving problems of Cohabitation TOLATA property disputes.

TOLATA litigation in the context of cohabitation claims can be risky, uncertain and expensive both financially and emotionally.  The COVID19 pandemic has encouraged professionals to move towards Dispute Resolution, including mediation, early neutral evaluation, private FDRs and arbitration, as an alternative method to litigation. This webinar will explore how these methods can be utilised in Cohabitation TOLATA property disputes.

Hosted by Graeme Fraser, Partner and Head of Family team at OGR Stock Denton LLP, and guest speaker Elizabeth Darlington, Barrister at 1GC | Family Law

If you would like to join this webinar, please email Ali Kabani:

akabani@ogrstockdenton.com

 020 8349 5514

What The 2021 Budget Means For Homebuyers, Employers, and Investors?

On 3 March 2021, Chancellor Rishi Sunak delivered this year’s budget. A year ago, two weeks before the first Coronavirus lockdown, the Conservative Party was promising to spend enormous sums in order to ‘level up’ and reward the so called ‘red-wall’ voters. Then everything changed almost overnight, and most of the money set aside for infrastructure spending etc was diverted into saving the economy, people’s jobs, and the NHS. This year’s budget was about continuing to provide Coronavirus support and paying for the mountain of debt accrued in fighting the pandemic. However, given the circumstances the country (and the world) are in, there was some surprisingly good news from the Treasury.

Residential Property Solicitors in London can help more people buy their home

Those looking to purchase a home have been given a double-shot of good news. Not only is the Stamp Duty Land Tax (SDLT) holiday being extended to the end of June, first home buyers are also set to benefit from a government-backed low deposit mortgage scheme.

Stamp Duty Land Tax

Introduced in July 2020 to help the residential property market recover after it came to a virtual standstill in the first lockdown, the SDLT raised the tax-free threshold to £500,000. This meant most homebuyers have not had to pay SDLT when buying a new home, saving them thousands of pounds. There was concern that the property market would fall off a cliff-edge if the tax break was abruptly ended on 31 March, as many transactions would not have completed, leading to buyers pulling out of sales as they would not be able to afford to pay SDLT. Thankfully, the Chancellor announced that the tax-free threshold would remain until 30 June 2021. From 30 June to the end of September 2021, the nil rate band will be set at £250,000 – double its standard level.

Low-deposit mortgages

Low-deposit mortgages have essentially disappeared over the last 12 months (although the number of lenders offering them has been declining since the 2008 financial crisis). This has made it almost impossible for first-time buyers, especially in London and the South-East, to save enough for a minimum 10% deposit. The government has said it is determined to turn ‘generation rent’ into ‘generation buy’.

To help all home buyers (not just those trying to get on the property ladder), the Chancellor confirmed that:

“several of the country’s largest lenders including Lloyds, Natwest, Santander, Barclays, and HSBC will be offering these 95% mortgages from next month.”  

Buyers will pay just 5% deposits to buy homes worth up to £600,000. The government will offer lenders a guarantee to provide mortgages covering the remaining 95%.

Businesses can continue to benefit from the Furlough Scheme

For both employers and employees, the Budget announcement that the Government’s Job Retention Scheme is being extended until September will be welcome. 

Speaking in the Commons, Mr Sunak said:

“As businesses reopen, we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July when we will ask for a small contribution of just 10% and 20% in August and September.”

Mr Sunak told the Commons: “As businesses reopen, we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July when we will ask for a small contribution of just 10% and 20% in August and September.”

Despite this positive news, there is likely to be redundancies when the Furlough Scheme does come to an end. For employees, this may mean seeking employment law advice on Settlement Agreements and whether they have a claim for unfair dismissal. Employers may need to see an employment lawyer for advice on ensuring the strict statutory redundancy process is correctly followed.

Inheritance Tax Solicitors can advise on the best estate planning strategies

For some, the budget did not bring good news. Although the Chancellor did not raise Income Tax, National Insurance, or VAT, a freeze was put on Inheritance Tax, pension ‘lifetime allowances’, and the personal tax allowance thresholds. As wages and the value of assets increase over the next few years, more people will be subject to increased taxes.

To protect your wealth, tax planning is essential. An Estate and Inheritance Tax Planning Solicitor will carefully evaluate your investments and advise on actions to take to avoid paying more tax than is necessary. Because the government’s need to repay the deficit will become more pressing over the coming years, it is vital to get your tax planning in order immediately.

To make an appointment to discuss any aspect of residential property, employment, or tax planning law please send us an email or phone 020 83490321.

Webinar – Covid and divorce, 12 months on…

OGR Stock Denton LLP would like to invite you to join our live webinar – Covid and divorce, 12 months on…

4.30pm, Thursday 11th March 2021

Zoom webinars

Join our live interactive discussion, where our experts reflect on the past 12 months and consider the issues for family lawyers as we come out of the second UK lockdown.

Topics covered in this webinar include:

  • What are new clients reporting in terms of separation and divorce due to lockdown issues
  • Reported case law during COVID-19
  • What will never be the same for divorce lawyers again post lockdown
  • What could improve when we are out of lockdown
  • Professional practice points and the future outlook for divorce lawyers

Hosted by Graeme Fraser, Partner and Head of Family team at OGR Stock Denton LLP, and guest speaker Max Lewis, Barrister and Arbitrator at 29 Bedford Row Chambers.

If you would like to join this webinar, please email Ali Kabani:

akabani@ogrstockdenton.com

 020 8349 5514

Webinar – How secure is the Bank of Mum and Dad?

OGR Stock Denton LLP would like to invite you to join our live webinar – How secure is the Bank of Mum and Dad?

1.00pm, Tuesday 2nd March 2021

Zoom webinars

With the introduction of the Stamp Duty Land Tax (SDLT) holiday in England & Wales there has been a surge of applicants borrowing money from their parents to purchase either their first and second home

This webinar will look at the legal and tax implications of parents lending money to their children to purchase a home, particularly where spouses and cohabitees are involved, including some recent case examples of how we helped clients in similar situations.

If you would like to join this webinar, please email Ali Kabani:

akabani@ogrstockdenton.com

 020 8349 5514

 Do We Really ‘Care A Lot’ About The Elderly? 

In February 2021, a new dark comedy ‘I Care A Lot’ was released on Netflix. Starring Rosamund Pike as a court-appointed (but really self-imposed) guardian for elderly wards of the State, the American movie illustrates how a con can easily divest an elderly person from their money and property.  However, Ms Pike’s character meets her match when a seemingly docile ward turns out to have some unsavoury connections and is just as ruthless (and nasty) as her guardian. 

Although ‘I Care A Lot’ is entertainment, Lasting Power of Attorney (LPA) Solicitors in London and elsewhere in the country know only too well the extent to which elderly abuse is rife in our society.  Although most media reports focus on abuse in care homes, Solicitors working on Court of Protection and LPA matters regularly advise and intervene (via the police) in cases where an Attorney is suspected of defrauding the elderly person who appointed them to manage their financial affairs.

The extent of elderly financial abuse 

In 2018, care home managers reported almost 13,000 cases of concerns regarding elderly people in care experiencing financial abuse to the Care Quality Commission (CQC).

Because the victims of elderly financial abuse are often suffering from serious health problems, including dementia, establishing the extent of the problem is challenging. A 2015 report by Age Concern suggests:

“On average, the best estimate for the UK is that between 1 and 2 per cent of people aged 65 or over in the United Kingdom today have suffered (or are currently suffering) financial abuse since turning 65. For estimation of numbers of those older (65+) people living in the community in the UK, there is no strong reason given in the literature to change the original CR/DH study estimate of 1.2%, which would mean approximately 130,000 people living in the community aged 65+ in the UK have suffered financial abuse at some point since turning 65.”

What is elderly financial abuse? 

The World Health Organization (WHO) defines elderly financial abuse as:

”The illegal or improper exploitation or use of funds or other resources of the older person.”

Another researcher defines it as:

“the unauthorised and improper use of funds, property or any resources of an older person.” This included the use of theft, coercion or fraud to obtain or try to obtain the older person’s money, possessions or property.”

Most Attorney’s carry out their duties with care and compassion.  However, those that do abuse their positions of trust can cause irreparable damage to the Donor (the person who creates the LPA), their family, and the wider community.

LPA Solicitors tips on how to spot elderly financial abuse

Bank staff, family members, health and care professionals, and Private Client Solicitors are all in a position to spot elderly financial abuse.

Signs of abuse include:

  • anomalies in bank account transactions, including large cash withdrawals
  • sudden changes in bank account or banking practice
  • unexplained withdrawals from a savings account
  • changes in authorising signatures on bank accounts
  • family members taking a sudden interest in protecting their inheritance
  • sudden changes to the Donor’s Will
  • anomalies between the Donor’s financial position and the standard of care home they are placed in
  • the Donor suddenly does not have enough money to pay their bills
  • the sale of possessions and assets which the Donor is unlikely to have approved of

It is sometimes the case that no clear signs are visible, but family members have an inkling that something is not right.  For example, Christine Beeston was jailed for two and a half years in 2018 after she stole £50,000 from her parents who had dementia.  She had obtained Power of Attorney and shortly afterwards, her parents moved to a care home, resulting in Ms Beeston having complete control over their financial affairs. Her brother became suspicious, and after obtaining joint Power of Attorney, he began making enquiries which led to the horrifying discovery of deliberate fraud and theft against his vulnerable parents.

Using an experienced Lasting Power of Attorney solicitor for your affairs 

In July 2019, Demos, a think-tank and Cifas, the UK’s fraud prevention community, published a report on the financial abuse of vulnerable people, including the elderly.  The report recommended that to prevent fraud, stricter controls should be placed on LPAs and a “register of people with active Lasting Powers of Attorney, or under Court Order of Protection with real-time updates should be established, which consumer services companies are able to check against”.

One of the best ways to mitigate the risk of your Attorney stealing funds from you is to have your LPA set up by an experienced Solicitor.  Not only can they advise you on how to select an Attorney, but they can also advise on how to limit an Attorney’s power and/or choose multiple Attorneys who can provide checks and balances on each other’s decisions.

To make an appointment with one of our North London Lasting Power of Attorney Solicitors please visit email or phone 020 83490321. 

Family Law Journal – Family lawyers should welcome remote hearings and artificial intelligence

Partner and Head of the family department, Graeme Fraser has written an article in the Family Law Journal, on the benefits of remote hearings and artificial intelligence, and how it can increase efficiency by negating the need for court space and reducing unproductive travelling.

The article has now been been published on the Family Law website. Read the full article here.

A Fine Balance – Coronavirus Lockdown Number Three

Although it was an inevitable consequence of a virulent new strain and the coming of winter, Coronavirus lockdown number three is taking its toll on an exhausted population. Despite the vaccine being rolled out at a galloping pace, being stuck at home during the dank, dreary days of mid-winter is filling few people with joy if the comments on internet forums and newspaper op-eds are to be believed.

However, much of the government’s mixed messaging that is causing frustration and confusion is the result of a much stronger and more positive strategy than was present during the March lockdown. Back in those scary days of early 2020, everyone, including scientists, healthcare workers, and politicians had little idea of what they were dealing with. So when a national lockdown was announced, the country (and indeed most of the world) simply shut up shop. Although initial estimates of a 14% drop in national output proved overly pessimistic, the actual figure of around £190 billion (a drop in GDP of 9.5%) was catastrophic for many industries and businesses.

Ten months on we have a better understanding of not only the virus, but how to keep as much of the economy running as possible whilst facilitating the extreme social distancing required. Schools have more children of key workers attending because not only has the definition of key worker been expanded, but fewer businesses are furloughing staff. The property market, construction, manufacturing – industries that ground to a halt in March, April, and May 2020 are continuing to operate. Furthermore, as always happens in a crisis, people quickly adapt and hunt out opportunities. Many small businesses have taken advantage of their agility and moved online and/or sought new markets abroad, resulting in some being busier now than they were pre-pandemic.

In light of the current dynamic situation, below are some factors which employers need to be aware of regarding the Job Retention Scheme and health and safety compliance, including pitfalls to watch out for.

Coronavirus Job Retention Scheme (the Furlough Scheme) and government-backed loans

In December 2020, the Chancellor, Rishi Sunak announced that the Furlough Scheme, in which the government pays 80% of a furloughed employee’s wages, will continue to the end of April 2021. Businesses will also be given until the end of March to access the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme.

Watch out for – furlough fraud

Alongside the extension of the Furlough Scheme a parallel project is being run by HMRC to claw back funds that should not have been claimed during the first lockdown. Make sure you follow the rules of the scheme diligently, the most important being that furloughed employees must not work. To mitigate your risk of an HMRC investigation, ensure that you keep up to date records of who is receiving furlough payments and the funds distributed. The other area of concern is the rampant furlough fraud being committed by organised criminal gangs. Protect your business from being unwittingly caught up in such fraud by having documented new customer and supplier due diligence policies and procedures in place and communicated to all staff. In addition, rigorously monitor your business accounts/investments for any unusual activity.

Manging Coronavirus risks in the workplace

If your employees cannot work from home you must conduct a Coronavirus health and safety risk assessment at your premises/s and implement policies and procedures to ensure your staff and the public are protected. Not doing so could result in your organisation and its directors facing a regulatory investigation, personal injury or employment law claims, and even prosecution.

Acas advice regarding keeping your workplace safe is regularly updated. At a minimum, all employers should have regard to eight priority actions designed to protect employees and customers:

  • Complete a Coronavirus risk assessment and share it with all staff.
  • Encourage staff to wash their hands regularly, provide hand sanitisers, and clean surfaces frequently.
  • Help with social distancing by putting a one-way walk system in place for staff and customers.
  • Ensure that face coverings are worn by anyone visiting your workplace (unless they are medically exempt).
  • Keep your workplace well ventilated. The HSE has provided excellent guidance on this.
  • If applicable to your business, follow the legal requirement to keep a record of staff and customers attending your workplace and ensure that your method of data collection is compliant with the NHS track and trace system.
  • Consider the mental health of you and your employees. Public Health England has produced useful guides on steps to improve mental health during this turbulent time.
  • If an employee is required to self-isolate they must do so. Under the Health Protection (Coronavirus, Restrictions) (Self-Isolation) (England) Regulations 2020, employers have a legal obligation to ensure staff they know have tested positive for Covid-19 or have been in close contact with somebody who has, do not come to work. Failure to comply with this law can result in a £1,000 fine for the first offence, rising to £10,000 for repeated offences. Workers must also inform employers if they are required to self-isolate.

Watch out for – breaching your duty of care to homeworkers

All employers have a duty of care to protect the health, safety, and wellbeing of their employees and visitors to their workplace. This includes homeworkers. Ensure that you have homeworking staff conduct a risk assessment relating to their workstation setup. HSE has provided a useful checklist for this. Also, keep in regular contact with homeworkers to make sure they are not feeling isolated and stressed. Out of sight, out of mind could result in a future Employment Tribunal claim so check in regularly and give all employees a point of contact who they can call if they need support.

The government’s aggressive rollout of the vaccination programme provides hope that this will be the last big lockdown we have to battle through. For employers, navigating the ever-changing laws and guidance is a challenge in itself. Our team is here to support you and provide bespoke advice for your business. The cliché “it is always darkest before dawn” has been regularly bandied about over the past few weeks, but in this case, it is likely to be true.

To make an appointment to discuss any aspect of employment law please email or phone our helpdesk on (0)20 8349 0321.

Import and export business update – Preparing for January 1st, 2020

Whether you import goods to the UK or export from the UK to the EU, this post contains key updates you need to be aware of, and for many, take action on before the end of the year.

After the post-Brexit transition period comes to an end, there are specific changes that EU businesses not currently established in the UK will need to make when moving goods or offering services.

While the primary focus in this post is for overseas businesses who trade with the UK market, there is still pertinent data that UK-EU importers and exporters can benefit from knowing before the changes take effect on January 1st, 2020.

This update offers some practical steps you can take to make sure your business is ready

UK – EU Trade Agreement

As discussions are still ongoing, it is uncertain whether a trade agreement with the EU will be reached before January 1st, 2021. Regardless of whether or not a deal is in place, there will be changes to the following:

  • How businesses provide services within the EU Market
  • The way goods are exported and imported
  • The hiring process for those looking to hire people from the EU

While the government has already launched a major campaign to help businesses prepare for the forthcoming changes, there are still many who need to take immediate action to ensure their business can keep moving.

In the next section of this post will break down the specifics relating to exports, imports, and customs as they stand at present. These changes apply to importers and exporters who work in the EU trading with the UK, and those in the UK trading with the EU.

Customs Information

You will essentially be using the same export and import processes used for non-EU countries without a trading agreement with the EU or UK. In summary, when moving goods across the border, this will mean:

  • The carriers will need specific information to move your goods between territories
  • Import and export declarations are needed to enter or remove goods into or from the UK or EU customs territory

If you already have a UK trading partner, it will typically be the trading partner who makes the UK declaration. Still, the specifics of what you need to do will ultimately depend on the arrangements you have in place with any customs representatives, carriers, or trading partners. If you do not have any of these provisions in place, then you need to get a UK representative to act on your behalf to deal with customs for you.

For a more comprehensive overview of the specifics for those looking to buy or move goods from the UK after Brexit, the government has produced a PDF that can be accessed here.

Other customs-related resources that could be useful to you are linked below:

VAT Information

There will be changes to VAT IT systems and import VAT on parcels you need to be aware of. For organizations selling to UK buyers, you may also need to notify customers of any changes to charges before January 1st, 2021.

If you sell to UK buyers and are based outside of the UK, you will need to pay Import VAT.

  • For goods worth £135 or less, you are responsible for the Import VAT
  • For goods over the £135 threshold, the buyer will need to pay the Customs Duty, Import VAT, and if applicable, any Excise Duty

Aside from the above, key changes are being made to VAT IT systems.

  • A new digital service for the checking of UK VAT numbers will be introduced
  • There will be changes to how you claim VAT refunds for UK business expenses
  • If you sell digital services, there are key changes* to how you pay VAT on services you provide to customers in the UK.

Service-based Businesses

If you operate a service-based business, you will need to check how these services are now going to be regulated and how professional qualifications gained in the European Economic Area and Switzerland will be recognised in the UK after January 1st, 2021.

This is particularly important if any of the below apply to your business.

  • If you send your employees to the UK to do business on your behalf
  • If you are planning to merge with a UK-based business
  • If you have subsidiaries or branches in the UK
  • If your employees provide services within or as part of a regulated profession
  • If you operate within a service sector in the UK

If you employ UK nationals that need a professional qualification to practice in the EU, then you must ensure their qualification is still recognised by the relevant EU regulator.

For further reading and the most up to date guidance on the relevant recognition of professional qualifications, please refer to this section of the government website.

Selling Manufactured Goods

If you manufacture goods that are sent to the UK market, there are going to be key regulatory changes* to approvals, testing, and labelling that come into force on January 1st, 2021. Knowing which rules apply to you depends on the type of goods you manufacture.

*At present, these changes only apply to placing goods into the Scottish, Welsh, or English markets. For Northern Ireland, the guidance will likely be different. If you plan to place manufactured goods in the Northern Irish market from the EU, further guidance can be found here. If goods are coming from the GB region, further guidance can be found here.

 The legislative framework is comprehensive, and for some, rather difficult to follow in terms of knowing which regulatory framework is applicable to your business. If this is something you need clarity on, our company and commercial team here at OGR Stock Denton can help.

Changes to CE Markings

This is another major consideration for those selling manufactured goods to the UK market. As part of the preparations needed, you should also check whether or not you need to make changes to your conformity assessment or markings before or after January 1st, 2021.

Before this date, a Pi mark, wheel marking, or CE mark have always been used to place goods onto the UK market. Going forward, the UKCA mark is going to be the conformity assessment marking for most of the goods that today use the CE Mark.

Although for certain products, the CE mark is going to be accepted in the UK until January 1st, 2022, it is vital that your business readies itself as soon as possible to use UKCA markings. I can also confirm that at this point, it will be possible to use both the UKCA and CE marking, as long as you are completely compliant with both EU and UK regulations.

According to the latest government guidance, those businesses that need to use the UKCA mark immediately from January 1st, 2021, include those where all of the following applies:

  • If you are covered under legislation that requires UKCA marking
  • If a conformity assessment has been undertaken by an official body in the UK, and you have not transferred your CA files from the UK body to the EU equivalent prior to January 1st, 2021.
  • If you require a mandatory conformity assessment by a third-party

Understanding Your Changing Legal Responsibilities

For manufacturers, your legal obligations will largely remain unchanged from January 1st, 2021. However, your regulatory requirements, VAT, and customs processes will most likely be affected and require some key changes in order to remain compliant.

For UK suppliers and distributors, it is essential to confirm whether it will be your supplier or your business that will become an ‘importer’ from January 1st, 2021. If it is your business who will be bringing goods from outside of the UK and placing them into the GB market (the rules for NI are going to be slightly different), then you will become an ‘importer’. Here’s a quick summary of how your legal responsibilities could change, along with some of the practical steps you may need to take.

  • Ensure the right conformity assessment procedures have been undertaken and that all conformity markings are compliant under the new legislation.
  • Making sure that all labels for goods include your company name and address – it is possible to provide this information on accompanying documentation until December 31st, 2022.
  • Make sure your business has a system to store all conformity declarations for a period of ten years.
  • Ensure the manufacturer has produced the correct technical documentation for their goods and that all labelling is fully compliant.

Although we are already well into the final quarter of the year, I do expect there to be more changes. While I intend to keep you updated in the form of further posts, you can also sign-up to receive emails directly from the government site here.

If you would like to get guidance on whether or not your goods will be affected and confirm the steps you need to take in order to become compliant with the new regulations, please contact one of our commercial solicitors today for further advice.