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.

The Impact of Coronavirus and The New Restrictions on UK Property Sector

Following the latest set of restrictions in November in the UK, the housing market will remain open. However, the outlook for house prices is looking increasingly uncertain. In this post, we look at how the Coronavirus epidemic is impacting the market from the perspective of homebuyers and sellers, as well as those in the real estate business.

Why has the property market been doing so well since the first lockdown?

The swift actions taken by the government earlier this year, in the forms of mortgage payment holidays and the furlough scheme, meant; that despite the recession, the property market has been able to keep moving forwards. This is why when we would usually expect to see a dip in house prices during a recession (being driven by people who are forced to sell as they can no longer afford it due to job loss, for instance); we have instead experienced a market that is being driven by people who are motivated to move, and who can afford to do so. In previous recessions, where no government support was offered, this resulted in people being forced into a financially challenging situation where they needed to move home.

When the housing market was forced to close down earlier this year, property website Zoopla reported that an estimated 375k property sales worth approximately £82 billion were placed on hold. When the market re-opened after the first lockdown, the property market was flooded on a large scale.

Buyers were typically looking for country locations and more space, and due to new home working arrangements, they were able to look for properties more rurally and not necessarily be tied into needing a property near a place of work. At this point, it seemed quite clear that it was a sellers’ market.  Add to this, the news of the stamp duty holiday which saw the nil-band raised from £125k to £500k, and it’s easy to see why, by August, house sales hit a record milestone; with Rightmove reporting that a 10-year high had been achieved with the number of properties selling within 7-days of being listed. 

UK House Price Outlook

Although it’s now expected there will not be any immediate drops in UK house prices, the economic impact of the secondary lockdown could have implications that surface further down the line. In October, it was widely reported that annual house price growth had reached a five-year high of 5.8%. However, there seems to be a growing consensus that this growth will not continue and that we should expect to see only minor price falls in the market next year.

The forecasts for UK house prices have varied a lot throughout the Coronavirus epidemic.

Deutsche Bank predicted drops as high as 23pts, while Zoopla and Savills remained more optimistic after the surge and predicts the year will end more positive, up 4% overall.

Ultimately, both the buying power and mortgage availability are all determined by the state of the economy.  For those looking at borrowing money for a mortgage, forecasts suggest that the Bank of England will not look to raise the base rate any time soon.

After the furlough support scheme comes to an end, followed swiftly by the end of the stamp duty holiday in March, all eyes will be on the state of the economy and its recovery. As this period is also thought to be the time when unemployment levels in the UK will peak, the potential for price falls will depend on how serious the damage to the economy is, and indeed, how much time it takes for unemployment levels to fall. If unemployment levels become too high, this could have a direct impact on property prices, and more people could be forced to sell their properties. Any further restrictions on lending could also reduce the prospects for first-time buyers as well.

The Impact of a Second Lockdown on UK Property Businesses

As we’ve already mentioned, the UK property markets are open for business. While Wales did face a two-week circuit breaker close down during the final part of October and early November, they are now fully operational once more.

Overall, the property market is showing great levels of resilience during lockdown number two. Property valuations are up by 38% over the same period, and as expected, viewings have fallen by around 15%. Interestingly, property exchanges have risen by approximately 11%, reaching another all-time high.

Although some estate agency owners feel sellers and buyers are potentially delaying decisions until after lockdown two is complete, there are others who report they’ve seen an increase in their property business revenues compared to the same period last year.

Outside of the control of UK property is the looming potential for a no-deal Brexit and the race to find a vaccine or treatment for COVID-19. Both of these events will impact the property market in one way or another. However, for now, those in the business of trying to forecast what will happen in the market seem to confer that following a busy summer period and the release of pent-up demand following the easing of the first set of lockdown restrictions in the UK, there is enough momentum to keep the market moving forwards.

If you have any questions about your contractual obligations or would like help with any property issue, our commercial property solicitors at North London firm OGR Stock Denton can give you the guidance needed to know exactly where you stand.

Coronavirus and Force Majeure

In this post, we review how specific Force Majeure provisions in business contracts could be engaged within the context of the COVID-19 epidemic under English law and consider safeguarding steps that can be taken in light of the evolving COVID-19 situation.

A Force Majeure event specifically relates to an event that is outside the reasonable control of an entity and is such an event that prohibits or prevents the entity from performing its contractual obligations.

What to do if you have a Force Majeure provision in your contract

If a party wishes to try and claim relief for a Force Majeure event, then the terms of the contract, specifically the Force Majeure provision, will need to be considered. Any party that is affected by a Force Majeure event will usually be relieved from their obligations to perform a service or obligation, and to the extent, they are affected, they may be entitled to receive compensation. While each event will need to be considered in relation to any contractual terms, there are some common features of Force Majeure provisions that we will expand on below.

What type of event constitutes Force Majeure?

Usually, the test of whether or not an event constitutes Force Majeure will come down to whether or not the following points can be satisfied or not.

  • The affected entity must be able to demonstrate they have taken all possible reasonable steps to mitigate or avoid the event or its potential consequences.
  • The event must be deemed to be beyond any reasonable control of the affected entity.
  • The affected entity’s ability to undertake its contractual obligations must have been impeded, prevented, or hindered by the event.

In the case of a valid Force Majeure event, the consequences for all parties will usually depend on the contractual obligations, along with the points expressly outlined by the Force Majeure provision in the contract. In some cases, this will allow a time extension for the purpose of carrying out any obligations or a suspension of contractual performance for the duration of the event. If the Force Majeure event is extended over a long period of time, there may also be such provisions that entitle the parties to undertake a termination of the contract.

What to do if you DO NOT have a Force Majeure provision in your contract?

If you do not have a provision in your contract for Force Majeure, but find yourself in a situation where either yourself or a contractor is unable to fulfil obligations due to such an event, then this section aims to offer some initial guidance.

The Doctrine of Frustration is something that parties can potentially rely upon in the absence of a provision for Force Majeure in an English Law Contract. It will typically be applicable if:

  • The circumstance or event takes place following the contract formation and was not foreseen by either party
  • The ‘event’ is no fault of either entity
  • It is either commercial or physically impossible to fulfil the contract, or where the obligation would need to radically be transformed compared to the initially outlined obligation.

The end-result under the Doctrine of Frustration being that contract will automatically come to an end, and each party will be relieved of their obligations to perform any future work under the contract. The threshold for proving frustration is higher than many Force Majeure provisions, and this is typically due to the fact that it must be proved that any impacted obligations are fundamental to the contract.

There could also be a ‘change in law’ provision in a contract that specifically addresses situations that involve a change in law and whereby such changes make it impossible for the party to carry out any contractual obligations. If this occurs, then parties may incur costs associated with the reimbursement for any affected parties, and in certain situations, there will also be a right to terminate the contract.

Practical Steps for Clients

To help your business prepare for different scenarios that could occur, review the following steps, and try to be as proactive as you can.

  • Review any contracts to see whether or not there is a Force Majeure Provision
  • Review your insurance coverage documents to determine whether or not your insurance will cover any such losses; this could be either a Business Interruption or Force Majeure Insurance policy.
  • Review your financial documentation to consider whether or not there are any notice periods that will need to be complied with relative to any perceived claims for Force Majeure.

If a clause for Force Majeure is present:

  • Review the Force Majeure definition to try and determine if there is are any express events that include a pandemic or epidemic such as COVID-19. If not, try and ascertain whether or not the generic language is adequate enough to reasonably include COVID-19 as a potential Force Majeure event.
  • Consider which elements of the contract you will not be able to perform as a direct or indirect result of COVID-19.
  • Think about any steps your company will take to try and reduce or avoid the effects of COVID-19 on your staff and your business. This is key as you will need to demonstrate that you have taken all and any reasonable steps while following the government guidance.
  • Review the potential consequences for a successful Force Majeure claim

Getting legal advice about Force Majeure claims as early as possible in the process is key.

Force Majeure under PRC Law

 There are many businesses in the UK and, indeed, the rest of the world who deal with goods imported from China. As such, understanding how Force Majeure events are regulated under the People’s Republic of China (PRC) is relevant.

As expected, the best place to start is with the contract and any relevant provisions that are made for Force Majeure events. As COVID-19 is a relatively new ‘event’, it’s possible but unlikely that any specific clauses will relate to COVID-19; however, there is the potential for a pandemic or disease-related clause to be present. In addition to pandemic, plagues, and disease clauses, work stoppages or actions by governments and authorities could also cover this type of event.

Where there are no such provisions, the consideration of whether or not an event could be considered to be a Force Majeure event will rely on any relevant PRC laws or regulations; for instance, the General Principals of Civil Law and the PRC Contract law. In both instances, a Force Majeure event is defined as something that ‘objectively unforeseeable, insurmountable, and unavoidable. This means that any party who is prevented from fulfilling a contractual obligation due to a Force Majeure event could be either fully or partially exempted from their subsequent liabilities, proportional to the given circumstances only. Additionally, it is down to the invoking party of the defence to prove the impact of the Force Majeure event.

There are some high courts; for instance, the High People’s Court in the provinces of Guangxi, Zhejiang, and Shanghai have already taken steps to release guidance documents that directly relate to COVID-19. These confirm that the present-day epidemic could be a Force Majeure event. In addition, the China Council for the Promotion of International Trade has already started to provide Force Majeure certificates to companies in China who are experiencing challenging times with their overseas partners as a direct result of the COVID-19 epidemic.

Regardless of the jurisdiction, Force Majeure’s applicability should always be decided on an individual case-by-case basis.

Drafting Contracts During COVID-19

As a final consideration, going forward, and in any future contracts, it would be wise to address the implications of the COVID-19 epidemic. Some of the key points to include could be defining a ‘triggering event’ to either include to exclude events such as public health crisis, epidemic, state of emergency, etc. It would also be pertinent to review whether disruptions to labour and/or supply chains should be addressed in advance and form part of the contract.

To help mitigate any potential losses or problems, our Company and Commercial team at OGR Stock Denton can help you with any contractual preparations.

If you have any questions about your contractual obligations or would like help with a potential claim for Force Majeure, our dispute resolution solicitors at North London firm OGR Stock Denton  can give you the guidance needed to know exactly where you stand.

If you’d like to know more about the enforceability of Commercial Contracts during the COVID-19 epidemic, our linked article provides more information on this topic

The Impact of the New UK lockdown restrictions for UK Businesses

From the 5th of November, new national restrictions have been imposed across the UK. These measures will undoubtedly have an impact on UK businesses and the economy at large. In this post, our north london employment solicitors outline some of the potential implications of these changes to the markets while looking at potential employment issues this could cause for businesses in the UK. 

UK Business Closures

Following the latest lockdown announcement from the Government regarding the closure of businesses in the UK, there will be an obvious impact on the business economy. The Government has requested that all employees who can work from work continue to do so. However, there are many businesses and venues that have been ordered to close completely.

The top-level summary of these business includes those mentioned below; and while there are certain caveats to some of these organizations keeping their doors open for vital community services, the business owners and their local economies will be impacted for at least a month, with much speculation that this period of closure could indeed last for longer than the initial 4-week plan.

  • Non-essential retailers
  • Hospitality venues
  • Accommodations
  • Sports and Leisure facilities
  • Entertainment venues
  • Community halls and centres
  • Personal care facilities
  • Places of worship

Coronavirus Job Retention Scheme Update

The current CJRS was due to end on the 31st of October but has since been extended into December.

UK Furlough Scheme Latest Information – the 5th of November

The Government has now announced a five-month extension to the furlough scheme, meaning this will now last until Spring 2021. This is designed to give workers a certain amount of certainty over the winter and is designed to help protect millions of jobs in the UK. While this news is positive, employers in the UK still have many questions about what this means for them and for their businesses.

This next section is a summary from our of some of the most asked questions from UK employers about the furlough scheme extension from our finchley based employment solicitors:

Does my business need to have used the CJRS before in order to use it again?

No. In order to be eligible for the scheme, an employee will need to be on the PAYE payroll as of 23:59 on the 30th of October. You must have made an RTI submission to HMRC by this date.

What costs will employers need to pay under the extended CRJS?

The Government will pay 80% of any eligible wages for hours unworked, up to a maximum of £2,500. Employers are still responsible for paying any pension and national insurance contributions for the unworked hours.

Can staff now be furloughed if they weren’t previously?

Yes, as long as they were on the PAYE payroll by the deadline of 23:59 on the 30th of October, and provided the employer meets the eligibility requirements, this is fine. This means that any new starters or staff members who were not previously furloughed can indeed be included in this scheme.

If staff were due to return to work are unable to do so, what action should employers take?

If you have members of your team who were due to make a return to work but are now unable to do so, the key element for employers to consider is communication. As we are facing somewhat unprecedented times, it is good practice to speak to your employees over the phone or via video conference as soon as possible. Avoid sending emails as a primary form of communication, and be prepared to answer their questions or listen to their concerns. Always follow up key conversations with emails or letters, but in the first instance, take the time to reach out and answer their questions via phone or VC. Supporting the well-being of your staff at this time is going to be key, and regular catch-ups or team meetings over video conference is a good way to do this.

If I made someone redundant, can I bring them back and furlough them?

There is no clear guidance on this subject from the Government at this point. Although the original furlough scheme did allow employers to rehire staff who had been made redundant, the current guidance does not make it clear whether this will or will not be included just yet.

Is flexible furloughing still possible under the new CJRS scheme?

As with the current scheme, both full-time and flexible furloughing will be possible. So, for those employers looking to bring back staff on a part-time basis, it is possible to do this and use the furlough scheme for the unworked hours.

We would expect there to be further updates to the furlough scheme. These are the most prominent questions we’re hearing from people at the moment. Although the last-minute announcement didn’t give businesses much time to plan for these changes, they have confirmed that they will not extend the furlough scheme again. Rishi Sunak also confirmed that the furlough scheme would be reviewed in January once a review of the economic situation had been undertaken. 

Self-Employment Income Support Scheme Latest Information

Support for the millions of self-employed workers across the country has already been reviewed, and there will be a third grant offered at an increased rate to the previous grant. It will cover the period from November through to January and is to be calculated at 80% of the average trading profits, up to a maximum amount of £7,500.

Further information on the announcements made by the Government on the 5th of November can be found on this economic support factsheet.

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. 

Seeking professional advice for probate – understanding valuations and tax liabilities

Irrespective of how straightforward an estate may seem, using inheritance tax solicitors in London can prevent you from unnecessarily losing more money in the long-term. This post elaborates on some of the typical questions asked by clients seeking professional probate advice while exploring the probate valuation process more.

The system allows for a layperson to handle such matters themselves, without using any solicitors to manage things on their behalf. However, although an individual can get through the process relatively smoothly, we frequently, as North London Solicitors, are called upon to pick up the pieces. This process can be sectioned into three-stages:

Stage 1 – Valuation

The initial stage involves ascertaining the value of any assets and liabilities. While this sounds relatively simple, if you are dealing with jointly held properties or company shares, there are many things that the law will allow you to do when valuing such items. From an inheritance tax perspective, the difference between getting the valuation correct vs. getting it somewhere near to where you believe it should be, could be substantial.

Getting things right from the beginning and having the correct valuation could potentially save you more than the cost of taking professional probate advice in the first place.

Stage 2 – Tax Return

The complexities of the tax return, and by having a comprehensive understanding of what the rules allow you to do or not, can end up with a client seeing sizeable savings here. As trusted Finchley probate solicitors, we are experts in knowing the right way to structure these returns for the best possible outcome.

When handling all aspects of this for a client, we can ensure the valuation and tax returns are completed correctly and with the right information. This saves our clients both time and money.

Stage 3 – Court Application

Following an application to the court, or for a will, it would be after a grant of probate; that the court could potentially revert back with questions. These questions must be answered correctly and, in a time-efficient manner. If tax is applicable, then you must be able to show that any tax has been paid. Additionally, it’s imperative to know the correct period you have to pay the tax.

Many people aren’t aware that certain assets lend themselves to having tax paid over a 10-year-period instead of straight away. This knowledge alone can save a significant amount of stress and alleviative the immediate need to source those funds.  

In Conclusion

When people seek out help with probate-related matters, understanding valuations and tax liabilities can make a critical difference to the process and outcome. There are specific situations, particularly with tax allowances and the residential nil rate band; the rules around which are highly complex; particularly if someone’s moved out of the property or they downsize a property that may still allow you to claim those rules.

While people often believe that seeking professional probate advice from any North London solicitor will cost money; it may help clients save money while alleviating much time and stress in the process

Probate Valuation FAQs

What does a probate valuation mean? Probate valuation is a system that helps to establish the value of a person’s assets should they die.

How long should probate take? In the U.K, the average time probate takes may vary between 1-9 months. The complexity of the estate, its size, and the volume of applications to the local probate office can impact the processing time.

What is the difference between a probate valuation and a market valuation? Market value is usually a broad estimate obtained by looking at sales of other similar properties. In contrast, the probate valuation is obtained so that HMRC will accept it to establish the amount of inheritance tax that is due to be paid.

What happens if the sale price is higher than the Probate value? If a property sells shortly after probate is granted, and the final selling price is more than the value submitted for probate; then HMRC could either substitute the sale price and recalculate the Inheritance Tax Liability, or they may look at the increase as a gain, meaning that Capital Gains Tax becomes payable.

What happens if the sale price is lower than the Probate value? Where a sale price is below the figure provided for probate, and the property is sold within four years of the date of death, a claim with HMRC could give you a refund for overpaying inheritance tax.

If you would like to arrange a consultation or have questions about probate advice, please email me or speak with a team member directly on (0)20 8349 5500.

Stamp Duty exemption for UK home buyers

The COVID-19 pandemic has turned many industries upside down by virtually shutting off their customer base, and the Government has resorted to a variety of extreme measures in order to limit the damage that the businesses in these industries suffer. Of all these measures, one of the biggest is the Stamp Duty holiday, which could exempt home buyers from tens of thousands of pounds in costs. So how does the holiday work, who does it affect, and how can we help? Let’s take a look.

What is the Stamp Duty holiday?

Chancellor Rishi Sunak implemented the Stamp Duty holiday to revive the flagging housing market, as the residential property market clamped up in response to the economic situation. The measures mean that Stamp Duty only has to be paid on properties worth more than £500,000, rather than the £300,000 limit under the old rules. This measure actually doesn’t mean much for first time home buyers, because the average new house only costs £208,000, but to professional landlords and investors, it can mean a huge boost to their profits.

What are the potential savings?

For property dealers who regularly transact in homes worth more than £500,000 the old SDLT regime would have seen them pay in excess of £30,000 in Stamp Duty alone, paying 3% on the first £125,000, 5% on the next £125,000 and 8% on the last £250,000. Now, as a result of these changes they will only pay the minimum rate of 3% on the sale, so a £500,000 property will only cost them £15,000 in tax. Clearly it’s well worth considering investing during this holiday, which ends in March 2021, due to the level of potential savings.

How can we help?

If you’re an existing landlord or investor hoping to capitalise on the holiday, or you’re a new starter looking to dip your toes in the water, it pays to get expert advice in these unprecedented times. While this is a potentially golden opportunity to make a life-changing investment, the difficult economy also makes it a serious risk, and to go about it without the best help could have serious consequences. Thanks to our years of conveyancing experience, and our down to earth and no-nonsense advice, we can help you make the best investment with your money and to ensure you make the most out of the SDLT holiday. If you’ve got your eye on a property, and you’d like to make your move during this time, get in touch with us on (0)20 8349 5501.

Redundancy fears as the Furlough Scheme comes to an end

In March 2020, Chancellor Rishi Sunak announced an unprecedented government-sponsored furlough scheme designed to protect jobs during the pandemic. The scheme meant that the UK government would pay the 80% salaries of furloughed workers up to a maximum of £2,500 a month, in a bid to prevent job losses while lockdown restrictions meant that companies across the country couldn’t operate as usual.

As restrictions are lifted, the scheme is set to come to an end on October 31st. Without the government’s furlough pay, many people in the UK worry that businesses will start cutting jobs in the weeks leading up to this date. If companies either aren’t operating at full capacity or aren’t making the same income they were before the pandemic, it’s easy to see why job losses might be the likely outcome.

How has the UK fared so far?

2020 has already taken a toll on the UK’s employment levels. Since March, the number of employers in the UK planning 20 or more redundancies has consistently been at least twice as many as in the same month in 2019. 695,000 UK workers have been cut from the payrolls of UK companies since lockdown hit, and many more could be set to join them once the furlough scheme ends.

Sunak has repeatedly ruled out an extension of the furlough scheme beyond October, but what does this mean for the coming months? The Trades Union Congress general secretary Frances O’Grady thinks government intervention is the only way out, saying: “If the government doesn’t act, we face a tsunami of job losses”, which was backed by governor of the Bank of England Andrew Bailey who suggested some sectors would benefit from further help, having previously backed the decision end the scheme in August.

Does employment law offer any protection from redundancy?

It’s possible to challenge a redundancy with proper legal advice, although if your employer is making you redundant alongside many other employees as part of Covid-19 cuts, it’s unlikely your appeal will be upheld. However, some protections are in place: you are still entitled to the full 45 days redundancy notice, and the government has recently brought in a new law to ensure that furloughed employees receive redundancy payments based on their full salaries, rather than their furloughed salaries.

For help and advice on matters relating to employment law, please get in touch with our employment team today

Government to bring forward an amendment to the Domestic Abuse Bill

The Government is bringing forward an amendment to the Domestic Abuse Bill inserting a new clause that would ensure that victims of domestic abuse are automatically eligible for access to special measures in family proceedings without the need for any determination of the victim’s vulnerability

This includes a new clause  given the Court the power to give a direction prohibiting cross-examination in person.

The direction will be given where such cross examination is likely to diminish the quality of the victim’s evidence or would cause significant distress to the witness

The court would have the power to appoint a legal representative to conduct cross examination on behalf of the perpetrator with payment made from central funds.

Further guidance is awaited.

This news is welcome. For too long, victims have been subject to cross examination by perpetrators. Currently, the Judge has limited powers only to prevent direct questioning, but this has the effect of making the process longer and more difficult.

The family courts make decision with lifelong consequences for children and it is essential that evidence is given that ensure a safe, lasting and satisfactory outcome for the child to ensure justice is done for all involved.

Graeme Fraser, Partner & Head of Family comments as follows:

This is welcome news, particularly at a time when domestic abuse has manifestly increased as a result of the Covid19 disruption and lockdown. We hope that these measures can be brought into force imminently so that justice can be done to all those affected.

 For information and advice in relation to domestic abuse issues, please contact the OGR Stock Denton Family Team.