Business Relief and BAD Rate Relief (Entrepreneur’s Relief!)

Business Relief can play a key role in Inheritance Tax (IHT) planning for anyone, however it should be of particular interest to SME business owners.

 

Business Relief, or Business Property Relief as it used to be known, was first introduced in the 1976 Finance Act. It was introduced to ensure that, after the death of the owner, a family-owned business could survive as a trading entity, without having to be sold or broken up to pay an inheritance tax liability.

So long as the asset has been held for at least 2 years, it is possible to receive 100% Business Relief on:

·       a business or interest in a business

·       shares in an unlisted company

It also allows you to give away business property or assets while you are still alive and your estate can still benefit from Business Relief on Inheritance Tax.

 

So, having established that your business is IHT efficient while you own it and if you gift it, what happens if you sell it?

You need to be aware that if you sell your business or shareholding, the money you realise from the sale is now liable for Inheritance Tax.

However, it is possible to invest the funds realised from the sale of a business in to ‘replacement property’ and retain the IHT exemption.

Business Relief is not just for business owners, sole traders, partners and shareholders, it is for private investors too.  Many private investors use Business Relief to help mitigate inheritance tax and there are a number of investment firms that make the process of investing in Business Relief qualifying companies very straight forward.

The advantage that the business seller has is that, while the private investor has to wait 2 years before their holding qualifies for Business Relief, a replacement investment qualifies immediately. The rules for replacements say that you need to have owned a qualifying asset for a total of at least 2 years over the last 5 years, and at the time of death or when the gift is made.  Therefore, even if you have sold a business in the last couple of years you should look at the benefits of moving the proceeds from the sale back into a Business Relief qualifying investment.

While we are thinking about the tax implications of a business sale, it is worth bearing in mind the impact of Capital Gains Tax and reminding ourselves of the changes that were made to Entrepreneurs Relief in 2020.

For a start, it is not no longer called Entrepreneurs Relief.  It is now called Business Asset Disposal (BAD) rate relief.  While the rules were tightened slightly so that to be eligible, a shareholder must have a 5% or more shareholding, and have been involved for a year or more with a company as an employee or director, the most significantly change was that the lifetime allowance of gain that will be taxed at a reduced rate of 10% has been greatly reduced, from £10million to just £1million.

Without wanting to state the obvious, Capital Gains Tax is only paid on the gain, not the full sale price of the business.  Any initial investment, directors loans, purchase costs and various other costs and fees can all be deducted.  Also, even though gains in excess of £1mn will be taxed at 20%, Capital Gains Tax still remains one of the less punitive taxes.  Therefore business owners should be able to extract a high percentage of the value of their business when selling.

Iain Campbell is a Senior Adviser at Stow Wealth Management Limited where he provides bespoke financial advice and planning to private individuals and companies.

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Corali: A Leader in Dance created by Artists with a Learning Disability

Music gives a vibration and mood that we can feel in our bodies. Almost instantly, we start moving. For most people, this happens naturally.

Corali explores the relationship between performers with and without a learning disability, between dance and other art forms, and between professional and participatory artwork.

Simon Jarrett, the chair of Corali, has for many years been committed to supporting people with learning disabilities to communicate and to be part of the larger community.

Corali has three main strands of activity:

• Producing original, devised performances in a variety of settings, including high profile arts venues, pop-up and site-specific settings

• Offering ongoing professional development and training opportunities, for their own artists and for other people, such as teachers

• Delivering a full programme of engagement and outreach activities throughout the year, including a schools programme, a youth company and a weekly adult community class

Corali is based in South London, often working in partnership with other venues, companies and artists across the capital, including Tate, National Youth Dance Company, Brixton House, Thick & Tight, and Judith Brocklehurst. To get an idea of the innovative work Corali does, check out this performance at Tate Britain.

corali charity

Photo courtesy: Corali

Corali´s vision

Corali’s vision is that people with a learning disability are recognised and valued for their equal place in the arts and society. By raising their national and international profile as a leader in dance created by people with a learning disability, Corali want to extend their influence, to inspire more people and change perceptions of disability.

The Benefits of Dance for People with Learning Disabilities

Dance inspires and empowers dancers and teachers.

Corali provides an opportunity for people with learning disabilities who do not wish to be defined by their ability. Corali is a charity providing opportunities for creative discovery, growth and performance for people with learning disabilities and provides an inclusive creative environment.

Remote sessions enable the members to stay active, connected and creative. Weekly classes will be delivered to both the youth and adult community classes for the professional development class interested in taking their dance and performance further. Therefore Corali wants to use Zoom to organise classes with teachers and equipment for its members and the project requires £5,000.
An example of remote classes: https://youtu.be/PG7dDgrjqbM

The Brooke Consultancy supports Corali by corporate sponsorship and as a New Model Law Firm we understand the benefits and the requirements necessary for remote delivery.

Lynne Brooke has a daughter with profound and multiple learning disabilities, not a member of Corali unfortunately, and that The Brooke Consultancy has become a corporate sponsor.

We are using Corali’s Just Giving page and we have decided to kick it off with £500 which will be ring-fenced to achieve the objective of delivering remote sessions to enable members to enjoy dance and take their dance performance further.

Join us in donating to Corali by clicking here and help people develop their creative talents, confidence and independence.

 

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Applying for UK visa: Your Options today

Brexit has happened and COVID-19 is happening. The UK Government has indicated in its recent Budget that it accepts that visas will be an important part of its response to these seismic events: in a changing world, the UK will have to reach out to a wider range of countries overseas to ensure that it maintains its reputation as a global centre for business and to aid its recovery from its current problems.

UK visa options

Which UK visas are currently available for overseas business people and highly skilled individuals? Here are some of the main options:

Investor visa route:

·       The investment must be £2m or more.

·       It is necessary to make the investment in share capital or loan capital in active UK companies – not in UK Government bonds.

·       It is normally possible to apply for Indefinite Leave to Remain after 5 / 3 / 2 years with an investment of £2m / £5m / £10m.

·       It is then normally possible to apply for British citizenship one year later.

·       The key requirement is the investment funds. Clearly the required amount is substantial. The main other requirements that sometimes cause difficulties are source of funds, location of funds and having a UK bank account for the investment funds.

·       You can find some basic information about this visa route (including some of the necessary documents) here: https://www.gov.uk/tier-1-investor

Innovator visa:

·       The key requirements are to have at least £50,000 in investment funds, for a business idea that is innovative, viable and scalable and that has received an endorsement from an official endorsing body.

·       The main barrier is generally obtaining the endorsement, as there are few endorsing bodies and they typically have restrictive criteria.

·       There are no specific requirements for an applicant’s experience. The point is that s/he needs to be a credible applicant – so for example if s/he has no experience in tech and wants to set up a tech company, it is unlikely that s/he will receive an endorsement.

·       It is normally possible to apply for Indefinite Leave to Remain after 3 years.

·       As for most other visas, the applicant will need to be able to show that s/he can support her/himself and any dependants.

·       It is now easier to apply for visas, including this visa, in the UK. However, there are limits – for example, it is not generally possible to apply for this visa if you are in the UK on a visit visa.

·       You can find some basic information about this visa route here: https://www.gov.uk/innovator-visa

 Global Talent visa:

·       This route is for leaders or potential leaders in academia / research, arts and culture, or digital technology. It is therefore clearly limited in scope. I will in any case set out the main features here:

o   It is necessary to obtain an endorsement from an official endorsing body.

o   The criteria are not easy to meet – this route is for leaders or potential leaders.

o   It is not necessary to have a job offer.

o   It is normally possible to apply for Indefinite Leave to Remain after 3 or 5 years.

o   You can find some basic information about this visa route here: https://www.gov.uk/global-talent

 Representative of an Overseas Business visa:

·       This enables an overseas company to send an employee to the UK to set up their first commercial presence here.

·       The employee would need to have a salary from the company and be a senior executive, enabling her/him to make operational decisions for the company.

·       S/he will need relevant experience.

·       It is necessary to provide clear information on the ownership of the company.

·       It is normally possible to apply for Indefinite Leave to Remain after 5 years.

·       You can find some basic information about this visa route here: https://www.gov.uk/representative-overseas-business

 Skilled worker visa:

·       This is for employees of UK based businesses which have a sponsor licence from the Government enabling them to employ foreign nationals.

·       The main barrier is generally obtaining the sponsorship – i.e. finding a company that is able and willing to sponsor. However, highly skilled people are in principle good candidates.

·       The salary needs to be at a sufficient level. This depends on the precise nature of the job in question, but generally it should be no lower than £25,600 per year.

·       It is normally possible to apply for Indefinite Leave to Remain after 5 years.

·       You can find some basic information about this visa route here: https://www.gov.uk/skilled-worker-visa

Intra-company visa route:

·       This is for employees of international companies who are transferred to the UK to work in existing branches of those companies in the UK.

·       As with the Skilled Worker visa, the employer needs to have a sponsor licence.

·       The salary needs to be at a sufficient level.

·       This does not provide a route to Indefinite Leave to Remain.

·       You can find some basic information about this visa route here: https://www.gov.uk/intracompany-transfer-worker-visa

Conclusion

Clearly, no visa route is simple. However, there are some options for highly skilled people. In the recent Budget, the Government also announced that it plans to introduce visa reforms for highly skilled migrants, including: a new unsponsored visa for international talent in science, research and tech; improved visa processes for scale-ups and entrepreneurs; and simplified bureaucracy for high skilled visa applications. It remains to be seen whether this will be enough for the UK to remain a global centre for business and to aid its recovery.

by Usman Sheikh

Ansar London Ltd.

Collaboration Partner – The Brooke Consultancy

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How ESG Requirements affect your Business

ESG has replaced Corporate Social Responsibility.  It is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce as well as the community at large.

ESG (Environmental, Social and Governance) while developing business opportunities and encompasses the following, below is a working list:

Environmental: pollution, waste, water, natural resource management, land use and deforestation, energy and climate change.

Social: customer satisfaction, data protection, privacy, health and safety, human rights, modern slavery, stakeholder and community engagement, employee relations, conflict zones and conflict minerals.

Governance: managing on a transparent basis with shareholder and employee involvement, anti-bribery an d corruption, anti-money laundering, executive pay, the gender pay gap, Diversity and Inclusion, board composition, conflicts of interest, political contributions, whistle blower programmes.

ESG is about ethics and it is not inconsistent with growth and profitability and will be attractive to certain categories of investors.

Pressure from investors is led by issues such as time for the environment and social equity and the view that ESG compliance is good business practice.  When funders look at pitch decks, they have in mind ESG as encompassing critical factors.

Companies are experiencing increase in pressure from investors, employees, customers and other stakeholders to increase transparency on sustainable and social responsibility by ESG reporting.

Transparency

Companies need to be transparent about their activities and that must be dealt with in their accounts if they are a listed company or if a private company that has a turnover of £36m+.  However, it is good practice for private limited liability companies to voluntarily address ESG in their Accounts.

Transparency means the market is better informed about companies and their behaviour. That impacts upon the issue of investment because lack of regard for ESG can affect a company’s reputation.

Consumers need to trust companies and that means that companies need to be proactive, keep the market regularly informed about their activities, show how they manage operations and the impact they have on the communities in which they operate.

Growth

ESG is a necessary part of any company and its growth. It is essential that management addresses the issue of ESG as a question of not only complying with legislation but also embedding it as part of its policies, governance, values and beliefs that find practical expression in how a company conducts its business.

 

Investors, Employees and Buyers

When looking at potential investments, investors will consider a company’s ESG as well as long term risk, opportunities and financial performance.  Customers and employees may well evaluate a company’s impact in ESG terms to decide if they want to work for or buy from a particular company.

 

How to create an ESG programme

ESG is an integral part of a company taking serious steps to build its corporate reputation and create a strong base for engaging employees, shareholders and stakeholders.

You can create your own ESG Management Framework. There are various tools available but you know your business best and how you want it to perform in relation to ESG which after all is a practical way of enhancing your company’s reputation as a company for which people want to work and to build a better picture of your company and its ESG rating.

Reporting on ESG in your financial results can benefit your company by presenting a sustainability story that is aligned to your business strategy and financial performance.  To do that you will need to:

·       Identify stakeholders impacted by and impacting on your company.

·       Formulate your ESG issues, performance matrix, targets, initiatives and frameworks.

·       Communicate how your ESG Management Framework and reporting aligns with your business strategy.

·       Report using your ESG Management Framework to achieve continual improvement by understanding sustainability issues that affect your business.

The actions in your ESG Management Framework must be specific, practical and transparent and the message in your financial report should be focused of your target audience. Reporting ESG with your financial results can benefit your company by having a sustainable narrative that is aligned to your company’s business strategy.

There is the opportunity to be imaginative without detracting from your company’s performance, for example SMEs can collaborate with Social Enterprises on projects such as educational sponsorship programmes, the provision of fresh water in countries where it is needed to improve lives and the environment in which they live.

If you have a query, please contact Lynne.

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Operational resilience to cyber-attack

Everyone thinks security. Keep the bad guys out. You’ve done all you can but then something or someone lets you down… is your business prepared for operational compromise?

Victims of cyber attack are not limited to large corporates – they just get the media attention. In fact, if you’re a small or medium-sized enterprise there’s around a 1 in 2 chance that you’ll experience a cyber security breach (source: Sarah Lyons, NCSC Deputy Director). And, if you rely on sensitive and time-critical data, the impact can be just as significant as it was for Garmin, TalkTalk or BA, simply on a smaller scale.

Analysis demonstrates that organisations with well-designed, and rehearsed, contingency plans survive cyber-attack far better than those without. This is what cyber ‘resilience’ is about.

This paper aims to explain how SMEs can also prepare to survive a cyber incident, by following a few simple steps.

From the IT department to the boardroom – cyber as an operational risk

The potential impacts of cyber-attack on ‘UK Plc’ have grown exponentially over the last decade, with our vital infrastructure and data being exposed to the expertise and determination of ‘bad actors’ across the globe. Over time it has become increasingly obvious to business, government and regulators that – in addition to preventing attacks – organisations must become more resilient to them should they occur.

Across the UK’s critical infrastructure and financial systems, operational resilience to cyber compromise has been matured and tested to breaking point. Regulators have harried the sectors they govern, and the concept of cyber insurance has taken root.

Today, cyber risk is firmly embedded within standard operational risk models and its management will doubtless continue to evolve.

However, the story does not end there as the concept of planning ahead for cyber compromise should also be applied to smaller businesses.

With over 60% of cyber-attacks aimed at small to medium sized organisations, and potentially fewer resources available to respond to compromise, SME cybercrime represents a potentially significant risk to the UK economy – even if it does garner fewer headlines.

How improving cyber-resilience protects your business

As a Marsh & McLennan / Cranfield study (source: Marsh & McLennan / Cranfield University) shows in this graph, mature cyber resilience significantly improves an organisation’s recovery from attack.

Simply put, the organisations which thrived were those which had prepared and rehearsed for compromise.

Although the scale and complexity is obviously different, there is no reason why the key lesson learned in large companies cannot be taken on board at the SME level – contingency planning can significantly improve how well your company survives an attack.

 

Cyber contingency planning – hope for the best, prepare for the worst

Contingency planning in the cyber world has fundamentally the same aim as the traditional business continuity model – keep the business running in an emergency. The difference is the the nature of the compromise – it’s not about buildings or people, it’s about data and systems. Not where the job gets done or by who, but if at all.

To adapt to this recent phenomena, management need to understand the technical aspects but the ‘plan – react – learn’ cycle depicted below could be adapted to most traditional operational risks.

Stages 1 & 2 are at the core of cyber contingency planning, and are what any SME can do to ensure stages 4 & 5 are effective. What this model also clearly illustrates is that – whilst the IT function has a core role in protecting the business and repairing the damage – it cannot prepare the business itself or manage an incident from a business perspective.

Contingency planning in SMEs need not be complex or arduous. Effective plans can be built around a simple three-step model.

1. Identify what you need to protect the most

Firstly, you need to identify your critical business processes, the technology which delivers them and the data which underpins them. In other words, the ‘crown jewels’ of your business.

Then you need to evaluate the impact to your business if a such process was compromised, and how much that impact worsens if the compromise persists.

Would the worst problem be a loss of availability, confidentiality or data integrity? And what would the impact be? Perhaps direct financial losses or loss of market share. Maybe reputational damage or regulatory sanction.

This long-established risk management approach is known as Business Impact Analysis and is essential to give focus to your contingency planning.

2. Analyse the threat vectors

Which existential cyber threats are most dangerous to your crown jewels? If, for example, a business process is absolutely time-critical, then a loss of availability has the biggest impact, and ransomware or denial of service attack would be the highest threats.

If, however, you are handling highly sensitive customer data, a breach of confidentiality would be the most damaging, with internal malpractice or accident representing likely threat vectors.

Or, if the accuracy of data is essential – perhaps in payment systems – a compromise to its integrity is what really counts and you would perhaps be concerned about malware corruption of data or hacking.

By aligning the most critical impacts to the most likely threat vectors, you create the base on which you can construct likely compromise scenarios, in turn from which you will develop response mechanisms.

3. Plan for compromise and rehearse those plans.

Incident management planning involves trying to envisage the kind of questions you’d be asking yourself if, one Monday morning, you lose all access to your business data or systems.

You would need to determine, and quickly;

• What has happened and what the impacts may be;
• Whether those impacts will worsen with time;
• Who is in charge of the situation;
• Who else needs to be involved (internally and externally);
• What are the most urgent tasks, and what can wait;
• Who might need to be informed (clients, suppliers, regulators etc);
• Whether law enforcement or legal advice is appropriate;
• What manual workarounds are available – how to keep the business going

And, as you start to recover;

• What caused the compromise and whether there were control failures;
• What can be done to lessen the chances of re-occurrence;
• Where management of the incident did not go according to the plan and how the latter needs to change

In addition to giving a clear framework for handling an incident, the plans will also allow continued access to vital data, such as contact information – possibly in printed format or stored off network.

Once you have produced your plan, you will need to ‘scenario test’ it;

• Walk through the plan step-by-step with all relevant stakeholders;
• Challenge each element with “but what if” questions – always presuming that the worst could happen even if unlikely.

Cyber contingency planning – How we can assist SMEs build resilience

The most important things that we bring to this exercise are proportionality and pragmatism. There is no need to over-complicate this in smaller firms with simpler structures so we do not approach projects as some, more traditional, consultancies might. For example, the Business Impact Analysis stage is usually completed with a self-assessment questionnaire, keeping time and costs to a minimum.

If you would like to ask any questions about protecting your business from cyber-attack, or how we might assist, please feel free to get in touch for a no-obligation discussion.

Michael Brunker CISM CIPP/E
Principal – BRP Consulting
Collaboration Partner – The Brooke Consultancy

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The Legal Sector Must Support the Lifeblood of the Economy

SMEs make a massive contribution to the economy and represent almost half the country’s private sector turnover with a combined annual turnover of £1.8 trillion, sustaining about 60% of all private sector jobs.  According to a recent survey, only 13% regarded lawyers as cost effective and almost half would only use legal service providers as a last resort.  Our Founder, veteran lawyer and SME champion Lynne Brooke says law firms need to re-establish trust with small and medium-size enterprises by providing cost effective and client focused services that actually support them. 

The devastating financial impact of Covid-19, with a total anticipated cost to UK SMEs exceeding £69 billion, and the new rules around Brexit, mean now more than ever, companies need effective business and legal advice to help them survive.  The legal sector will need greater aptitude for business to solve their client’s problems, and only in doing so, can lawyers expect improved trust in return.  With the pandemic causing a crisis that affects so many lives and livelihoods in the SME sector, lawyers can now play a vital role in protecting the backbone of the country’s economy.

Seeking legal advice should never be seen as a last resort!  We believe now it is more important than ever for lawyers to rekindle trust with the SME community. TBC works to achieve that by being business problem solvers, rather than just legal problem solvers. We use technology and virtual working practices to empower our multi-disciplinary network of lawyers and specialist business collaborators to help the SME sector and social enterprises grow and prosper.

There has been an emergence of New Model Law Firms disrupting the legal sector, providing greater choice and competition to businesses seeking legal advice. The law is broad and constantly evolving, and SMEs now need ‘a partner in law and business’ who is fairly priced, longevity focused on their business and trustworthy. Coupled with this, an increasing number of lawyers want to work within more rewarding and flexible structures, where their professional, financial, and personal ambitions can be met.

The Brooke Consultancy (TBC) was set up in 2009 to provide ‘Business Advice in the Round’, with the specific purpose of creating a law firm where SMEs can access collective business knowledge and legal expertise from a single trusted source and lawyers, freed from the burden of admin can enjoy all the benefits of operating as part of a multi-disciplinary team, without losing autonomy over their career and income.

The Brooke Consultancy is actively looking for lawyers of all experience levels and in all regions of the UK to join them.

* Source: Legal Services Board

** Source: Federation of Small Businesses

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Directors face increasing risk of personal liability and criminal prosecution

Amid the human tragedy of the loss of life resulting from the corona virus pandemic, some of the financial consequences of the crisis and new legislation brought in by the government in response to these problems have not received anywhere near the amount of press coverage and scrutiny that would have been expected in more normal times.

The speed with which the various financial reliefs had to be given following the first national lockdown in March 2020 did not allow a lot of thought to be given to the safeguards that needed to be put in place before funds were released.  Not surprisingly the various financial reliefs granted have been plagued by fraud.  However, the scale of the suspected fraud in relation to furlough scheme and the various corona virus loans is breath taking at an estimated £30 billion. To put this into context this is equivalent to the annual budget for Public Order & Safety services which include amongst other things the cost of the nations police force to catch criminals, the cost of the Crown Prosecution Service to prosecute these criminals and the prison service to lock them up.

In lieu of a mea-culpa, the government has recently introduced the Finance Act 2020 as its first shot to see if it can recover some of its money. The Finance Act gives HMRC extensive new powers to conduct criminal investigations and pursue directors by pressing criminal charges and issuing personal liability notices for a company’s tax liabilities. If this sounds a bit draconian it should be noted that furlough cheats are now on par with drug lords as HMRC has also been given the power to conduct dawn raids on homes and business premises under a warrant.

The political and financial pressures that have led to this development did not simply arise in the last year or so but have been brewing for the last 12 odd years since the Great Financial Crisis of 2008/2009 and its useful to see how we got here.

The central tenet of the Companies Act 2006 is that directors of companies have a fiduciary duty to exercise their powers with the objective of promoting the success of the company.  Furthermore, in doing so they are expected to exercise reasonable skill, care and diligence in performing their duties whilst avoiding conflicts of duty by exercising independent judgment. Nothing controversial here.

In good times, the benchmark for assessing a director’s conduct is a subjective test which runs along the following lines – did the director honestly believe that his act or omission was in the best interest of the company. Unfortunately, in bad times when a company is teetering on the edge of insolvency this is turned on its head.  Any concerns about the wellbeing of shareholders are shuttled to one side and the interests of creditors become paramount and the question is reframed as to whether an intelligent and honest man in the position of a director of the company could, in the circumstances, have reasonably believed that the transaction in question was for the benefit of the company.

More meat was put on the bones in the recent case of BTI 2014 LLC v Sequana SA (2019) which threw out of the window the concept of limited liability, at least as far as it applies to directors.  Apparently, the privilege of limited liability is not conferred on directors, that protection is only afforded to shareholders. What this means in practice is that if a creditors interest test is triggered and the director’s conduct is found wanting, there is a very real risk that they may be found to be personally liable for the debts of the company.  In simple terms the closer to the insolvency event a transaction takes place the greater the burden of the duty to creditors.

Which brings us to the Finance Act 2020.  This simply expands the scope of powers available to one creditor, namely HMRC, that believes it has unwittingly been the victim of the financial equivalent of domestic abuse- “tax abuse”.  In HMRC’s views this means that anyone involved in activities such as tax avoidance /evasion and phoenixism where a company goes into an insolvency process without paying taxes can be pursued.  The legislation has been broadly drafted to catch in addition to the directors any employees and professionals like accountants, solicitors and tax consultants who may have advised the company.

Apart from the twin threats of criminal prosecution and personal liability the third change introduced by the Finance Act puts skin in the game for HMRC.  This is the re-introduction in December 2020 after 17 odd years of secondary preferential status for all the company’s PAYE and VAT liabilities where companies go into an insolvency process.  The big change this time around is that there are no time limits on the how long the VAT and PAYE have been outstanding. For lenders with floating charge security these changes mean that the value of their security may potentially be worthless as HMRC will be paid in full in priority to them.

In 2021, as HMRC flexes its newly granted long desired powers it is more important that directors and promoters of companies seek appropriate professional advice to ensure that they do not fall foul of new legislation as they navigate through the most challenging and turbulent trading conditions in living memory.

by Nimish Patel

Partner, Re10 Restructuring and Advisory Ltd

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The Importance of Insurance

There are two schools of perspective when it comes to insurance:

1.       Insurance is a waste of money.  Pay a premium, never claim and round it comes again the following year, and there is no return.  Plus, it takes time we do not have; or

2.       Insurance saved my business, when the {insert disaster situation here}.

The key is understanding what you buy when you purchase insurance and knowing that if the worst happens then there is some insurance that will respond.

I have been an insurance broker for over 30 years.  I have spent my time meeting businesses and not for profits getting to understand what it is that worries them and letting them know what I would be worried about if I was in their shoes.  It is a relaxed approach.  No one needs to buy insurance unless they want to.  There are only two compulsory covers – employers’ liability and motor fleet – so everything else is a matter of choice.

The choice needs to be an informed one.

It has been a turbulent year in the insurance world.  After many years of relatively low premiums in a competitive insurance market, the tide turned.  Fires, floods, overseas disasters, a pandemic and subsequent economic slowdown have hit insurers hard.  Premiums are going up for many, but not all.

Now is the time to become informed.

I started Sona Insurance Brokers in November 2019 having worked for a few insurance brokers over the years with a resolution that I would advise clients on what they can and cannot insure for and what they might consider and manage.  I am not an advocate of buying any and every policy that a company could buy, but I have seen my fair share of surprising situations to know how valuable a policy can be when things go wrong, particularly cyber related in recent times.

Part of the role is to be there when things do go wrong.  I have seen people run for the hills when things go wrong.  That is not our approach.  Sona wants to help.

Sona will help you undertake a thorough review of your organisation’s risks.  It does take a bit of time, but it leads to some major benefits, such as better premiums, preparedness and importantly peace of mind.

Sona means wisdom.  It is wise to be informed, particularly in these turbulent times. For more information visit: www.sonainsurance.com

by Rob Thacker

Sona Insurance Brokers 

Collaboration Partner – The Brooke Consultancy

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Steps to be taken in relation to trademarks and designs

Steps to be taken in relation to trademarks and designs since the advent of the UK/EU Trade and Cooperation Agreement

–        Make a note of the new UK registration numbers along with the due renewal dates.

–        File new UK trade mark and design applications in relation to any pending EU applications:  any EU trade mark applications or EU design applications still pending on 1 January 2021 will NOT have been automatically cloned into comparable UK registrations.  This includes any designs which may have been allowed by 1 January 2021 but under deferred publication. Provided the new applications for trade marks and designs are filed in the UK by 30 September 2021, the original filing dates of the EU pending rights can be maintained.

–        Check whether any comparable UK rights fall due for renewal during 2021.  Even if the EU registrations have already been renewed, the UK registrations will NOT be automatically renewed if they fall due in 2021

–        Ensure that any licenses recorded against EUTMs are re-registered against the new UK registrations:  any licenses recorded against an EUTM registration will NOT automatically be recorded on the UK trade mark register

–        Consider whether to appoint a UK representative in relation to your new UK registrations.  Whilst it is not compulsory to do so unless the registrations are subject of any proceedings (e.g. invalidation proceedings), there is an advantage to appointing a UK trade mark attorney as the address for service as this will ensure any official deadlines and renewals are entered into a records system to ensure that no rights are lost

 

The patent side of IP is largely unaffected by Brexit because the European Patent System exists outside the EU.    In fact, nothing changes for patents and UK patent attorneys are still representing applicants at the EPO exactly as they did before Brexit.  Brexit does mean that if the Unitary Patent and the Unified Patent Court eventually does come to life, the UK will no longer participate in that. However, this is not up and running yet (and there are doubts as to whether it ever will be) and so there’s no particular action that you need to take on that yet.

Rosemary Cardas of Keltie LLP:  Rosemary.Cardas@keltie.com

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Calling All Developers – Are You Commonhold Ready?

Pankaj Patel is TBC’s commercial and property lawyer who combines his wide legal skills with many years’ of entrepreneurial experience.

The concept of Commonhold has been around since 2002 but there has been very little take up by developers.  However, now that there has been escalating criticism of leasehold properties, the time may now have arrived. It’s not that novel; it’s the way that flats or units are sold in Australia and in USA.  That’s why they are called a Unit or Condominium. Instead of owning a leasehold flat, you purchase a freehold flat.

Leaseholders are granted a lease by the freeholder to occupy a flat for a fixed number of years. Leaseholders encounter problems, including:

· being required by the lease to pay ground rent, which increases alarmingly over time;

· as the lease gradually gets shorter, its market value slips, and there are problems selling it; buyers are unable to obtain a mortgage, as lenders are averse to lending against short leases;

· having to comply with restrictions in the lease such as not being able to keep any pet at all. This may sound de minimis (a trifle), but pets have become popular now people are spending a lot of time at home.

Government reforms are expected to include legislation: –

· enabling leaseholders to extend their leases to 990 years, for a fee payable to the freeholder;

· requiring ground rents to be zero in newly extended 990-year leases and new leases;

· encouraging Commonhold ownership instead of leasehold.

Commonhold is a form of ownership for multi-occupancy developments, such as a house divided into flats. In a Commonhold structure, each flat owner: –

· is called a ‘unit holder’, and owns the freehold of their flat (their flat is called a ‘unit’); there is no ground rent and their interest is not limited to a fixed number of years.

· is also a member of a ‘Commonhold Association’, which is special form of limited company, which is the freehold owner and manager of the ‘common parts’ of the development.

Thus, as one of the members of the Commonhold Association, a unit holder has a ‘communal stake’ in the management of their development, unlike a leasehold.

Commonholds have been available for over a decade, but very few have been formed for various reasons. The Government reforms are expected to make the Commonhold structure popular, and perhaps even compulsory.

The Government reforms, together with adroit marketing by a developer, may result in units in a Commonhold development achieving a higher market price on sale, than a leasehold.

A higher market price may be attractive to developers, representing an accelerated receipt of a lump sum in payment for giving up the freehold.

We shall be following the Government reforms as they take shape in the coming months.

If you have a query please contact Pankaj.

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