Employment Bulletin – November 2018

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Theresa May wants ethnicity pay reporting to tackle discrimination

Prime Minister Theresa May has announced plans for a series of measures to remove the barriers facing ethnic minorities in the workplace

Mrs May has launched a consultation on ethnicity pay reporting in response to the recent Race Disparity Audit, which revealed significant disparities in the pay and progression of ethnic minority employees compared to their white counterparts.

In the first consultation of its kind, the government will invite employers to share their views on a mandatory approach to ethnicity pay reporting, since the number of organisations publishing information on the issue voluntarily remains low.

The consultation will run until January 2019.

Mrs May also wants to establish a pioneering Race at Work Charter, which will commit businesses to a set of principles and actions designed to drive forward a step-change in the recruitment and progression of ethnic minority employees.

Major organisations including NHS England, Standard Life Aberdeen, Norton Rose Fulbright, Saatchi & Saatchi, KPMG, RBS, the Civil Service and WPP are among the early signatories.

Mrs May said: “Every employee deserves the opportunity to progress and fulfil their potential in their chosen field, regardless of which background they are from, but too often ethnic minority employees feel they’re hitting a brick wall when it comes to career progression.

“That’s why I’m delighted to launch the Race at Work Charter, which gives businesses a clear set of actions to work towards in helping to create greater opportunities for ethnic minority employees at work.

“Our focus is now on making sure the UK’s organisations, boardrooms and senior management teams are truly reflective of the workplaces they manage, and the measures we are taking today will help employers identify the actions needed to create a fairer and more diverse workforce.”

Leading employment lawyers say the new measures could lead to a flood of tribunal claims relating to unequal pay and race discrimination.

Please contact us if you would like more information about the issues raised in this article or any aspect of employment law.

 

Woman ‘side-lined’ during maternity leave wins discrimination claim

A compliance officer with an international bank who was “side-lined” after having a baby has won her claims of maternity and sex discrimination.

The employee joined the bank as a senior compliance advisor in 2012. By 2015 she was being considered as a possible candidate for head of department.

In 2016, she went on maternity leave and maternity cover was recruited to take her place until she returned. However, the employee claimed that her duties were really carried out by a colleague who was junior to her at that time.

While on maternity leave, the employee contacted the bank about attending a quarterly meeting but was “strongly discouraged” from doing so. She attended a meeting prior to her return expecting a formal handover to her, but no such handover took place.

When she returned to work, she felt that her position had been eroded. Her maternity cover had left as planned but the junior colleague was now carrying out much of her work. She complained that she was being marginalised.

An internal talent review again identified her as a potential department leader, but this time suggested she would be ready in two or three years.

The employee, who still works for the bank, brought claims of sex and maternity discrimination to the Employment Tribunal, which found in her favour.

It found that while she was on maternity leave, her junior colleague “had taken over nearly the entirety of her role”.

The Judge said: “When [the maternity cover] joined, rather than providing maternity cover by doing the Claimant’s job, she provided support, advice and supervision to [the junior colleague] who continued to essentially undertake the Claimant’s job.

“That is why there was no handover on the Claimant’s return. There was no real intention of [the junior colleague] handing back the work. Since the Claimant’s return, despite the protestations to the contrary, she and [the junior colleague] have been essentially at the same level.

“We find that the Claimant was side-lined on her return from maternity leave and her role was diminished. That is continuing, and we consider it is ongoing maternity discrimination.”

The tribunal also found that the employee had been subjected to sex discrimination because she was not fairly considered for the head of department role in 2015. She and another female candidate had been described as “divisive”. The term would not have been used about a man in similar circumstances and amounted to direct sex discrimination.

 

Company held liable for MD punching employee after works part

A company has been found liable for an assault by its managing director after a Christmas party that left an employee with brain damage.

The incident happened after the director organised and paid for a Christmas party for staff. After the party he arranged for taxis to take some of the attendees to a nearby hotel, where they were staying at the company’s expense.

They all continued drinking and a work-related discussion turned to a new member of staff, who was said to be receiving higher pay than others.

The director began to lecture his employees, and when challenged by a manager, he punched him twice. The second punch knocked the manager to the floor where he hit his head and sustained a serious brain injury.

The issue before the High Court was whether the company was vicariously liable for the director’s actions.

The judge found that it was not, because the hotel drinking session was entirely independent of the Christmas party and unconnected to the company’s business.

The manager appealed, saying that there was enough connection between the managing director’s position and his wrongful conduct to render the company liable under the principle of social justice.

The company argued that the director was a mere reveller at the hotel and was not acting within the course of his employment or his actual authority.

The Court of Appeal found in favour of the salesman. It held that the judge had been wrong to find that there was insufficient connection between the director’s field of activities and the assault.

The drinks occurred on the same evening as the work event paid for and orchestrated by the director. He was present as managing director. His managerial decision-making having been challenged, he took it upon himself to exercise authority over his subordinate employees by summoning them and expounding the extent and scope of his authority with the intention of quelling dissent.

Giving judgment, the Judge said that the director “was purporting to exercise his authority over his subordinates and was not merely one of a group of drunken revellers whose conversation had turned to work.

“He asserted his authority in the presence of around 50% of [the company’s] staff and misused that authority.”

The amount of compensation the salesman should receive is still being assessed.

 

Cashier sacked during TUPE process was unfairly dismissed

A cashier who was sacked by her firm while its business was being taken over by another company has won her claim of unfair dismissal.

The cashier worked for a company (the transferor) which specialised in selling wine and beer.

It got into difficulties in December 2014 so another company (the transferee) agreed to purchase stock and take on any employees under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), which preserve an employee’s terms and conditions when a business is transferred to a new owner.

The transferee then assumed responsibility for all employees except the cashier, who was dismissed by the transferor two days before the transfer took place. The dismissal letter said: “I am sorry to inform you that due to unforeseen circumstances concerning the business, we must inform you that our business will now cease to trade. As a result, we will unfortunately have to terminate your employment as from today.”

The cashier brought a claim to the Employment Tribunal, alleging that the reason for her dismissal was the transfer of the business, which meant it was unfair under TUPE regulations. She said the transferee did not want her to work for them because she had a strained relationship with one of her colleagues.

The transferee’s defence was based on a meeting on 9 December in which it said that the cashier had objected to the transfer and therefore under TUPE, her claim of unfair dismissal was not valid.

The tribunal found in favour of the cashier. It said it preferred her evidence that the transferee anticipated there would be ongoing difficulties in her working relationship with a colleague.

The Judge said: “It is for this reason that the Claimant was the only employee told that she was not wanted. She did not object to the transfer. The reason for the dismissal was the transfer. As such her contract of employment transferred and she was unfairly dismissed.”

The Employment Appeal Tribunal has upheld that decision.

The case is a timely reminder that businesses cannot use transfers as an opportunity to dismiss employees they consider troublesome. TUPE offers significant protection and employers must ensure they follow the correct procedures to avoid costly claims and tribunal cases.

A Christmas bonus for shared ownership buyers

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First-time buyers who bought a shared ownership property in the last twelve months should check if they are due a refund on any stamp duty paid.  

That’s because when Chancellor Hammond extended the stamp duty relief available to first-time buyers of shared ownership property in his Autumn 2018 budget, he also applied the extension retrospectively to any qualifying transactions that took place between 22 November 2017 and 29 October 2018.

Since November 2017, relief has been available to first time buyers of shared ownership property who opted for the full market value election, paying stamp duty on the value of the whole property not just their share. Now, the relief has been extended to the first premium for those opting to pay their stamp duty in stages, and, in the case of a newly granted lease, to the portion calculated on net present value of rent.

For those paying in stages, first time buyer relief will continue to be excluded from subsequent stages of any so-called ‘staircasing’.  And for those purchases of a property with a market value in excess of £500,000, normal stamp duty rates will apply.

Stamp Duty Land Tax (SDLT) is payable in England on residential property transactions where the market value is more than £125,000, with a tiered scale related to the purchase price, but there are different rules if you’re buying your first home and the purchase price is below £500,000.  These provide a complete exemption from stamp duty for qualifying first-time buyers where the full market value of the property they’re buying is £300,000 or less, and a reduced bill when the full market value is £300,001 and £500,000.  Overall, this can make a saving of up to £5,000 on the stamp duty payable.

When the property is being purchased under an approved shared ownership scheme, the calculations are more complex, and buyers can choose whether they pay SDLT on the full market value or just on the value of the share they have purchased.  Also, when buying a new lease for a new build shared ownership property, SDLT is due on what is known as the ‘net present value of rent’.

Said property law/conveyancing expert Sarah Avern of Band Hatton Button solicitors in Coventry:  “Any first time buyer who completed on a shared ownership purchase on or after 22 November 2017 and opted to pay stamp duty in stages, can now make a claim for a refund of stamp duty.  And those who elected to pay the full market value option should also check where they stand, if the purchase involved a new lease, as they may be due a rebate on the rental element, to which the relief has also been extended.

“Many first-time buyers could stand to benefit from the changes, as they are less likely to have opted for the market value election.  It involves paying out a large sum up front in expectation of later staircasing, and it’s often not a viable option for those starting out on the property ladder.”

Any claim must be made to HMRC no later than 28 October 2019.  Refunds will also attract repayment interest at 0.5% for the period involved.

Saah added:  “For those not yet on the property ladder and considering shared ownership, it’s worth getting some guidance in advance to understand what costs will be involved at each stage as it can involve a complex set of calculations.”

 

Understanding the options on stamp duty for shared ownership purchases
Market value Election : pay up front

You use the total market value of the property to calculate how much to pay, no matter what size share you are buying.  You don’t pay any more SDLT after this, even if you buy a bigger share in the property later.

 

Paying in stages : pay as you go 

You use the price you pay for the lease – known as the ‘lease premium’ – if it’s above the SDLT threshold.  If the lease premium is below the threshold, you don’t pay SDLT at this point.   Those who qualify will receive the first-time buyer exemption on the SDLT against the lease premium, but will not qualify for the exemption if they buy a bigger share of the property later.

 

Staircasing 

If you buy any more shares in the property, you don’t have to pay any more SDLT or send a return to HMRC until you own more than 80%, but once your share of the property goes over 80% you must send a return and pay SDLT on the transaction that took you over 80% and any transactions after that. Once you own over 80%, earlier purchased shares may become linked and so SDLT might become due on those previous shares. No first-time buyer relief will apply to staircasing share purchases after the initial lease premium transaction.

 

SDLT on new leases 

This is the complex part of the calculation when a new lease is involved, as you may have to pay SDLT if the total rent over the life of the lease is more than £125,000. This is known as the ‘net present value’ and SDLT is due at 1% on the amount over £125,000 and must be added to any SDLT being paid on the lease premium.  It is calculated by working out the current value of the rent you will pay to the housing association over the full length of your lease.

 

Firm lands triple recognition at regional awards ceremony

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Coventry law firm Band Hatton Button has landed triple recognition at a regional awards ceremony in what has been a record year of accolades for the firm.

Keri Wood, lawyer in the wills, trusts and probate department scooped young lawyer of the year at the Warwickshire Law Society’s annual dinner, which was attended by 120 people and 8 law firms at the Manor Hotel in Meriden.

Daniel Blood, Head of commercial property at Band Hatton Button, was also named as lawyer of the year, while the residential property team triumphed in the team of the year category.

Keri was recognised for her inspirational journey since joining the firm in 2006 – working her way up from a receptionist to a fully-fledged lawyer, which involved studying alongside her full-time job.

Daniel – who oversees a 20-strong group – saw his commercial property team beat their 2018 financial year target by over 30 per cent, a record result, with Daniel smashing his own individual target by more than 40 per cent.

Band Hatton Button’s residential property team has seen consistent growth. The alleviation of stamp duty for first-time buyers meant that Band Hatton Button’s residential property team, led by Sarah Avern, saw a 46 per cent increase in demand in the 2017 financial year, smashing their financial target by around £180,000.

This growth has continued, with residential property currently operating at 116 per cent of their financial target for the 2019 financial year.

The triple recognition follows the firm’s recent success at the Coventry Telegraph Business Awards, where Band Hatton Button won the contribution to the community and leadership team of the year categories.

Mark Moseley, managing director at Band Hatton Button, said: “To receive five separate pieces of recognition for our work in 2018 is a phenomenal achievement.

“It also reflects what a buoyant region we are operating in with growth across the majority of departments, and the challenge is to keep on capitalising on the opportunities that are out there.

“Keri is a fantastic role model for the next generation of lawyers, while Daniel and Sarah have unrivalled reputations in their respective areas that are helping us to continue our growth year-on-year – congratulations to all of them on their awards.”

Associate level promotions for six lawyers

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A growing Coventry law firm will see the New Year in with associate level promotions for six of its lawyers.

Band Hatton Button, based on Warwick Road in the city centre, has promoted lawyers Charlotte Macalister, Christina Polychronakis and Lisa Moseley from the firm’s wills, trusts and probate team to associate.

Kristy Ainge and Raman Dhillon from the firm’s litigation department are also starting 2019 at associate level, as is residential property lawyer Rani Bola.

The promotions come off the back of a strong period of growth for the firm, which currently has an annual budget of £4.5 million.

“This particular group epitomises why we are growing organically as a business with their positive customer feedback and dedication to personal development, whether that’s expanding their legal knowledge or engaging with community groups,” said Mark Moseley, managing director at Band Hatton Button.

“They have around 50 years of service to the firm between them.

“Charlotte, Christina and Lisa are all now accredited members of Solicitors for the Elderly, and are signed up as Dementia Friends, ensuring they are tuned in to how issues affecting the nation’s elderly community can affect their assets in later life.

“Having Kristy on board as a solicitor advocate also means we are able to represent clients in court as well rather than handing a case over to a third party – and because of her strong networking skills we are making significant headway with this service.

“Raman joined us two years ago with a sterling track record of acting on multi-million pound cases and has developed her case load to drive strong year-on-year growth for the litigation department.

“Rani is one of our longest-serving colleagues having joined us in 2000 and has built up unrivalled relationships with a range of the region’s estate agents, which has stood us in good stead, and the residential department continues to see exorbitant work levels.

“This group of professionals are role models for other up-and-coming lawyers which is particularly useful as we look to expand our teams further over the coming year.”

 

Soaring fees set deadline for executors and estate planning

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Controversial court fees which have been branded a stealth tax on bereaved families are expected to prompt a surge in probate applications before the hike hits.  The new banded fee structure will see the cost of probate soar by thousands of pounds for higher value estates.  

The current flat fee is £215 for a personal application for probate, or £155 when handled through a solicitor, but this is to be replaced by a tiered set of fees.  While the fees have been reined in from the original proposal last year, which would have seen charges of up to £20,000, the biggest estates will still find themselves paying £6,000 in court fees.

The fees are payable to the court when the executors apply for formal authority to act in the administration of the estate, once they have identified and itemised all the assets owned by the person who has died.  This follows submission of the inheritance tax return for the estate and payment of any inheritance tax that is due.

And until the application for a Grant of Probate or Letters of administration has been approved by the court, the executors are unable to bring in the assets of the estate.  Banks will not release the funds held in bank accounts, the proceeds of shareholdings cannot be handed over and no houses or commercial property can be sold until probate has been obtained.

As no funds can be distributed until the Grant has been issued, except for payment of funeral costs and inheritance tax, there are concerns that families will struggle to pay the probate fees before they can access the money locked in the deceased’s estate.

And those estates that comprise high value property, but are short on liquid assets, may find themselves paying high court fees without any expectation of cash to offset the cost.  This could be the case where a husband or wife has died and the survivor needs a grant of probate to transfer the property into their sole name.

Said Lawyer Michelle Gavin of Coventry based Band Hatton Button solicitors: “For executors who are already in the process of administering estates, especially larger ones where the increased fees will be more of a hit, it’s worth reviewing the position to see if they can get the estate ready to apply for probate sooner rather than later.  It’s currently expected to be April when the switch is made to the tiered fee structure, but it could be earlier and there will be just 21 days from the announcement until the new fees kick in.”

“Looking to the future, if you expect your estate is going to be affected then it’s worth getting some advice.  There are only limited ways in which to tackle the amount of fee that will be due, but there are other ways in which you can ease the burden for your executors.”

Ways in which forward planning may help, according to Michelle Gavin, include taking out a life insurance policy and putting it in trust.  If made over in this way for the benefit of a family member, or other beneficiary, the pay-out will not be included within the estate and can be accessed on death without the Grant of Probate.

Leaving property to a surviving spouse by means of a trust rather than an absolute gift will reduce the value of the surviving spouse’s estate for the purposes of the court fee calculation when he or she dies.

She added:  “The important thing when estate planning is to make sure you understand all the implications and check that what you’re planning will solve the problem and not create a new one, which is why you do need to get specialist advice if you’re getting into more technical areas.

“For example, the taxman is taking an increasingly forensic approach to checking out transfers of property made before death.  Growing numbers are handing over property to family but continuing to live there, which is known as a ‘gift with reservation of benefit’ and gives rise to all sorts of complications and potential tax liabilities.

“It’s good practice to regularly review your estate and tax planning, as things are always changing, so this is a good time to do that temperature test.”

New probate court fees from April 2019:

Estates with a value of less than £50,000 will be exempt.  Above that, the fees will be on a sliding scale from £250 to £6,000.

Estate value                                  Fee

Up to £50,000 or exempt             Nil

£50,000-£300,000                        £250

£300,001-£500,000                      £750

£500,001-£1m                             £2,500

£1,000,001 – £1.6m                     £4,000

£1,600,001 – £2m                        £5,000

Over £2m                                    £6,000

Coventry and Warwickshire’s hot property market creates vacancies

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Coventry and Warwickshire’s hot property market has created a number of new vacancies at one of the city’s law firms.

Band Hatton Button, which is based on Warwick Road, has three vacancies in their commercial property department and two in their residential property department.

Both departments are operating at 116 per cent and 117 per cent of their annual targets respectively.

It comes as the Office for National Statistics revealed house prices in the West Midlands showed the highest annual growth in England in the 12 months to September 2018 (6.1 per cent).

The vacancies on offer in Band Hatton Button’s residential property department include a lawyer and a paralegal, while the roles in commercial property are for two lawyers and a paralegal.

Band Hatton Button – which has an annual budget of £4.5 million – is also recruiting for a lawyer to bolster the firm’s family department.

Mark Moseley, managing director at Band Hatton Button, said: “Coventry is very much a city on the up and it has fast become an attractive destination for studying, working and visiting which is something we feel is going to build as we get closer to UK City of Culture in 2021 and with innovations such as driverless cars being developed on our doorstep.

“It’s for this reason that we have decided to inject long-term investment into our property departments.

“The property markets, particularly in the West Midlands, are bucking the wider national trend of slower property prices which is undoubtedly being driven by increasing demand for property in Coventry and Warwickshire.

“Band Hatton Button has gradually grown its workforce and has seen its team increase by approximately 30% in recent years, many of whom are long-serving and, by the New Year, we hope to have seen our workforce grow by another ten per cent which is very much in line with our future growth plans.”

New employment rights raise another red flag for employers

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New payslip requirements are set to come into force, requiring itemised calculations for variable rates of pay and hours worked. Alongside, the requirement for payslips will be extended to include workers, not just employees.   

The two amendments to the 1996 Employment Rights Act will come into force on April 6 2019.  From that date, employees and workers, including those under casual or zero hours contracts, must receive correctly detailed written, printed or electronic payslips.  

The greater transparency is designed to help employees understand their pay and see if they are being paid correctly.  Also, it is hoped that it will make it easier to identify if employers are meeting  their obligations under the National Minimum Wage and National Living Wage and that holiday entitlements are correctly applied. 

But while the change itself is straightforward, new payroll procedures and alternative software may be needed to satisfy the new requirements. 

Alongside, a more complex question for many companies when it comes to implementing the new requirements will be whether someone is an employee, a worker or a self-employed contractor.  

Many organisations do not recognise that even where someone is not an employee, they may still be categorised as a ‘worker’ and be entitled to certain rights such as the national living wage, paid holiday and sick leave.  An employee may also be a ‘worker’, but with extra employment rights and responsibilities.  

And the boundaries as to who is a worker and who is self-employed are increasingly difficult to pin down following high-profile cases involving Uber and other so-called gig economy companies, with individuals winning the right to be treated as a worker, rather than a self-employed contractor.  

“Many employers are not meeting legal minimum requirements because they do not understand their employment law obligations when it comes to workers.  It’s hoped that this new process will be one step towards improved awareness,” explained employment law expert Mark Ridley of Coventry based Band Hatton Button solicitors.  

“The distinctions between an employee, a worker and a self-employed contractor may not be clear cut for some organisations, so it’s important to keep abreast of what’s going on in employment law and what legislative changes are coming up.  That way you can keep ahead of the deadlines and make sure you’re facing up to issues that may otherwise pose difficulties later.”  

What needs to be included in the written statement of wages

  • the amount of gross wages or salary 
  • for any part that varies according to time worked, the total number of hours worked and the rate of pay, either as a single aggregate figure or separately for each type of work or rate of pay 
  • the amounts of any deductions and what they relate to  
  • the net amount of wages or salary payable
  • if paid in parts, the amount and payment method for each part  

The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018

The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No. 2) Order 2018

 

Welcome Arvin Bhamra

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Welcome Arvin Bhamra!

Arvin Bhamra has joined Coventry city centre based Band Hatton Button as an Associate in their residential property team, which has taken nearly 1,000 enquiries in the last quarter and is currently operating at 116 per cent of its annual financial target.

Bhamra, a qualified solicitor , has 15 years of experience across residential and commercial conveyancing, as well as real estate finance work.

Career highlights include acting in a deal which saw the transfer of 5,000 houses from a council to a housing association, and working on a £95 million loan for a portfolio of 15,000 properties.

“Demand for residential conveyancing keeps growing, particularly in Coventry, and this is a great opportunity for me to join a busy team and build on that reputation ” said Bhamra.

“I’ve spent a lot of time gaining rounded knowledge of the conveyancing industry and residential property was what I first practised in, so this role is a homecoming for me.

“I’ve joined a department and firm that is experiencing growth consistently year-on-year, and coupled with opportunities for long-term progression within the firm, that was an opportunity I couldn’t turn down.” 

Sarah Avern is Head of Residential Property at Band Hatton Button, with the department’s recent growth aided by the firm’s new online tool, which can produce a residential conveyancing quote in one minute.

“Arvin has varied, sought-after experience under her belt and an impressive CV, so we are thrilled to welcome her to our team,” said Avern.

“Not only is this a coup for our team which now stands at 14 people, but her experience means she can lend her expertise and provide referrals to our commercial property team.

“We are continuing to grow as a department in line with Coventry’s popularity as a place to live whether it is because of our range of manufacturing employers we have based in our region, landlords expanding their property portfolio or first time buyers climbing on to the property ladder.

“Digitising our services is key to capitalise on this market activity. We are currently converting around three quarters of online conveyancing enquiries into customers, and we expect this service to expand even further in the near future.”

The Legal 500: Most Ranked Law Firm in Coventry

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Band Hatton Button have retained our status as the most ranked law firm in the city in a national industry guide. 

The Legal 500, which is aimed at buyers of legal services and is read by four million people in the UK, has recommended Band Hatton Button in six different areas of practice – more than any other law firm in the city.

This includes charities, corporate and commercial, employment, family, personal tax, trusts and probate, as well as real estate.

Some of the firm’s work for Allied Irish Bank, The Albany Theatre and The Nicholas Chamberlaine School Foundation, amongst others, was highlighted in the commentary. 

Mark Moseley, managing director here at Band Hatton Button, said: “We are operating in a highly competitive region, so to retain our position as the leading firm in Coventry for legal services across multiple sectors is a fantastic achievement.

“The Legal 500 is one of the most prestigious guides in the UK as it attracts so many visitors, and is a vital tool for us to be able to generate extra work – and to help us keep an eye on our competition.

“The past year has seen the business achieve a record year of £4.5 million in turnover, driven by increasing caseloads across the majority of our departments so this listing is well-deserved as we gear up for another year of expansion in 2019.”

Chancellor’s anti-austerity spending spree has few surprises

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An anti-austerity package of £30 billion of government spending was announced in the Chancellor’s Autumn Statement, drawing on improved public finance projections to support a range of new initiatives.  

Predicted growth for 2019 now stands at 1.6%, up from 1.3% forecast in spring and the Office for Budget Responsibility has said that the upward revision to GDP growth is giving the Chancellor a £11.9 billion windfall this year, rising to £18.1 billion in 2022.  

Spending announced by Philip Hammond included an additional £500m for Brexit preparations, making a total commitment of over £4 billion since 2016.  Another Brexit promise came in the shape of a 50p commemorative coin to mark the country’s exit from the European Union; a proposal that has since minted a wealth of design suggestions on social media, although none likely to pass approval by the Bank of England.  

Tax savings for individuals were announced, with the basic-rate income tax threshold rising to £12,500 in April 2019, and the higher rate threshold increased to £50,000.  Alongside, the National Living Wage, paid to those aged 25 and over, will increase to £8.21 per hour from April 2019.

For business, the Annual Investment Allowance will increase to £1 million for all qualifying investment in plant and machinery during a two-year period from 1 January 2019 until 31 December 2020, to help stimulate business investment. And construction of new non-residential structures and buildings will be eligible for a 2% capital allowance where all the contracts for the physical works are entered into from 29 October 2018 onwards.  

There will also be a reduction in the apprenticeship levy for smaller firms, reducing the contribution from 10% to 5%, and larger firms will be able to invest up to 25% of their levy to support apprentices in their supply chain.   

Alongside, a change in the qualifying period for Entrepreneurs’ Relief will focus on encouraging longer-term investment.  In future, individuals will need to meet the qualifying conditions for a minimum of two years, up from the 12 months currently required, to benefit from a reduced rate of capital gains tax on gains made on disposal of assets.   This will come into effect for disposals made on or after 6 April 2019.

On the high street, from April 2019 the government is cutting business rates by one-third for retail properties with a rateable value below £51,000, in a move designed to support small independent shops.  

Those getting on the property ladder through shared ownership also stand to gain, with the announcement that stamp duty land tax (SDLT) relief for first-time buyers is to be extended to shared ownership homes and backdated to include transactions from 22 November 2017.  The detail of the proposed changes is complex, so it makes sense to get advice. 

But overseas property buyers face an increase in stamp duty. The Government will publish a consultation in January 2019 on a SDLT surcharge of 1% for non-residents buying residential property in England and Northern Ireland.

Other losers on the property front are those who have become landlords of what was previously their main home, for example when moving away to work, with the announcement that from April 2020 lettings relief on capital gains tax will apply only where the owner of the property is in shared occupancy with the tenant. The final period exemption will also be reduced from 18 months to nine months although there will be no change to the 36-month final period exemption available to disabled people or those in a care home. 

Overall there were few surprises, as many announcements had been made before the day, and while there are some big figures, there was a cautious note from Mr Hammond as he spoke of austerity ‘coming to an end’.  We are not there yet, was the message.  

Alongside, there were some measures likely to draw positive headlines – whether an end to PFI contracts, a controversial funding model which hit the headlines earlier this year with the collapse of construction company Carillion, or the announcement of a 2% tax on income made by tech giants from UK users, in a move designed to target companies like Amazon and Google.  

And finally, the sting in the tail is that the budget is dependent upon a satisfactory Brexit deal being reached, with Hammond saying that a no-deal departure would see this game plan being set aside and the interim Spring statement becoming a full budget to tackle the situation.  We can safely assume that the Chancellor doesn’t think it’s going to be resolved by an extra run of commemorative Brexit 50p coins…  

 

This is not legal advice; it is intended to provide information of general interest about current legal issues.