As we await the Budget, still scheduled for 3 March 2021, speculation continues in the press as to whether it will bring a rise in tax and in particular Capital Gains Tax (CGT).
CGT is currently paid at a rate of 20% by higher rate taxpayers on most gains but can be reduced by various reliefs such as Entrepreneurs Relief (which allows business owners to take the first £1 million of gains at a CGT rate of 10%). A recent Treasury report recommended aligning the CGT rates with the Income Tax rates including top rates of 40-45%, a shift that would take us back to the position in early 2000s when the rates were much more closely aligned.
The latest Insolvency statistics
The latest insolvency stats have just been released by the Insolvency Service and it comes as no surprise to see the figures for the past nine months have been historically low- about 40% lower than normal- as companies continue to benefit from the Government support measures and the temporary restrictions on the ability to issue statutory demands and winding up petitions.
The rise in corporate (but not personal) insolvencies in the month of December 2020 did come as a bit of a surprise. There were a total of 1,228 registered company insolvencies, which comprised of:
On Friday 15 January 2021 the Supreme Court delivered its eagerly awaited judgment in the test case between the Financial Conduct Authority (FCA) and various insurers. The FCA was acting on behalf of policyholder businesses disrupted by COVID-19.
To the relief of SMEs awaiting the decision, the court found heavily in favour of the policyholders.
It is estimated that 370,000 policyholders could be directly affected.
Alissa Marsh (pictured below), joined Bermans in January 2017 as a solicitor working across both of our Asset Finance and Invoice Finance departments.
L-R Martin March, Phil Farrelly and James Whittaker
As we head into 2021 and the inevitable restructure of the economy as we (hopefully) return to some sort of normality, we thought it would be useful to share details about the depth of experience in our Insolvency team and to share some of their experiences during the lockdown.
Partner and Head of Insolvency, Phil Farrelly, will be known to many of you and has been with Bermans since 2005. He is a familiar face on the North West legal scene and has extensive experience of acting for insolvency practitioners, ABL and other lenders and directors in all aspects of corporate insolvency.
The team has recently been strengthened with the arrival of two experienced insolvency solicitors.
Bermans, commercial law firm in Liverpool and Manchester, is delighted to announce that it has promoted 6 individuals to more senior roles at the firm.
Andrew Henderson (left) joined Bermans in 1985 and has developed an expertise in asset finance litigation. He has been made a Partner and joins Alex Chapman, David Gledhill and Jonathan Berkson as partners in the specialist Asset Based Lending team that is ranked in the Legal 500 London Asset Finance Lending rankings.
He deals with matters such as fraud, freezing orders, title claims, delivery up claims, guarantee/indemnity claims, shortfalls and general debt recovery for a wide range of asset based lenders.
Whilst much uncertainty remains as to the future arrangements for asset financiers doing business across Europe, we can now say that in terms of specific legislative requirements upon the operation of asset financiers within the UK, required changes would appear to be limited to the deletion of references to “standard European consumer credit information” (SECCI) from CCA regulated consumer credit agreements as reported in our last Briefing.
On 2 December 2020, the Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020 (SI 2020/1248) (“2020 Regulations”) came into force, amending the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) (“1983 Regulations”).
HMRC has confirmed that, in a significant change from its previous position, as from 1 February 2021 it will regard almost all payments made upon early termination of asset finance agreements as chargeable to VAT.
Employers and employees must follow the ACAS Code of Practice in relation to disciplinaries and dismissals. If either party fails to follow the Code, the tribunal can increase or decrease tribunal compensation by up to 25%. In Wardle v Credit Agricole Corporate and Investment Bank, the Court of Appeal said that a tribunal should only fix the rate of uplift once it has considered how much the uplift would equate to financially, to ensure it isn’t disproportionate.
An Employment Tribunal can ‘reconsider’ any judgment where it is necessary in the interests of justice. A tribunal can do this of its own initiative, at the request of the Employment Appeal Tribunal or if one of the parties makes an application for a reconsideration within 14 days of a judgment. The Employment Appeal Tribunal has recently looked at a case where an employer asked a judge to reconsider a case ‘of its own initiative’ in circumstances where they were out of time to make the application themselves.