Our newsletter of particular interest to Housing Associations is now out. VAT updates affecting the social housing and charity industries, avoiding VAT for housing associations and health and housing are a summary of the topics covered in the newsletter. Please contact Fern at su-fernlee@cartercamerons.com if you would like a copy of the newsletter sent to you.

The latest budget was revealed by the Chancellor on 22 June 2010. Here is a summary of the key points:

VAT will be raised to 20% from 4 January 2011.

Capital gains tax will increase to 28% for higher rate taxpayers from 22 June 2010 but remain at 18% for low and mid income savers. The £10,100 annual exemption will remain.

Corporation tax is to be cut by 1% a year over the next four years, taking it to 24% by 2014-15. Small companies tax rate to be cut to 20 per cent. The Enterprise Finance Guarantee Scheme is to be extended.

The Chancellor has also scrapped SDLT on homes costing £250,000 or less for first-time buyers. The existing nil rate of SDLT on residential purchases not exceeding £125,000 and commercial purchases not exceeding £150,000 continues to apply as before (which means that it is not limited to first-time buyers).

Housing benefit will be limited to £400 a week for a four bedroom house and £280 a week for a one bedroom house. The move is intended to save £1.8 billion a year by the end of the Parliament.

Banks will be charged a £2 billion-a-year levy.

The Chancellor increased the income tax threshold by £1,000 to £7,475.

Child tax credits and child benefits will be frozen for 3 years.

The link between the state pension and earnings which had been abolished by Margaret Thatcher was restored and, in a £2 billion move, the Chancellor increased child tax credits to the lowest-earning families by £150 above inflation.

Other benefits to be cut include the health in pregnancy grant while the Sure Start maternity grant will be restricted to the first child only and lone parents will be expected to look for work when their youngest child goes to school.

Five new mandatory conditions for licensed premises became law on 6 April 2010 intended to lessen the risk of alcohol related crime and anti-social behaviour.

Drink downing competitions, offering free drinks at specified events or incidents in a football or rugby match and “all you can drink for £10” (does not apply where the alcohol is consumed with a table meal) are examples of promotions that may be prohibited.

Three of the conditions came into force from 6 April 2010:

1. To ensure that staff do not arrange or participate in any irresponsible promotions in relation to the premises.
2. To ensure that no alcohol is dispensed directly into the mouth of another.
   This condition is designed to prevent drinking games such as the “dentists chair”.  Assisting a person to lift a yard of ale glass may also be prohibited. The regulation will not be breached where the recipient is unable to drink without assistance by reason of a disability.
   The regulations may also affect events where a free bar is included.
3. To ensure that free tap water is provided on request to customers where it is reasonable available.

Five categories of irresponsible promotions are referred to in the new regulations:

(a)    Drinking games;
(b)    Providing unlimited or unspecified quantities of alcohol free for a fixed or discounted price;
(c)    Providing discounted alcohol or anything as a prize to encourage or reward the purchase and consumption of alcohol over a period of 24 hours or less;
(d)    Providing alcohol free or for a discounted price in relation to a sporting event shown on the premises where the sale depends on the outcome of a race, match or other event, and
(e)    Providing alcohol in association with promotional posters or flyers which can reasonably be considered to condone encourage or glamorise anti-social behaviour or refer to the effects of drunkenness in any favourable manner.

According to The Department for Culture Media and Sport (DCMS) guidance, a promotion is considered irresponsible if it is carried on for the purpose of encouraging the sale or supply of alcohol in a manner which carries a significant risk of:

• leading or contributing to crime and disorder,
• prejudice to public safety,
• public nuisance, or
• harm to children.

"Happy Hours" however, are not prohibited as long as they are not designed to encourage excessive or rapid drinking.

Two remaining new mandatory conditions come into force from 1 October 2010:-

1. To ensure that an age verification policy applies to the premises.
2. To ensure that customers are aware that drinks are available in small measures.

Further details on the two remaining conditions can be found in the Carter Lemon Camerons’ Autumn Newsletter 2010.  For a copy, go to Contact Us.

These are introduced under the Licensing Act 2003 (Mandatory Licensing Conditions) Order 2010.

DCMS has published revised guidance on their website.
http://www.culture.gov.uk/what_we_do/alcohol_and_entertainment/default.aspx/

If you need more information or any advice on Licensing laws, please contact Ian West at ianwest@cartercamerons.com

The chancellor scrapped stamp duty land tax on homes costing £250,000 or less for first-time buyers for the next 2 years.

But if you are selling your house, to buy another you will still pay stamp duty at 1% of the purchase price on the new home if it costs between £125,000 and £250,000.

The HMRC’s definition of a ‘first-time buyer’ looks strict, but it is hard to see how the HMRC is going to monitor effectively which buyers are truly new to the market. The Council of Mortgage Lenders appears to agree having warned that the concession “looks like a tax loophole waiting to happen”.

The new regime, which is hoped to put the dream of home ownership back within reach of thousands, does not address what many see as “the real problem” with the property market, which is that many first-time buyers, particularly those who cannot raise a large deposit, are still finding it hard to obtain a mortgage.

Prodromos Shakallis, property team

What Can We Expect in the Employment Law World in 2010?

In a year that we face a general election and prospect of a change of government, what is on the Employment Law Agenda?   Andrew Firman guides us through.

First cab off the rank effective on New Year’s Day was the revised ACAS Code of Practice on time off for trade union duties and activities.  It replaced the 2003 code and gives employers guidance on the provision of cover when employees take time off, payment for it, training and provision of e-learning, duties of line managers and union reps in ensuring time off arrangements are meaningful and access to facilities and use of e-communication technology.
Find the Code here: http://www.acas.org.uk/CHttpHandler.ashx?id=1128

By contrast, on 1st February when we expect the usual increase in limits we will not this year see a rise in the amount of a week’s pay for the purposes of calculating things like statutory redundancy pay: it rose to £380 last October and there it is expected to stay until February 2011.   We will see though the drop in RPI filtering through to the limit on the compensatory award for unfair dismissal:  it changes from £66,200 to £65,300.

Looking at pending legislation, we have the Equality Bill making its way through Parliament.   The Act which emerges will consolidate the nine major pieces of discrimination legislation and around 100 statutory instruments currently in force, not to mention the 2,500+ pages of guidance and statutory codes of practice.   As well as harmonising existing legislation, it will update and extend existing provisions.  Royal assent is expected in the spring, with the main provisions of the Act which relate to employment and services and public functions coming into force in October of this year.  Other parts will be delayed until spring 2011 and beyond.    This is subject to any changes which might be wrought by a new Conservative government.

Headlines to the main changes are:

•    A single objective "justification" test to replace different tests currently in use for employers/service providers, which should be a higher  threshold than the present test making it more difficult for employers to justify less favourable treatment
•      New ways to claim disability discrimination
•      It will be easier to claim reasonable adjustments for service providers
•      Direct discrimination or harassment based on association or perception will be unlawful.
•      Public bodies will be subject to a single equality duty.
•      Claims for discrimination on two combined grounds will be allowed e.g. for being a disabled woman.

Due to come into force on 6 April 2010, is the fit note system.   It will provide for a new medical statement to be used by GPs. The statement will list common changes which could be made to an employee's work environment or job role to help facilitate a return to work. Where a doctor considers another option is more appropriate, he or she will have the opportunity to state this in the comments box.

A ‘fit for work’ option had been proposed but this has been withdrawn as it has been recognised that doctors do not have the appropriate knowledge about an individual's role and the risks involved to be able to assess this.

There will be an option for the GP to indicate 'you may be fit for work taking account of the following advice'. Again, this is an acknowledgment that it is not the doctor, but the employer, in consultation with their employee, who is best placed to make a decision about whether they can accommodate any changes to facilitate a return to work.

The maximum duration a medical statement can be issued for will be reduced from six to three months during the first six months of a health condition.

If an employer is not able to facilitate a change or an adjustment, a revised statement is not necessary; the existing statement is evidence that an individual has a health condition preventing him or her carrying out the current role.

Specific guidance for individuals, employers and healthcare professionals is expected to be available shortly.

Finally, last year's decision in R (On the application of Age UK) –v- Secretary of State for Business, Innovation and Skills upheld the UK's default retirement age (DRA) of 65.  It looked at DRA at the time that the challenge to the latest regulations enacting it (in 2006) was started.   The court indicated, however, that had the same DRA been introduced in 2009, it would not have been found to be a proportionate means of achieving a legitimate social policy aim such as securing the integrity of the labour market and its short term competitiveness.   The government had already announced by the time of the judgment that it would bring forward to this year a review of the DRA and the judge indicated that he might have reached a different conclusion if that announcement had not already been made.   The government's major research project surveying employer's policies, practices and preferences relating to age will close for submissions on 1 February and we must wait to see what ensues from there.

Andrew Firman
andrewfirman@cartercamerons.com
Andrew Firman leads the Employment team at Carter Lemon Camerons LLP