Legal News

Thomas William Good v HMRC [2023] EWCA Civ 114 The taxpayer took part in a tax avoidance arrangement. Using a mixture of his own funds and borrowed capital from a lender, he acquired film distribution rights and, under a ‘distribution agreement’, assigned them in exchange for a continuing share of the films’ profits together with minimum annual payments ( MAPs) expressly set to enable him to service his loan obligations and liabilities. As security, he transferred the benefit of, and granted a charge over, the MAPs to the lender. The MAPs were to be paid directly to the lender, to be applied to interest and repayment of the borrowing as they fell due each period. It was envisaged that the arrangement would generate a tax loss for sideways relief (although it was ultimately accepted this was unavailable because he was not carrying on a trade) and that...

Leon v Kensington Mortgage Company Ltd [2023] EWHC 121 ( Ch) What are the practical implications of this case? This decision offers reassurance to those who guarantee corporate borrowings. The court held that when an individual acts as surety for a company and elects to discharge the debt, the subsequent dissolution of that company does not bar the surety from stepping into the benefit of any security that was taken for the debt. Had the court ruled the opposite—that dissolution deprives the surety of access to the security—it would have placed sureties in an invidious position: anyone guaranteeing a company’s obligations would run a material risk that, if the company were later dissolved, the surety could be compelled to satisfy the liability yet be unable to recoup their outlay even where the company’s indebtedness had been secured against property. Such a result could have had...

The consultation sets out how the FCA plans to operate a new regulatory gateway that would: place an automatic curb on FCA‑regulated firms that sign off financial promotions created by third parties require any firm wishing to keep approving promotions for others to apply to the FCA to have that approval ban lifted A tightening of the perimeter for financial promotion approvers was explored in July 2020 in a consultation response, where HM Treasury expressed concern that the current approval framework is inadequate, as authorised firms face no dedicated assessment before they may approve the financial promotions of unauthorised firms. The document identified three potential risk areas, including: insufficient expertise within approver firms: because financial promotions span a wide array of products and services, authorised firms can end up approving material beyond their competence, risking content that is...

These additional rules will also sit alongside the usual obligation that promotions are transparent, fair, and not misleading. As the UK government set out its plans to bring crypto activities within the existing financial services regulation, it also said it would exempt crypto businesses, which are not currently authorised in the UK, from needing their adverts to be signed off by an authorised firm. The exemptions were introduced in response to industry concerns about the lack of......

The text and data mining exception The text and data mining exception that would ease copyright rules so computational artificial intelligence ( AI) methods can analyse large volumes of information to detect patterns, trends and ‘other useful information’, often embedded in copyright works, was mooted by the UK Intellectual Property Office ( UK IPO) in June 2022. On 31 January 2023, Lopez acknowledged the IPO was ‘probably surprised...in terms of the level of concern that was expressed’ and confirmed the matter had been discussed further within the government. ‘ I am pretty confident that some of the options the IPO considered to try to create a more permissive environment for AI in this area will not......

Investigations & Enforcement Trends 2023—a perfect storm for regulatory enforcement Introduction Set against intensifying economic headwinds, geopolitical volatility and a continuing shift to a post-pandemic landscape, 2022 delivered a surge in UK regulatory activity across bodies such as the Financial Conduct Authority ( FCA), Prudential Regulatory Authority ( PRA) and Office of Financial Sanctions Implementation ( OFSI). The FCA handed down 26 fines in 2022 versus 10 in 2021, although the aggregate value declined from £567.7m in 2021 to £215.8m last year. The UK’s appetite to strengthen enforcement shows little sign of easing, with the FCA already issuing two fines this year. The authors accordingly foresee a testing year ahead as regulators further expand the scope and scale of their investigative reach. AML Systems and Controls As expected, robust action persisted in 2022, with the FCA levying its largest penalty of the...

Isle of Wight NHS Trust and others v HMRC [2023] UKFTT 23 The dispute originates in correspondence about the proper VAT treatment of supplies of locum doctors to NHS hospitals. Acting for multiple NHS Trusts, the appellants’ representative (a VAT adviser) sent HMRC a technical paper on the VAT position for locum doctors. The adviser explained that formal claims would follow within weeks, and included illustrative figures to indicate the likely scale. That correspondence set the context for the dispute, as the adviser’s letter trailed the intended claims while providing worked examples to illustrate quantum. The submission contested HMRC’s stated position and contended that an earlier tribunal decision on the same issue had been wrongly reached. HMRC replied at length, upholding its policy as correct. After receiving HMRC’s detailed response, which affirmed the existing position, the adviser treated that reply as a...

R (on the application of Edward Blacker) v Chelmsford City Council [2023] EWCA Civ 25 What are the practical implications of this case? The judgment sets out no fresh propositions; instead, it reiterates settled points relevant to a local planning authority’s handling of a planning application: An application decision only takes effect once it has been communicated to the applicant, not when the Planning Committee merely resolves to grant or refuse. Up to the point of formal notification, the Committee may alter its view at any stage, even where there has been no material change in circumstances. An earlier grant or refusal for the same site can amount to a material consideration on a later application, underscoring the need for consistency in similar cases. That consistency principle is not engaged, however, where no substantive earlier decision existed—as here, where a majority vote at an initial...

Energy Works ( Hull) Ltd v MW High Tech Projects UK Ltd and another [2022] EWHC 3275 ( TCC) What are the practical implications of this case? The comprehensive judgment of the Honourable Mr Justice Pepperall sets out the practical hazards and challenges frequently faced on energy and infrastructure schemes, particularly where advanced technology intensifies complexities in design and construction. It further highlights the significance of a contractor’s reporting duties, within a contractual framework that did not restrict liability for wilful defaults, including the deliberate misreporting of progress. This ruling will be of clear interest to practitioners, construction professionals and other stakeholders working across the construction, infrastructure and energy sectors. The court also provided useful guidance and clarification on several broader legal issues relevant to disputes arising in construction, infrastructure and energy projects. First, the court confirmed that, in the absence of express contractual or statutory...

Mainpay Ltd v HMRC [2023] UKFTT 16 ( TC) The appellant operated as an umbrella company, delivering standard admin and PAYE functions for contingent staff it hired and supplied, through multiple recruitment agencies, to ultimate clients across hospitals and schools. Those workers were engaged by it and supplied, via agencies, on assignments to clients. It maintained that, because workers were engaged under a continuing, overarching contract (that is, a single employment), each location where assignments were performed qualified as a temporary workplace, so travel and subsistence could be deducted from earnings for tax. It further contended that, given the brevity of each posting, individuals were not attending any site 'regularly', and therefore no workplace was permanent. HMRC’s position was that every assignment constituted a 'separate employment', entailing attendance at a permanent workplace, and it raised determinations on that basis. The key...

Honda Group- UK Pension Scheme Trustee Ltd and others v Mercer Ltd and another [2022] EWHC 3197 ( Ch), [2022] All ER ( D) 75 ( Dec) What are the practical implications of this case? In considering continuing breach, Mr Justice Trower distils the authorities confirming that a professional is generally under no obligation to return to a task once completed. Authorities include New Islington and Hackney Housing Association Ltd v Pollard Thomas & Edwards Ltd [2001] PNLR 20 at [14]–[20], Capita ( Banstead) 2011) Ltd v RFIB Group Ltd [2015] EWCA Civ 1310 at [19]), and PSGS Trust Corp Ltd v Aon UK Ltd [2022] EWHC 2058 ( Ch). As His Honour Judge Richard Seymour QC observed in Tesco Stores Ltd v Costain Construction Ltd [2003] EWHC 1487 ( TCC) at [270], in ordinary life a task considered...

What are the key provisions in the Bill of relevance to telecoms lawyers? Much of the law that governs the telecoms regime in the UK is derived from EU law. In broad terms, what impact would this Bill have on that existing legal framework if it is passed? The Retained EU Law ( Revocation and Reform) Bill 2022–2023 was introduced in September 2022, aiming to sweep away retained EU law automatically at the close of a sunset on 31 December 2023. That repeal would catch EU‑derived retained measures unless they are specifically kept. Consequently, any retained EU rules set out in domestic secondary legislation, as well as retained direct EU legislation, are due to lapse on 31 December 2023. In turn, for instance, elements of the Communications Act 2003 and the Wireless Telegraphy Act 2006 that, through domestic secondary...

Re Lehman Brothers International ( Europe) (in administration) and other companies [2022] EWHC 2995 ( Ch) What are the practical implications of this case? This ruling offers a concise digest of the statutory framework for seeking extensions under paragraph 76 of Schedule B1 to the Insolvency Act 1986 ( IA 1986), and, drawing on recent leading authorities from the Lehman and Nortel Networks administrations, explains the approach the court ought to take when exercising its discretion on such requests. In short, the court’s discretion is unfettered, yet it must be deployed for the benefit of the company’s creditors as a whole. With eight separate companies before the court—each facing distinct concerns, issues and factual backgrounds—the judgment provides rich insight into the factors that carried weight in granting the extensions. The judge’s assessment of the evidence presented serves as a practical roadmap for lawyers and...

The Insolvency Service has revealed that Glasgow-based management consultant, Steven David Hutton, aged 47, received an eight-year disqualification order after failing to maintain proper accounting records for the company, covering income of more than £63,800 and assets of more than £137,000 in total. Hutton was the sole director of Marchmount Consulting Ltd, incorporated in December 2008, which operated as a management consultancy providing ongoing professional services......

What are the practical implications of this case? This judgment carries practical consequences for all appellants engaging with the Planning Inspectorate. In particular, appeals that APOs commonly handle through the written representations’ procedure—namely householder and advertising appeals—are likely to be impacted and/or adjusted to align with the High Court’s observations on the limited role they ought to play. In addition, the ruling is expected to have broader effects on the Planning Inspectorate’s implementation of the Rosewell Review... What was the background? The claimant sought express consent for an advertisement in Shoreditch, London, which the local planning authority, the London Borough of Hackney, refused. The claimant then appealed to the Planning Inspectorate. During the appeal, they were informed that the matter would be determined via the written representations’ procedure and that a site visit would be undertaken by an inspector or his/her...

Harris v HMRC [2022] UKFTT 447 ( TC) The appeal related to a tax charge of around £900,000 set out in a partial closure notice issued by HMRC. The appeal was placed in the complex category, and the taxpayer did not opt out of the costs regime. The FTT characterised the litigation as ‘ill‑tempered’, but in due course HMRC informed the FTT that they would no longer contest the appeal, whereupon the FTT allowed it. The taxpayer subsequently sought costs of more than £350,000, to be assessed on the indemnity basis. HMRC at first applied to have that application struck out on procedural grounds, but the FTT refused this,......

Withers v HMRC [2022] UKFTT 433 ( TC) The landholding comprised a dwelling with a self-contained annexe and gardens and grounds of circa 10 acres, together with a further circa 20 acres. Part of the additional land was used for grazing, and part was entered into a rewilding scheme. The grazing area had been used in that way continuously for 20 years, although a formal written grazing agreement—which did curtail the taxpayer’s use of the land in certain respects—was only adopted in 2019. Pursuant to that agreement, a local farmer grazed his sheep on the land in return for a nominal rent and the farmer’s ongoing upkeep of the land. The rewilding land was subject to stringent conditions limiting the taxpayer’s access and use, and imposed duties on the taxpayer to control pests and to refrain from grazing livestock on the specified land. In both...

Riley v Sivier [2022] EWHC 2891 ( KB) What are the practical implications of this case? Two notable themes arise from this careful judgment on serious harm to reputation, the public interest defence in DA 2013, s 4, and the assessment of damages. First, the court considers how evidence of poor reputation bears on serious harm. Steyn J held that ‘fresh’ allegations may still inflict serious harm even when readers already regard the claimant unfavourably. Here, the piece appeared on a site that strongly backed Jeremy Corbyn. Steyn J accepted this likely meant a sizeable share of readers were politically hostile to the claimant, who had been forthright in criticising antisemitism within the Labour Party (para [114]). Nonetheless, the new assertion that the claimant endorsed online abuse of a teenage girl would have lowered readers’ opinions of her, irrespective of...

Common fees For most UK work visa applications, statutory charges account for most of the overall outlay, typically far surpassing the professional fees paid to immigration specialists for guiding applicants through the process. Government fees may include: the visa application fee the Immigration Health Surcharge ( IHS) the Certificate of Sponsorship ( Co S) fee the Immigration Skills Charge ( ISC) optional services to streamline and expedite the visa process By law, the ISC is the only government charge that employers cannot pass on to the visa applicant. Other disbursements can include translation costs, tuberculosis screening, English language testing, or obtaining criminal record certificates. Many of these relate to mandatory stages of the visa process and can mount up quickly, so employers should take a holistic view before deciding who will be responsible for these extra costs. The level of cost assistance provided Some employers may already have...

Is your appointor entitled to appoint? The importance of verifying the power to appoint UK administrators ( Borg- Olivier v Knowles & others) Borg- Olivier v Knowles and others [2022] EWHC 2579 ( Ch) The authority to install an administrator is a key tool for debenture holders when moving to realise their security. To use that mechanism, the debenture must constitute a QFC and it must be capable of enforcement. Borg- Olivier underlines how crucial enforceability is, and how a lack of it can undermine the validity of any administrator appointment. Here, the appointees ultimately discovered they were not validly appointed after the Court concluded the QFC was not enforceable on the date of appointment. Facts Administrators were put in place using the out-of-court route by a QFCH. Before the appointment, the QFCH served a formal demand on the company for...