Legal Practice Notes

Ambitions to cut the volume of waste sent to landfill, alongside technological progress, have prompted a new generation of waste infrastructure across the UK. Typically, there are two principal contracting models for such schemes: waste Private Finance Initiative ( PFI) and Public- Private Partnership ( PPP) infrastructure contracts; and merchant waste infrastructure contracts This Practice Note centres on waste PFI/ PPP infrastructure contracts. For background on waste projects, including common project types, see: Waste projects—overview. Waste PFI/ PPP projects Waste PFI/ PPP projects are long-term agreements between public sector bodies and a private sector provider, under which the public sector outsources its waste management services and waste to an operator that agrees to take some (or all) of that body’s waste. The private partner generally designs, builds, finances, maintains and operates the waste infrastructure assets and related services, and typically bears the...

Batteries Directive 2006/66/ EC Directive 2006/66/ EC (the EU Batteries Directive) sought to reduce the environmental harm from batteries and waste batteries. The UK gave effect to its requirements through: the BAPMR 2008, SI 2008/2164, setting limits on certain substances in batteries and specifying labelling rules the WBAR 2009, SI 2009/890, establishing arrangements for the separate collection, treatment and recycling of waste batteries In 2023, the EU Batteries Directive was repealed by Regulation ( EU) 2023/1542 of the European Parliament and of the Council of 12 July 2023 on batteries and waste batteries (the EU Sustainable Batteries Regulations 2023). For further detail on EU battery regulation, see Practice Notes: EU Batteries Directive—snapshot [ Archived] and EU Sustainable Batteries Regulation—overview of requirements. For guidance on WBAR 2009, see Practice Notes: Portable battery obligations and Industrial and automotive...

The Waste Batteries and Accumulators Regulations 2009 ( WBAR 2009) In force from 5 May 2009, these rules cover every battery, whatever its form, volume, weight or purpose, whether or not fitted within an appliance. They do not extend to batteries used in equipment safeguarding essential security interests, or to those in equipment intended for launch into space. For EU rules on batteries, see Practice Note: EU Batteries Directive—snapshot [ Archived]. WBAR 2009 applies to: industrial batteries automotive batteries portable batteries, such as AA and AAA batteries, and those powering laptop computers or mobile phones Compliance rests on producer responsibility. Producers must limit the environmental harm of waste batteries by improving the design of new batteries and by funding the separate collection, treatment, recycling and disposal of waste batteries. Where a producer is a member of a battery compliance scheme, the scheme meets these costs. For details of the...

Warranty and Indemnity ( W& I) insurance in private M& A transactions—guide to the key documents With the marked increase in the uptake of Warranty and Indemnity ( W& I) insurance in private M& A deals, solicitors are ever more involved in specifying and negotiating W& I policy terms. Although each policy is shaped to the particular demands of a given transaction, the underlying approach tends to be comparable across matters. Against that backdrop, this Practice Note sets out guidance for legal practitioners on procuring and negotiating W& I insurance (the Placing Process), with emphasis on the paperwork exchanged between W& I brokers and insurers, which must be signed by the insured before the W& I policy incepts. W& I insurance documents Confidentiality undertakings and non-reliance letters The following are standard requirements: Execution of a confidentiality undertaking or non-disclosure agreement ( NDA). The W& I...

This Practice Note explores particular matters within Ofcom’s regulatory framework concerning voice over internet protocol ( Vo IP) technology, offering pragmatic guidance on addressing shifts in this field. Vo IP now underpins widespread carriage of voice calls online. More and more, both individuals and businesses adopt it as a lower-cost substitute for traditional public switched telephone network ( PSTN) services. The regulatory position In an early communication on the topic, Ofcom, the UK telecommunications regulator, identified three aims it regarded as central when shaping policy for Vo IP services: fostering innovation in a technology-neutral manner ensuring consumers are well informed maximising the availability of access to emergency services Providers of communications services (including Vo IP providers) must comply with Ofcom’s General Conditions of Entitlement ( GCs). The GCs are updated from time to time; however, they underwent a major review and...

This Practice Note outlines the principal UK competition law considerations that arise in distribution and reseller arrangements. It is designed chiefly for commercial and IT practitioners who are conducting their own competition assessment—particularly in‑house counsel without immediate access to specialists—while also serving as a handy reference for competition lawyers delivering comprehensive advice to clients. It covers: a concise summary of the UK regime for vertical agreements; core points to consider in an initial review of a distribution/reseller contract; specific risk areas, with drafting pointers to steer clear of traps. The emphasis is on securing compliance with the UK vertical agreements block exemption—the Competition Act 1998 ( Vertical Agreements Block Exemption) Order 2022 ( VABEO). Overview of the law Chapter I prohibition Distribution and reseller deals fall within section 2 of the Competition Act 1998 ( CA 1998), which bans agreements between...

Exports for VAT purposes From 1 January 2021, for VAT purposes, an export refers to a supply of goods dispatched from Great Britain ( GB) to any destination outside the UK, or from Northern Ireland ( NI) to a non- EU country outside the UK. There are two categories of exports: direct and indirect. For VAT purposes, a direct export takes place where the goods are removed under the control of, or on behalf of, the supplier; by contrast, an indirect export is where removal occurs under the control of, or on behalf of, someone other than the supplier, most commonly by the overseas customer. Do please note that the customs definitions differ: a direct export is when goods leave the EU without travelling through another Member State, whereas an indirect export is when goods depart the EU via another Member State. This...

This Practice Note addresses VAT zero-rating available to developers who sell or let residential buildings, other than dwellings, that they have built. Such properties are classed as buildings for a ‘relevant residential purpose’ ( RRP). For guidance on the zero-rating of dwellings, see Practice Note: Zero-rated sales and leases—person constructing a dwelling. Why does zero-rating matter? If zero-rating is not in point, the supply will ordinarily be exempt, meaning the developer is unable to reclaim VAT (ie input tax) on expenditure, including construction costs, professional fees and potentially the purchase of the site. For further detail, see Practice Note: When can a person recover VAT? There is also a zero-rating for constructing an RRP building, but only where the works are commissioned by the ultimate user, for example the operator of a care home. The zero-rating considered in this Practice Note is an...

This Practice Note addresses the zero rate of VAT available to developers who sell or grant leases of specific buildings they have built, where the property is designed for charitable use. Such properties are termed buildings for a relevant charitable purpose ( RCP). This Practice Note contains citations to case law of the EU Court of Justice. For advice on whether rulings of the Court of Justice bind the UK courts, see Practice Note: Assimilated law— Assimilated case law. For commentary on assimilated law (previously retained EU law) and tax more broadly, including the bespoke approach now applied to VAT legislation, see Practice Note: Assimilated law and tax. The Court of Justice decisions cited in this Practice Note were issued before the end of the implementation period (which the UK entered on 31 January 2020 and which concluded at 11 pm on 31...

Under the UK’s VAT regime, taxable supplies can be subject to the standard rate, a reduced rate, or be zero-rated. This Practice Note sets out the principal categories of zero-rated and reduced-rate supplies, and offers further detail on five commonly encountered zero-rated areas in practice: food books and printed materials construction of buildings, plus some sales and leases by property developers drugs, medicines and appliances clothing and footwear Zero-rated supplies A zero-rated supply is still treated as a taxable supply even though no VAT is charged on it, making it different from an exempt supply. This leads to two key consequences: zero-rated supplies count when assessing whether a business must (or is entitled to) register for VAT; see Practice Note: Who must and who can register for VAT in the UK? input tax attributable to a zero-rated supply can be recovered from HMRC (whereas input tax on an exempt supply is not...

Transfer of a business as a going concern (a TOGC) The sale of a ‘business’ is, in substance, a package of assets sold together. As a rule, VAT would accordingly be levied on the disposal of each asset under the usual rules—i.e. standard-, reduced- or zero-rating, or exemption—depending on the nature of the asset, unless the transaction is treated as a transfer of a business as a going concern (a TOGC). Where a sale qualifies as a TOGC, it counts as neither a supply of goods nor a supply of services, placing it outside the scope of VAT. No VAT is therefore payable on the sale. To qualify as a TOGC, specific conditions must be satisfied, which this Practice Note sets out. Where those conditions are met, there are implications for both buyer and seller, discussed in Practice Note:...

Everyone knows that value added tax ( VAT) is a levy that pushes up the cost of goods and services purchased by UK consumers. For a tax lawyer, before delving into precisely when it bites and the way it is run, it is vital to appreciate more about what it is intended to achieve. Where does VAT come from? There are numerous varieties of value added or sales taxes worldwide. The UK’s VAT regime stems from the European Union ( EU). The EU’s common framework for VAT is contained in Council Directive 2006/112/ EC of 28 November 2006 on the common system of value added tax (the VAT Directive). It is described as common because it requires EU member states to enact domestic laws giving effect to the system. Nevertheless, within that structure there are several areas where member states may choose whether, and in what...

Practice Note: VAT—what is a transfer of a business as a going concern? The criteria for a transfer of a business to be recognised as a transfer of a going concern ( TOGC) are explained in Practice Note: VAT—what is a transfer of a business as a going concern? In broad terms, where a transfer meets the TOGC rules, it is treated as a ‘nothing’ for value added tax ( VAT) because no supply occurs. Nonetheless, there remain a number of implications to keep in mind when giving advice on a TOGC. This Practice Note considers the consequences for the buyer (transferee) and the seller (transferor) of a business transfer that is: correctly treated as a TOGC, and incorrectly treated (or not treated) as a TOGC This Practice Note also cites EU case law. The UK ceased to be an EU Member State on 31...

Why is the exemption for financial services important? VAT is a significant issue for firms in the financial sector because supplies of certain financial services to customers who belong in the UK are exempt from UK VAT. This matters because: businesses do not charge VAT on services that fall within the exemption; and those businesses cannot recover input VAT on costs they incur when making an onward exempt supply Dealing with securities exemption The issue, transfer, receipt of, or any dealing with: any security; or secondary security is exempt from VAT. Throughout this Practice Note, this is described as the 'dealing with securities exemption'. This Practice Note also looks at examples of how the dealing with securities exemption applies in practice. For detailed definitions and the conditions attaching to this exemption, see Practice Note: Exemption from VAT for dealing with securities and underwriting. The supply of...

This Practice Note addresses opting to tax land and buildings. It looks at who may make the election, the breadth of that election, how it is exercised and notified, the consequent effects, when it can be withdrawn, and the pros and cons of opting. For situations where the election is expressly disapplied, see Practice Notes: Option to tax—disapplication for residential and other property and Option to tax—disapplication under anti-avoidance rules. Why does this matter? By default, property dealings are VAT‑exempt (see Practice Note: Exemption from VAT for land and buildings), meaning no VAT is charged and associated input tax is irrecoverable. Electing to opt generally converts supplies into taxable ones and enables input tax recovery. In day‑to‑day practice, the majority of commercial property is covered by an option to tax. As a rule, once a property owner has opted, the election governs all of their...

FORTHCOMING CHANGE : HMRC issued a call for evidence, ‘ Simplifying the VAT Land Exemption’, in May 2021, seeking views and input on bold options for redefining the exemption’s scope and future direction. Among the ideas were bringing all ‘short‑term or minor’ rights over land within the VAT net, or abolishing the existing ‘option to tax’ regime and instead treating every land deal as subject to VAT, with targeted carve‑outs for, for example, residential or charitable property. While these suggestions largely failed to win favour with respondents, they may nevertheless signal narrower and potentially more suitable reforms that HMRC could look to advance in the near term. The evidence‑gathering consultation exercise ran from 12 May 2021 to 3 August 2021. A response summary appeared on Tax Administration and Maintenance Day on 30 November 2021, confirming that the government did not, at that point, plan any...

Single composite supplies vs multiple supplies When a supply consists of several components attracting different VAT treatments, a central issue is whether those components should be taxed separately for VAT purposes (a multiple or mixed supply) or whether the bundle should receive a single VAT treatment (a single or composite supply) and, if so, which one applies. This conundrum has repeatedly perplexed the courts, HMRC and taxpayers, and has frequently and regularly reached both the domestic courts and the EU Court of Justice. This Practice Note outlines the present position in law and administrative practice in this area today. The UK left EU membership on 31 January 2020, and the implementation period—during which, for many purposes, the UK continued to be treated as a Member State—ended at 11pm on 31 December 2020. For guidance on the ongoing significance of EU Directives, and of the Court of...

Why is the exemption for financial services important? VAT is a significant concern for businesses in the financial sector, since the supply of certain financial services to customers who belong in the UK is exempt from UK VAT. This is important because: businesses will not levy VAT on services that fall within the exemption, and such businesses cannot recover input VAT on supplies they receive when making an onward exempt supply The financial services exemption from VAT The UK exemption for financial services is derived from the relevant provisions of Directive 2006/112/ EC (the VAT Directive). These have been enacted into UK law by Schedule 9, Part II, group 5 of the Value Added Tax Act 1994 ( VATA 1994), which sets out a range of items within the exemption. This Practice Note focuses on the exemption for dealing with securities ( VATA 1994, Sch 9, Part II,...

Where is a supply made for VAT purposes? To work out whether a supply is liable to UK VAT or VAT in another jurisdiction, you must apply the place of supply rules. As set out in Practice Note: When does VAT apply? UK VAT is only due on a supply made in the UK. In many instances it seems clear that a supply takes place in the UK and is therefore within UK VAT, but where goods and services are: bought from, or exported to, overseas jurisdictions, or of a particular kind the position is less straightforward and a detailed review of the place of supply rules is required to determine the VAT place of supply. There are separate rules to establish: the place of supply of services, and the place of supply of goods Broadly, these rules are designed to prevent double...

The term ‘business’ is a concept which underpins the operation of VAT because: a person is only liable or entitled to register for VAT (ie is a taxable person) when they make taxable supplies in the course or furtherance of a business VAT can be charged solely by someone who is in business and registered for VAT, and whether a person must register depends on whether they are a taxable person and thus in business a person is entitled to recover VAT only where that VAT was incurred for the purposes of their taxable business Accordingly, establishing whether a person is in business for VAT is of real importance. While in many situations it is clear that a person is in business, this is not always so. This Practice Note contains references to EU Directives and case law. On 31 January 2020, the UK ceased to be an EU...