Tax Memo: Income tax
08 Dec 2009

Administration: Changes to form for agent registration at HMRC

HMRC have announced changes to the form 64-8  which is used to authorise an agent to act on behalf of taxpayers.
HMRC will require that both the full National Insurance number of the taxpayer and the self-assessment unique taxpayer reference number (“UTR”) are included on the form before an agent will be registered. Forms which have been submitted already without both of these numbers will be registered but any further forms missing these details will be returned.

HMRC web posting 1 December 2009

Employment Memo: Award and rate changes
10 Feb 2010

The minimum basic unfair dismissal award (which applies where the employee has been unfairly dismissed for certain inadmissible reasons) did not increase on 1 February and remains at £4,700. The maximum basic unfair dismissal award, which increased to £11,400 on 1 October 2009, also remains the same, although the maximum compensatory unfair dismissal award has decreased slightly to £65,300.

For all other award and rate changes from 1 February, see Employment Memo 2010, which has just been published.

Employment Memo: Conventional dress code requiring differences in dress between men and women not discriminatory
14 Jan 2010
The EAT has confirmed that employers may adopt a dress code requiring conventional appearance with differing requirements for men and women, provided that it enforces compliance of those differing requirements in the same way for both genders. Here, a male trainee police officer asked before he attended basic training whether wearing his long hair in a bun would comply with the employer’s dress code, which required recruits to wear hair above the collar or if long, fastened close to the head. Although he was told that it would, when he started training he was told to get his hair cut. He made a claim of sex discrimination. The EAT upheld the decision of a tribunal that the dress code, looked at as a whole, was balanced in the way it treated the sexes and that there had been no less favourable treatment, because a woman would also have been required to comply with the code in so far as it affected her.

Dansie v The Commissioner of Police for the Metropolis [2009] UKEAT 0234_09_2010

Employment Memo: Disability discrimination - treatment of those with ADHD
14 Jan 2010
This case was a disability discrimination claim brought by the parents of a child with ADHD who was excluded from school after he assaulted a member of staff who was trying to restrain him. The High Court held that both the tendency to physical abuse as a freestanding tendency and cases where such behaviour is a manifestation of an underlying condition fell outside the scope of protected disabilities. However, it considered that the school’s failure to provide enough training on the management of pupils with ADHD, including dealing with non-compliant and disruptive behaviour, was related to the disability ADHD, and not to the tendency to physical abuse. It therefore upheld the decision that the school had failed to make reasonable adjustments.

Governing Body of X Endowed Primary School v Special Educational Needs and Disability Tribunal and ors [2009] IRLR 1007, HC

Comment: While this was not an employment case, the same principle will apply in the employment context.

Employment Memo: Racial discrimination – faith school exemption does not apply to racial discrimination
14 Jan 2010
By a majority, the Supreme Court has confirmed that a criterion for admission to a school based on the Jewish ethnic origin of an applicant, rather than his religious observance, amounted to direct race discrimination. In this case, the applicant was the son of woman who had converted to Judaism in a Masorti synagogue, which did not satisfy the strict criteria of the school. The Court emphasised that its decision did not imply any moral criticism of the school for its admission policy. If it was thought right to allow selection based either on matrilineal descent from an Orthodox Jewish background or on conversion under the Orthodox tradition, legislation would be required to add an exception to the Equality Act 2006.

E, R (on the application of) v Governing Body of JFS and anor [2009] UKSC 15

Employment Memo: Civil claims under the Protection from Harassment Act
14 Jan 2010
In this case an electrician was constantly picked on by her supervisor at work, to the extent that she became depressed and eventually left her job. She brought a civil claim against her employer in the County Court under the Protection from Harassment Act 1979. Her claim failed, on the ground that the conduct was not so bad that a criminal prosecution could have been brought. She successfully appealed to the Court of Appeal who held that the correct test was to consider whether the conduct was “oppressive and unacceptable”, rather than whether it was criminal. In this case, the level of victimisation over a relatively short period easily satisfied the test. The Court commented that while malice is not a required element of harassment, its presence makes it easier to establish.

Veakins v Kier Islington Ltd [2009] EWCA Civ 1288

Employment Memo: Whistleblowing disclosures must be more than an allegation to be protected
14 Jan 2010
The EAT has considered the content required for a disclosure to qualify as protected. In this case, a dispute arose between two directors of a company on the one hand and a third director, G. G’s solicitors wrote to the other directors suggesting that a proposal they had made to backdate a shareholders’ agreement was unlawful. The EAT held that this was no more than an allegation; to be a disclosure capable of being protected the statement must consist of information and not mere allegations.

Comment: The director also appealed against certain instructions given by the High Court to the valuer when determining the price of the director's shares. His appeal on this point was allowed in part because the High Court judge had effectively tied the valuer's hands on a matter that was for the expertise of the valuer, which the court ought not to have done.

Is this a sign of the reported economic recovery? Some would say not and that it is merely a reflection of the success of Revenue and Customs’ Time to Pay scheme (which allows businesses experiencing cash-flow problems to pay tax over a longer period of time). Recent speculation in the press as to whether this scheme will survive the expected general election has led to growing concern that the worst is yet to come, in terms of corporate insolvencies, when the outstanding tax payments are finally demanded.

VAT Memo: Scope of VAT: Exempt supplies – Other exemptions
03 Dec 2009
HMRC have confirmed that “electronic lottery terminals” are gaming machines subject to VAT at the standard rate.

VAT Memo: Compliance: Reporting – Returns
03 Dec 2009
Most VAT-registered businesses will have to submit VAT returns online, and pay VAT electronically, for accounting periods which start on or after 1 April 2010. This applies to: businesses currently registered for VAT which have an annual VAT-exclusive turnover of £100,000 and above; and businesses, irrespective of turnover, with an effective date of registration on or after 1 April 2010. There is an exemption for businesses run by individuals who have a religious conscience objection to the use of computers and the internet. There is also an exemption for all businesses that are subject to an insolvency procedure.

HMRC web posting, 12 November 2009

VAT Memo: Cross-border issues: Goods within the EU – Intrastat declarations
03 Dec 2009
HMRC have announced the Intrastat thresholds for 2010. From 1 January 2010, the exemption threshold for arrivals is increased from £270,000 to £600,000. The exemption threshold for despatches is reduced from £270,000 to £250,000.

VAT Memo: Cross-border issues: Supply of services
03 Dec 2009
A new VAT Notice covers the amended cross-border place of supply of services rules with effect from 1 January 2010.

AFR Memo: Rights Issues in foreign currencies now to be classified as equity
16 Nov 2009
As a result of the global financial crisis, the Accounting Standards Board (ASB) has published a Financial Reporting Exposure Draft (FRED) proposing an amendment to FRS 25 (IAS 32) “Financial Instruments: Presentation”.

The proposed amendment follows a change to IAS 32 in response to an increase, in the global financial crisis, in the number of entities using rights issues to raise capital. Under existing rules, if these rights issues are denominated in a foreign currency, they are classified as derivative liabilities. The FRED states that if a fixed number of rights, options or warrants are issued pro rata to an entity’s existing shareholders for a fixed amount of foreign currency, these should be classified as equity regardless of the currency in which the exercise price is denominated.

The proposed amendment is thought to better reflect the substance of the rights issue, which is a transaction with shareholders in their capacity as owners. It would also ensure, if adopted, that FRS 25 remains fully converged with IAS 32.