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New arbitration process to help commercial landlords and tenants settle coronavirus-related disputes

A new, legally-binding arbitration process will be introduced to help commercial landlords and tenants settle coronavirus-related disputes, it has been announced.

The new rules will come into effect from 25 March 2022 – the date after which commercial tenants are no longer protected from eviction.

According to the report, the new laws are being introduced to resolve disputes relating to commercial rent arrears accrued as a direct result of the pandemic.

The Commercial Rent (Coronavirus) Bill will establish a legally-binding arbitration process for commercial landlords and tenants who have not reached an agreement before 25 March 2022.

Arbitration – a form of alternative dispute resolution – is commonly used to settle a dispute without having to go to court. Each arbitration session features a claimant, a respondent, and an independent arbitrator. The arbitrator listens to each party’s argument and assesses the evidence before making a legally-binding award.

The Government said the new arbitration process – which will apply to only commercial rent debt related to the mandated closure of certain businesses – will help landlords and tenants resolve disputes effectively and efficiently.

This includes firms, such as pubs, restaurants, and hotels, which were mandated to close, in full or in part, from March 2020 until the date restrictions ended for their sector.

Commenting on the move, Business Secretary Kwasi Kwarteng said: “Today’s measures provide commercial landlords and tenants with the clarity and certainty they need to plan ahead and recover from the pandemic.

“We encourage landlords and tenants to keep working together to reach their own agreements ahead of the new laws coming into place, and we expect tenants capable of paying rent to do so.”

For help and advice with related matters, please get in touch with our team today.

What you need to know about staff attendance hit by adverse weather

As the winter months approach, getting to work could become a problem for some people affected by snow, winter storms or heavy flooding.

We saw in 2018 how The Beast from the East and Storm Emma brought freezing temperatures, snow, high winds and travel chaos.

Employees affected in this way should talk to employers about any difficulties and possible ways of working around it, which could be working from home, taking holiday or making time up at a later date.

Home working has become more routine during the pandemic if they can use a computer or laptop.

Employees are not automatically entitled to pay if they’re unable to get to work because of bad weather. Guidance is available from the Advisory, Conciliation and Arbitration Service (Acas) about winter weather – travel disruption.

However, should the office have to close because of the weather, employees are being prevented from working. In this case, unless their contract specifies otherwise, they will need to be paid in full for any work they miss due to the closure of the workplace.

Government guidance over disruption by poor weather includes:

Offering a paid leave option for staff

Employers can ask staff to take paid holiday (annual leave) if they give the correct notice. This must be at least double the length of time they want employees to take in annual leave. So for one day’s annual leave it would be two days notice.

The employment contract may set down a different notice period and if so, this will usually apply.

Flexible working

Employers may ask flexible workers to work from home or make up time later. Unless the employment contract says so, employers cannot insist on this.

If the workplace is closed

If the workplace is closed because of disruption and the employee does not usually work from home, employers cannot usually deduct pay. Employers might be able to ask staff to go to another workplace or work from home.

Looking after children

If an employee’s child’s school is closed or their normal childcare arrangements are disrupted, they could have the right for time off to look after them. This should be agreed between the employee and the employer.

Staying in contact with staff

Should an employer need to close the office, for example, they will need to tell everyone via personal contact, not just a work email, as employees may not have access (or choose not to) to work emails and phone outside of working hours.

Rights about travel disruption can be outlined in the employment contract – employees should check.

For help and advice on employment matters, contact our expert team.

Residential property tax to be revealed by Chancellor in Budget

The consultation on the introduction of the new Residential Property Developer Tax (RPDT) ends this week with details revealed in this month’s Budget.

The Government announced on 10 February 2021 that it would introduce the RPDT as part of its Building Safety Package.

The Building Safety Package aims to:

• Pay for the removal of unsafe cladding for leaseholders in all residential buildings 18 metres (six  storeys) and over in England.

• Provide a finance scheme for leaseholders in lower rise, lower risk buildings – those between 11 and 18 metres (four to six storeys) – to help pay for cladding.

•  Introduce an industry levy and a new tax on residential developers, to ensure developers play their part and make a fair contribution.

The Government says measures are designed to bring an end to unsafe cladding, provide reassurance to homeowners and support confidence in the housing market.

Details of the new tax will be provided by Chancellor of the Exchequer Rishi Sunak in his Autumn Budget on 27 October.

The Government held a consultation seeking views on the policy design of the RPDT between 29 April and 22 July 2021.

It has since been holding a technical consultation on the draft legislation of the RPDT ahead of its inclusion in the 2021-22 Finance Bill, to ensure the legislation operates as intended, and concludes on 15 October.

To help pay for these interventions the government is introducing two revenue raising measures:

•  A new Gateway 2 levy, which will be applied when developers seek permission to develop certain high-rise buildings in England.

•  A new tax on the residential property development sector.

• The tax would be time-limited and apply to the largest residential property developers in relation to the money they make from UK residential development.

•  It would be introduced in 2022 and seek to raise at least £2 billion over a decade.

The Government says it helped support confidence in the property market with interventions on stamp duty land tax and the mortgage guarantee scheme. Therefore, given the significant costs associated with the removal of unsafe cladding, the government believes it is right to seek a fair contribution from the largest developers in the residential property development sector to help fund it.

For help and advice with commercial property matters, please get in touch with our expert team today.

More estates to be made exempt from full inheritance tax accounts

More estates will be made exempt from the need to submit full inheritance tax accounts as a condition of obtaining probate, it has been revealed.

The move comes after the Office for Tax Simplification (OTS) published recommendations earlier this year on how the probate process could be streamlined.

According to the revised legislation, the Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021 have been amended to exempt even more estates from burdensome reporting requirements for deaths on and after 01 January 2022.

As part of the changes, the threshold gross value of an excepted estate has been increased from £1 million to £3 million, while the threshold of an excepted estate’s chargeable trust property has been increased from £150,000 to £250,000.

Other changes include:

  • Increasing the value limit concerning specified lifetime transfers from £150,000 to £250,000.
  • The definition of ‘IHT threshold’ has been revised to reflect the IHT nil rate band multiplier where less than 100 per cent of an unused IHT nil rate band is transferred to the deceased.
  • Simplifying the “alternative information” that is to be produced for both small estates and exempt estates.
  • Removing excepted status from estates of foreign persons where the deceased either owned indirect interests in UK residential property or made lifetime gifts of UK assets above £3,000 in the seven years before death unless the estate is not liable for IHT.

Commenting on the measures, HM Revenue & Customs (HMRC) said: “The measure will reduce IHT reporting burdens for more than 90 per cent of non-taxpaying estates requiring probate or confirmation, and ensure that estates are not excepted from delivering IHT accounts where the deceased was never domiciled in the UK and IHT is due.”

The amendments also align the period in which HMRC may make enquiries into estates where accounts are not required at 60 days from the date of probate.

The full details of the changes can be found here.

For help and advice with related matters, please get in touch with our estate planning and probate team today.

Record number of business owners place company into voluntary liquidation in wake of coronavirus pandemic, figures reveal

A record number of business owners placed their company into voluntary liquidation in the third quarter of 2021, the latest statistics have revealed.

Experts suggest that the figures are now beginning to reflect the true impact of the coronavirus pandemic on the economy.

The report, published by the Insolvency Service, show that there were 3,765 corporate insolvencies during July, August, and September 2021 – 17 per cent more than in the second quarter of 2021 and 43 per cent more than in the same period last year.

It means that one in every 341 active companies entered liquidation between 01 October 2020 and 30 September 2021.

The increase in insolvencies was driven mainly by an increase in the number of company voluntary liquidations (CVLs), which soared to their highest level since the second quarter of 2009.

A CVL – also known as a creditors’ voluntary liquidation – is when a director or business owner chooses to stop trading and winds up their company because it cannot pay its debts.

Commenting on the figures, Nicky Fisher, Deputy Vice President at insolvency and restructuring trade body R3, said the economic damage caused by the pandemic is now “starting to be reflected in the levels of corporate insolvency”.

“The rise in CVLs would suggest that company directors are choosing to close their businesses after trading for more than a year and half during a pandemic and deeming future success unlikely,” she said.

“As we enter the winter months, directors need to be alert to signs their business might be distressed, which include cashflow issues, problems paying staff or suppliers and increasing stock levels – and seek advice as soon as any of them present themselves, or if they become worried about their business and its finances.”

For help and advice with related matters, please get in touch with our team today.

Charity calls for more support for employees suffering bereavement

Bereavement is all too common at the moment with the effects of the COVID-19 pandemic, and it poses problems for employees returning to work.

A recent survey has found that nearly half of employees (49 per cent) were forced to return to the workplace before they were ready as they did not receive any paid leave. They also cited job security as another reason.

In addition, nearly 60 per cent of those surveyed by the end of life charity Marie Curie, said their performance at work was affected for months after bereavement.

In the wake of COVID-19, employers should review their bereavement policies to support grieving members of staff, says the charity.

It surveyed 1,000 employed people who experienced a bereavement in the previous 12 months as well as over 400 HR professionals about policies and procedures in place to support their staff.

At the moment an employee has the right to time off work after the death of a dependant such as a partner, child or parent and may be eligible for Parental Bereavement Leave and Statutory Parental Bereavement Pay if they or their partner either:

  • Has a child who has died under 18 years old
  • Had a stillbirth after 24 weeks of pregnancy

The move came about as a result of Jack’s Law, also known as the Parental Bereavement Leave and Pay Regulations. Jack’s Law is in memory of Jack Herd whose mother Lucy campaigned tirelessly on the issue.

The Chartered Institute of Personnel and Development (CIPD), Marie Curie and others are now calling for an extension of Jack’s Law so employees experiencing the bereavement of other close family members are also supported by statutory provisions.

Ken Akers, Head of HR at Marie Curie, said: “Returning to work before you are ready can complicate experiences of grief but for some work can be that routine and sense of normality people crave in times of crisis. Whatever the decision, employees must feel supported and trusted to do what is best for them.”

Claire McCartney, Senior Policy Adviser, Resourcing and Inclusion, at the CIPD, said: “We think it’s crucial that organisations properly support their bereaved colleagues. Employees will need time to come to terms with what’s happened and will be unlikely to be able to perform well at work if they are forced to return too quickly.”

The CIPD has issued guidelines as to how employees should be supported:

  • Employers should work to be knowledgeable about the law and bereavement, including parental bereavement leave and pay and emergency time off for family and dependants.
  • Employers should address health and safety obligations in relation to bereavement and avoid discrimination and address the risk of bullying.
  • An open culture of support helps people feel more comfortable asking for support.
  • Develop a bereavement policy, covering aspects like reporting a bereavement, any leave and pay and returning to work.
  • Educate and support people managers to show empathy and compassion.
  • Provide training and support so they understand the organisation’s bereavement.
  • Flexibility is key: build flexible responses and be open to ongoing flexible working provisions.
  • Provide information on workplace support and signpost employees to external sources of support.

For help and advice on matters relating to employment law, contact our expert team today.