Ground Rent charges set to be scrapped for new leaseholders. What does this mean?

The Department for Levelling Up, Housing and Communities has announced that the Leasehold Reform (Ground Rent) Act 2022 will come into force on 30^th June 2022. The news comes following an initial 2018 consultation by the government, meaning that the arrival of this legislation has been in progress for a long time. The government have described the policy as “part of the most significant changes to property law in a generation”.

Once the Act comes into force it will abolish ground rents for qualifying residential long leases and will apply to new residential leases. If landlords choose to charge ground rent, then the maximum amount will be reduced to “one peppercorn” – in reality this means zero ground rent for leaseholders.

There will also be further measures in 2023, when the provisions will apply to retirement homes from 1^st April 2023 – future detail will be released about this in due course. However, ground rent will also be reduced to zero in these retirement homes, ensuring that those living in retirement homes benefit from the same reforms as leaseholders. The delay in the ban on ground rent for retirement homes is due to it taking longer for retirement developers to update their systems.

Accord to the Leasehold Minister, Lord Stephen Greenhalgh: “This is an important milestone in our work to fix the leasehold system and to level up home ownership. Abolishing these unreasonable costs will make the dream of home ownership a more affordable reality for the next generation of home buyers”.

The key word in this quote is “more affordable” given the current UK crisis in housing affordability and the price of property inflation for many would-be homeowners living in expensive rented accommodation – particularly in London.

But what is ground rent?

Ground rent is a yearly charge paid by the leaseholder to the person who is ultimately the owner of the home, the freeholder. The idea of ground rent is that the leaseholder is paying an annual charge for the privilege of living on the freeholder’s land. Leasehold property holders pay an average of £319 in ground rent costs per year, totalling £447 million. Leaseholders do not own their homes outright, but instead it is a form of home ownership which gives a leaseholder the exclusive right to live in a property for a fixed number of years.

The report which informed this policy found that ground rent provides no clear services in return for the charges and can also increase on a regular basis. The removal of these charges will therefore certainly be welcomed by leaseholders who have felt a squeeze on living standards during recent times.

What types of leases does the Ground Rent Act apply to?

The Act will only apply to residential long leases (over 21 years) which have been entered into from the 30^thof June 2022 and granted for a premium. Those who are preparing to sign a new lease on a home before the act comes into force should ensure that their ground rent rate reflects the changes in the new act. In reality, many landlords have already reduced ground rents to zero prior to the 30^thof June.

Nevertheless, there will be some exceptions to the Act. These include applicable community-led housing, certain financial products as well as business leases. Further exemptions from the Act include statutory lease extensions for both houses and flats.

As well as the benefit to new leaseholders, those who own properties with companies including Aviva, Persimmon, Countryside Properties and Taylor Wimpey will see their ground rate reduced to the amount it was when they first bought the property. This follows pressure applied to the companies by the Competition and Markets Authority (CMA), which has also gained new powers in consumer law as a result of the Consumer Protection Study 2022.

Issues with current ground rent scheme

There are a number of issues with the current system which has resulted in the writing being on the wall for the ground rent scheme for a number of years.

Among these are the fact that while ground rent usually starts at a low level, it often doubles every ten years or so and can therefore end up presenting a significant cost for leaseholders. In fact, a 2018 report found that 9 in 10 leaseholders regretted buying a leasehold house, with many feeling that they had been mis-sold the property.

The market has also remained largely stagnant for these types of properties because while no lender wants to lend, nor does anyone want to buy these properties for the aforementioned reasons. Many leaseholders have also become trapped in poverty because of these types of leases and have been unable to pay the ballooning ground rent costs.

One example cited in Which? magazine saw an annual ground rent of £295 in 2008 which would end up being £9,500 in 2058 due to the insertion of clauses which saw the ground rent increase exponentially.

Our thoughts

While the Leasehold Reform (Ground Rent) Act 2022 has been in the works for a while, the announcement of a commencement date will provide good news for new leaseholders who will pay less than they would have done otherwise.

Nevertheless, the new laws will not apply to leaseholders who need to formally extend their lease. Such people will continue to see thousands of pounds in costs depending on the length of the lease. While there is talk of making the process easier and cheaper through new legislation, there is no more news about when this is set to come in at this moment in time.

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James Cook

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The end of fake reviews? New rules claim to protect consumers and boost competition

The Department of Business, Energy and Industrial Strategy has announced new rules which it claims will protect consumers and boost competition. This follows the “reforming competition and consumer policy” consultation which was launched by the government last year. The Government-sponsored Consumer Protection Study 2022 found that between April 2020 and April 2021, the equivalent to £54.2 billion had been lost to at least one problem with a product, resulting in stress, monetary loss or time wasted for UK consumers.

Consumer protection

Fake reviews

One of the main focuses of the new rules is tackling fake reviews. Most people these days, whether they are going to a restaurant, choosing a film to watch, or booking a hotel will look at reviews. As a result, it is pretty important that the reviews consumers look at are genuine. Fake reviews do nothing other than cheat consumers out of their money by misleading them about the quality of an experience. This only serves to lower confidence in such review websites.

The press release which accompanied the announcement claimed that the average UK household spends £900 per year as a result of online reviews. This makes tackling fake reviews especially pertinent given the cost-of-living crisis which the UK is currently experiencing.

The consultation which will be launched into this area will look at:

Making it illegal to pay someone to write a fake review
To host a fake review without checking whether it’s genuine
Offering or advertising to submit, commission or facilitate fake reviews

These measures will be welcomed by the vast majority of consumers; however, some businesses may be concerned about the potential of the second point which asks businesses to check whether a review is genuine before hosting it. Despite this, one would imagine in this case that the onus would be on review websites such as Google and Trustpilot to check whether a review is genuine.

Subscriptions

Another area where the plans aim to boost consumer protection is subscriptions. Consumer issues around subscriptions tends to arise when consumers sign up for a free trial and are lulled into paying for a product once the free trial comes to an end.

The new plans would:

Require businesses to remind consumers that their free trial is coming to an end
Require businesses to provide a reminder before a contract auto-renews onto a new term.
They would also have to ensure that consumers can exist contracts in a “straightforward, cost-effective and timely way”.

Currently, while many subscription services allow consumers to sign up on their website, they do not allow them to withdraw from the subscription in the same way. For example, a customer may be forced to phone the business directly to cancel their subscription, potentially causing issues around accessibility for customers with disabilities.

As a result, the steps taken with these new rules represent a positive change for consumers which will hopefully ensure that fewer people get caught out by charges caused by the end of a free trial. The consumer protection rules discussed in this article will apply to Great Britain, with Norther Ireland having devolved powers related to consumer protection.

Enforcement of consumer law through the CMA

The Competition and Markets Authority (CMA) will be empowered in order to directly enforce consumer law and competition law. The CMA is the official competition regular in the UK, responsible for strengthening business competition. As a result of the change, some of the powers the CMA will wield including being able to:

Fine firms up to 10% of their global turnover for mistreating their customers. This replaces the previous system, where courts were the arbiters of awarding compensation to consumers
Non-compliance with an information notice, as well as concealing evidence or providing false information. Penalties for these be worth up to 1% of a business’ annual global turnover or up to £30,000 for an individual. Additional daily penalties would be added for continued non-compliance.
Fine businesses abusing their market position with a turnover of £20 million or over. The previous threshold for this was £50 million.

Another approach taken within the new rules to reduce the influence of the courts is to improve Alternative Dispute Resolution (ADR) services in consumer markets. This would include amending the ADR Regulations 2015 to “improve the quality and oversight of ADR services” as well as require the accreditation of businesses offering consumers dispute resolution services.

The government has been keen to promote the use of ADR, partly as a consequence to a depleted legal system which has been subject to cuts over the past decade. Another recent example of an increase in focus on ADR is the introduction of no-fault divorce (see here).

While the CMA has been strengthened in some areas, it will also lose some power in a bid to “boost competition”. When it comes to mergers, the CMA will be excluded from control where both parties involved have a UK turnover of less than £10m. These measures will apply throughout the whole of the UK.

Our thoughts

These new rules are certainly welcome and will help to protect consumers from the many challenges addressed by the changes. They will also potentially alleviate the pressure on the courts and the legal system by putting more emphasis on the CMA.

As pointed out by the Chief Executive of the Chartered Trading Standards Institute, the last decade has seen cuts of 50% of capacity in some trading standards services at the local level. This directly affects customers and therefore needs to also be addressed in order to see the full benefits for people up and down the country. However, the tackling of fake reviews and misleading subscriptions in particular is an area where consumers will see a direct benefit once these laws come into effect.

Have questions about this article? Get in touch today!

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James Cook

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Past association with extremists results in naturalisation claim being refused by Home Secretary

A person can apply for naturalisation and become a British citizen if they satisfy all the requirements. Some of these requirements include suitability requirements, eligibility requirements and passing the Life in the UK test.

Schedule 1, paragraph 1(2)(a) of the British Nationality Act 1981 states that any applicant must be in the United Kingdom for a period of 5 years prior to the date of the application (the five year rule).

The aim of the five-year rule is to ensure that an applicant for citizenship has a clear, strong connection with the UK evidenced by presence in the UK.

This means that an applicant can only be absent for a certain amount of days prior to the application to be eligible.

Under the British Nationality Act 1981, it is mandatory that all applicants must satisfy the good character requirement. We have previously covered another case focused on naturalisation, click here.

R (on the application of Amin) v Secretary of State for the Home Department

In the case of R (on the application of Amin) v Secretary of State for the Home Department (SSHD), the Claimant brought judicial review proceedings against the decision of the SSHD to refuse the Claimant’s naturalisation application on ‘good character’ grounds.

The SSHD refused the Claimant’s application as the Claimant was associated with members of an extremist organisation or people with extremist views. The SSHD considered that there was nothing to suggest that the Claimant was unaware of their views or that he himself did not share those views.

The SSHD did not believe that sufficient time had passed so that previous associations could be disregarded, and no evidence was provided showing that he did not share those views. The Claimant was simply distancing himself from the individuals.

The Judicial Review was dismissed, and the Claimant appealed the decision.

The hearing

The Claimant argued that the decision refusing the application was irrational or had involved overlooking or ignoring a relevant factor.

The Claimant argued that although a person’s past might provide a helpful indication of whether the person was currently of good character, the following should also be considered:

the passage of time since the associations had ended
his new family
an incorrect assumption that he shared the views of the people he had previously associated with.

The Court held that there was nothing to indicate any irrationality or unlawfulness in the way the Secretary of State for the Home Department had considered the Claimant’s application for naturalisation had taken place.

Home Secretary’s concerns about Claimant’s good character

The Secretary of State has concerns about the Claimant’s good character arising from his association over many years with a person who was a leader of an organisation with extreme views. No evidence was provided by the Claimant that these connections had ended.

Accordingly, the decision made to refuse the application was based on the material before her and therefore the decision for the Secretary of State for the Home department to refuse the Claimant’s application on good character grounds was not an irrational conclusion.

The Claimant’s appeal was therefore dismissed.

Our comments

The case shows the importance of ensuring that an application is well prepared and furnished with substantive evidence. If there are issues in the past, which are no longer present, evidence must be shown clearly showing the same.

In this case, the claimant failed to provide evidence that their connections with the leader of an organisation with extreme views had ended. As a result, it is perhaps not surprising that the Home Secretary refused the application.

Have questions? Get in touch today!

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James Cook

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UK Expansion Worker Visa – what do you need to know?

Have questions or looking for help applying for a UK Expansion Worker Visa? Contact us today by emailing [email protected] or calling us on 020 7928 0276.

But first, read our article below to learn all about the new UK Expansion Worker visa which replaces the Sole Representative route for overseas companies seeking to expand in the UK.

The UK’s new Global Business Mobility routes officially opened on the 11^th April 2022, forming part of the Home Office’s new statement of changes, Immigration Rules HC 1118. The five new routes are as follows:

1. Senior or Specialist Worker, to meet specific business needs

2. Graduate Trainee, as part of a training programme

3. Secondment Worker, to UK firms in high value contracts or investments

4. Service Supplier, to the UK in line with UK trade agreements

5. UK Expansion Worker, to establish a UK presence

While there are some drawbacks for the UK Expansion Worker Visa route compared to its previous iteration, the Sole Representative of an Overseas Business Route (as we addressed here), namely that the new route does not automatically lead to settlement, there are still major benefits to the UK Expansion Worker Visa for overseas companies seeking to expand in the UK. Not least, the new route allows the possibility of sponsoring up to 5 people on your license, whereas the old route only allowed one.

Keep reading for information on how to apply and whether the UK Expansion Worker visa would be a suitable route for your business.

Key things to remember

The Expansion Worker Visa is a specific type of visa for senior managers or specialist employees overseas who are assigned to the UK to carry out work related to the expansion of a business in the UK. It has replaced the Representative of an Overseas Business route, however those already on that route do not need to switch. In contrast to the previous route, the Expansion Worker visa requires the worker to have a UK sponsor.
The Expansion Worker Visa is for businesses who intend to establish a branch or subsidiary in the UK.
The Expansion Visa can only be used when the business has not begun trading in the UK. If the business has begun trading, then a different visa like the Senior or Specialist Worker or Skilled Worker route should be used instead.
UK Expansion Workers must be paid at least £52,500 per year, or the full going rate for the occupation (whichever is higher).
Expansion Workers can stay in the UK up to one year initially, with the option to extend this by up to two years, however two years is the maximum amount of time a person can stay on this particular route. Most people who qualify for the license will later be able to switch to a Skilled Worker visa,
Businesses are only able to sponsor the number of people they genuinely need to establish their UK business, which is up to a maximum of 5 people at any one time. However, once your business has managed to establish a presence in the UK then you can add other routes to your sponsorship license and sponsor workers on those routes.
However, businesses should note that as the expectation is that a trading presence will be established within two years. Failure to do so will mean that you will not be able to sponsor any more workers on the route, your existing sponsored workers will be unable to extend their stays, and you may also lose your license.

Who does not need to be sponsored?

You do not need to sponsor Irish citizens (who come under the UK-Ireland common travel area), EU, EEA or Swiss citizens with have been granted settled status under the EU Settlement Scheme. Nor do you need to sponsor people with indefinite leave to enter or remain in the UK (settlement).

How do you get a Global Business Mobility Licence?

You must hold a valid sponsor license for the relevant route, in this case the UK Expansion Worker route
Other than the Senior or Specialist Worker route, the other four GBM routes are classed as ‘temporary worker’ routes. This means organisations must pay the standard fee for a Temporary Worker sponsor license, which is £536
You must also offer employment which meet the required skill level for the route, meets the salary requirement of the route, is genuine and where relevant meets the rules on third-party working
Have a qualifying overseas business route, which in the case of the UK Expansion Worker route “You must provide credible evidence that you intend, and are able, to establish a new UK branch or wholly-owned subsidiary of an established overseas business”
Meet the additional requirements for the UK Expansion Worker route, which we will go through below

UK Footprint requirement

Unlike the other sponsored work routes, you must not be actively trading in the UK. However, you must be able to show that you have a UK footprint, which can come in the form of:

A lease agreement or documents should you’ve purchased a premises
Providing evidence that the business is registered with Companies House
If the company is a subsidiary of an overseas linked business, then you only need your Companies House reference number
If you don’t have a UK footprint, your application will be refused

Overseas trading presence requirement

The expanding business must have been able to prove they have been active and trading at least 3 years before the application is made
You must provide evidence (for example, corporate bank statements) that the overseas business has been trading throughout the 12 month period immediately prior to the application for a sponsor license

Credible expansion plan

You must also have a credible expansion plan. This means that you must intend and be able to expand to the UK and establish a UK trading presence within two years. The business will be examined to determine whether this is possible, including looking at evidence of business planning and finances.

The planned expansion must be the same type of business that you conduct overseas and must also be wholly owned or part of the same legal entity as the overseas business.

Exceptions for certain types of businesses

There are however exceptions to the rules for certain types of businesses, as seen below.

Certain Japanese businesses (they do not need to show they have been trading in Japan for 3 years if only looking to sponsor one worker)
The overseas business is listed on the Main Market or Alternative Investment Market of the London Stock Exchange
The business is listed on an international stock exchange which is considered by the Financial and Conduct Authority to have an equivalent level of regulation to UK markets.
If a government department supports and confirms the viability of the overseas business’s expansion to the UK

Appointing key personnel

Like the other Global Mobility Routes, you must have an Authorising Officer (AO), a Key Contact or at least one Level 1 User in place at the time you apply for your license.

Your Authorising officer can be:

A worker based in the UK who will be overseeing the expansion of your company in the UK
If there is no suitable person in the UK, then you can assign a senior employee of the overseas business to the UK in order to oversee the expansion
They must be the most senior person in your organisation responsible for the recruitment of migrant workers or are otherwise responsible for your activity as a licensed sponsor.
Nevertheless, it is likely that the person responsible will be based outside of the UK given the need to acquire a sponsor license in the first place

What does your Authorising Officer need to do?

If your Authorising Officer is already in the UK, (less likely due to the reasons listed above), then you will be given an A rating and a Certificate of Sponsorship (CoS) allocation of 5 licenses.

However, if your Authorising Officer is based outside of the UK, you will be given a CoS allocation of 1 license initially, as well as a Provisional License rating.

The Authorising Officer must therefore assign the CoS to themselves in order to make a successful application for entry clearance to the UK.

Once your Authorising Officer has entry clearance

Once the Authorising Officer is granted entry clearance, they must update their details on the sponsorship management system. They must also come to the UK to start their sponsored role no more than 28 days after the date recorded on their CoS or the date their entry clearances becomes effective (whichever is later).

To sponsor more workers, the AO must make a request for your license to be changed from a Provisional License to an A rating. Both measures can be taken once the AO has been granted entry clearance to the UK.

Once you have an A rating for your sponsor license you can request an increase to your CoS allocation up to a maximum of 4 via your SMS account.

What if the Authorising Officer is refused permission?

If your AO is refused entry clearance or if it is cancelled, then your sponsor license will usually be revoked. However, in exceptional circumstances you may be able to nominate another AO, Level 1 user, and key contact instead.

How long will the sponsor license be for?

If the sponsor license application is successful, then your license will be valid for a period of 4 years. However, unlike other routes, you will not be able to renew your UK Expansion Worker license at the end of the 4 years.

You will be expected to have established a full trading presence within 2 years from the date your license was granted. At the end of this period, your CoS allocation will be reduced to zero, meaning you will be unable to sponsor any new workers or extension applications from existing workers on this route.

Your license may be revoked if you are not meeting the requirements of the route, subject to the undertaking of a compliance visit.

Once you have established a UK trading presence

Once you have managed to establish a UK trading presence, you can then add other routes to your license. This includes other types of visas such as Skilled Worker, Senior or Specialist Worker etc. As a result, your already sponsored workers can then switch to other routes to negate the two-year limit on the UK Expansion Worker route.

Your UK Expansion Worker sponsor license will automatically expire after 4 years and cannot be renewed.

Have questions about this article? Get in touch today!

Call us on 020 7928 0276, our phone lines are open and we will be taking calls from 9:30am to 6:00pm.

Email us on [email protected].

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James Cook

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Afghan boy entitled to damages after being unlawfully removed by the Home Office

Written by Mahfuz Ahmed

The Court of Appeal have recently handed down a judgement determining that a vulnerable 16 year old Afghan boy should be awarded damages for the infringement of his Article 8 rights under the European Convention on Human Rights (ECHR).

Article 8 of the ECHR states:

1. Everyone has the right to respect for his private and family life, his home and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.

QH (Afghanistan) v Secretary of State for the Home Department

In the case of QH (Afghanistan) v Secretary of State for the Home Department, the Appellant appealed against the Upper Tribunal’s decision that a declaration was sufficient for the breach of the Appellant’s rights under Article 8 of the ECHR.

The Appellant is an Afghan national who came to the UK via Germany in April 2016. Upon arrival, he claimed asylum on the basis that he was a minor.

The Secretary of State removed the Appellant to Germany, after Lincolnshire County Council decided that he was 19. However, shortly after being removed, Germany recognised him as a minor and a person with significant mental vulnerabilities. The Appellant was ordered to be brought back to the UK.

The Appellant bought proceedings against the Secretary of State for damages. The matter was heard by the Upper Tribunal who held that the Appellant’s removal had been a breach of his rights under article 8 of the ECHR. However, the Tribunal was not of the view that it was justified for the Appellant to be awarded damages.

The Appellant then appealed the decision to the Court of Appeal.

Court of Appeal

The sole issue that the Court had to consider is whether the Upper Tribunal erred in making the decision that the Appellant was not entitled to damages. The Upper Tribunal had already confirmed that the Appellant’s article 8 rights were breached.

Lady Justice Laing also determined that the removal of the Appellant was “not an accident. It was a deliberate act”, contradicting the Home Office’s claims that it had been because of a clerical error.

The Court held that the Secretary of State’s actions had significant practical consequences for the Appellant. The only conclusion which would give just satisfaction to the Appellant would be an award of damages to the Appellant. Accordingly, the Appellant was successful.

Our comments

This case is a reminder to the Secretary of State of the importance of ensuring that every individual’s rights under the ECHR are protected. We welcome the decision by the Court of Appeal to award damages and hope this case will represent a reminder to the Secretary of State for the Home Department.

Have questions? Get in touch today!

Call us on 020 7928 0276, phone lines are open and we will be taking calls from 9:30am to 6:00pm.

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James Cook

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Former Scottish footballer’s IR35 tax battle offers warning for off-payroll working arrangements

Former Rangers and Scotland icon, Neil McCann, has lost a battle with the tax man over his work for Sky Sports. The ex-footballer is reported to owe HMRC £190,000 as a result of being regarded for income tax purposes as an employee.

Meanwhile, another recent high-profile case saw the tv and radio presenter, Adrian Chiles, have his appeal accepted. This article will look at both cases and see how they compare as well as why only McCann was found to have fallen foul of the rules.

While Chiles had his appeal accepted, both cases offer a warning for those who see themselves as self-employed but could be regarded by HMRC as being employed by a particular company under the off-payroll working IR35 tax rules.

But first, what is an IR35 contract?

IR35 is the name given to the UK’s anti-avoidance tax legislation designed to tax ‘disguised’ employment at a rate similar to employment, who pay income tax and make national insurance contributions. In contrast, disguised employees only pay corporate taxes. Here, “disguised employees” means workers who receive payments from a client via an intermediary, i.e., their own company, and whose relationship with their client would equate to being an employee of that client if they were only paid directly, instead of being paid via their own company.

To put it simply, an IR35 case can be launched when someone is using their own company as a barrier between themselves and a client, in order to pay less tax on their earnings paid by that client.

According to HMRC, if the rules apply, “Income Tax and employee National Insurance contributions must be deducted from fees and paid to HMRC. In addition, employer National Insurance contributions and Apprenticeship Levy, if applicable, must be paid to HMRC by the person who pays the worker’s intermediary.”

From April 2021, the rules have changed so that according to HMRC, “all public authorities and medium and large-sized clients outside the public sector are responsible for deciding if the rules apply. If a worker provides services to a small client outside the public sector, the worker’s intermediary is responsible for deciding the worker’s employment status and if the rules apply.” The obligation is therefore on the employer to decide whether the rules apply to workers who provide their services to the employer through an intermediary. However, workers should be mindful of tax avoidance schemes.

McCann Media vs HMRC

In contrast there was no evidence of McCann providing services to or being engaged by anyone other than McCann Media Limited (MML) during the tax years in issue. McCann had his Personal Services Company appeal rejected by the First-Tier Tax tribunal after HMRC concluded that the arrangement between McCann and Sky for his punditry and co-commentating services were an employment arrangement for IR35 purposes.

There were three main reasons as to why HMRC determined that McCann’s contract with Sky was one of employment:

1. The contracts between MML and Sky largely reflected the agreement between the two parties, despite the 6-week stint that McCann had as interim manager of Dundee FC.

2. Sky had final editorial control over any products that contained McCann’s contributions.
• They also had the right to determine when and where the work was done, as well as the role that McCann would perform.
• He was restricted in his use of social media and could not promote any competitor of Sky, nor be involved in the provision of services to any TV, radio or other media organisation without the written consent of Sky

3. Finally, when considering whether the hypothetical contract which determines the outcome of an IR35 case was one of employment, the First Tier Tribunal noted there was a lack of an absolute right for Sky to determine the dates on which McCann was to attend and act as a pundit. Nevertheless, this did not negate the right level of mutuality of obligations. Sky still had a level of control over McCann which meant that the hypothetical contract was indeed one of employment between Sky and McCann. They also concluded that he could not be in business on his own account under the terms of the hypothetical contract, with McCann entitled to an annual fee from Sky.

As a result of these findings, McCann’s appeal was therefore dismissed by the First-Tier Tribunal.

Basic Broadcasting vs HMRC

Let’s now take a look at a high-profile figure who managed to make a successful appeal against the IR35 rules. Adrian Chiles is a well-known sporting presenter who has presented Match of the Day 2 on the BBC, as well as World Cup coverage on ITV. It is his work for these channels which was the basis of the claim by HMRC that he owed them £1.7m.

While McCann has been forced to pay the tax man £190k, Chiles’ IR35 appeal (Basic Broadcasting vs HMRC) was allowed after HMRC had claimed £1.7m against the presenter. The appeal by Chiles was allowed on the basis that through his personal service company (PSC), Chiles was determined to be self-employed, rather than employed by BBC and ITV. Furthermore, Chiles had employed an agent, which the FTT saw as indicative of the fact that Chiles being in business on his own account and indicated self-employment.

Chiles was also found to have multiple contracts and sources of income, whereas there was no evidence of McCann providing services to or being engaged by anyone else other than McCann Media Limited during the tax years in issue.

Tax and legal experts have since commented that the outcome of the case highlights HMRC’s patchy record when it comes to case relating to IR35 legislation, having only won 7 out of 20 cases since 2010 according to Contractor Calculator, a website for freelancers.

What can we learn from McCann’s case?

Where the person is economically dependent on a broadcaster, and where the broadcaster has the right to restrict the individual from participating in other activities, such as presenting for rival broadcasters, the presenter cannot be considered to be in charge of business on his or her own account. It’s also worth bearing in mind that McCann’s case took place prior to Adrian Chile’s IR35 case, where Chiles was found to be in business on his own account. Any worker who provides their client services through an intermediary, but would be considered an employee if contracted directly should be mindful of the IR35 rules.

Have questions? Get in touch today!

Call us on 020 7928 0276, phone lines are open and we will be taking calls from 9:30am to 6:00pm.

Email us on [email protected].

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James Cook

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Home Office broke the law by searching, seizing and retaining data from phones of migrants

Written by Mahfuz Ahmed

The Divisional Court has handed down a judgement determining the Home Office’s policy of searching, seizing and retaining data from the mobile phones of migrants arriving to the UK by boat as unlawful.

The court’s ruling occurs at a time when the Home Secretary, Priti Patel, is trying to push through the Nationality and Borders bill. If passed without amendments, the policy would contradict the United Nations’ 1951 Refugee Convention by only giving full benefits of the Refugee Convention to those who come to the UK through “safe and legal pathways”. The practise of seizing phones appears to fall under the umbrella of the Home Office’s “hostile environment” that has been in place for the past 10 years.

Under a secret blanket policy, the Home Office would search all migrants arriving by boat to the United Kingdom so that they could seize, retain and download all data from their phones. This policy was in operation until November 2020.

Immigration officers would often demand the migrants PIN numbers and use threats of false criminal sanctions. The policy allowed the Home Office to retain phones for a period of 3 months, however in reality the phones were retained for much longer.

The legality of these actions was considered in the case of three asylum seekers, (HM, MA, KH) v Secretary of State for the Home Department.

(HM, MA, KH) v Secretary of State for the Home Department)

In MA’s and KH’s cases all of their accessible data, including personal data such as photos and messages, was downloaded and stored on Home Office systems.

The Home Office’s starting position was that no such secret, blanket policy existed. This provided a huge contrast from their position many months later, when the Home Office made significant concessions. Most notably, they admitted that their secret policies were unlawful by virtue of being blanket and unpublished policies which consequently also breached the ECHR and the Data Protection Act 2018. Nevertheless, they did not deny that such a practise was unnecessary.

The Court accepted that the operation of a secret and blanket policy, the retention of phones for a minimum period of three months, and the complete extraction of data was unlawful under the ECHR along with numerous obligations under the DPA 2018.

The Court held that the practice requiring PINs was unlawful and the Home Office was in breach of the DPA 2018.

In relation to the seizing of phones, the Court held that in searching for a weapon or an item that could aid escape, as permitted under paragraph 25B of the Immigration Act 1971, did not mean that a mobile phone could then be seized.

In response to the outcome, a Home Office spokesperson stated:

“Channel crossings are an overt abuse of our immigration laws but they also impact on the UK taxpayer, risk lives and our ability to help refugees who come to the UK via safe and legal routes.

“It is paramount that we continue to go after those facilitating dangerous crossings. We are considering the judgment and it would be inappropriate to comment further at this stage.”

Our comments

The case shows that a migrant’s rights and freedoms under the European Convention on Human Rights and the protections in the Data Protection Act 2018 is of the utmost importance.

The Home Office made a number of concessions in the course of the proceedings, however their comments do not show any regret or remorse for the policy, merely for its lack of transparency. Following this case, should a migrant have come to the UK by boat before November 2020, and was subject to the above, then they may have a claim against the Home Office.

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James Cook

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Welcome Brian!

We are delighted to welcome the newest member of our team, Brian Feng. Brian joins us as an AML Administrator and has already displayed an eye for detail and shown himself to be a hardworking team player.

Brian majored in statistics at the University of Edinburgh and has previously taken part in some interesting projects in data science, including visualizing traffic maps across Scotland, modelling prices for second-hand items on eBay, and analysing the purchase history of Lego products.

He had a full-time job in the KYC team at Amazon, and has also lived and interned in Beijing and Shanghai.

Brian is fluent in Mandarin and English. He also claims to be proficient in a global language called “drinking beer” and looks forward to the opportunity to grab a pint and talk to everyone about life after work.

Besides beer, his other interests include long-distance running. He has participated in many cross-country orienteering competitions and came in third place in one of the men’s group competitions in Beijing.

He hopes to get to know everyone as soon as possible and continue to bring value to the team.

Have questions? Get in touch today!

Call us on 020 7928 0276, phone lines are open and we will be taking calls from 9:30am to 6:00pm

Email us on [email protected].

Use the Ask Lisa function on our website. Simply enter your details and leave a message, we will get right back to you: https://lisaslaw.co.uk/ask-question/

Or, download our free app! You can launch an enquiry, scan over documents, check progress on your case and much more!

James Cook

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Employer guidance for respiratory infections such as Covid-19

The UK Health Security Agency has published new guidance for employers around reducing the effect of respiratory infections in the workplace, including Covid-19. In terms of business law, this is certainly something to take into account for employers.

Although all Covid-19 restrictions have now been lifted by the Government, the guidance asks employers, workforce managers and people who are managing a workplace to be mindful of considering the importance of the measures they take and to ensure that coronavirus is explicitly considered in their health and safety assessments.

This continues to be important because while most people are now vaccinated to some degree, Covid-19 continues to be extremely infectious. Indeed, an estimated one in 13 people had the infection during the week ending 26^th March. This increases the importance of employers taking their practises into account in relation to respiratory infections like Covid-19 – both commercially and from a health and safety standpoint.

Read on for the latest information about the new Covid-19 symptoms now recognised by the Department of Health and UK Government, as well as the guidance measures that they have produced for businesses.

Update to Covid-19 symptoms

There has also been an update to the UK government’s list of Covid-19 symptoms after it was finally expanded from 3 symptoms to 12. This comes roughly two years after the identification of the three original symptoms during which time many other health organisations such as the World Health Organisation and the Centre for Disease Control in the United States had already updated their list of symptoms.

This is particularly important now that free testing has been removed by the Government. There are concerns by experts that particularly at a time when the UK faces a cost of living crisis that many people may not have the funds to be able to pay for testing themselves. As a result, the hope is that by providing an expanded list of symptoms, those who think they may be infected with Covid-19 will be able to more easily identify whether they have it. Nevertheless, as the guidance also points out, many of the symptoms below are also synonymous with other respiratory infections.

While up until recently the list of symptoms only included the following:

fever
new continuous cough
loss of sense of smell or taste

The new list also features a substantially longer list:

shortness of breath
feeling tired or exhausted
aching body
headache
sore throat
blocked or runny nose
loss of appetite
diarrhoea
feeling sick or being sick

Similarity of Covid-19 to other respiratory infections may be a challenge for businesses

The similarity of the symptoms of Covid-19 to other types of respiratory infections such as flu is something which may provide a challenge to businesses considering the recent removal of free testing for the vast majority of the public by the UK Government.

Those who can still get free testing include people who work in hospitals or social care, as well as people going to hospital for surgery or a procedure.

As a result of the removal of free testing, there are fears that many people will be unable to prove that they have tested negative. Trade unions including the GMB and TUC have criticised the measures, with the GMB’s Health and Safety Officer stating: “The cost of providing tests will likely be dwarfed by the productivity cost of millions of preventable infections.” If businesses suffer lots of absences from Covid-19 then this could be harmful for them at a time when many are only just getting back on their feet after the past two years.

What should employers do if a member of staff has symptoms of a respiratory infection, especially Covid-19

The guidance advises employers to ensure that their members of staff follow the guidance on a positive test for Covid-19, which is to stay at home if possible. It also suggests that in accordance with their legal obligations, employers should consider how best to support their workforce to follow this guidance as closely as possible.

Actions to take in order to prevent the spread of Covid-19 in the workplace

There are a number of steps that employers are recommended to take in order to prevent the spread of Covid-19 in the workplace.

These include the following:

Encouraging and enabling vaccination: With 73.6% of the total population now vaccinated, most employers don’t have too much to worry about when it comes to vaccination numbers, however employers should still consider when and how to best support their employees who wish to get vaccinated. The government also have a specific page which advises employers on how to enable vaccination, click here.

Ventilating the workplace by letting fresh air in: Fresh air helps to lower the concentration of respiratory particles, reducing the risk of airborne transmission of respiratory viruses such as Covid-19. Crowded and poorly ventilated areas can mean that virus particles can stay in the air for longer and where there are more people who are likely to be infectious.

Cleaning the workplace: Keeping workplaces clean reduces the risk of infection. Providing sanitiser is a particularly effective measure as well as cleaning products or soap and hot water.

Management of members of staff who are at risk of serious illness from Covid-19: Some staff are more a risk of serious ill health as a result of contracting Covid-19, such as people who have a weakened immune system. The guidance states that employers may therefore wish to consider the needs of these employees, even though their guidance also states that the vaccination programme means that it is no longer necessary for those people who are classed as clinically extremely vulnerable (CEV).

And finally, risk assessment: This section reaffirms the fact that the guidance for employers to explicitly consider Covid-19 in their risk assessments is no longer necessary. Nevertheless, it adds that “Employers should continue to comply with the requirements for cleaning, ventilation and welfare facilities in the Workplace (Health, Safety and Welfare) Regulations 1992 or the Construction Design and Management Regulations 2015 to control occupational health and safety risks.”

Have questions? Get in touch today!

Call us on 020 7928 0276, phone lines are open and we will be taking calls from 9:30am to 6:00pm.

Email us on [email protected].

Use the Ask Lisa function on our website. Simply enter your details and leave a message, we will get right back to you: https://lisaslaw.co.uk/ask-question/

Or, download our free app! You can launch an enquiry, scan over documents, check progress on your case and much more!

James Cook

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What is No Fault Divorce? The reforms that have modernised UK divorce law

The Divorce, Dissolution and Separation Act 2020 (commonly known as no fault divorce) represents the biggest reform to divorce law for 50 years. With the legislation now in effect since 6^th April 2022, let’s take a look at the main changes to divorce law and why there has been so much discussion about the reforms.

No fault divorce

Campaigners have dubbed the law, “no fault divorce” as it will mean that instead of the two parties looking to play the blame game with each other in order to get a divorce, they will be able to file for divorce amicably instead. DDSA 2020 received royal assent by the Queen in June 2020 but only comes into force now, almost 2 years later.

DDSA 2020 amends the Matrimonial Causes Act 1973 and the Civil Partnership Act 2004 to remove fault-based concepts in proceedings for divorce, dissolution and (judicial) separation. The two parties will also be able to make a joint application for divorce, dissolution or separation.

Previous grounds of divorce

Previously, couples who wanted a divorce had to be able to prove that their marriage had broken down irrevocably through one of five reasons:

Adultery
Unreasonable Behaviour
Desertion
You’ve been separated for 2 years
You’ve been separated for 5 years

This will now no longer be the case, with couples no longer needing to apportion blame to each other.

Timescales and costs

DDSA also introduces a new minimum overall time-frame of 26 weeks (6 months). This involves a 20 week minimum period between when the court issues the application and when the applicant may apply for a conditional order and the minimum six week time-frame between the conditional order and when the order can be made final.

The President of the Family Division, Sir Andrew McFarlane recently issued advice designed to explain the impact of the changes to divorce on the court’s approach to costs. He advised that the vast majority of cases will be undisputed and that the new reforms will mean that the court will not consider the reasons for or responsibility for the breakdown of the marriage or civil partnership, in contrast to the previous laws.

The grounds for opposition will be reserved to issues about the court’s jurisdiction or the validity or subsistence of the marriage or civil partnership. It is therefore unlikely that an order for costs will be appropriate, although the court will retain a discretion to make a costs order against either party.

Our thoughts

DDSA 2020 will address the antiquated divorce laws of the Matrimonial Causes Act 1973, exemplified by the Owens v Owens 2018 case that prompted the government reform of divorce law.

The effects of DDSA 2020 are likely to be a positive for many families, helping to alleviate the stress which often occurs during the divorce process under the current system by not apportioning blame to one party.

Furthermore, the new law will help to alleviate the backlog faced by family courts, which have transpired partly as a result of the cuts to legal aid in the 2013 Legal Aid, Sentencing and Punishment of Offenders Act 2013.

Have questions? Get in touch today!

Call us on 020 7928 0276, phone lines are open and will be taking calls from 9:30am to 6:00pm.

Email us on [email protected].

Use the Ask Lisa function on our website. Simply enter your details and leave a message, we will get right back to you: https://lisaslaw.co.uk/ask-question/

Or, download our free app! You can launch an enquiry, scan over documents, check progress on your case and much more!

James Cook

See Full Bio

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