Solicitors from Withy King’s corporate & commercial and private client teams in Swindon discuss a few of the issues which may affect directors and other business decision-makers at work and in their personal lives.
Employers may have to pay for staff travel time
Employers are advised to check whether they have to pay for their staff’s travel time after the latest ruling from the European Court of Justice. The ruling confirmed that employees with no fixed place of work, such as carers, cleaners or construction workers, must be paid for their travel time to and from customer sites at the beginning and end of the day. Affected businesses will need to review and update their employment contracts and staff handbooks. It would also be wise to introduce policies which set out the circumstances under which employees will be paid for travel time and the payment mechanisms as well as a monitoring system.
As with many aspects of employment law, there are grey areas. For advice, please contact Helen Lucas at helen.lucas@withyking.co.uk
Is it a parking fine or a penalty clause?
The Supreme Court has recently clarified the law relating to penalty clauses. The case regarded overstaying the permitted time in a car park. The test for whether you are bound to pay any charge imposed has historically been whether the charge is a genuine pre-estimate of the loss the other party suffers. If it isn’t, the clause is often an unenforceable penalty. Now the courts will also look at whether the party imposing the charge has a ‘legitimate interest’ in doing so and whether the sum is extravagant, out of proportion or unconscionable, rather than whether it is a genuine pre-estimate of loss. It is important to carefully consider clauses that impose a financial consequence for the party in breach to ensure they are enforceable. This includes, for example, a clause in a share purchase agreement reducing the purchase price if the seller breaches his non-compete restrictions.
To find out more about this or any other business issue, please contact Rishi Ladwa at rishi.ladwa@withyking.co.uk
Be aware of increased debt recovery costs
It now costs £1,630 to present a winding up petition and £1,105 for a bankruptcy petition, so threatening to wind up or bankrupt a debtor is not a cheap fix for getting someone to pay up. In addition, misuse of the insolvency process can have serious cost consequences for the creditor if there is a dispute about whether or how much of the debt is owed. The threshold for bankruptcy was recently increased from £750 to £5,000 which means it may no longer be viable for many companies to recover their debts. These changes highlight the importance of having strong credit control procedures in place, particularly when offering credit to sole traders.
If you have an unpaid debt owing to your company and are unsure of the options available to you, please contact Marianne Johns at marianne.johns@withyking.co.uk
Good news for entrepreneurs
Entrepreneurs’ Relief is a valuable tax relief for those selling their businesses, allowing CGT on profits (up to a lifetime limit of £10m) to be paid at 10%, as opposed to the usual rate of 28%. In his Autumn Statement, the Chancellor announced a potential relaxation of restrictions imposed in the 2015 Budget, in an effort to show more support for businesses involved in genuine commercial transactions. This is currently good news for entrepreneurs. However, it is likely that such a generous tax relief will remain under close scrutiny by the Government, and individuals who anticipate that they will be disposing of a business in the relatively short term should consider whether it may be advantageous to then to do so sooner rather than later.
For advice on tax or estate planning, please contact Samantha O’Sullivan at samantha.osullivan@withyking.co.uk
Pension ‘freedoms’ and divorce
Recently introduced pension ‘freedoms’ enabling pension funds to be accessed without restrictions from the age of 55 are enabling a more creative, flexible approach to negotiating financial settlements on divorce. For those over or approaching this age, a pension fund can now be treated as a more ‘liquid’ or accessible asset. In addition to pension sharing orders, solutions involving off-setting pensions against other capital can be used more easily to structure settlements. It’s also worth noting that the ability to withdraw cash from pensions can be used to limit income or maintenance payments.
For a confidential discussion on divorce and advice on structuring financial settlements please contact Victoria Emens at victoria.emens@withyking.co.uk
