Please see below our corporate insights for April from our business law experts.
Are business rates payable while a property is being redeveloped?
by Lily Meyer
If you’ve googled this question in the past few years, you may have found that the answer was ‘yes’.
This is because, as a result of a Court of Appeal judgement in 2014, the position was that a property undergoing internal refurbishment was not exempt from business rates even though various major building elements had been removed. In that particular case, this included the air conditioning system, electrical wiring, sanitary fittings and most of the ceiling tiles.
If you’ve googled this question recently, you will have found that the answer is now ‘no’. This change follows the recent Supreme Court decision in Newbigin (Valuation Officer) v S J & J Monk (a firm).
Those owning and developing vacant commercial premises will be pleased with the Supreme Court’s recent decision. In ascertaining whether business rates should be payable, a developer should refer to the Local Government Finance Act 1988 which provides that, where non-domestic property is vacant, the rateable value of the property is based on the amount of annual rent reasonably obtainable for the property, on the assumption that before the tenancy commences the property is in a state of reasonable repair, but excluding any repairs that a reasonable landlord would consider to be uneconomic.
Should you have any questions or require help or assistance in relation to these issues please feel free to contact your usual Morrisons’ advisor or Lily Meyer by phone 020 8614 4590 or by email [email protected]
DIY debt collections… hints and tips
by Catherine Fisher
All businesses are under pressure to keep cash flowing, collect debts and keep costs down. When it comes to collecting debts, the rises in court fees mean that a lot of businesses are tackling debt collection themselves rather than paying a solicitor to do it for them.
To celebrate the start of the new tax year, here are some top tips to help you through the process.
Useful acronyms and websites
MCOL – money claims on line. This is the electronic issue centre for issuing claims for money.
https://www.gov.uk/make-money-claim-online (the Money Claims OnLine portal)
https://www.gov.uk/government/publications/money-claim-online-user-guide (the user guide).
CCMCC (County Court Money Claims Centre). This is the county court where all claims for money are issued.
The CPR – the court procedure rules. These are the “rules of the game” and tell you exactly what you should do, when, why, and which form to use. You can read them online in their official website.
Top Tips
1. You can only use MCOL if you are owed less than £100,000 and you are suing a maximum of two people or organisations. If your debt is more than £100,000, or if you need to sue more than two people (e.g. 3 partners) you will have to send a paper claim form to CCMCC.
2. You can only claim money in claims that are issued at the CCMCC or MCOL. If you want anything else, such as a declaration about what a contract means, you must issue at a local county court hearing centre. The converse is also true. If all you want is money, you must issue through either MCOL or CCMCC. However, if you have a counterclaim that is for something other than money, you can file it at CCMCC. The claim will be transferred by the court to your local hearing centre.
3. If you have a claim that is close to limitation (broadly, 6 years from the date it fell due) you can submit a paper claim and fee at your local county court hearing centre. They will date stamp it and then send it on to CCMCC for you. Most local county courts require you to book a counter appointment in advance.
4. Try to avoid re-formatting court forms when you complete them, as this can cause problems when they are printed out at CCMCC. Make sure you use the up to date court forms.
5. When filing documents by email, bear in mind that:
– the total size of the email (including attachments) must be less than 10 megabytes (mb); and
– the entire email, when printed out, must not exceed 50 pages (a page being one side). This includes the covering email, attachments, embedded items and enough copies to serve on the required parties.
6. Allow 5 working days before contacting the court for an update. The court will almost certainly not have processed your letter/form in less time.
Should you have any questions or require help or assistance in relation to these issues please feel free to contact your usual Morrisons’ advisor or Catherine Fisher by phone 01483 215357 or by email [email protected]
Consultation on beneficial ownership regime for foreign entities
by Greg Vincent
The Department for Business, Energy and Industrial Strategy (BEIS) has published a paper proposing a new register of beneficial owners of overseas legal entities (“OLEs”) which own UK property or make public tenders. This will be kept at Companies House and will be known as the “OEBO register”. It will be the first of its kind in the World.
Who does it apply to?
We await full details from BEIS but the new regime will apply to all non-UK legal entities (including partnerships and limited companies). The OEBO register will be modelled on the recently enacted regime relating to the underlying control of UK entities (the “PSC” regime) and will require the identification of such controllers using similar criteria.
On providing information to Companies House, an OLE will receive a registration number.
What is the impact of failing to comply?
If an OLE fails to comply with the regime, the proposals are that it will be unable to acquire or hold UK property. This is because, an OLE will need to provide the registration number when applying to register the transfer of the property at the Land Registry. Any OLE already holding property in the UK will have 12 months to obtain a registration number and supply it to the Land Registry. Finally, an OLE would not be able to win a public contract tender worth more than £10M unless it has supplied its beneficial ownership details to Companies House and obtained a registration number.
Are there any exceptions?
There will be some common-sense exceptions. Under the proposals, registration at Companies House is unnecessary if the OLE is already required to make equivalent information available (free of charge) in the relevant foreign jurisdiction or it is possible to register an intermediate legal entity instead (such as under the PSC regime).
It is early days but this will have an impact on any overseas organisation caught by the regime that has previously avoided disclosure requirements due to the fact that its only direct nexus to the UK was title to UK property. It is accepted by BEIS that a possible result of the new rules will be flight from the UK and it is currently carrying out an impact review.
Should you have any questions or require help or assistance in relation to these issues please feel free to contact your usual Morrisons’ advisor or Greg Vincent by phone 0208 971 1033 or by email [email protected]