Key themes and developments on the agenda for businesses in November include the Chancellor’s Autumn Statement, evaluating the first international anti-bribery management system standard and reviewing the Criminal Finances Bill. All in-house lawyers should also be aware that the new CPD regime will become compulsory on 1 November.
Autumn Statement on 23 November
The Chancellor, Phillip Hammond MP, will deliver his first Autumn Statement on 23 November. Among other things, we expect announcements on:
- Termination payments. The government published its responses to the 2015 consultation on simplifying the taxation of termination payments in August, together with draft legislation for further consultation. The Autumn Statement may include responses to the latest consultation and, possibly, a further draft of the legislation.
- Corporation tax losses. Following an announcement in the 2016 Budget, HM Treasury and HMRC published a consultation setting out detailed proposed reforms to corporation tax loss relief. Draft legislation will be published in the Autumn Statement for technical consultation before its inclusion in the Finance Bill 2017.
- VAT grouping. HMRC announced that it would launch a formal written consultation on the VAT grouping rules in January, following recent ECJ judgments. The consultation is still awaited and may be launched on the date of the Autumn Statement.
- Restricting salary sacrifice. HMRC published a consultation on restricting the use of salary sacrifice for the provision of benefits in kind in August. Responses to the consultation were sought by 19 October 2016 and the Autumn Statement may include a summary of responses and, possibly, draft legislation.
Practical Law will publish an Autumn Statement predictions article in early November. An overnight update will be published following the statement highlighting the key business tax implications, and a practitioner comment article will be published on 25 November.
Evaluate the first international anti-bribery management system standard
The International Organisation for Standardisation (ISO) has recently published a global standard ISO 37001: Anti-Bribery Management Systems. This voluntary standard is designed to assist organisations around the world implement and maintain an effective and proportionate anti-bribery programme.
Action points: Evaluate the new standard and consider using it as either an internal benchmarking tool or seek ISO 37001 certification of your anti-bribery programme through an accredited third party provider.
Review the Criminal Finances Bill
The Criminal Finances Bill was introduced to the House of Commons in mid-October. The Bill creates a new corporate offence of failure to prevent tax evasion. The two new offences of “failure to prevent” are loosely based on section 7 of the Bribery Act 2010:
- Failure to prevent facilitation of UK tax evasion offences.
- Failure to prevent facilitation of foreign tax evasion offences.
HMRC has published draft guidance on the proposed corporate offence of failure to prevent tax evasion. Among other things, it aims to provide guidance to relevant bodies on how they might conduct an assessment of the risk of their representatives criminally facilitating tax evasion.
Respond to the FCA consultation on the Senior Managers Regime
In September, the Financial Conduct Authority (FCA) launched a consultation on whether the person who has overall responsibility for the legal function (the GC) at a bank, building society, credit union or PRA-designated investment firm (a Regulated Firm) should be a Senior Management Function (SMF) and therefore subject to the senior managers regime.
If a GC is held to be an SMF, GC appointments at Regulated Firms would be subject to regulatory pre-approval, including an assessment of fitness and propriety. Once approved, the GCs of Regulated Firms would also have to comply with additional conduct rules to those they are already subject to under the Solicitors Regulatory Authority, Bar Standards Board (or other local equivalents).
Action points: GCs at Regulated Firms should consider making a submission to the consultation, which closes on 9 January 2017.
New CPD requirements come into force
The Solicitors Regulatory Authority’s (SRA) new approach to ensuring continuing competence to practice becomes compulsory from 1 November. The new regime removes the requirement that solicitors must undertake 16 hours of CPD annually and replaces it with a reflective cycle.
Action points: From 1 November, in-house lawyers can comply with their duties to provide a proper standard of service by:
- Reflecting on the quality of their practice by reference to the SRA Competence Statement for solicitors and identifying learning and development needs.
- Making an annual declaration that they have considered their training needs and taken measures to maintain their competence.
This exercise of reflection will help to identify learning or developments needs that in-house lawyers should then plan to address over the following year.
Assess the BEIS proposals on the payment complaints scheme for small businesses
BEIS has published a consultation setting out its proposals on how the Small Business Commissioner should handle complaints by small businesses about payment issues with larger businesses. As part of this role, the Commissioner is to provide an in-house complaints handling function.
This will allow a small business supplier to seek a decision from the Commissioner about a payment issue with a larger business with which the small business has a previous, current or potential supply relationship. The consultation closes on 7 December 2016.
Action points: Larger businesses should familiarise themselves with the complaints scheme proposals, so that they are prepared to respond to complaints submitted by smaller suppliers.
Review the ICO’s new code of practice on privacy notices
The Information Commissioner’s Office (ICO) has published a new code of practice on privacy notices, which is the first piece of ICO guidance that advises on compliance with the Data Protection Act 1998 and the EU General Data Protection Regulation ((EU)2016/679) (GDPR). The code is aimed at all organisations that collect information about people, directly or indirectly.
Action points: Review your privacy notices in the light of the new code of practice, which includes guidance on what to include in a privacy notice, where to deliver privacy information to individuals and when to actively communicate privacy information.
Continue to focus on corporate governance
In her keynote speech at the Conservative Party Conference, Theresa May stated that her government will publish plans later this year to have consumers and workers represented on company boards. The speech follows previous statements on plans to crack down on excessive corporate pay and poor corporate governance. All these issues were addressed in the Business, Innovation and Skills Committee inquiry on corporate governance, which came to a close on 26 October 2016.
October Brexit developments
The Prime Minister Theresa May announced at the Conservative Party conference that Article 50 of the Treaty on European Union will be triggered before the end of March 2017, and that the next Queen’s Speech (expected in April or May 2017) will include a Great Repeal Bill, to repeal the European Communities Act 1972.
At a hearing to decide the process for triggering Article 50, the government indicated that MPs will be able to vote on the Brexit deal. Appearing on behalf of the government, James Eadie QC stated that it was “very likely” that MPs will be given a final say over the nature of the deal at the end of the Brexit negotiations, but that they would not have power to amend the deal.
The House of Lords EU Internal Market Sub-Committee launched an inquiry into future trade in services between the UK and the EU after Brexit following on from its inquiry into trade in general between the UK and the EU after Brexit. The inquiry focuses specifically on digital and telecommunications, professional business services, aviation, and creative and broadcasting.
The Shadow Brexit Secretary and Shadow Foreign Secretary wrote to the Brexit Secretary (formally known as the Secretary of State for Exiting the European Union) raising 170 questions concerning Brexit.
Our Brexit homepage highlights resources from across Practical Law on the legal implications of Brexit.
Last orders: consultations closing in November
Consultations on the following matters are closing in November:
- A possible new penalty for participating in VAT fraud.
- The transposition of the Fourth Money Laundering Directive into national law.
- The European Commission’s preliminary report on its provisional findings of its e-commerce sector inquiry.
- Digital tax compliance and associated measures.
- The first draft of regulations for the calculation and payment of the Apprenticeship Levy.