Data Protection Regulation. The draft Data Protection Regulation proposed by the European Commission back in January 201
In-house News Bulletin
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Keeping you abreast of the big commercial legal stories, that could affect your business. 2015 Preview
January
February
VAT changes for electronically supplied services in the EU
National minimum wage in Germany
Do you sell electronically supplied services in the EU For example; training, music and film downloads?
We usually only cover across EU or UK changes but we thought we’d flag that the first ever national minimum wage will apply in Germany, commencing this January.
If so, you will be subject to the new VAT rules that came into effect on January 1st. The critical change is that VAT will be charged based on the location of the customer. This is a significant change and is perhaps best illustrated with an example. E.g. If a UK customer downloaded music from a company based in Luxembourg, the music would have been subject to 3% VAT, but from January 1st the UK customer will be charged UK VAT, currently 20%. The affected online retailers will need to either register for VAT in the countries where they sell or will need to register with the Mini One Stop Shop (MOSS) system. I am sure this will be the obvious choice as it allows such retailers to pay VAT to one place and the VAT monies will then be distributed as appropriate on its behalf. For those affected by these changes, there’s plenty to think about. Will you swallow the price differential? Or have different ‘after VAT’ prices in the effected member states? There will inevitably be significant system changes needed, particularly with the additional data that will need to be collected on purchase.
Auto-enrolment We have placed auto-enrolment in January. Not because there are any significant changes for January but rather to highlight that businesses that have not yet been subject to auto-enrolment, need to keep an eye on when their staging date is, this is dependent on the size of their business. As you’ll no doubt be aware auto-enrolment requires all employees meeting certain minimum requirements to have an option of an employee pension scheme with contributions being provided by the employer. You can check the staging date for your business simply by entering your PAYE reference on the Pension Regulator website: www.thepensionregulator.gov.uk/ If your staging date is during 2015 we recommend that you do not delay your planning. There is lots of information detailing what needs to be done on the Pension Regulator website and, of course, we are here to help too.
Data Protection Regulation The draft Data Protection Regulation proposed by the European Commission back in January 2012 is expected to be adopted in February. We do not expect it to be law in the UK until 2016, at the earliest. This will be one of the most significant changes within data protection laws. Including; implementing dramatic increases to fines and a requirement to have a designated Data Protection Officer within large companies.
Low Pay Commission The Low Pay Commission is due to report to government in February with its recommendations for the national minimum wage applying from October 1st.
CPD points The Solicitors Regulation Authority is shaking up the continuing professional development system. From February organisations can choose to be early adopters of the new system which abolishes the need for a minimum of 16 CPD points.
April
May
Corporation tax
May 2015 will see the next General Election. Until we know who will be celebrating in No.10’s Rose Garden the future of the UK legal landscape has added uncertainty.
You may recall from the 2013 budget that the chancellor announced a step change in the main rate of corporation tax. This dropped to 21% in 2014 and will drop again to 20% this year. The alignment of corporation tax to 20% makes the UK the lowest corporate tax regime out of the G20 countries.
Autumn Announcement We don’t have time to cover all of the announcements in last month’s autumn statement but thought it was worth just flagging a couple of highlights: • There will be a new Diverted Profits Tax. We are still getting our heads into the detail but it seems that this will be a 25% tax on any profits ‘artificially’ diverted from the UK by multi-national businesses. • Personal allowance on income tax will increase to £10,600 and the higher rate threshold will increase to £42,385.
Employment law Last October, fathers and partners of pregnant women were able to take unpaid time off for antenatal appointments. From April 5th, it will be extended to adopters and their partners. In addition, shared parental leave is coming into force for babies and children expected to be born or placed for adoption on or after April 5th. This flexible system, under which the mother has the first two weeks off after the birth with the remaining 50 weeks shared between both parents. Finally, the shock announcement in the 2014 budget concerning over 55’s being able to take their entire defined contribution pension pot without any requirement to purchase an annuity or be subject to income drawdown will be implemented. This new choice is also supported with free impartial financial advice.
Employment law, as is usually the case, will certainly be subject to a new direction if there is a change in Government. In the written version of this report we have produced an employment law table with our current understanding of the direction the three main parties intend to take. Given the significant drop in tribunal claims by 45% year on year it seems that some reform of the tribunal system is likely, whichever party win on the cards for whichever party will be in charge. All parties also plan reforms to the practice of zero hour contracts although the Liberal Democrats and Labour plan to go further by implementing rights to request regular hours.
July ADR Directive The UK has to transpose the requirements of the EU Alternative Dispute Resolution (ADR) directive into national law by July 9th. The Directive requires there to be a certified ADR body for any dispute concerning contractual obligations between a consumer and a business. The directive does not make the use of ADR mandatory on either businesses or consumers, but member states must ensure ADR is available if both parties agree to use it. Business to business disputes are not covered by the directive, nor are disputes initiated by a business against a consumer. That said, it is worth noting that this does not alter the existing sectors where ADR can be forced on a business. For example, in the financial sector where financial service providers must allow the Financial Ombudsman to handle any unresolved complaints. Trading Standards Institute is to act as the UK’s competent authority covering ADR schemes in non-regulated sectors. The directive also sets out some minimum requirements for the ADR procedures including timeliness of dealing with the matters and that it must be provided at either no charge or a minimal fee. Given, however, that the use of ADR is voluntary it is difficult to see that the implementation of the directive by itself will have any meaningful difference.
Online Dispute Resolution (ODR) Regulation Although this Regulation is not in force until January 2016 the requirements relating to the creation of an ODR contact point will apply on July 9th. The Government has said it intends to establish an ODR contact point to help consumers with cross-border disputes submitted via the European’s Commission’s ODR platform.
August
October
New security guidelines to combat fraud
The consumer rights bill
The European Banking Authority (EBA) has proposed new internet security guidelines to ‘contribute to fighting payment fraud’. Under these guidelines payment service providers would have to contractually commit their suppliers to the guidelines and online retailers will have to implement security measures in their IT infrastructure. In the EBA’s consultation it has now kicked off a discussion about whether more rigid guidelines should be adopted and brought into force by August. The watchdog said payment service providers (PSP) must ‘perform certain assessments of the risks associated with providing internet payment services and ensure payments cannot be initiated or sensitive payment data accessed, without strong customer authentication’.
September September 4th is the final date for implementation of the directive on attacks against information systems. The directive introduces new measures including criminal offences for attacks using malicious software and increased sentencing of up to five years imprisonment for the most serious offences.
It is anticipated that that the Consumer Rights Bill will come into force in October although this is subject to the will of Parliament. The government has recognised the need to provide businesses with guidance at least six months before the legislation is implemented, and therefore proposes to have this issued by April. The Bill is the result of general agreement across business and consumer groups that existing UK consumer law is unnecessarily complex, fragmented and has not kept up with technological change. There are also overlaps and inconsistencies between EU and UK legislation. The Bill aims to make consumers better informed and better protected. In particular the Bill aims to: • clarify the standards a consumer can expect when they buy something • set out what to do when goods, services or digital content don’t meet those standards
In addition, the Consumer Rights Bill will introduce new collective action rights for competition law breaches. The government has decided to establish the Competition Appeal Tribunal for competition actions, introduce a limited opt-out collective actions regime and promote alternative dispute resolution. The representatives can be class members or other bodies, subject to a ‘just and reasonable’ requirement. The Government has stated that law firms and litigation funders will not be able to act as representatives. The introduction of an opt-out action is a significant departure from existing procedures for multi-party litigation in England and Wales. These generally require potential claimants to make a positive decision to opt-in to the proceedings and will give rise to a significant change in the landscape for competition law damages actions.
• clarify when terms and conditions can be considered unfair Large chunks of existing law including business to consumer sections of unfair Contract Terms Act and most of the business to consumer sections of the Sales of Goods Act will be swept up by the Consumer Rights Bill.
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