WORLDWIDE LAW REVIEW
L Also in This Issue... Tackling Negative Content the Easy Way. Enclosed Spaces Onboard Ships Continue to Pose Dangers. Digitisation of Tax ‘Harder on Small Businesses’. HMRC’s Approach to Collecing Tax from High Net Worth Individuals.
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Plus all the Latest News
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Welcome to the very first edition of the Worldwide Law Review, brought to you by the publisher of leading corporate magazine Acquisition International. This new magazine draws upon our immense expertise in the legal industry, as well as our network of industry contacts to provide the most up to date news, comment and industry insight on the market. Featuring contributions from some of the greatest legal minds of our day, Worldwide Law Review offers razor sharp editorial designed to educate, inform and, ultimately, inspire readers, making it an invaluable resource for anyone involved with or interested in the global legal market. Through our dedicated newsletter, awards programmes and a regularly updated website we offer more than just a magazine; rather Worldwide Law Review is a platform for all the latest information, news, profiles, comment and much more on all aspects of the law. I hope you enjoy reading the varied and engaging content that this issue has to offer, which marks the dawn of an exciting journey.
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Contents. 4. News LEGAL SERVICES 10. AIG UK and Dechert to Offer Legal Advice to CorporateGuard Clients 12. Cavendish Advises SG Court Pharmacy Group on Its Acquisition by Paydens Ltd 14. Legal Cost Finance Launches Two Membership Schemes for UK Lawyers 16. Tackling Negative Content the Easy Way 18. Technavio Announces Top 5 Global Players for the Legal Services Industry from 2016-2020 INSURANCE 20. A.M. Best Special Report: Money Market Reforms - Overall Insurance Industry Impact Expected to Be Minimal 22. BIBA Urges Businesses to Avoid Under -Insurance Following the Brexit Effect 24. Enclosed Spaces Onboard Ships Continue to Pose Dangers REGULATION 26. British Safety Council Offers Support as CIEH Surrenders Its Status as a Regulated Awarding Organisation 28. AvePoint and CIPL Assess Global Preparation for EU General Data Protection Regulation TAX 30. HMRC’s Approach to Collecting Tax from High Net Worth Individuals 34. Digitisation of Tax ‘Harder on Small Businesses’ DECEMBER 2016 Page 3
The Thomas Miller Robin Travis Scholarship 2016 The UK P&I Club, one of the leading shipping protection and indemnity mutual insurers, is pleased to announce that Jan Döhle has been selected as this year’s Robin Travis Scholar. Jan has an MSc in Shipping, Trade and Finance and is qualified as a member of the Institute of chartered ship brokers. He has already gained relevant shipping experience working for a ship operator in Germany and for a short spell with insurance brokers in London.
Upon completion of his scholarship, Jan will be joining Döhle Assekuranzkontor GmbH & Co. KG, in order to further extend his educational and shipping experience. The Robin Travis scholarship is a flexible programme, tailored to provide a breadth of knowledge and understanding and build on the Scholar’s current commercial experience. For the UK Club, it offers a continuing opportunity begin and maintain long term relationships with individuals in the German market
As this year’s Scholar, Jan is spending three months based in Thomas Miller’s London office. He will gain an insight on those maritime related businesses in which Thomas Miller is involved and have the opportunity of spending time with other service providers including maritime law firms and brokers.
Robin Travis was a Thomas Miller director who was responsible for Thomas Miller’s German business, initially for UK P&I Club and later for the Through Transport (TT) Club. He died suddenly and prematurely in 1991 and the Robin Travis Scholarship was set up in his memory the following year.
On the scholarship, Jan commented, “this programme will provide me with the ideal opportunity to develop technical maritime knowledge. During my time in London, I also aim to build up a strong network of internationally-driven maritime and insurance professionals, who have a passion for the shipping industry.”
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Awareness of Key Patient Safeguarding Legislation in the UK Is Low to Average A survey of health and social care professionals* in England and Wales has discovered shortfalls in adhering to key legislation designed to protect vulnerable patients. Over half (56%) consider awareness and application levels of the Mental Capacity Act (MCA) 2005 to be low to average. An additional 89% state that they would like a better understanding of how to work with patients under the MCA. The survey follows a recent Care Quality Commission report, stating that despite pockets of good practice, hospital and care providers are still not adequately implementing their responsibilities around the MCA Desuto, a provider of online decision support and report writing tools for health and social care professionals, carried out the survey* to establish industry attitudes and opinions on implementation of the Act. Respondents included various professionals such as social workers, nurses and care home managers that are required to comply with the MCA. The results evidence the need for more support as the stress of clinical demand, time pressures and lack of resources take their toll. Almost three quarters (71%) of respondents also express concerns over litigation and other noncompliance related consequences. There is a clear desire for more support to aid with decisions and reporting as 96% of health and social
care professionals agree that expert guidance and information around the MCA would provide more confidence in the workplace. Furthermore, 92% of respondents believe that tools and technology could aid with the decision-making process and streamline reporting. Efficiency was also found to be an issue with 87% of respondents finding the creation of patient reports time-consuming. Mike Hostick, CEO of Desuto states, “protecting the rights of patients is paramount to health and social care professionals. Our survey demonstrates, however, that to do so the industry needs more information on hand to help with decision-making. This is matched by an eagerness from professionals to meet their obligations as fully as possible – with the right education and support. A number of barriers are preventing professionals from feeling fully confident in practice
which in turn could adversely affect patient care.” Mike Hostick continues, “There is an increasing acceptance of digital health tools in the NHS and care sector, which has been shaping the way in which professionals work. New tools and technology are sought in order to streamline processes and provide real-time information and resources. As this continues to evolve, we expect technology to play a greater role in the decision-making process and particularly with the successful adoption of the MCA. These tools will also help to alleviate concerns around the potential financial consequences and reputational damage of non-compliance.” Desuto provides a unique new online tool designed to transform the decision-making process for health and social care
professionals across the UK in relation to the Mental Capacity Act. The tool supports making lawful and ethical decisions for those who are unable to make decisions for themselves. It generates detailed, professionally written reports to streamline the process and helps to increase user knowledge. To sign up for a free trial of Desuto’s decision-making tool please visit desuto.com/register. * Highly targeted survey of 100 health and social care professionals that are required to adhere to the MCA polled during October 2016 Picture caption: Research by Desuto demonstrates that health and social care professionals would like a better understanding on how to work with patients under the Mental Capacity Act.
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Gide Counsel to FURUI on Investment in MEDIAN Technologies Gide is advising Inner Mongolia Furui Medical Science Co., Ltd., a Chinese company listed on ChiNext GEM Board and dedicated to pharmaceutical, diagnosis and medical services, on its investment in MEDIAN Technologies, a company listed on Alternext specialised in medical imaging software and services dedicated to oncology clinical trials, cancer screening and clinical practice. The transaction, which is subject to customary conditions precedent, will consist in a capital increase of MEDIAN Technologies at a price of €13 per share, representing a total amount of €19,599,996 reserved to Furui Medical Science Company Luxembourg, a wholly owned subsidiary of FURUI. The completion of the transaction will allow Furui Medical Science
Company Luxembourg to hold 13.01% of the share capital and 13.03% of the voting rights of MEDIAN Technologies. The Gide team advising FURUI on this transaction comprises Antoine Tézenas du Montcel (partner), Régis Henry and Elise Bernard in
Paris and Ronan Diot (counsel) in Beijing. MEDIAN Technologies was advised by Roy Arakelian (partner), Madia Iliopoulou, Clémentine Kervran and Olivier Chapalain from PDGB Avocats.
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Gide is a premier international law firm and the first to have originated in France. Founded in Paris in 1920, the firm now operates from 14 offices throughout the world. It has 600 lawyers, drawn from 35 different nationalities. Gide offers some of the most respected specialists in each of the various sectors of national and international finance and business law. For more details, please visit: gide.com
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Armenian Parliament Passes Financial Market Laws The Armenian parliament has passed a package of laws regulating the local financial markets and amendments to the law on the securities market, following close cooperation with the European Bank for Reconstruction and Development (EBRD). The EBRD welcomed the decision as a ‘milestone’. The new law provides for the enforceability of derivatives transactions, including netting, close-out netting and financial collaterals, amends over 17 laws and introduces more than 15 new regulations to Armenia’s financial legislation, including settlement finality. The EBRD provided technical cooperation to the Central Bank of Armenia for the drafting of the package. Experts, funded by the EBRD-managed Shareholder Special Fund, worked with the Central Bank on the legal reform. This project was also coordinated with, and supported by, the International Swaps and Derivatives Association (ISDA). Mark Davis, EBRD head of office in Yerevan said, “this decision marks a true milestone in Armenia’s reform efforts and confirms the country’s readiness to facilitate the further development of its capital markets. This pioneering step will help improve the investment climate in Armenia. We are grateful to the Central Bank for our fruitful cooperation and we look forward to working on many more exciting initiatives.”
Nerses Yeritsyan, deputy chairman of the Central Bank of Armenia added, “we are very grateful to the EBRD for providing us with expertise and experience in the development of this important legal package. It represents a big step forward in creating the conditions in which our economy can move to a more sophisticated stage of development. Armenia has a strong sense of entrepreneurship and it is for lawmakers and regulators to enable these forces.”
2016 has also seen the extension of the EBRD SME Local Currency Programme to Armenia. This framework offers local small and medium-sized enterprises (SMEs) lending in local currency. In exchange for better access to affordable funding, Armenia has committed itself to continuing reforms to improve, broaden and deepen its local currency and capital markets.
The EBRD is a leading institutional investor in Armenia, having invested over €1.1 billion in 153 projects in the country’s financial, infrastructure, energy and corporate sectors, with 88 per cent of these projects being in the private sector. www.ebrd.com
The legal package adopted by parliament opens the door for hedging tools, including foreign currency and interest rates and allows banks and corporates to properly manage their risks. This is an important step to attract investors, including the EBRD. The EBRD has worked closely with the Central Bank of Armenia to improve the functioning of capital markets in the country, strengthen the local capital market and increase local currency lending. The new law will contribute to the creation of a prospering derivatives market in Armenia. The EBRD, under a local currency and capital markets initiative, is working on similar projects in Georgia, Morocco and Ukraine.
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Discover Recognised for Its Commitment to Corporate Legal Diversity Discover Financial Services has received the 2016 Association of Corporate Counsel Matthew J. Whitehead, II Diversity Award. The award recognises Discover for its outstanding commitment to promoting diversity and inclusion in the legal profession.
“Each employee brings unique perspectives, ideas, and background to Discover. We believe that diversity and inclusion are a driving force in our innovation, growth and success,” said Kelly McNamara Corley, executive vice president and general counsel at Discover. “We are extremely honoured to receive this award because a strong diverse workforce ensures that we are in
the best position to provide advice to our clients and deliver positive results to our customers and shareholders.” The award recognises outstanding achievement by a corporate counsel or a corporate legal department in creating a program or initiative that increases awareness of and commitment to corporate legal diversity, and/or the improvement of employment, retention, advancement and career path opportunities for lawyers of diverse constituencies.
“From diversity and pro bono initiatives to expanded resource and program offerings to strategic planning, this year’s award recipients have reinforced Association of Corporate Counsel as the global voice of the in-house bar,” said Veta T. Richardson, ACC president and CEO. “Their innovative practices and efforts to drive change in the legal community at large has played an integral role in ACC’s growth and development worldwide.”
The Association of Corporate Counsel’s (ACC) Matthew J. Whitehead, II Diversity Award honours the memory of Matthew J. Whitehead, II, an ACC Board member and former Foundation president who made diversity a core value of ACC membership, activities and leadership. The award was presented to Discover during the Leadership Dinner & Awards Ceremony at the ACC Annual Meeting in San Francisco in October. Kareem Dale and Raina Jones, Co-Chairs of the Law Diversity and Inclusion Committee, accepted the award on behalf of Discover. For additional information about ACC’s award winners, visit www.acc.com/awards and www.discover.com/company
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Law Firm Radcliffes LeBrasseur Launches Dedicated Private Client Offer in Wales Law firm RadcliffesLeBrasseur has in early November announced that it has strengthened its Private Client team and launched a dedicated practice in Wales. RadcliffesLeBrasseur has appointed Paul Lindsey as an Associate in its 17-strong Private Client team. He is based in the firm’s Cardiff office and will lead and build a practice advising wealthy individuals and families in Wales. With increased tax powers expected at the Welsh Assembly, there is a growing market for professional services in South Wales. Local business leaders are maximising the opportunities presented by successful professionals and high net worth individuals moving to the rural areas surrounding Cardiff, and the strong links between the capital cities of England and Wales; a market that RadcliffesLeBrasseur is well positioned to serve with offices in both capitals. Paul joined from an established South Wales firm, where he led its trusts and estates team. He brings to the firm considerable expertise in estate planning, IHT planning for individuals, businesses and agricultural clients, Court of Protection matters, advice on care fees and powers of attorney, estate disputes, personal injury and disabled persons trusts, and probate.
Commenting on his move, Paul said, “RadcliffesLeBrasseur has a first-class reputation in England and Wales, and is looking to grow its team in Cardiff. I am excited by the opportunity to launch and build a dedicated private client practice in South Wales.”
Operating in a variety of sectors, the firm advise on: • Healthcare providers and insurers; • Regulatory and public sector bodies; • Start-ups through to established companies;
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Property developers and investors; Banks and other institutions; Charities; Private individuals and; Inward investors to the UK.
www.rlb-law.com
Private Client Partner Jonathan Shankland said, “we are delighted to have Paul on board.He brings with him an impressive client and referrer base in Wales as well as a depth of expertise and sector knowledge. We are delighted that Paul has joined us to lead our targeted launch in the Welsh Private Client arena.” Tim Newsome, Senior Partner at RadcliffesLeBrasseur added, “Paul has a terrific reputation and a strong client following. We are delighted by his decision to join the firm and we look forward to the contribution he will bring to our team in South Wales and to the wider Private Client practice.”
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AIG UK and Dechert to Offer Legal Advice to CorporateGuard Clients
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AIG UK and Dechert to Offer Legal Advice to CorporateGuard Clients AIG UK, the UK arm of global insurer American International Group, Inc. and global law firm Dechert LLP have partnered to offer legal advice at no additional cost to AIG UK CorporateGuard policyholders regarding the termination of the United Kingdom’s membership of the European Union.
Dechert will offer an initial consultation at no additional cost to all AIG CorporateGuard clients on the impact of Brexit on business or planning issues. This could include best practice advice for Brexit planning, steps to mitigate risks and maximise opportunities and the legal implications of Brexit on a particular sector or a client’s workforce. CorporateGuard clients should contact their brokers to access this new service. Dechert has been actively advising companies and trade associations on identifying potential mitigation steps that may help to minimise any risks associated with Brexit while also maximising opportunities. Dechert’s Brexit resource page can be found here: https://www.dechert.com/ brexit/
Anthony Baldwin, chief executive of AIG Europe Limited and AIG UK said, “we continue to innovate to mitigate potential risks for our clients surrounding Brexit. While the outcome of negotiations between the UK and the EU are not known, we are pleased to be able to offer this add-on service, at no additional cost, from one of the leading law firms in this area to give our clients additional insight and advice.”
We continue to innovate to mitigate potential risks for our clients surrounding Brexit.
Miriam Gonzalez, partner and co-chair of the firm’s International Trade and Government Regulation practice at Dechert commented, “the changing regulatory and trade landscape as a result of Brexit is one of the main risks facing companies in the UK. Dechert’s Brexit team is a leader in this area. We help companies to map out the impact that Brexit may have on their sector and their firm. We also advise companies on steps to mitigate any risks that Brexit may bring and maximise opportunities, including how to try and shape the ongoing negotiations and new trade agreements to their advantage.”
David Kistenbroker, partner and co-leader of the white collar and securities litigation practice of Dechert added, “whether it is trade disruption between the US, UK and EU or adverse impacts on capital markets and M&A activity, the Dechert Brexit team is wellpositioned with deep expertise to shepherd your company through this rapidly changing regulatory landscape.”
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Cavendish Advises SG Court Pharmacy Group on Its Acquisition by Paydens Ltd
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Cavendish Advises SG Court Pharmacy Group on Its Acquisition by Paydens Ltd Cavendish Corporate Finance, the UK’s leading sell-side mid-market M&A firm, has advised the shareholders of the SG Court Pharmacy Group (SG Court), a privately-owned chain of pharmacies located in the South East of England, on its acquisition by Paydens Ltd (Paydens). Also located in the South East, Paydens is a leading, independently owned pharmacy group that also includes a pharmaceutical wholesaler and a small care home group within its portfolio. Established in 2004, SG Court has grown strategically through acquisition, and now runs a chain of 21 pharmacies in key locations predominately across Kent, Sussex and Surrey. SG Court has a highly attractive pharmacy footprint, and dispenses approximately 2.7m prescription items each year, significantly higher than average script levels and operates modern premises from strategic locations, with an established and loyal customer base. The SG Court pharmacies will continue to provide comprehensive healthcare services to the communities they serve, supported by Paydens’ wider geographical reach and distribution channels across the region.
Growing competition among pharmacy groups, combined with recently announced Government funding cuts, has encouraged recent consolidation amongst pharmacy groups. The combined business will have a total network of 129 pharmacies, enabling further economies of scale and allowing distribution to be centrally controlled in one geographical location. Cavendish Corporate Finance, which advised the shareholders of the SG Court Group, has considerable experience in advising pharmaceutical and healthcare businesses. Recent high profile transactions include advising on the sale of Kent Pharmaceuticals to DCC plc and the sale of off-patent pharmaceuticals provider DB Ashbourne Ltd to Ethypharm.
Michael Jewell, partner at Cavendish Corporate Finance, which advised SG Court on the transaction commented, “we are delighted to have advised the shareholders of SG Court and to have found in Paydens the right buyer to continue to develop the network and continue its reputation for customer focused service. This acquisition will see SG Court and Paydens unlock significant synergies from their complementary geographical reach, improve pharmacy efficiency and deliver high quality patient services. SG Court and Paydens are both recognised names in the pharmacy industry and the acquisition by Paydens presents an exciting opportunity for continued growth. The competitive landscape of pharmacies has changed over the past decade, and we believe that further cuts to NHS funding will result in further consolidation in the industry.”
Dennis Pay, managing director, Paydens Pharmacy Group commented, “we are very pleased to have found such a complementary match in SG Court, a company we have long admired. The firm operates a successful chain of pharmacies and has a strategic geographical presence in the South East that complements our own. SG Court has an impressive track record and has successfully grown the business against the backdrop of a challenging economic environment and Government funding pressures on community pharmacies. We look forward to welcoming SG Court to the Paydens family and to integrating its business operations into our growing network of pharmacies.” For more information, visit: http://cavendish.com/ www.morganrossiter.com
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Legal Cost Finance Launches Two Membership Schemes for UK Lawyers
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Legal Cost Finance Launches Two Membership Schemes for UK Lawyers Legal Cost Finance, the pioneers of ‘payment plans’ for legal costs, has launched two membership schemes for lawyers (both Solicitors and Direct Access Barristers). First, it has launched its free Associate Membership scheme, which supports and empowers lawyers to offer ‘payment plans’ to each member’s own clients.
Second, the influx of consumer enquiries directly received by Legal Cost Finance has necessitated the need for an exclusive membership scheme, which is named Catalist. Panel Members of Catalist receive fully-funded case instructions from consumers who have made contact with Legal Cost Finance before appointing a lawyer, and thus require not just funding but also an introduction to a suitable practice. Legal Cost Finance Associate Membership By joining the no-cost, noobligation Associate Membership scheme, lawyers become part of the wider Legal Cost Finance ‘family’ in offering ‘payment plans’ to their own clients. Legal Cost Finance is fast becoming the household name as the most attractive scheme for paying legal costs, which has been triggered by an intensive marketing campaign. Lawyers across the UK, from firms of all sizes and specialising in all areas of law, are seeing an increase in new client conversions, because the ability to pay their legal costs in monthly instalments means more people can pursue their legal matters.
Legal Cost Finance founder Dr Yuri Rapoport commented, “as we have a ‘payment plan’ to suit every client – including those with limited access to funds through to high-net worth individuals and businesses – the breadth of legal practices offering Legal Cost Finance is wide, and growing each day. “There is no cost and no catch to becoming an Associate Member. There aren’t many situations in business where you can genuinely claim to be ‘win-win’, but Legal Cost Finance offers exactly that.” In existence since 2013, Legal Cost Finance has helped hundreds of lawyers minimise ‘aged debt’ by offering their clients unique payment plans for all kinds of legal matters, both contentious and noncontentious. While there are other financing options in existence for legal costs, most are restricted to narrow qualifying criteria and pose high risks to lawyers. Such is the case with Litigation Funding, for example, which favours applicants with ‘cases that are likely to produce the highest financial awards’, rather than those ‘deserving of justice.’
The Catalist Membership Panel Dr Rapoport has also announced the launch of an exclusive new membership panel, named Catalist, which again is ‘powered’ by Legal Cost Finance. Dr Rapoport said, “due to the heightened consumer awareness of Legal Cost Finance, many consumers are now coming to us directly - so we are creating an industry-first, exclusive membership panel of lawyers, who receive fully-funded case instructions through Legal Cost Finance. The scheme is based on each practice’s growth target from new client income.” Many Legal Cost Finance Associate Members have already signed-up to the Catalist panel, so they can recommend Legal Cost Finance to their own clients, and can also receive new clients from Catalist, with fully-funded cases. Catalist measures the financial outcomes it will create for the member practice and promises a 1000% return on the subscription fee, making the membership scheme the ‘dream tool’ of any business development and marketing director.
Dr Rapoport concluded, “the Catalist guarantee ensures there is no risk for any participating panel member by providing a quibblefree refund policy. We truly put our money where our mouth is, so you can rest assured that when we say we can accelerate your practice performance, we really mean it. The financing is coming in from lenders and the clients are queuing up for payment plans. All Catalist does is allocate these new client instructions fairly and appropriately among its panel member lawyers. “Catalist will become the legal practice’s best and most effective marketing tool – there’s absolutely no risk and it is in a different league to any other client generating platforms, such as ‘referral services’, currently operating in the market. Catalist truly is a first - it delivers actual client instructions – clients with sufficient funding in place to pursue their legal matter. That is a very powerful proposition.” www.catalist.legal www.legalcostfinance.co.uk
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Tackling Negative Content the Easy Way
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Tackling Negative Content the Easy Way Self-help reputation expert, Simon Wadsworth, says that while there will always be situations where expert legal advice is required - there are many instances where SMEs can help themselves – thus achieving the same level of success while avoiding a hefty bill.
It has the potential to cause long-term damage to any business - but in an age where online reviews are king, how do you tackle negative content without blowing your budget? Several recent cases have demonstrated the power of using legal redress to take down malicious or unfair criticism. But while calling in lawyers might work well for larger corporates; smaller organisations might do well to adopt a more DIY approach. As Simon Wadsworth, managing director of UK-based reputation experts, Igniyte, explains: “While there will always be situations where expert legal advice is needed, there are many instances where SMEs can help themselves - achieving the same level of success while avoiding a large bill. “When I speak with clients and business leaders, I suggest taking a series of relatively simple steps. For lawyers, pursuing a legal route is second nature, but this can be very costly and appear confrontational.
“Adopting a more ‘human’ strategy - speaking to people and organisations directly rather than through lawyers - can achieve results that are just as positive, without the large legal bill. So, when it comes to tackling one of the most common problems we see - disparaging comments written on an individual’s website or on a public forum - this kind of direct contact can work really well. A useful first step might be to find the owner of the site and send them a handwritten letter explaining the impact these negative comments are having on your business. “Be mindful of your tone of voice and language when you do this. Being light, friendly and to the point usually gets the best results. Make it clear that you understand they might not be obliged to remove content, but it would be greatly appreciated if they would consider doing this as it would make a real difference to you personally.
“Another important strategy comes from looking at publishers’ own guidelines. So, take some time to examine their small print. Most sites have clear terms of use/ user guidelines on acceptable conduct and reviewing these can provide an easy way forward. If a site or publisher’s own T&Cs have been broken, you can ask and encourage them to undertake a non-legal removal of posts on your behalf.” Simon Wadsworth is an expert in online reputation management. He is the founder and Managing Partner of Igniyte – which has been managing the online reputation of high-profile individuals and wellknown brands since 2009. Simon also runs the popular Reputation blog, Reputation Matters, which explores current trends and provides practical advice to business owners on managing reputation risk. For further information please contact: Aimee Sutcliffe; PR Manager.
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Technavio Announces Top 5 Global Players for the Legal Services Industry from 2016-2020
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Technavio Announces Top 5 Global Players for the Legal Services Industry from 2016-2020 Technavio’s latest market intelligence report has listed the top five leading suppliers for the legal services market until 2020. These suppliers implement the proprietary approach to differentiate themselves from competitors as well as to help clients save on costs. Their expertise and wide service portfolios gives them the ability to provide proprietary services that can cater to specific buyer requirements in specific subcategories.
Competitive landscape Although, the legal services industry is largely dominated by global players, the small service providers have an advantage over the global players in terms of regional expertise. The major buyers of legal services are mostly from industries such as large pharmaceuticals, healthcare, automotive, FMCG, media and entertainment, and retail sector. To stay ahead of market competition, suppliers are adopting various approaches, some of which include operating on low profit margins, offering proprietary products, and expanding product portfolios to evolve into one-stop shops that can cater to all legal service requirements of large organisations. About the top five legal service providers Baker & McKenzie Baker & McKenzie has the capability to provide legal services to various industry sectors including energy, government services, healthcare, and automotive. The company has strong financial backup and is
best known for its work in mergers and acquisitions, corporate restructuring, and financial services.
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Some of the key services provided by the company include: • Antitrust and competition; • Banking and finance; • Dispute resolution; • Energy, mining, and infrastructure; • Environmental; • Mergers and acquisitions plus; • DLA Piper.
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DLA Piper tops the charts in terms of the number of mergers and acquisitions on a global scale for the fifth consecutive year. Recognised as a top global outsourcing advisory by the International Association of Outsourcing Professionals in February 2016, the firm demonstrates expertise on in dealing with a wide array of legal issues of corporates and businesses. Over a thousand lawyers from DLA Piper have been termed as ‘the best’ by several directories in their respective areas of legal practice. Some of the key services provided by the company include:
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Capital markets; Emerging growth and venture capital; Fund formation and investment funds; Mergers and acquisitions; Private equity; Administrative law and; Latham & Watkins.
Latham & Watkins operates across industrial sectors such as aerospace, defence and government services, communications, oil and gas, and mining and metals. The company provides and online portal with a wide selection of education programs on various legal practices, accessible at any time. Some of the key legal advisory services provided by the company include antitrust, joint ventures, and strategic alliances. Clifford Chance Ranked the number law firm in the Global Top 30 Chambers list of 2015, Clifford Chance demonstrates its expertise across various legal practice areas. The company’s services cover clients across industries such as banks, consumer goods and retail, energy and resources, and healthcare and life sciences.
The company provides expertise in the following areas: • Capital markets; • Corporate; • Finance; • Litigation, dispute management; • Real estate; • Tax, pensions, employment, and incentives and; • Allen & Overy. In January 2016, Allen & Overy was ranked the top legal advisor for private equity buyouts in Europe. The company offers several online platforms that have enhanced security features and simplify clients’ access to legal documents. Some key services offered by the company include: • Corporate governance and compliance; • Emerging markets; • Environment and regulatory law; • Public international law; • Intellectual property and; • Corporate consulting services, and mergers and acquisitions. www.technavio.com
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A.M. Best Special Report: Money Market Reforms—Overall Insurance Industry Impact Expected to Be Minimal
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A.M. Best Special Report: Money Market Reforms —Overall Insurance Industry Impact Expected to Be Minimal New rules governing money market mutual should have minimal financial impact on the insurance industry as a whole, although many companies may need to reassess strategic liquidity planning based on exposure levels, according to a new A.M. Best special report. In 2014, the U.S. Securities & Exchange Commission adopted amendments to the rules that govern money market mutual funds, which in October 2016, will go in effect.
The Best’s Special Report, titled, ‘Money Market Reforms— Overall Insurance Industry Impact Expected to be Minimal’ states that the new rules require a floating net asset value (NAV) for institutional prime money market funds, which allows the daily share prices of these funds to fluctuate along with the changes in the market-based value of fund assets. In addition, the new rules provide the boards of nongovernment money market funds new tools to address runs in the form of liquidity fees and redemptions gates, which can be used in conjunction during times of duress. With a floating NAV, institutional prime money market funds (including institutional municipal
money market funds) are required to value their portfolio securities using market-based factors and sell and redeem shares based on a floating NAV. These funds no longer will be allowed to use the special pricing and valuation conventions that currently permit them to maintain a constant share price of $1.00. While floating NAVs will result in taxable gains and losses, the Internal Revenue Service is proposing new rules to address the treatment of gain/loss calculations and reporting, as well as wash sale rule situations. A further change stemming from the new rules is the ability of fund issuers to apply a liquidity fee against redemption proceeds, which would be retained by the fund. Such fees are intended to
be a disincentive for shareholders to redeem shares of a fund in distress, and also to help bolster the liquidity levels in a fund by infusing the fund with cash withheld from redemption proceeds. According to the report, the insurance industry’s exposure to Class 1 Money Market Funds, which contain a mix of government and non-government funds and will likely be affected by the new rules, has declined 11.7% to $40.4 billion in 2015 from $45.7 billion in 2010. This largely was driven by a 36.2% decrease in the property/casualty segment from 2010-2011. However, since the new reforms were announced in 2014, the property/casualty and health segments have seen allocations increase 26.8% and
11.0%, respectively, while the life/ annuity segment has decreased its holdings by 10.3%. A.M. Best believes prime funds likely will continue to play a vital role in serving many insurers’ cash and liquidity needs; however, companies may need additional planning as the hourly liquidity benefit may now be lengthened to a few hours or following day depending on the transaction time. Overall, A.M. Best urges companies to be aware of the changes and potential challenges in accessing their historically very liquid money market funds. A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com
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BIBA Urges Businesses to Avoid Under-Insurance Following the Brexit Effect
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BIBA Urges Businesses to Avoid Under -Insurance Following the Brexit Effect The British Insurance Brokers’ Association (BIBA) has launched a guide to help small businesses avoid under-insurance. The guide is published at time when businesses are potentially more vulnerable to the risks of under-insurance as a result of uncertainty in the run up to Brexit leading to a fall in the value of the pound. This currency fluctuation may make it more expensive to import goods such as replacement equipment, plant or machinery. This is an additional concern given that the guide was initially produced following findings of ‘an alarming degree of underinsurance’ by the Financial Conduct Authority (FCA). The guide aims to help businesses buy the right level of cover to protect them against loss or damage to their property and injury to employees or someone else caused by their business. Finding at the time of a claim that an insurance policy is not sufficient can have devastating consequences to a business. Under the Insurance Act, under-insurance might result in a ‘proportionate remedy’ being applied, possibly resulting in additional premium, different policy terms or a reduction in claim payment. In BIBA’s guide, businesses are advised to get correct and regular valuations, consider how the risks to their business change including areas such as cyber risk and data protection, and to base the sums
insured for buildings on the cost of rebuilding and not the market value. Regarding Brexit, the guide advises businesses to consider that the effect of the planned EU exit might have an impact on the cost and the delivery time for replacement machinery, plant or other contents if a supplier is based in the EU, which will need to be factored in to the amounts insured. BIBA chief executive, Steve White also advised that when reviewing an indemnity period for a business interruption cover, businesses should consider that 24 months is likely to be the minimum period needed for a business to fully recover its trading level and rebuild its customer base. He said: “If you buy a simple online package policy check that the liability limits of indemnity, business interruption indemnity periods and other standard policy limits are sufficient as well as the basis on which the sum insured is to be calculated.” Graeme Trudgill, BIBA’s executive director commented, “insurance
brokers have long raised the issue of under-insurance with us and we all want to ensure that claims are paid quickly and in full to help businesses recover when disaster strikes. A simple way to ensure this is to make sure that the correct levels of insurance are in place at the beginning or at renewal, along with considering any increased expenses to import goods from the EU that might impact the cost of a claim. It is important for businesses to review their cover regularly with their broker who can help. We hope that our new guide will help businesses address the under-insurance issue that the Financial Conduct Authority found.” The guide has been supported by a number of companies and organisations including the Federation of Small Businesses (FSB). FSB National Chairman, Mike Cherry said, “it is vital small businesses aren’t left in the lurch when the worst happens. We would encourage all small firms to make sure their current insurance arrangements offer suitable protection, to mitigate the risks of business failure or
constricted cash flow resulting from unexpected costs. This guide will be a helpful tool, especially for all those businesses who are currently under-insured.” Insurance brokers are able to provide advice on how to assess sums insured and can help to buy insurance cover that meets their needs. They will help businesses to understand the basis of their insurances and how sums insured can be calculated to ensure that you are properly covered if you have a partial or a total loss. • General insurance brokers contribute 1% of GDP to the UK economy and BIBA brokers employ more than 100,000 staff. • 54% of all general insurance is sold by an insurance broker and they arrange 78% of all commercial insurance business. • Insurance brokers put the client’s interests first, providing advice, access to suitable insurance protection and risk management. www.biba.org.uk
DECEMBER 2016 Page 23
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Enclosed Spaces Onboard Ships Continue to Pose Dangers
WORLDWIDE LAW REVIEW
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INSURANCE
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Enclosed Spaces Onboard Ships Continue to Pose Dangers The UK P&I Club is a leading provider of P&I insurance and other services to the international shipping community. ‘A (Stable)’ rated by Standard & Poor’s with free reserves and hybrid capital of $559m the UK P&I Club is renowned for its specialist skills and expertise which ensure ‘best in class’ underwriting, claims handling and loss prevention services. In recent news, Chris Roberts, senior risk assessor at UK P&I Club, gave advice on seafarers not correctly implementing enclosed space entry permits. Chris Roberts, senior risk assessor at UK P&I Club, commented on seafarers not correctly implementing enclosed space entry permits, “amendments to the SOLAS convention on enclosed space entry came into force on 1 July 2016, requiring all ships to carry portable atmosphere testing equipment on board. “Under the new regulation the atmosphere testing equipment on board must be able to measure the concentration of oxygen, flammable gas/vapours, hydrogen sulphide and carbon monoxide as a minimum before a crew member enters an enclosed space. Any space that has limited openings for entry and exit, inadequate ventilation and is not designed to be continuously occupied qualifies as an enclosed space and the atmosphere in these spaces can pose a very real risk to the life of crew members.
“However, even with the potential threat to life these spaces can cause, the UK P&I Club’s Risk Assessors are still finding instances where the proper, and now legally required, precautions are not being carried out. In order to minimise the threat to life caused by entering enclosed spaces, The Club recommends ensuring that the Permit to Work checklist includes the following precautions as a minimum: • Is the multi-gas detector supplied with tubing long enough to reach all areas of the space to be entered? • Has the enclosed space been ventilated for at least 24 hours prior to entry? • Has ventilation been stopped at least 10 minutes prior to initial gas testing? • Has an adequate risk assessment been undertaken and a pre-work safety meeting been held involving all personnel?
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Is the Self-Contained Breathing Apparatus set, and a qualified stand-by person designated to be at the entrance during entry, with adequate communication to the personnel inside the space? Are all personnel to enter the space issued with a personal multi-gas alarm unit? Is there proper through ventilation continuous during entry? Is there an adequate atmosphere re-testing regime during the entry period? Have all personnel involved signed the Permit to Work?
The UK P&I Club is managed by Thomas Miller, an independent and international insurance, professional and investment services provider. Principal activities include: • Management services for transport and professional indemnity insurance mutual; • Investment and wealth management for institutions and private clients; • Professional services and; • Building defects insurance. For more details, please visit: www.ukpandi.com and www. thomasmiller.com
“To safeguard the health and wellbeing of all crew, only when all proper safety precautions have been taken into account should personnel be allowed to enter an enclosed space on board” Roberts concluded.
DECEMBER 2016 Page 25
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British Safety Council Offers Support as CIEH Surrenders Its Status as a Regulated Awarding Organisation
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REGULATION
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British Safety Council Offers Support as CIEH Surrenders Its Status as a Regulated Awarding Organisation The British Safety Council came forward to reassure existing training centres of the Chartered Institute of Environmental Health (CIEH) that it is able to offer many of the qualifications which the Institute has been providing until now. CIEH has announced its intention to surrender its status as a regulated awarding organisation. This means that 38 of CIEH’s regulated qualifications will be withdrawn by either 31 January 2017 or 28 April 2017. The Institute’s 18 non-regulated qualifications will be phased out by 28 April 2017.
To help existing CIEH centres deliver regulated qualifications in the future, the British Safety Council is offering: • Free centre approval; • Fast-track centre registration; • Fast certificate turnaround time – 99% in two days; • Free qualification approval and; • Free learning materials.
The British Safety Council is an expert provider of health, safety and environmental management qualifications. It is the only UK regulated Awarding Organisation to offer a complete suite of health and safety qualifications from Entry Level to Level 6 in the national qualifications framework. Its qualifications are delivered by over 700 approved centres in the UK and abroad. The British Safety Council’s comprehensive offer of food safety qualifications includes Level 2 and 3 Awards in food safety in catering, for manufacturing and for retail.
For organisations, which are already approved centres of the British Safety Council and deliver CIEH qualifications, but wish to switch to equivalent British Safety Council’s qualifications, it is offering free and fast-track approval for equivalent qualifications in addition to its standard terms and conditions.
The British Safety Council continues to receive praise from its approved centres for the excellent customer service they receive. Importantly, the British Safety Council’s qualifications are competitively priced and offer one of the fastest turnaround time for certificates of any Awarding Organisation. The British Safety Council is well known for the high quality and user-friendliness of its training materials. First aid learners, for instance, benefit from practical assessment log books and knowledge-based assessment task lists. These documents facilitate learning and students’ progress in a structured and efficient way.
Mike Robinson, chief executive of the British Safety Council said, “the surrender of its awarding organisation status by CIEH has created a very uncertain and worrying situation for the CIEH centres and their clients. We are glad that the British Safety Council’s awarding organisation status, our training expertise and resources enables us to step into the breach and offer our existing centres, as well as other training providers and their students, the equivalent CIEH qualifications.” www.britsafe.org
DECEMBER 2016 Page 27
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AvePoint and CIPL Assess Global Preparation for EU General Data Protection Regula-
WORLDWIDE LAW REVIEW
REGULATION
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AvePoint and CIPL Assess Global Preparation for EU General Data Protection Regulation With indicators suggesting that organisations face much work ahead, AvePoint and CIPL partner to provide insight and guidance to ensure readiness for global impact of European data privacy mandate.
AvePoint, the Microsoft Cloud expert and leader in data protection, and the Centre for Information Policy Leadership (CIPL) at Hunton & Williams, LLP, a global privacy think tank, announced from the halls of the IAPP Europe Data Protection Congress the availability of the first-ever global benchmark report for the European Union General Data Protection Regulation (GDPR). Launched in May 2016, the survey compiles responses from 223 predominantly multinational organisations on their preparedness for GDPR implementation. The European Union GDPR marks the beginning of significant changes to how companies manage and process personal data, their privacy compliance programs, as well as IT systems and infrastructure. The GDPR replaces Directive 95/46/EC and will come into force in May 2018.
“The GDPR signals the start of a new generation of data privacy laws and practice in Europe and beyond,” said Bojana Bellamy, President of CIPL. “The new law will affect the risk profile of organisations, impact their management, use and sharing of data, as well as their IT systems and infrastructure. But GDPR also represents an opportunity for organisations to consider data privacy compliance more strategically and holistically, as it becomes key to their data strategy and the digital transformation of their business.” The report highlights nine key trends that relate the most to everyday business and compliance concerns, including: GDPR Impact: Respondents believe that the aspects of the GDPR that will have the largest impact on their organisations are the requirements for a comprehensive privacy management program, use and contracting with processors, as
well as data security and breach notification. As expected, senior management is most concerned about the GDPR’s enhanced sanction regime and the data breach notification requirements, as well as how the regulation will impact their data strategy and ability to use data.
privacy compliance tasks. Only a minority of organisations use technology to automate and industrialise their data protection impact assessments (DPIAs), data classification and tagging policies, data processing inventories, and delivery of the new data portability right.
Data Transfers Outside the EU: Organisations appear to use a wide variety of mechanisms today for data transfer related to internal human resources (HR), consumers/customers, and vendors. According to responses, they will continue to do so after the GDPR is implemented. The most popular mechanisms today are, in descending order: Model Contracts, consent and necessity for contracts, as well as Privacy Shield.
“This GDPR survey report is designed to help organisations understand and benchmark the key operational impacts of the regulation and to support their internal change management program,” said Dana Simberkoff, chief compliance and risk officer, AvePoint. “We hope that this report will allow organisations to accelerate their progress toward true operationalisation for GDPR readiness.”
Compliance Technology Tools and Software: Currently, organisations do not appear to widely use or have access to technology tools and software to aid with data
To access the full report, please visit the AvePoint website at: www.avepoint.com. For more information on CIPL, please visit the Centre’s website here: www. informationpolicycentre.com
DECEMBER 2016 Page 29
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HMRC’s Approach to Collecting Tax from High Net Worth Individuals
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TAX
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HMRC’s Approach to Collecting Tax from High Net Worth Individuals HMRC estimate that its specialist unit dedicated to collecting tax from high net worth individuals raised £416m from its compliance work with this group in 2015-16 according to an early November report by the National Audit Office (NAO). This is separate from tax already voluntarily declared by these individuals. As this specialist unit expands HMRC needs to do more to identify the most effective approaches to maximising the tax revenue paid by the very wealthiest people in the UK. High net worth individuals often have complex tax affairs and they generally have more choice over how they manage their income and assets than the average taxpayer. It can be challenging for HMRC to understand their tax affairs and assess if there are any risks to address. In 2009, HMRC established a specialist unit to manage the tax affairs of high net worth individuals to give it a better understanding of the overall tax position of high net worth individuals and their behaviour. At the start of 2015-16 HMRC considered there to be around 6,500 high net worth individuals, roughly 0.02% of all taxpayers.
The amounts of tax revenue that are at stake are significant. In 2014-15, high net worth individuals paid over £4.3 billion in tax. This included £3.5 billion in income tax and national insurance (1.3% of the total revenue for those taxes) and £880 million in capital gains tax (15% of all CGT). HMRC does not record other types of tax that are collected, such as Inheritance Tax, in a way that easily allows it to identify the amounts paid on high net worth individuals’ wealth. HMRC is investigating risks from high net worth individuals with a potential value of £1.9 billion. This figure is an initial estimate of the tax that could be due and covers more than one tax year. £1.1 billion of this relates to the use of marketed avoidance schemes; around 15% of high net worth individuals have used
at least one scheme. HMRC has identified that the risks from high net worth individuals relate primarily to tax avoidance and the legal interpretation of complex tax issues, rather than tax evasion. HMRC is currently running a formal enquiry on around a third of high net worth taxpayers, with an average of four issues being examined per taxpayer. Formal enquiries occur where HMRC does not understand or agree with the position taken by a taxpayer. These enquiries can take a long time to resolve with 6,000 issues under enquiry open for more than 18 months, 4,000 of which have been open for more than three years.
DECEMBER 2016 Page 31
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HMRC’s Approach to Collecting Tax from High Net Worth Individuals
WORLDWIDE LAW REVIEW
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TAX
, HMRC recorded yield of £416 million in 2015-16 from the work of the high net worth unit. This is an increase from £200 million in 201112, and exceeds HMRC’s internal target of £250 million in 2015-16. In addition to the work of the high net worth unit, since 2009 HMRC has recorded yield from high net worth individuals of around £450 million. Around half of this – £230 million – has come from its work in tackling marketed avoidance schemes. A further £80 million relates to fraud investigations and around £140 million from the use of offshore disclosure facilities (Liechtenstein disclosure facility). HMRC prioritises the recovery of tax where it identifies fraud and uses civil investigations in the majority of cases. Where high net worth individuals are suspected of tax fraud, their case
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Identifying high net worth individuals is not straightforward as most of the information about their wealth such as sources of income or assets owned does not need to be reported. During 2015-16, HMRC undertook a review and identified an extra 1,000 people with net worth of more than £20 million. HMRC has developed its approach to high net worth individuals over time. HMRC initially focused on getting a better understanding of the circumstances of high net worth individuals. It has since refined its approach to become increasingly focused on the riskiest taxpayers. HMRC has not evaluated its approach to high net worth individuals. While HMRC knows more about this group that it did when the high net worth unit was
Facts and figures • 6,500 is the number of taxpayers HMRC considered to be high net worth individuals at the start of 2015-16. • £4.3bn worth of tax collected from high net worth individuals in 2014-15. • £416m is HMRC’s estimate of the yield from the high net worth unit’s compliance work in 2015-16. • £20 million wealth required to be designated a high net worth individual by HMRC until 2016 when the threshold was reduced to £10 million. • Marketed avoidance £1.4bn tax at risk from 1,000 high net worth individuals (1% of all users of schemes, but 10% of the tax at risk). HMRC is making good progress in tackling the use of marketed schemes.
HMRC recorded yield of £416 million in 2015-16 from the work of the high net worth unit. This is an increase from £200 million in 2011-12, and exceeds HMRC's internal target of £250 million in 2015-16. is passed to a specialist team within HMRC which examines whether the evidence is sufficient to merit a criminal, rather than civil, investigation. In the last five years, HMRC has investigated and closed 72 cases relating to high net worth individuals. 70 of these were investigated with civil powers, raising £80m in compliance yield including penalties. Two cases were criminally investigated and passed to the Crown Prosecution Service, one of which was taken forward and successfully convicted. At October 2016 HMRC was criminally investigating a further 10 high net worth individuals.
set it, it has not looked at what works and why in its current approach. It could use such analysis to increase the impact of its work. Amyas Morse, head of the UK’s National Audit Office commented, “the tax affairs of the wealthiest in society are complex, making it harder for HMRC to ensure that they are paying the right amount of tax. HMRC’s specialist team gives it a better understanding of the tax affairs and behaviours of these taxpayers. While the yields from HMRC’s work in this area have increased, it needs to evaluate what approaches are the most effective and to understand the outcomes it achieves.”
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Offshore evasion 137 high net worth individuals have voluntarily told HMRC about £141 million of tax liabilities through the Liechtenstein Disclosure Facility (2% of all disclosures and 11% of total value). Inheritance Tax HMRC has identified 161 Inheritance Tax records relating to high net worth individuals’ estates between May 2014 and April 2016. Inheritance Tax of £183 million has been paid on these 161 estates to date. The final amount due is not yet known.
www.nao.org.uk
DECEMBER 2016 Page 33
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Digitisation of Tax ‘Harder on Small Businesses’
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WORLDWIDE LAW REVIEW
TAX
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Digitisation of Tax ‘Harder on Small Businesses’ In preparation for its ‘Making Tax Digital’ project, HMRC is reviewing the results of its official consultation period with the business community. The UK200Group, the UK’s leading membership association of quality-assured chartered accountancy and law firms, has been an active part of the consultation process and has in turn asked its members for their views and the views of their SME clients. The UK200Group represents the interests of 150,000 SMEs through its members and it is taking a lead on tax digitisation to guide business owners through the process. So what exactly does HMRC mean by ‘making tax digital’? By 2020, businesses, selfemployed people and landlords earning over £10,000 per annum will manage their tax affairs through a digital, online account, and will be required to update HMRC at least quarterly. These digital tax accounts will be a more sophisticated version of the personal tax accounts which are already in use for individuals, and allow taxpayers to see their Pay As You Earn position, tax credits and National Insurance Contributions, plus an estimate of state pension on retirement. However, by 2018, banks and building societies will be required to report interest payments to HMRC to be included in digital tax accounts, and individuals will be able to report additional sources of income digitally. Digital tax accounts for businesses will show an overview of income tax or corporation tax, VAT and National Insurance Contributions, plus income and expenses on a quarterly basis. Taxpayers will be expected to use software
accounting systems to record day-to-day transactions, categorise them into different types of income and feed back to HMRC. Andrew Jackson is Head of Tax at UK200Group member Fiander Tovell and Chair of the UK200Group Tax Panel, and is also on the consultative committee of the Office for Tax Simplification. He said, “the digitisation of tax is going to have a very different effect on small companies compared to larger ones. For larger companies with financial controllers, accounts teams and reasonably sophisticated software accounting systems in place, the switch will be much easier than for smaller businesses without a dedicated accountant or bookkeeper. There is already internal reporting going on in a large business so it is not so difficult to start diverting that reporting to HMRC. “Making tax digital will force all businesses and self-employed workers to start using accounting systems, and that implies having someone to deal with accounts – even if they’re not a chartered accountant. If they don’t have someone to input the data, keep the system up-to-date – who is aware of how things need to be done – they will have to get to a place where they have one. And often, that will be a bookkeeper who has never had to deal with taxation before.
“HMRC officials think that getting small business to use accounting systems will reduce errors, and if people are making fewer errors they should have a more accurate idea of how their businesses are performing. That’s got to be a good thing. “However, they don’t seem to appreciate why people aren’t using accounting systems at the moment. I think what they’ve failed to identify is that businesspeople aren’t doing it now because of the cost of implementing an accounting system - this isn’t just financial, but includes the time and effort spent learning how to use it and keeping it up to date. It’s not just a case of putting a few numbers in various boxes – it takes a whole new set of skills to use these programs properly. “This, again, is going to affect small businesses more than it affects larger ones because the overheads for setting up accountancy systems are going to remain broadly the same, regardless of turnover. A complex accounting system, for example, is also massively overengineered for a lot of the UK’s businesses, which might only have half a dozen clients or customers. “HMRC seem to acknowledge this, and are also proposing that businesses be allowed to use simplified methods for doing their accounts. Unfortunately, what this would do is destroy a lot of the
useful information that is the whole the point of preparing accounts in the first place. There are also technical issues that Andrew sees as potential problems for his clients, such as whether he’s going to be able to access their digital tax accounts easily and effectively. He went on to say, “HMRC officials are happy to make the information in the digital tax account available to agents. Agents will be able to dial into HMRC’s systems, download the information they need and pull it into the tax return or the accounts that they’re preparing, or use various interfaces to see the information in the way that they want to. They’ll not be restricted to seeing the information in the way that the client does, and the format will be more flexible and more useable. I like that. “However, what HMRC officials have said is that the agent will not be able to see the digital tax account itself. What they’ll have to do is reconstruct the account from the data they have available. Now that is very dangerous because it means that the taxpayer and the agent are potentially seeing different things. I think it’s crucial that we can see on our screens what the client can see on theirs. If we can’t see your tax affairs, how are we supposed to help you handle them?” www.uk200group.co.uk
DECEMBER 2016 Page 35
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