LEGAL UPDATE Imelda Moffat February 2012 BUSINESS WITH

LEGAL UPDATE Imelda Moffat February 2012 BUSINESS WITH CONFIDENCE icaew. com

BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Example of slide notes • • Enlightened shareholder value – what does it mean? Codifying the common law requirement to act in the company’s best interest. Directors must act in a way that promotes company success for the benefit of shareholders as a whole, and in doing so must have regard where appropriate to: – – long-term factors interest of other stakeholders (eg, employees, suppliers and customers) community and environment company reputation. • Government guidance is available at www. berr. gov. uk/files/file 40139. pdf • • Other useful links are http: //www. berr. gov. uk/whatwedo/businesslaw/co%2 Dact%2 D 2006/ and http: //www. companieshouse. gov. uk/companies. Act. shtml • • • And some ICAEW links are: icaew. com/companylaw CA 06 and major accounting changes: icaew. com/index. cfm/route/156108/ FFM CA 06 Summary: icaew. com/index. cfm/route/148125/ • GOODIE ! There is a useful and short leaflet summarising the changes for private companies available at www. berr. gov. uk/files/file 42262. pdf • • There is also a more detailed one at www. berr. gov. uk/files/file 42261. pdf and www. companieshouse. gov. uk/companies. Act/pdf/berr. Updating. Your. Clients. pdf And finally BERR is now BIS - Department for Business Innovation and Skills – as of June 2009 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Topics • Employment • Pensions • Professional reform BUSINESS WITH CONFIDENCE Copyright © ICAEW

Employment • 2012 - A year of big changes – rights to claim unfair dismissal – the tribunal system – introduction of fees • Research carefully and take advice • Availability of good resources • Interim Management Group at ICAEW BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Status • Employee • Worker • Self employed BUSINESS WITH CONFIDENCE Copyright © ICAEW

Recent changes • Agency Workers Regulations 2010 – In force from October 2011 – Blurs lines between agency workers and employees – Aim for equal treatment in pay and conditions between agency workers and hirers’ permanent employees • Equality Act 2010 – In force from October 2010 – Consolidation – Protected characteristics BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Pinch points • Give a statement of employment within 2 months • Plan early on business sales and restructuring and assess position • Look out for TUPE changes in the future BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Retirement • Default retirement age of 65 abolished October 2011 – Employees in transition – Growth in Golden Goodbyes? • Possible however if ‘Objective Justifications’ exist BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

The Seldon case • Heard by the Supreme Court in January 2012 – decision awaited • Mr Seldon forced to retire at 65 in accordance with partnership deed • ‘Avoids the need to expel partners through performance management, thus contributing to the congenial and supportive culture in the firm’ BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Pensions • Imelda’s test……. • Distinguish between a ‘defined benefits scheme’ and a ‘money purchase’ scheme • Big changes in 2004 – Pensions Regulator – Pensions Protection Fund BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Practicalities - moral hazards regime • Notifiable events • Contribution Notices and Financial Support Directions • Advance Clearance procedure – for corporate deals; capital restructurings, dividend payments BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Auto Enrolment 2012 Watershed • Auto-enrolment with compulsory employer contributions • Revised timetable issued January 2012 • October 2012 – largest employers first, steep scale and affecting those with – Less than 50 employees - August 2015 – Less than 30 employees – January 2016 • Automatic staging dates dependent on PAYE reference BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Specifics • Age 22 upwards (but younger can elect) • Includes permanent, temporary and agency workers • Administration hurdles – Investment in systems – Review of existing schemes – Prepare for self certification – Guidance for trustees BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Arrangements • Choose Qualifying Scheme(s) – Is existing scheme compliant? – Two tier arrangements needed? – Feeder schemes? • NEST scheme – National Employment Savings Trust BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Pensions regulator starting to flex muscles ? • Lehman and Nortel – October 2011 – Large insolvent groups – Costs rank as insolvency expense and therefore in priority to preferred creditors, floating charge holders, unsecured creditors • Boxclever - January 2012 – FSD issued by the pensions regulator against ITV Television in respect of a joint venture deal in 2000 – Pensioners left attached to a weak subsidiary overloaded with debt after cash stripped out – Support must remain in place until scheme winds up – ITV is appealing the decision BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Legal services reform • Why? • Legal Services Act 2007 – Legal Services Board - LSB – External ownership and investment – ‘Tesco Law’ – First true MDPs involving lawyers and other professionals – Alternative business structures – ABS • Slater and Gordon – a firm over there now involved over here - February 2012 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

ICAEW concerns • The procedure ……. And delays in thought process • Divergent views on nature of ‘legal advice’ • Timing - first ABS operational in October 2011 • Distinguish between: – External ownership – Work types - personal injury and conveyancing – Work structures – multi disciplinary practices BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Considerations • You or your client could be a – Participant – Manager – Investor • Appetite depends on business model, size, niche – Consider MDPs to save costs – Tax services – Forensic and insolvency specialists – Novel structures and relationships for service delivery BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

The future • Legal competitors will be looking at you, your clients and your business offering • Innovate – you or your clients may want to add specialised services or enter into collaborative arrangements • Remember its professional services reform BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved. icaew. com

Any questions. . ? BUSINESS WITH CONFIDENCE Copyright © ICAEW 2012. All rights reserved.

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