The Competition and Markets Authority (CMA) recently fined an association of estate and lettings agents, 3 of its members and a newspaper publisher over £735,000 for agreeing to restrict the advertising of fees or discounts in a local newspaper.

In light of this case, the CMA has sent warning letters to a number of estate and lettings agents that it has reasonable grounds for suspecting have been involved in anti-competitive agreements to restrict the advertising of fees.

Separately, the CMA has received complaints that other associations of estate agents and local newspapers may be engaging in similar practices, and is considering whether to take further action.

In order to help businesses avoid competition law risks, the CMA has also published open letters to companies in the property and newspaper industries and a case study to raise awareness that this type of activity is likely to be illegal and that businesses may face significant fines if they engage in it.

Businesses that are found to have broken competition law can be fined up to 10% of their annual worldwide turnover, and company directors can be disqualified for up to 15 years where their conduct in relation to such a breach makes them unfit to be concerned in the management of a company. In addition, individuals involved in certain very serious cartel activity, such as price-fixing, may be found guilty of the criminal cartel offence and could go to prison for up to 5 years and/or have to pay an unlimited fine.

The CMA is working with a number of industry bodies, including the National Estate Agents Association and the Property Ombudsman, to help publicise the lessons to be learned from this case and encourage best practice.

Ann Pope, CMA Acting Executive Director, Enforcement, said:

The CMA is keen to work with businesses across the property and newspaper publishing industries to explain the implications of this case and ensure they understand what they need to do to comply with competition law and can recognise where they may be at risk of breaking it.

The CMA has published a range of guidance to help businesses comply with competition law. In addition, we encourage businesses to have an effective compliance programme, including a clear and unambiguous commitment to competition law compliance from senior management. Businesses need to assess if they are at risk of breaking competition law and, if necessary, take steps to remedy the situation.

David Cameron announces plans to double free childcare for working parents, with some families set to benefit as early as next year.

• Parents set to benefit from 30 hours of free childcare, with rollout to start from 2016 – a year earlier than planned.
• Childcare funding rates to increase, with review promised before summer.
• New government taskforce will introduce changes as soon as possible.

The Childcare Bill, introduced 2 June 2015 will double free childcare available for all working parents of 3 and 4 year olds to 30 hours a week – available to up to 600,000 families and worth around £5,000 a year – including the £2,500 they can already save from existing free childcare offers.

And, in a move to underline the government’s commitment to support working families with the costs of childcare, plans are being drawn up to introduce the changes for some families a year earlier than planned, with pilots in some areas offering 30 hours worth of free places from September 2016.

On top of this, the government is also committing to increase the average childcare funding rates paid to providers (the hourly funding provided for each free place): the Department for Education is set to begin a review before summer, overseen by Childcare Minister Sam Gyimah.

A new government taskforce, headed by Minister of State for Employment Priti Patel, will also work to drive forward the plans and ensure not a moment is wasted in passing the benefits onto working families.

Communities Secretary Greg Clark is to announce landmark changes to spread home ownership to millions.

• Government confirmed in first Queen’s Speech measures including a ground-breaking Housing Bill
• Right to Buy to be extended to 1.3 million housing association tenants
• Sweeping new measures, including a Right to Build, to also boost house building

Communities Secretary Greg Clark said:

Our Housing Bill will offer over a million people a helping hand onto the housing ladder. That is what a government for working people is about – making sure people have the security they need to build a brighter future for them and their families.

The Bill includes a comprehensive range of measures to offer England’s 1.3 million housing association tenants the chance to benefit from the same opportunities council tenants enjoy, with significant discounts to buy their homes.

Receipts from selling an owner’s current property will help build replacement affordable homes on a one-for-one basis. This means the number of homes across all tenures will effectively double for each home sold, increasing national housing supply and creating a new affordable home for those in need from each sale.

First-time buyers will be further helped by plans to deliver 200,000 Starter Homes, which will be available at a 20% discount to first-time buyers under 40.

A ‘Right to Build’ in the Bill will also help increase housing supply and diversify the housing sector by giving people the right to be allocated land with planning permission for them to self-build or commission a local builder to build a home. Self-build delivers a majority of homes in many other countries and can act as a boost to smaller and medium sized builders.

The Bill will confirm housing as a priority for the government, and ensure home ownership is once again seen as an attainable aspiration.

 1 June 2015 – Due date for Corporation Tax due for the year ended 31 August 2014.

 19 June 2015 – PAYE and NIC deductions due for month ended 5 June 2015. (If you pay your tax electronically the due date is 22 June 2015.)

 19 June 2015 – Filing deadline for the CIS300 monthly return for the month ended 5 June 2015.

 19 June 2015 – CIS tax deducted for the month ended 5 June 2015 is payable by today.

 1 July 2015 – Due date for Corporation Tax due for the year ended 30 September 2014.

 6 July 2015 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

 19 July 2015 – Pay Class 1A NICs (by the 22 July 2015 if paid electronically).

 19 July 2015 – PAYE and NIC deductions due for month ended 5 July 2015. (If you pay your tax electronically the due date is 22 July 2015.)

 19 July 2015 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2015.

 19 July 2015 – CIS tax deducted for the month ended 5 July 2015 is payable by today.

A court order appointing a Provisional Liquidator was made by the High Court in March 2014 against Parkwell Investments Ltd, based in Wilmslow, Cheshire. The order removed the company’s officers and appointed a Provisional Liquidator in their place to protect the company’s remaining assets.

The company’s officers then deliberately and knowingly acted in contempt of court by transferring £450,000 out of the reach of the Provisional Liquidator.

The funds are now very unlikely to be recovered, a point which presiding Judge Mr Justice Norris took into consideration when sentencing. He said the company officers’ actions “were an affront to the rule of law and order”.

Amran Munir, Ali Sami Farooq, and Saif Chaudhry were each sentenced to six months’ imprisonment, of which three months is to be served in prison before being granted unconditional release. Unusually, the prison sentence was given in civil, rather than criminal, proceedings.

The individuals initially defended their actions but at the eleventh hour admitted to breaches of the court’s order.

Once you have registered your business for VAT the first thing you should consider is the possibility of reclaiming input tax on purchases of goods and services prior to registration.

 This article summarises the issues you will need to consider for the two categories: goods and services.

There’s a time limit for backdating claims for VAT paid before registration. From your date of registration the time limit is:

• 4 years for goods you still have, or that were used to make other goods you still have
• 6 months for services

You can only reclaim VAT on purchases for the business now registered for VAT. They must relate to your ‘business purpose’. This means they must relate to VAT taxable goods or services that you supply.

You should reclaim them on your first VAT return (add them to your Box 4 figure) and keep records including:

• invoices and receipts
• a description and purchase dates
• information about how they relate to your business now

If your pre-registration purchases and other costs are significant, this facility can produce a reasonable cash flow benefit. Please call if you would like our help to assess the possible claim you could make.

Pensions’ automatic enrolment is not going to go away. Businesses have begun to receive notification of their staging date: the date on which pension arrangement under the scheme should be in place.

 According to the Pensions Regulator’s commentary on automatic enrolment:

“The law on workplace pensions has changed. Every employer with at least one member of staff now has new duties, including putting those who meet certain criteria into a workplace pension scheme and contributing towards it.

This is called automatic enrolment. It’s called this because it’s automatic for your staff – they don’t have to do anything to be enrolled into your pension scheme. But it’s not automatic for you. You need to take steps to make sure they’re enrolled.”

The stages or tasks you will need to complete by your staging date include:

• Assessment of your workforce to see who is eligible.
• Provide a point of contact.
• Create an action plan.

 This will include choosing a pension scheme or checking that your present scheme will qualify.

If you are still unsure what you should be doing, we would be happy to point you in the right direction. As we mentioned at the beginning of this article, this requirement is not going to go away.

In order to process the Finance Bill 2015 through the parliamentary procedures before the recent election, certain clauses were deferred. It is likely that the deferred clauses will be reintroduced in the summer Budget, 8 July 2015.

 As announced, George Osborne will present his first Budget of the new parliament 8 July. The clauses that were deferred are:

• Tax exemption for travel expenses of members of local authorities.
• Consortium relief – the “link company” rules.
• Fuel duty incentives for aqua methanol.
• Exemption for trivial benefits in kind.
• Amendments to rules for the Enterprise Investment Scheme and Venture Capital Trusts.

 Speculations about other matters that may be included in a post election budget are rife and may include:

• The announcement of an increase in Inheritance Tax exemptions for married couples passing on the family home, to a possible £1m, and
• Loss of higher rate tax relief for pension contributions.

High street retailer Next has been hit with a £22.4m tax bill after a court ruled the firm’s complex tax scheme was artificial tax avoidance.

HM Revenue & Customs (HMRC) successfully challenged Next Brand Ltd, which is part of the well-known Next group, over its use of a tax avoidance structure known as a rate-booster.

The First-Tier Tribunal (FTT) ruled in HMRC’s favour after finding Next’s scheme artificially moved money around the group so they could try and claim tax relief on overseas profits.

HMRC’s Director General of Business Tax Jim Harra said:

This case shows how HMRC takes effective action against big businesses that try to avoid paying tax through convoluted, artificial avoidance schemes. HMRC expects all businesses to steer well clear of such schemes.

This is the second rate-booster case to reach the FTT after the tribunal ruled against P&O in 2013, who appealed and a decision is awaited.

About £130m in tax is at stake across 20 rate-booster cases, which were waiting on the P&O and Next decisions. Around 70 rate-boosters have already been conceded by companies rather than go to court, which has brought in more than £500m in tax.

Rate-booster schemes involve trying to avoid Corporation Tax on foreign profits that are paid back to the UK from a subsidiary.

The UK company receiving these profits gets credit for any foreign tax the subsidiary paid. The rules are designed to prevent companies being taxed twice on the same income and is known as double taxation relief.

Some companies set up artificial arrangements involving complex circular movements of money between companies in the same group so they can claim there has been double taxation.

Through these movements the companies claim far more tax had been paid on the overseas profits than was actually the case.

Legal changes in 2005 and 2009 mean rate-booster schemes are no longer possible or attractive.

No doubt we will see more high profile tax wins by HMRC in the coming months as the government continues its clampdown on corporate tax avoidance.

Sajid Javid set out his priorities for supporting Britain's small businesses last week. Here’s a summary of what he said:

Over the next 5 years, we’ll build on the success of ‘One in, two out’ to put a strict brake on new regulations. For the first time, the actions of regulators will be counted towards achieving the overall £10 billion in cuts.

This will be the first time in modern history that government has successively reduced red tape and continued with reductions in the next parliament.

And business will be our partner…giving us the evidence we need to roll back the state. One crucial aspect of this roll back will be the extension of the rule that is known as Primary Authority.

Primary Authority allows a business to get advice on regulation from a single local council. This advice must then be respected by all other local councils, thus reducing the time and cost to businesses of having to obey multiple masters. When Primary Authority came in, the purpose was to help larger firms trading nationwide. But it was so successful that we opened it to small business in 2013. Today, more than two-thirds of the businesses taking advantage of Primary Authority are small businesses.

It frees them from inconsistent and confusing red tape. It reduces their operational costs, and allows them to focus on expansion.

Thanks to Primary Authority, cheese makers don’t have to display their cheddar on wooden boards in one place and on steel platters in another. Yet only a tiny fraction of small businesses that could benefit are actually doing so. Accordingly, we’re going to simplify Primary Authority itself. 

And we’re going to extend its reach. There’s one more area I wish to cover this morning. It’s a subject that’s exercised me for some time.

There’s a situation familiar to small business owners up and down the country. A letter turns up from a larger customer changing payment terms, or charging them to remain a supplier, and in some cases even deducting that charge on the spot against payment owed.

This pattern of behaviour is an outrage. It’s bullying – pure and simple. In 2008, late payment alone cost British business £19 billion. This year, that’s set to exceed £40 billion. The average amount owed to a small business is more than £30,000. You know as well as I what figures like that can do to the cash flow of small businesses. It’s enough to force a company into insolvency.

We’ve not been blind to these issues.

During the last Parliament, we introduced legislation requiring the UK’s largest companies to report on their payment practices. That’s going to shine a light on poor performance when it comes into effect next April. Recent U-turns show that public scrutiny can make big firms mend their ways. We also strengthened the Prompt Payment Code to introduce a maximum 60 day payment term and promote 30 days as the norm.

Government has rightly been leading by example. We pay our suppliers within 30 days. We’ve brought in measures requiring all public sector contracts to pay out within 30 days, all the way down the supply chain.

Now, we’re going to widen the powers for representative bodies to act on behalf of their members to challenge grossly unfair payment terms. There’ll be a consultation on this later this year. And we will fulfil the manifesto pledge to set up a Small Business Conciliation Service to help small businesses settle their problems with large corporations.

The purpose is to avoid expensive legal costs and maintain business relationships by reaching mutually satisfactory agreements.

This model has worked in Australia. We will explore it, and other models, and find what works best here in the UK.