CreditFILE August 2011
Brethertons Solicitor Receives Insolvency Practitioner’s Association Honour
Edward Bible, Head of Brethertons Insolvency Department, has been appointed as Vice President of the Insolvency Practitioners Association. Edward will become President of the Association in 2012.
The
Insolvency Practitioners Association promote and maintain standards of performance and professional conduct amongst those engaged in insolvency practice. They look to encourage a wider knowledge and understanding of insolvency within and outside the insolvency profession through access to their examinations, qualifications and membership and through exposure and discussion of insolvency issues which affect the profession, its stakeholders and the general public.
Edward explains: “I am delighted to have been appointed as Vice President of the Insolvency Practitioners Association, which is one of the governing bodies of the insolvency profession. I hope to be able to make a worthwhile contribution during my year as Vice President and look forward to my Presidency in 2012”.
Brethertons Senior Partner, Richard Pell says: “We are delighted with Edward’s appointment within the Insolvency Practitioners Association. We wish him all the best during his year as Vice President and as President in 2012”.
Brethertons Lawyers Promoted
Brethertons is pleased to announce that a number of its senior lawyers have been promoted to associates, including Jackie Ray, a Fellow of the Institute of Credit Management. It is always worthwhile recognising key employees who contribute to the success of the business, as without them the business can suffer both in terms of service delivery and continuity. Shaun Jardine said of the announcement: “My partners and I were delighted that Jackie accepted the invitation to become an Associate at Brethertons. Jackie is a valuable member of the firm and heads one of our largest teams.”
Commercial Recoveries – New Team Photo Available Soon!
The team photo has finally been updated! As one of the fastest growing teams at Brethertons, as soon as the photograph has been taken another person joins the team! However, one of our team was unavailable for the ‘shoot’ and has been added by editing the photograph. There is a £10.00 Marks & Spencer Gift Voucher available for the first person spotting who has been ‘ghosted’ in. The photograph will be released shortly so keep watching the
website.
Free Legal Review
In these increasingly challenging times for businesses, ensuring your credit control policies, procedures and terms and conditions of trading are as effective as possible is essential. Brethertons is offering businesses a free review of your internal credit policy and supporting documents to help your business avoid costly mistakes. The review process is totally free of charge, and can even be done remotely using our webinar technology.
For more information, download our
flyer. If you would like to take advantage of the free review, complete and return the flyer to Jackie Ray, Head of Commercial Recoveries at Brethertons LLP.
Bribery Act Guidance Published
The Government has now published final guidance for businesses on compliance with the Bribery Act 2010. The implementation of the Act, originally scheduled for April this year, was delayed to allow time for the guidance to be finalised. The Act came into force on 1 July 2011.
Section 7 of the Act makes it an offence for a commercial organisation to fail to prevent bribery. A business can provide a defence by showing that it had in place adequate procedures to prevent bribery from taking place, and the guidance details the approach that should be taken when implementing such procedures. The overriding point is that these should be proportionate in view of the likelihood of bribery occurring, which will depend on the size of the business and the countries and markets in which it operates. Although the principles remain similar to those in the draft guidance, published in September 2010, the advice in the final version is more detailed.
Section 14 of the Act provides that where an offence is committed with the consent or connivance of a senior officer of an organisation, that person (as well as the body corporate or partnership) is guilty of the offence and liable to be proceeded against and punished accordingly.
Under Section 11 of the Act, the maximum penalty for individuals is 10 years’ imprisonment or an unlimited fine, or both. The maximum penalty for commercial organisations is an unlimited fine.
For more information on the Bribery Act, and how it affects you, download our
fact sheet.
Economic Upswing No Reason to Abandon Good Credit Control
The faltering steps the economy is taking towards recovery seem to be breeding a degree of overconfidence on the part of some businesses, but there is no reason to abandon good credit control practice. According to a recent report from Creditsafe, more than half of UK firms have suffered losses in the last year because they either neglected to do their homework on those with whom they were forming contracts or failed to attend to contract formalities. A substantial minority also entered into contracts with customers who subsequently proved unable to pay for the goods or services provided.
Other recent surveys report that more than a quarter of businesses say they are experiencing cash-flow difficulties and nearly half admit to having worries about their ability to service their debts. At the same time, the indications are that both HM Revenue and Customs and the banks are taking a hard line with businesses experiencing financial problems.
The most dangerous phase in the credit cycle is when the economy is beginning to grow again. It is good business practice to ensure you take steps to minimise your credit risk.
Problems with Insolvent Landlords
It is not only tenants that go broke: increasingly, overstretched landlords are in danger of becoming insolvent.
If you are a commercial tenant and have a rent review coming up, it makes sense to do some research into your landlord’s finances and to make sure that you protect your position if necessary.
If you have paid a rent deposit and it is not legally separate from the landlord’s other assets, it may be lost if the landlord becomes insolvent. Check your lease. It may be possible to persuade your landlord to refund the deposit or to agree to vary the lease to allow the deposit to be protected.
If the landlord fails to comply with its covenants, it is possible that the breach may be sufficiently serious to allow you to repudiate the lease, should you so wish.
Another common problem arises where the insolvent landlord is itself a tenant and defaults on its covenants with the head landlord. If this results in the forfeiture of the landlord’s lease, this could lead to the loss of the right to occupy the premises.
If you have concerns about what your position would be in the event of the insolvency of your landlord, we can advise you and assist in any necessary negotiations.
Statistically Invalid Estimate Still Enforceable, Rules Tribunal
When it comes to contesting tax assessments, the playing field is far from level, as a recent VAT case shows.
HM Revenue and Customs (HMRC) made assessments on a trader based on discrepancies between recorded sales and cash in the tills on two visits. The assessments were made to cover a six-year period.
In appealing against the assessments, the trader obtained an expert report from a statistician, who gave evidence that to extrapolate from such a small amount of data in the way HMRC had done was statistically invalid.
The First-Tier Tribunal rejected the trader’s claim and an appeal was made to the Upper Tribunal on the ground that the First-Tier Tribunal had ignored the expert evidence. The Upper Tribunal rejected that assertion and dismissed the appeal. The Tribunal was entitled to prefer HMRCs evidence, which was that their estimate was based on the evidence available to them, despite the fact that this was not statistically valid.
