Government measures in key jurisdictions 3rd edition final - Flipbook - Page 141
UnitedKingdom
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Many business tenants are now able to open their doors to the public, although some
remain closed. Aside from the legislation above and absent any
other intervention, leases will continue and the obligations on tenants will carry on as before.
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Despite many business tenants being able to open again, there may still be significant financial
problems. The most practical route for the majority of tenants will be some form of
temporary adjustment to the rent payable under the lease, from a switch from quarterly
to monthly rent payments, to a rental holiday or deferment or even a full rent-freeperiod.
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Landlords in the UK are being encouraged to approach negotiations with a degree
of flexibility. The government has published a Code of Practice to help landlords and tenants to
work together which can be viewed here.
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A number of practical tips for both landlords and tenants is here.
Litigation
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In the England and Wales, with the help of some technological innovation such as the use of video
conferencing tools, the civil courts are operating largely ‘business as usual’.
Are the courts
operating?
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On 19 March 2020, the Business and Property Courts of England and Wales issued a protocol
regarding remote hearings, providing that remote hearings should take place wherever possible.
Where a remote hearing is not possible, then the Court has only two solutions: (1) proceed with
the matter in court; or (2) adjourn because a remote hearing is not possible. The protocol
emphasises the need for the court and parties to be proactive in relation to forthcoming hearings.
Subsequent guidance from the senior judiciary and from case-law has been consistent that
remote hearings are to be the norm for the foreseeable future wherever possible even in
more complex cross-jurisdictional cases. To find out more information, see here.
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Similar methods are being employed to deal with arbitration hearings. To find out more
information, see here.
Tax
Has any new
legislation been
introduced in light of
Covid-19?
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The cash grants being offered under the UK Government’s Coronavirus Job Retention Scheme
mentioned is closely linked to HMRC’s existed pay-as-you-earn (PAYE) tax withholding system.
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Payments of VAT for the period from 20 March 2020 until 30 June 2020 may be deferred until
April 2021, regardless of the type or size of business, although the VAT returns must still be made.
However, VAT refunds and reclaims will be paid by HMRC as normal to aid businesses’ cashflow.
HMRC will also consider extending payment deadlines for customs duty and import VAT on a
case-by-case basis for importers facing severe financial difficulties as a direct result of Covid-19.
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Income tax self-assessment payments for the self-employed, including individual partners in
partnerships, that are otherwise due on 31 July 2020 will also be deferred until 31 January 2021.
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All businesses in the hospitality and retail sectors irrespective of their rateable value are
exempted from paying business rates this tax year.
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A £25,000 grant will also be available to businesses with smaller retail, hospitality and leisure
premises that have a rateable value between £15,000 and £51,000.
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There is also a support package for self-employed individuals who make profits of up to
£50,000 a year and who will be entitled to a taxable grant worth 80% of their
average monthly profits over the last three years, up to £2,500 a month for 3 months.
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Coronavirus and the UK tax system
Government measures in key jurisdictions
141