Regulatory

New sentencing guidelines 

The Sentencing Council (SC) published the new sentencing guidelines for health and safety offences which came into effect on 1 February 2016 and apply retrospectively. There may be a number of instances where those rules could have a direct impact on your business. The most important changes made are:

  • The new guidelines apply to health and safety offences committed by organisations and individuals, as well as to corporate manslaughter and food safety/hygiene offences.
  • The measures of culpability for individuals for health and safety offences have been changed to mirror those of organisations.
  • Fines for health and safety offences increased significantly and it is expected that imprisonment will follow the breaches.

London’s Safer Lorry Scheme 

The scheme introduces a requirement for lorries to be fitted with basic safety equipment and operates across the same area as the low emission zone.

All the vehicles over 3.5 tonnes will be caught by the new rules. The vehicles need to have the class V (5) and VI (6) mirrors fitted and the side guards between the front and rear axles. 

Compliance issues for employers – operator licence holders have to comply with these regulations. Companies will have to put adequate measures in place to ensure compliance. 

Clandestine entrants into the UK

Businesses need to be aware of the requirement to put in place a voluntary code of practice stipulating what is expected of drivers and hauliers in preventing the carriage of clandestine entrants into the UK. There are currently penalties for carrying clandestines into the UK. 

Containers’ Weight 

SOLAS (Safety of Life At Sea convention) Chapter VI Regulation 2 has been amended with regards to the process of weighing up containerised cargoes and declaring those weights. The amendment became legally binding as of 1 July 2016. Two permissible methods of weighing the containers are:

  • Weighing the packed container using calibrated and certified weighing equipment
  • All packages and cargo items to be packed in the container, adding the tare mass of the container to the sum of single masses, using a certified method provided by the UK Maritime and Coastguard Agency

Consultation

The government is due imminently to unveil the results of its consultation on higher penalties for handheld mobile phone use and it seems likely it will announce that the minimum fine will increase from £100 to £150 and three points will rise to four for non-HGV drivers and from three to six points for HGV drivers.


Employment Issues

National Living Wage

The Government's National Living Wage was introduced on 1 April 2016 for all working people aged 25 and over, and is set at £7.20 per hour, rising to £9 by 2020. The current National Minimum Wage for those under the age of 25 still applies. This is unlikely to have a significant impact on drivers’ wages but it will be applicable to those employees in lower paid roles.

Holiday pay

The law in relation to holiday pay, and in particular what should be included in holiday pay, has evolved in recent years. A recent decision of an Employment Tribunal, whilst only a first instance decision, adds further guidance to employers assessing what must be taken into account when determining the amount of holiday pay.

In Brettle –v- Dudley Metropolitan Borough Council a group of 56 claimants brought claims for unlawful deductions from wages in respect of under paid holiday pay. The claimants argued that voluntary overtime, voluntary standby allowance and voluntary call-out payments should have been factored into holiday pay calculations.

The Tribunal relied upon previous case law to find that what is normally received constitutes “normal pay” and the regularity and consistency of the payments led the Tribunal to conclude that they were intrinsically linked to the employment. Accordingly, the payments were to be included in calculation of holiday pay.

This decision is a reminder to employers that holiday pay should, in effect, “mirror” what the normal pay is. 


Gender Pay Gap reporting

Compulsory gender pay reporting has been introduced for private sector employers in the UK with at least 250 employees.

Employers will be required to publish their mean and median overall pay for each gender and all reports must contain a statement confirming that the information is accurate before being published on the organisation’s UK website in a manner that is accessible to all employees and the public.

All applicable employers will need to take a snapshot of their gender pay data in April 2017 and annually thereafter.

The headlines suggest that employers do not need to focus on this until 2018; we on the other hand believe you should start planning now.

The risk of reputational damage arising from negative publicity over gender pay gap issues and employment relations risks will be significant for businesses despite the absence of sanctions in the proposed legislation.


Taxation

Trade in Services Agreement (TiSA) negotiations

TiSA is a trade agreement currently being negotiated by 23 members of the WTO (who account for 70% of the world trade participants) including the EU. 

TiSA is based on the WTO’s General Agreement on Trade in Services (GATS). The talks are based on the proposals made by the participants and concern areas like licensing, financial services, e-commerce and maritime transport. 

There is no set deadline for negotiations to formally end; however, given the importance of the potential changes, it is vital for business to monitor the developments. 

Budget 2016
 

  • The rates of Insurance Premium tax have risen from 9.5% to 10%.
  • The Climate Change Levy on electricity, gas, LPG and solid fuels supplied to businesses and public sector consumers will increase from 2019.
  • The difference in rates between electricity and gas is at an electricity to gas ratio of 2.9:1 and this will be adjusted to 2.5:1.
  • CCL rates for LPG and other taxable fuels will also be increased in proportion to the rate for gas.
  • A new Apprenticeship Levy is to take effect from April 2017.
  • The measure will apply to employers with a pay bill of more than £3 million each year.
  • The levy will be charged at a rate of 0.5% of the company’s annual pay bill. There will be a levy allowance of £15,000 per year to offset against the levy charged. (This means the levy will only be payable by a company if its pay bill exceeds £3 million in a given year.)
  • In England, employers will receive a 10% top-up to their monthly levy contributions and this will be available for them to spend on apprenticeship training through their digital account

New proposals for lorry driver funding support

The government has announced that a new scheme will be introduced in April 2017 that provides funding for apprentice lorry drivers and the cost of licence acquisitions.

The measure applies to LGV drivers, warehouse operatives and logistics and supply chain operators. 

The latest press releases suggest a company could receive up to £4,500 per apprentice with an additional £2,000 for 16–18 year olds, though these amounts will vary according to the size of the company and the levels of its co-investment.

HMRC change to overnight allowance

HMRC had announced that, with effect from April 2017, new requirements will be imposed on hauliers that are currently paying an agreed overnight fee of £26.20. This change was not, however, ratified by Parliament in the Finance Bill 2016 as was expected. There is no indication of when the new requirements will be implemented (if it all). 

If the requirements are ratified: 

  • Hauliers are expected to be required to get an agreement from HMRC to make an overnight allowance payment tax and NI free. The RHA had advised its members to seek clarification in writing from their local office with regards to the specificity of the checks to be undertaken.
  • Hauliers may also be required to carry out random checks on their drivers that expense is being incurred.


Potential changes to Tonnage Tax flagging test

An update from the Chamber of Shipping in May 2016 suggested that HMRC is considering changing the way in which it notifies taxpayers on whether the tonnage tax flagging test applies in particular financial years.

Rather than publishing a Revenue & Customs Brief for the financial year (as is current practice) HMRC would include in their Tonnage Tax Manual a list of financial years in which the flagging test applies, and would update this list annually. 

Litigation

Excise Duty 

A haulier may be held liable for unpaid excise duty on goods carried in certain circumstances. 

This was confirmed on 26 August 2016 in the first-tier- Tribunal (Tax Chamber) case of Urbanczyk v Revenue and Customs Commissioner. In that case, 885,000 cigarettes were 

found concealed in hollowed out pallets and HMRC had sought the unpaid excise duty and a penalty from the haulier. Generally speaking a haulier is considered to be “holding” goods intended for delivery so as to trigger a liability for excise duty under the Excise 

Goods (Holding, Movement and Duty Point) Regulations 2010 reg. 13, if he makes delivery of the goods or holds the goods for delivery. 

However, where a haulier is an entirely innocent party who did not know and could not have known that that he was in possession of goods liable to unpaid excise duty he may not be liable to pay. In this case, however, the Court found that the haulier was liable for the excise duty and the penalty payment requested from HMRC as he should have been aware from the circumstances of the order that the cigarettes had been present. 

Rent Apportionment 

In Marks and Spencer plc v BNP Paribas Securities Services Trust Company the Supreme Court found that rent is not apportionable on termination of a lease unless there is a specific clause in the lease allowing for it. This means that if a tenant exercises a break clause part way through a rental period and has paid rent in full (which is often made a condition of the break), then the tenant is not entitled to reimbursement and will effectively have to pay for the whole period, including the days after the lease has ended.