Author: Glenn

A recent case [London United Busways Ltd. (LUB) v De Marchi and Abellio London [2024] EAT 191] revealed the complexities of working under the Transfer of Undertakings (Protection of Employment) Regulations 2006, or TUPE.

A Mr. De Marchi had been working as a bus driver for two decades by LUB from his local bus depot, even though his contract contained a clause to the effect that employees may be expected to work at any of the depots across London. After LUB lost its tender for his route, his employer elected to exercise this right of transfer, unless the employee objected by a specified deadline under Regulation 4(9). Given the options to transfer, resign or object, Mr. De Marchi objected to his transfer and requested redundancy, as the new depot was over an hour from his domicile. As this was not one of the three alternatives, LUB rejected his approach, and Mr. De Marchi took a leave of absence suffering from stress and anxiety as he had been informed that, if he failed to sign a new contract by the deadline, his employment would effectively be terminated.

Mr. De Marchi failed to respond and later brought a claim for unfair dismissal against the transferor. The tribunal found that, while the employee may object to becoming employed by the transferor under Regulation 4(7) of TUPE, the effect of that objection is to preclude the transfer of his contract and any of the rights and obligations under Regulation 4(2) of TUPE.  However,  Regulation 4(8) TUPE operates to terminate the contract with the transferor to the detriment of the employee.

This ruling serves to provide useful guidance in terms of who is liable. If the objection occurs before the transfer, then the liability falls on the transferor. However, if the employee does not object to the transfer in a timely fashion and then tries to argue Regulation 4(9), then the liability falls on the transferee. It is thus advisable to seek legal advice before transferring employees to other positions or locations.

The UK's Competition and Markets Authority (CMA) has initiated its new digital markets competition regime, effective from January 1, 2025, following the Digital Markets, Competition and Consumers Act's Royal Assent in May 2024.

Strategic Market Status (SMS) Designations

Under this regime, the CMA can designate firms with "Strategic Market Status" (SMS) concerning specific digital activities. This designation applies to companies with substantial and entrenched market power, allowing the CMA to impose conduct requirements or introduce pro-competition interventions to enhance outcomes for UK consumers and businesses.

Upcoming Investigations

The CMA plans to launch SMS designation investigations in three digital activity areas within the first six months of 2025. The initial two investigations are scheduled to commence in January, with details forthcoming later this month. A third investigation is anticipated towards the end of this period, allowing the CMA to manage resources efficiently and minimize stakeholder burden. Each investigation has a statutory completion timeline of nine months.

Commitment to Fair Competition

Sarah Cardell, Chief Executive of the CMA, emphasized the regime's role in balancing investment and innovation benefits from large digital firms with ensuring a level playing field for UK tech start-ups and scale-ups. The regime aims to foster more innovation, choice, and competitive pricing for UK businesses and consumers.

Guidance and Stakeholder Engagement

The CMA has published guidance detailing its approach to the new regime, including an 'explainer' guide for businesses, advisors, and stakeholders. This initiative underscores the CMA's commitment to transparency, proportionality, and predictability in enforcing the new regulations.

International Context

The UK's approach aligns with global trends in regulating digital markets. For instance, the European Union's Digital Markets Act enforces similar regulations to ensure fair competition among digital platforms.

The CMA's proactive measures reflect a commitment to fostering a competitive digital economy, ensuring that dominant market players do not stifle innovation or consumer choice. As the regime unfolds, its impact on the digital marketplace will become more evident, with the potential to set precedents for digital market regulation globally.

The UK government has unveiled a series of proposals aimed at curbing exploitative practices in the ticket resale market, seeking to protect consumers from exorbitant prices and enhance transparency in ticket sales.

Key Proposals:

• Capping Resale Prices: The government is considering implementing a cap on ticket resale prices, potentially limiting them to the original face value or allowing a maximum increase of up to 30%. This initiative aims to prevent professional touts from purchasing large quantities of tickets and reselling them at significantly inflated prices, a practice that has frustrated fans and hindered fair access to events.
• Limiting Ticket Quantities for Resale: To further deter large-scale touting, there is a proposal to restrict the number of tickets an individual can list for resale to the maximum number permitted per purchase in the primary market. This measure seeks to prevent organized groups from monopolizing ticket availability and profiting unfairly.
• Enhancing Accountability of Resale Platforms: The government plans to introduce stricter regulations for ticket resale websites and applications, ensuring they provide accurate information regarding ticket prices and availability. This move is intended to increase transparency and protect consumers from misleading practices.
• Stricter Penalties and Licensing Requirements: The proposals include the possibility of imposing tougher fines and establishing a licensing regime for resale platforms that violate ticketing rules. Currently, penalties for such breaches are limited, and the government aims to introduce more stringent consequences to deter malpractice.

These measures are part of a broader effort to address concerns raised by consumers and industry stakeholders about unfair practices in the ticketing market. The Competition and Markets Authority (CMA) has previously highlighted issues such as significant mark-ups on secondary ticket sales, with some tickets being resold for up to six times their original price. Research indicates that such practices cost music fans an estimated £145 million annually.

Planning to sell your business or shares? Capital Gains Tax rates for Business Asset Disposal Relief (BADR) are set to rise from 10% to 14% on 6 April 2025, and to 18% from 6 April 2026. Selling before these dates could result in significant tax savings.

Business Asset Disposal Relief (BADR) applies to the sale of a business, shares in a trading company, or an individual’s interest in a trading partnership. When this relief is available, a reduced Capital Gains Tax (CGT) rate of 10% is currently applied instead of the standard rate, potentially resulting in significant tax savings for those exiting their business.

It is important to note the future increases in the CGT rate for BADR that were announced as part of the Autumn Budget measures. The CGT rate for BADR will increase to 14% for disposals made on or after 6 April 2025. A further increase to 18% will apply for disposals made on or after 6 April 2026.

For business owners contemplating an exit strategy, the coming months might be an opportune time to consider selling before the upcoming changes take effect on 6 April 2025.

Currently, you can claim a total of £1 million in BADR over your lifetime, allowing you to qualify for the relief multiple times. The lifetime limit may be higher if you sold assets before 11 March 2020. No changes were made to this lifetime limit in the recent Budget.

The lifetime limit for Investors’ Relief was reduced in the Autumn Budget to £1 million (from £10 million) for qualifying disposals made on or after 30 October 2024. The CGT rates for Investors’ Relief mirror those for BADR.

Are you a landlord? Maximise your rental income by knowing which expenses you can claim to reduce your tax bill. From maintenance costs to Replacement of Domestic Item Relief, understanding allowable deductions is key to smart property management.

If you are a landlord, it is important to be aware of the expenses that can and cannot be claimed from rental income. As a general rule, allowable expenses must be wholly and exclusively for the purpose of renting out the property. In some cases, a proportion of expenses can be claimed if part of the expense relates to the property business.

Common types of deductible revenue expenditure include:

• General maintenance and repairs to the property (but not improvements).
• Water rates, council tax, gas, and electricity.
• Insurance costs.
• Letting agent and management fees.
• Qualifying legal and accountancy fees.
• Direct costs such as phone calls, stationery, and advertising for new tenants.
• Vehicle running costs (only the proportion used for the rental business), including mileage rate deductions for business-related motoring costs.

Additionally, the Replacement of Domestic Item Relief allows landlords to claim tax relief when replacing furniture, furnishings, appliances, and kitchenware in a rented property, provided certain conditions are met.

Landlords should also keep a record of any capital expenditure incurred on investment properties. These expenses cannot be claimed as revenue expenditure against rental income but can usually be offset against Capital Gains Tax when selling a property.