Archive for the ‘General’ Category

Personal circumstances should not affect Planning Approval

A Council has been criticised by the Local Government Ombudsman for a sympathetic approach to a planning application which involved an elderly and disbled person, stating that a Council's procedures should be adhered to and that personal circumstances should not impact. It will be interesting to see if this type of ruling might be challeneged in future inder the Equality Act or Human Rights legislation, both of which are having an increasingly significant legal impact.
The person who applied for permission to build the bungalow was elderly, disabled and owned a home which was susceptible to flooding. Melton Borough Council granted planning permission despite the objections of the owners of adjoining land and even though the application was contrary to the Council’s stated planning policies and went against the recommendation of the planning officer who had reviewed the application.
The Ombudsman ruled that the owners of the adjoining land should be compensated for the diminution in value of their property as a result of planning permission being granted and awarded an additional £500 for their time and trouble in raising the complaint.

Charity Trustees Given Financial Crime Awareness Warning

Charity Trustees have been reminded of the need to be aware of the possibility that their charity may be used for financial crime, with the National Fraud Authority estimating that annual losses to charities due to financial crime amount to more than 2 per cent of total income.
 
As the Charity Commission points out, ‘trustees have a legal duty and responsibility under charity law to protect the funds and other property of their charity so that it can be applied for its intended beneficiaries. They must also comply with the general law (and overseas law where applicable) including in relation to the prevention of fraud, money laundering and terrorist financing.’
 
The Charity Commission has therefore prepared a list of ‘ten top tips’ for charity trustees to ensure they are aware of the possibility and take appropriate steps to reduce the risk of financial crime.
 
These are as follows.
 
  1. Review your financial controls at appropriate intervals and do so critically, keeping them up to date. Just because you have not been a victim of fraud, do not assume that it will never happen;
  2. Segregate duties – do not allow one or two people to be in charge of all aspects of your charity’s financial controls without any checks being made;
  3. Make sure all of the separate parts of the financial records agree with each other. Always ask for and keep receipts. Reconciling bank statements with invoices, receipts, purchase and payment authorisations will often help to identify fraud at an early stage, and may discourage potential fraudsters;
  4. Never weaken your financial security for the sake of short cutting or time saving. For example, do not pre-sign blank cheques, even if a second signature is required. Doing so reduces your cheque security by 50 per cent –or, to put it another way, doubles the risk;
  5. Keep lists or registers of valuable fixed assets and key charity property, and periodically inspect them;
  6. Ensure that electronic or online banking arrangements are secure and are protected with dual-level authorisation;
  7. When recruiting staff – especially those who handle the charity’s finances – make appropriate background checks and take up references;
  8. If your charity makes grants to beneficiaries or other organisations, carry out appropriate due diligence checks on applicants. Guidance on this can be found at  ‘know your beneficiaries’;
  9. Ensure that as trustees you receive and consider regular reporting information about the charity’s finances. If you are a trustee or manager, make sure that you understand the financial summaries and reports that are presented to you, and if you do not, ASK for an explanation that you CAN understand; and
  10. If you suspect or become aware of fraud, make sure that you know what to do and who to inform. Make sure it is part of the culture of your charity. Prompt and appropriate action will help to protect your charity and limit any financial damage.
 
If you have concerns about how a charity of which you are the trustee is being run, contact us for advice.

No-Shows – ECJ Rules No Vat Due

A recent decision of the European Court of Justice will come as good news for hard-pressed hoteliers and has led to HM Revenue and Customs issuing new guidance on deposits.

hotel 1
The decision confirms that there is no relationship between a deposit taken and the supply of a standard-rated service. Accordingly, therefore, where a deposit has been taken for a hotel booking and retained because the person making the booking is a ‘no-show’, there is no need to account for VAT on the deposit.
 
However, if the deposit is made for a specific room which is therefore kept vacant, the supply remains one on which VAT is due.
 
Hotel owners can reclaim VAT overpaid as a result for the past four years only. In addition, hoteliers will want to consider their terms and conditions to ensure they are VAT efficient.

If it is in the Sky, It is Weather!

Plane on runway

The Financial Services Ombudsman has refused to refer a test case involving a travel insurance claim to the court in order to determine whether the volcanic ash cloud which caused so much disruption to European aviation in 2010 was not covered by the phrase ‘poor weather conditions’.
 
Most travel insurance policies contain limitations in cover which exclude or limit claims resulting from ‘acts of God and those relating to areas where there is civil unrest or war or to which travel is undertaken when the Foreign Office has advised against it. Normally, they allow a claim to be made where it results from adverse weather conditions.
 
The case involved a woman whose claim was refused by the insurer, which argued that it was not covered by the clause that allowed a claim to be made when the travel disruption resulted from adverse weather conditions. She appealed to the Ombudsman.
 
The ombudsman concluded that it was not a suitable case to refer to the court as a test case and made an award to the claimant.

Two Flats are Not a Residence

When a family is being housed, the provision of separate, self-contFlats and dangerained flats with no common living areas does not mean that accommodation had been made available such that the members of the applicant’s family could ‘reside together’ in the ordinary meaning of the phrase. 

First Company Convicted of Corporate Manslaughter Loses Appeal

diggerCotswold Geotechnical Holdings Ltd., which became the first company to be convicted of corporate manslaughter (under the Corporate Manslaughter and Corporate Homicide Act 2007) in February of this year, has lost an appeal against its conviction.
 
The company was convicted following the 2008 death of geologist, Alexander Wright, 27, who died when a trench he was working in collapsed. 

Banks Give in Over PPI

Payment Protection Insurance (PPI), which was sold aggressively by many of the clearing banks during the debt boomCommercial property 1110 of the 1980s and 1990s, has led to large provisions being made for losses as the banks have abandoned attempts to fight mis-selling claims.
 
Thousands of customers w ere sold PPI policies, which undertook to cover loan repayments on lo an in the event that the borrower became unemployed or fell ill and was unable to make the repayments. The policies were extremely profitable for the banks because the claim rates were very low and the policy costs were high.
 
However, following widespread complaints and successful litigation, the banks have abandoned their struggle and have earmarked more than £5 billion to meet claims.
 
 

Who is a Member of a Company?

Keeping company records up to date is not always a top priority for the directors of smaller companies. However, failing to keep the shareholders’ register up to date can have a downside if a share transfer has occurred but the new owner’s name is not entered into the register of members.

 
The problem is that under the Companies Act 2006, except in very limited circumstances, the person shown as a member in the register of members is a member and a person not shown isn’t – until the register is rectified.
 
This can have practical effects such as making notices of meetings invalid, invalidating votes of shareholders and so on and can affect, as it did in a recent case in the Supreme Court, whether or not one retains the rights attaching to shares transferred for financial purposes into the names of nominees.
 
Contact us for advice on company secretarial and company law matters.
 

More Businesses ‘Critical’

SaleThe number of businesses in the UK which are suffering from ‘significant’ or ‘critical’ financial problems on the first quarter of 2011 has risen to 186,000, according to a report by insolvency specialists Begbies Traynor. This is an increase of 26 per cent over the figure for the third quarter of 2010 and is 15 per cent more than the same quarter in 2010.
 
Another report shows a 4 per cent jump in the number of retail businesses at ‘high risk’ of insolvency and there has also been a 15 per cent increase in the number of retails using company voluntary arrangements compared with 2010.A report by accountants PwC also revealed an increase of more than 12 per cent in corporate insolvencies with retailing the worst-hit sector.
 
Things are tough in retailing and the building industry was recently identified as having had a particularly bad winter.
 

For advice on managing your trade risk, contact us.

Biker Parking Challenge Fails

A motor cycle rider who  challenged Westminster Council over parking charges for motor bikes and then pursued it all the way to the Court of Appeal has seen it rejected.
Motorbike1
Warren Djanogly claimed that the introduction of roadside parking charges by the Council, by an order made in 2010, was invalid.
 
Unfortunately for him, the Court ruled that the achievement by the Council of a traffic management benefit through the introduction of the parking charge was sufficient to make the order legitimate.