Pubs Code timings – Jan 2021.

An update from the Pubs Code Adjudicator’s office

Following the announcement about a national lockdown in England from 06 January 2021 and in addition to the national restrictions in Wales, the PCA has been contacted by the Pub-Owning Businesses (POBs) and been told their furlough arrangements mean that they either cannot (or may not be able to) comply with all of their Pubs Code duties in respect of serving compliant Rent Proposals, Rent Assessment Proposals (RAPs) and Market Rent Only (MRO) full responses during the new national restriction period.

In light of this, the PCA has agreed to restore the Declaration agreement initially for the period covered by the restrictions from 6 Jan 2021 until 31 March 2021 – this in effect suspends all timings under the code related to the service of rental offers and requests. Those tenants at Independent Assessment are not affected, the new declaration does not apply.

The full announcement on the lockdown can be read on the Pubs Code Adjudicators website here

If you need advice on the code contact us here

Further, the PCA has also published an open letter to all Tied Pub Tenants see our other blog HERE

The long-awaited judgement for the appeal of the Financial Conduct Authority (FCA)’s test case on business interruption insurance will be handed down on Friday, January 15, 2021 at 9.45am via live video link.

Link to the Supreme Court news pages are here

The hand-down(s) will be streamed on Supreme Court Live but will then be made available later on the Supreme Court’s video on demand service.

Beer Ties can be broken by using the pub’s code,

Tied pubs can have a market rent only agreement (MRO) and go free of tie, but tenants need to know their trigger opportunities to get an MRO offer.

Most triggers to going free of tie are unforced, that is to say, they occur contractually or with the passing of time e.g. at rent review, lease renewal, 5 years after concluding the last rent.

Other ways to trigger your right to a market rent are “forced”, that is to say, if you can find fault in previous rent offers you can have the offer remade or if the pub’s trading situation changes.

In a recent award published on the Pubs Code Adjudicator website, PAS represented an EI Group tenant whose previous rent assessment was riddled with faults and non-compliant. With our expert help, they got a new offer which re-triggered their MRO – see points 152 and 163 of the award. Download a copy here Quarter_3_2019_9_Statutory_Arbitration_Award_1_CLATWORTHY

Aside from finding faults in tied rent offers you may be able to use the downturn in trade to “force” trigger MRO too, see our service here

If you would like us to force an MRO trigger for your pub contact us here

A recent article by an award-winning journalist outlines the opportunity to force an MRO, as we said in the article there has never been a more “fertile” chance to break the tie, this moment is more about the long-term survival for many in the U.K. pub industry.

Read the full article from Jonny Garrett in Good Beer Hunting here

IR35 Reforms and Off-Payroll in Pubs

In April 2021 the HMRC rules are changing, this is expected to have a huge effect on employment practices in the pub’s sector, especially where a pub manager is a self-employed contractor (say) supplying staff or labour often via a small limited company – or personal service companies (PSC).

Those who are not genuinely self-employed will no longer be able to be off payroll and supply services to pub companies or landlords after April 2021. They will either have to become employed or stop working. It is not going to apply to tenants and lessees who rent pubs.

The data from the HMRC indicate the majority of small company service set-ups are not genuine self-employment and will fall foul of the new rules, the big change is that any company caught hiring “workers” under arrangements that fall foul will be fined from April onwards.

The change in April 2021 pushes the liability from the “worker” to the “hirer”, however, IR35 industry experts expect that there could well be investigations into all previous periods once they get the list of names from the companies. Worryingly high court cases against BBC TV presenters and Ryan Air pilots (who set themselves up as self-employed contractors) show that the liability falls fully on the individual “worker” and not the “hirer” for arrangements prior to April 2021. Workers in those cases were unsuccessful in blaming the hirers for their predicament (some said they were forced by the BBC into creating limited companies or would lose their jobs) and instead were left with large sums and fines owing to the HMRC. After several waves of test cases it is feared HMRC could target those in the low-paid sectors.

The HMRC expects to recoup over £100m per month by ending what has been dubbed “disguised employment” or “sham self-employment”.

IR35 tax reform – what is it?

It was unveiled in 1999, the measure came into effect in the public sector in 2017 the change is now being rolled out to the private sector and will force medium and large businesses in the UK to set the tax status of their contractors and freelancers (which was previously set by the contractors themselves). Contractors found inside IR35 will have to pay more tax than they might expect, many people will have to change status and become employed – though this is not a bad thing as they will then get employment rights such as minimum wages, overtime, pensions and holiday/sickness pay.

The reforms are the biggest crackdown yet on workers who behave as employees but avoid regular income tax and national income contributions by billing “hirers” through personal service companies (PSCs), which are taxed at (lower) corporate rates.

What can publicans do about IR35?

Check your status with the HMRC here

Find out more, speak to your “hiring” company and ask them if you will be employed after April 2021, and if not why not – get responses in writing.

If you are a self-employed contractor in the pub’s trade are worried or being offered an employment contract and need advice please drop us a line here

 

The bill to help Scottish tied pubs go free of tie has passed stage 1 with a unanimous vote you can see the historic vote below.
Scottish Government backed the bill as did all the major parties – the plight of tied pubs has become a truly cross-party issue.

Reform is intended to deliver a right for tied publicans to go free of tie on demand, key policies to fair and lawful dealing, to be no worse off, and to rebalance risk and reward for tenants.

If you wish to watch the whole debate see further down the page.

Huge thanks for all the help and support in making this happen.

Minister Jamie Hepburn MSP

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Whole Debate here

See our dedicated page for Scotland here