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Changes to zero-rating of new buildings for relevant charitable or relevant residential use
On 1 July 2009, HMRC announced that it is effectively changing its concession on the zero-rating of buildings used for "relevant charitable purposes" so that at least 95% of the building must be used for those purposes in order to qualify for zero-rating. The current concession, which is available until 30 June 2010, is based on at least 90% use for those purposes.
Estate agent's commission: was a share purchase a "purchase of the property"?
The High Court has recently considered the meaning of an estate agency agreement (agreement) which provided for a payment of £2 million commission to the agent when the buyer completed a purchase of "the property".
The transaction was restructured from a straightforward property sale to a share sale.
The High Court held that, although the agent had "introduced" the buyer within the meaning of the agreement, no commission was due to the agent as the share purchase was not a purchase of "the property".
Estate agents should ensure that their agreements are clearly worded so that their commission entitlement is not affected by how the deal is structured.
Legislation Updates
Business Rate Supplements Act 2009
The Business Rate Supplements Act 2009 (BRSA 2009) received Royal Assent on 2 July 2009. The BRSA 2009 gives levying authorities a discretionary power to impose a supplement, on non-domestic ratepayers, of up to two pence per pound of rateable value. The revenue raised must be used on projects that promote local economic development. The BRSA 2009 has not yet been brought into force, but the Government can do so at its discretion.
Flood and Water Management Bill
The Department for Environment, Food and Rural Affairs and the Welsh Assembly Government have issued a consultation paper on the draft Flood and Water Management Bill. The consultation paper also seeks views on various policy matters which have not been dealt with in the draft Bill.
The draft Bill covers a wide range of issues related to water and flood and coastal erosion risk management, including provisions to end the automatic right to connect surface water drainage to the public sewer. The proposals will affect local authorities, property owners, developers, farmers and the water industry. Consultation on the draft Bill closes on 24 July 2009.
Finance Bill 2009
The Finance Bill 2009 as brought from the Commons was published on 10 July 2009, incorporating amendments made at Report stage on 7 and 8 July 2009. The Bill will be debated by the House of Lords on 20 July 2009 but the Lords cannot amend it. In practice, this means that the Finance Bill is now in its final form. Accordingly, for accounting purposes it is "substantively enacted".
