Monthly Archives: April 2013

Government Consultation on proposed Legislation in the Pub Industry

 Government Consultation on Legislation in the Pub Industry

www.gov.uk/government/consultations/pub-companies-and-tenants-consultation

The following are extracts from two Government emails on the subject, it would appear that serious thought is now being applied to the issues affecting a large sector of leased and tenanted pubs.

 

Pub Companies and Tenants

Explanation of the wider context for the consultation and what it seeks to achieve

The Government seeks to support a healthy, thriving and diverse pubs sector. One longstanding issue in the sector is that, for many years, serious concerns and numerous complaints have been raised about the relationship between large pub companies and their tenants. The focus has been on tied pubs and the share of reward gained by pub owning companies, for example through large unjustified rent increases.

Such behaviour is possible due to pub companies’ better access to information and resources. The tie gives an additional route of abuse and complicates the relationship. Tied tenants are also more likely to face serious hardship. A self-regulatory approach has been tried since at least 2004, with a last chance given in 2011, but this has not worked. As such the Government is now proposing to legislate.

As part of its overall aim to secure a healthy pubs industry, the Government’s key objective is to ensure that tenants are treated fairly and that tied tenants are no worse off than free-of-tie tenants. Accordingly, the Government is:

  • Proposing to establish a Statutory Code and an independent Adjudicator to enforce that Code.

  • Setting out proposals as to how ‘a tied tenant should be no worse off than a free-of-tie tenant’ should be interpreted in calculating rents.
  • Asking an open question as to whether the Code should include a mandatory free-of-tie option.
  • Proposing that the Code should apply to all pub companies with over 500 pubs
  1. .

The Government welcomes views on these proposals.

Contents………………………………………………………………………………………………………..1

Pubs Statutory Code and Adjudicator………………………………………………………………….2

Impact Assessment (IA)………………………………………………………………………………………2

Summary: Intervention and Options…………………………………………………………………….2

RPC Opinion: …………………………………………………………………………………………………..2

Summary: Analysis & Evidence Policy Option 1…………………………………………………….4

Summary: Analysis & Evidence Policy Option 2…………………………………………………….5

Summary: Analysis & Evidence Policy Option 3…………………………………………………….6

Evidence Base (for summary sheets)………………………………………………………………….7

Option 1: Continue with the self-regulatory approach. (Do nothing option)………………13

Option 2: Establish a strengthened statutory code and an independent adjudicator to enforce the code. (Preferred option)…………………………………………………………………14

Option 3: Mandatory free of tie option with open market rent review………………………23

1 Title:

Pubs Statutory Code and Adjudicator

IA No:

BIS0395

Lead department or agency:

Department for Business, Innovation and Skills

Other departments or agencies:

 

Impact Assessment (IA)

Date:

15/02/2013

Stage:

Consultation

Source of intervention:

Domestic

 

Type of measure:

 

Primary legislation

 

Contact for enquiries: James Ravenscroft, 0207 2152171, james.ravenscroft@bis.gsi.gov.uk

 

Summary: Intervention and Options

 

Total Net Present Value

Business Net Present Value

Net cost to business per year

(EANCB on 2009 prices)

In scope of One-In, One-Out?

Measure qualifies as

-£17.01m

-£16.03m

£1.86m

Yes/No

 

 

IN

 

 

What is the problem under consideration? Why is government intervention necessary?

For many years serious concerns and numerous complaints have been raised about the relationship between large pub owning companies and their licensees. The focus has been on tied pubs and the share of reward gained by pub owning companies, for example through large unjustified rent increases. Such behaviour is possible due to pub owning companies’ better access to information and resources. The tie gives an additional route of abuse and complicates the relationship. Tied licensees are also more likely to face serious hardship. A self-regulatory approach has been tried since at least 2004, with a last chance given in 2011, but this did not work. As such a stronger intervention may now be needed.

RPC Opinion:

 

RPC Opinion Status

NPower exposed at last.

NPower are the worst Energy company in my opinion, without the tax avoidance.

They sent the bailiffs in to me twice claiming that I owed them enormous sums of money, up to £9K, saying that they had documentary proof that I was the tenant of a pub in Taunton. I owned a freehouse in Taunton about five miles away, the ensuing hassle was enormous and they refused to believe me, it was a nightmare and very intimidating.

I just hope that public reaction brings them to their knees, I would not recommend them as an Energy company to anyone.

Is Npower the new Starbucks? At the same time as hiking our energy bills, Npower are using accounting tricks to dodge paying their fair share of tax in the UK. Yesterday it was revealed that they haven’t paid a single penny in corporation tax for the last three years! [1]
But now this is out in the open, Npower are vulnerable. Just look what a PR disaster it was for Starbucks when their tax affairs were exposed last year. Tax dodging scandals can ruin a company’s reputation. And that can cost them their customers. [2]
Npower rely on their customer loyalty. If they realise that their tax scams are damaging their reputation, they’ll have to back down. So let’s make them feel the strength of public opposition by building a HUGE petition warning them that their customers are ready to leave them. Please click here to sign: https://secure.38degrees.org.uk/npower-tax
A huge petition can help turn this tax dodge into a full-on PR crisis for Npower. It’ll help spread the word and raise awareness of what they’re up to. And it’ll encourage the media to keep reporting on this scam. That’s exactly what Npower’s PR team don’t want to happen!
After Starbucks’ tax scams came out, customers crossed the street to buy coffee from another cafe. Npower will already know that they’re at risk from customers switching gas and electricity providers. It’s not like it’s that difficult to switch – we proved that last year, when thousands of us switched together to get a better deal. [3]
The news of yet another huge company like Npower dodging tax stinks, and not just because it comes at a time when our gas and electricity bills are going through the roof. By dodging tax, Npower are actively contributing to the UK’s deficit – and to the stinging impact of government cuts.
Let’s force Npower to stop using accounting tricks to dodge their fair share of tax . Sign the petition to Npower now: https://secure.38degrees.org.uk/npower-tax
Thanks for being involved,
James, Becky, Susannah and the 38 Degrees team
PS: NPower’s accounting scam works like this: they are turning UK operating profits into accounting and tax losses by making large “interest payments” to other parts of their own business, based overseas. This is currently legal – and in the longer term, we need to push the government to close this blatant loophole. But right now we have a chance to force Npower to drop this scam – so please sign the petition now: https://secure.38degrees.org.uk/npower-tax
NOTES [1] The Sun – Energy giant pays zero tax: http://www.thesun.co.uk/sol/homepage/news/politics/4891267/Energy-giant-Npower-pays-zero-corporation-tax.html

More Medical Advice

WATER CONSUMPTION — THIS IS VERY INTERESTING……..

How many people do you know who say they don’t want to drink anything before going to bed because they’ll have to get up during the night!!

Heart Attack and Water – I never knew all of this! Interesting…

Something else I didn’t know … I asked my Doctor why people need to urinate so much at night time.

Answer from a Cardiac Doctor –

Gravity holds water in the lower part of your body when you are upright (legs swell). When you lie down and the lower body (legs and etc) seeks level with the kidneys, it is then that the kidneys remove the water because it is easier. This then ties in with the last statement!

I knew you need your minimum water to help flush the toxins out of your body, but this was news to me.

Correct time to drink water… Very Important. From A Cardiac Specialist!

Drinking water at a certain time maximizes its effectiveness on the body:

2 glasses of water after waking up – helps activate internal organs

1 glass of water 30 minutes before a meal – helps digestion 1 glass of water before taking a bath – helps lower blood pressure

1 glass of water before going to bed – avoids stroke or heart attack

I can also add to this… water at bed time will also help prevent night time leg cramps. Your leg muscles are seeking hydration when they cramp and wake you up with a Charlie Horse.

Subject: Mayo clinic aspirin Good information.

Mayo Clinic Aspirin Dr. Virend Somers, is a Cardiologist from the Mayo Clinic, who is lead author of the report in the July 29, 2008 issue of the Journal of the American College of Cardiology.

Most heart attacks occur in the day, generally between 6 A.M. and noon. Having one during the night, when the heart should be most at rest, means that something unusual happened. Somers and his colleagues have been working for a decade to show that sleep apnea is to blame.

1. If you take an aspirin or a baby aspirin once a day, take it at night.The reason: Aspirin has a 24-hour “half-life”; therefore, if most heart attacks happen in the wee hours of the morning, the Aspirin would be strongest in your system.

2. FYI, Aspirin lasts a really long time in your medicine chest for years, (when it gets old, it smells like vinegar).

Please read on.

Something that we can do to help ourselves – nice to know. Bayer is making crystal aspirin to dissolve instantly on the tongue.They work much faster than the tablets.

Why keep Aspirin by your bedside? It’s about Heart Attacks –

There are other symptoms of a heart attack, besides the pain on the left arm. One must also be aware of an intense pain on the chin, as well as nausea and lots of sweating; however, these symptoms may also occur less frequently.

Note: There may be NO pain in the chest during a heart attack.

The majority of people (about 60%) who had a heart attack during their sleep did not wake up. However, if it occurs, the chest pain may wake you up from your deep sleep.

If that happens, immediately dissolve two aspirins in your mouth and swallow them with a bit of water.

Afterwards: – Call 911. – Phone a neighbor or a family member who lives very close by. – Say “heart attack!” – Say that you have taken 2 Aspirins. – Take a seat on a chair or sofa near the front door, and wait for their arrival and ….DO NOT LIE DOWN!

A Cardiologist has stated that if each person after receiving this e-mail, sends it to 10 people, probably one life could be saved!

I have already shared this information. What about you? DO forward this message. It may save lives! “Life is a one time gift”

Logic of a Beer Drinker (Barrel-Dregs 260)

Pub and Beer Humour

Here’s something to make you smile

Logic of a Beer Drinker

Lady Interviewer:  Do you drink every day?

Man: 
Yes.

Lady Interviewer: 
How much a day?

Man: 
Around 3 six-packs, starting at noon.

Lady Interviewer:  How much does a 6-pack cost?

Man: 
Roughly £10.00 at a Supermarket.

Lady Interviewer:&n bsp; And how long have you been drinking like that?

Man: 
15 years.

Lady Interviewer:  So with a six-pack costing £10.00, and you consuming 3 six-packs a day, you are spending roughly £900 each month.  In one year, you would then be spending £10,800, correct?

Man: 
Correct.

Lady Interviewer: 
If in 1 year you spend £10,800 on beer, not accounting for inflation, 15 years puts your spending roughly £162,000; correct?

Man: 
Correct.

Lady Interviewer: 
Did it ever occur to you if you did not drink for the last 15 years, you could have bought a Ferrari?

Man: 
Do you drink?

Lady Interviewer:  No.

Man:  So, where’s your Ferrari?

Barfly

Alliance Online Catering Equipment – suppliers of Pub and Bar Equipment to the Licensed Industry

Pub Statutory code: Consultation set to go ahead ‘shortly’

PUB Statutory Code

If you don’t see the Morning Advertiser, this is worth reading, click on the link.

Statutory code: Consultation set to go ahead ‘shortly’

The consultation into the statutory code and adjudicator to manage the pubco-tenant relationship is set to go ahead “shortly”, the Government has confirmed to the Publican’s Morning Advertiser (PMA).

http://www.morningadvertiser.co.uk/General-News/Statutory-code-Consultation-set-to-go-ahead-shortly

John Gaunt and Partners, National Minimum Wage latest

Pub News and Advice,

Latest National Minimum Wage

John Gaunt and Partners


Scotland – 5 day ban for failing test purchase overturned

Posted: 15 Apr 2013 05:00 PM PDT

In November 2011, we reported on Glasgow Sheriff Court’s decision to uphold a 5 day ban on alcohol sales imposed by Glasgow Licensing Board for a Lidl store which failed a test purchase despite the store’s significant due diligence systems, passing of a subsequent test purchase and sacking of the manager who made the sale.

Our previous article can be found here in our article: “Scotland – Under Age Test Purchasing: Due Diligence not enough?

The subsequent appeal to the Court of Session has now been determined and has resulted in the ban being overturned, with the appeal judges stating “it is difficult to identify any cogent reason for which the respondents could properly have come to the view that grounds existed for a review of the appellants’ Premises Licence”.

Further, they went on to say that “we are therefore left with having to draw the virtually inevitable inference that the objective of the respondents in suspending the licence for five days was to impose a financial penalty upon the premises licence holder on the sole basis that one employee had departed on a single instance from the employers’ procedures and instructions.”

This is a significant decision for operators but also reinforces the need for licence holders to ensure that they have appropriate and rigorous due diligence systems in place.

The full judgment can be found here http://www.scotcourts.gov.uk/opinions/2013CSIH25.html

National Minimum Wage (NMW) increases announced

Posted: 15 Apr 2013 05:00 PM PDT

The Government has announced increases to the NMW rates which will apply from October 2013.

From 1 October 2013:

  • the adult rate (21 year olds and over) will increase by 12p to £6.31 an hour
  • the rate for 18-20 year olds will increase by 5p to £5.03 an hour
  • the rate for 16-17 year olds will increase by 4p to £3.72 an hour
  • the apprenticeship rate will increase by 3p to £2.68 an hour
  • the accommodation offset increases from the current £4.82 to £4.91.

John Gaunt and Partners, just what are the councils up to with Pubs?

Pubs and EMRO’s

John Gaunt and Partners, just what are the councils up to?


EMROs and the Late Night Levy – just what are the councils up to?

Posted: 14 Apr 2013 05:00 PM PDT

Over the past few weeks we have been contacting all the Licensing Authorities around England and Wales to gauge the likely uptake of either a Late Night Levy and/or an Early Morning Restriction Order.

There is an increasing swell of reports in the trade press of reports of councils in consultation, pre-consultation or in ‘navel gazing’ mode.

These include:

Early Morning Restriction Order

  • Hartlepool – Hearing was set for 24th April with 35 representations received, but having just failed to give the required 10 working days’ notice, this is to be re-arranged for a date in May (possibly 7 May) – BREAKING NEWS!
  • Blackpool – Delayed consultation

Late Night Levy

  • Newcastle-upon-Tyne  – Consultation ends 30th April
  • Milton Keynes – Consultation ends 18th May

So what have we learnt from our exercise that might not yet have been reported?

Our team contacted 363 Councils.

As for the detail…..

Three quarters of all councils contacted were not planning on introducing a LNL or EMRO (LNL: 78% and EMRO: 77%) in the near future; some confirmed this was after discussion with the Licensing Committee and others was just a distinct ‘no’. A common trend was that a Licensing Policy review would be undertaken before any decision was made.  This is supported by a legal view that such a policy review is a necessary pre-requisite.

8% of councils have stated that an EMRO is a possibility, that they are doing further research on the benefits and will put it forward to the committee whether they will go to a formal consultation.

One surprise is Great Yarmouth who have managed to get a voluntary closure saying: “There are a few key premises within the Great Yarmouth area authorised to open until 6am.  Licence holders of these premises have been consulted by the police and have agreed to a voluntary 4am closure.  This has been put in place within the last few weeks with minor variations to the premises licences.  With these measures in place, it is hoped that an EMRO will not then be necessary.”  This is a potential risky stance to take as it only takes one rouge operator to apply for a licence, and receive no reasonable objections and you will get a number following suit.

With Late Night Levies it seems to follow a similar pattern with various reasons for not implementing one: “the high administrative burden for the local authority” or “…decided to take a watching brief on these matters for 18 months to see how successful (or not) they may elsewhere.”

What was plain to see was that the vast majority (LNL: 78% and EMRO: 77%) are not looking into introduce it in any form at the moment.

Councils that did comment seemed to have a variety of different views, some highlights are as follows:

  • ‘I can advise you that this authority considered the subject of both the Late Night Levy and EMROs at the Licensing Committee of September 2012.  It decided to take a watching brief on these matters for 18 months to see how successful (or not) they may elsewhere.  So in other words we will not consider the matter again until 2014 earliest.’
  • ‘We have no plan (to date) to introduce an EMRO in our area as there are currently insufficient collective problems to warrant such an action. If and when such a problem does occur we will deal with the matter on the merits of each individual case by means of a review of the identified premises or through the courts , as appropriate. This course of action has been successful in the past in achieving the promotion of the licensing objectives and I see no reason to introduce a disguised failed ADZ which could technically penalise the good with the ‘not so good’ managed premises.’  Who would disagree with this view?
  • ‘We did take a report to members last year explaining both procedures and the feedback we received was that most felt the LNL was a sort of additional tax which given the financial climate may well cause further premises to close and also that such a levy was unfair to rural pubs/restaurants who cause little problem with regard to enforcement. [We are] essentially rural with 4 market towns, the majority of licensed premises being outside these 4 towns.  With regard to EMROs we could perhaps see limited use but felt that using EMROs would only cause associated problems to be moved to another area not covered by the EMRO. We are happier to focus on an individual problem premise by using the review procedure ‘

So where does this leave us?  Well self-evidently the majority of councils have these very much on the back burner, whereas we have a few councils ‘path finding’ their way forward.  How these proposals fare will or may determine the approach of other councils going forward.

For more detail of the results and other comments please do get in touch with us.

 

Stretch limousine licensing – a reminder

Posted: 11 Apr 2013 05:00 PM PDT

East Riding of Yorkshire Council has issued a timely reminder (in anticipation of senior school ‘prom’ season!!) to its local schools that parents and head teachers need to check that stretch limousines are appropriately licensed. Clearly stretch limousines are the thing in this neck of the woods!

The licensing system relating to stretch limousines (and other such vehicles) was introduced to ensure passenger safety and entails appropriate assessments of the driver (such as a competence assessment and criminal records check) as well as an examination of the vehicle in question.

In brief, limousines must be run by a licensed operator unless they are hired out without a driver.

Small limousines (seating up to 8 passengers) require a private hire vehicle (PHV) operator licence (administered in England and Wales by Local Authorities and Transport for London depending on your location) and must be booked via a licensed PH Operator and be driven by a licensed PH driver.

Interestingly, an exemption applies whilst limousines are being used in connection with a funeral or a wedding.

Large limousines (seating 9 or more passengers) require a public sector vehicle (PSV) operator licence (administered by the traffic commissioner).

Stretch limousines must also have an Individual Vehicle Approval (IVA) to be licensed unless built before 29 July 2011 when a Certificate of Fitness should be sufficient.

The vehicle and Operator Services Agency has issued guidance for stretch limousine operators, which can be found here:

Guidance for operators of stretch limousines

For those that wish to hire a stretch limousine, therefore, it is always worth checking with the booking agent if the limousine is properly licensed and with whom.

 

MORGAN & CLARKE April Newsletter, Well worth reading

Pub & Restaurant Rent Review Information

MORGAN & CLARKE  APRIL 2013 NEWSLETTER NO. 19

Pigeon House, The Broadway,

Oakridge Lynch, Stroud, Glos. GL6 7NU

Email: nigel@morganandclarke.co.uk   Phone:  01285 719292

www.morganandclarke.co.uk

(Also at:  London, Cardiff, Matlock, Braunton, Lewes)

 

Well the Budget has now come and gone with the one general positive feature of the scrapping of Alastair Darling’s Beer Escalator.   The reduction of a token 1p in beer duty was a nice bit of window dressing, but effectively of no particular use whatsoever to the trade.   The salient fact exists that to a remarkably large number of people, a visit to the pub is now becoming an expensive social activity and once the habit of regular visits is lost, that habit rarely returns.

 

1.  Price Increases

Setting aside taxation and its associated window dressing, the Brewers and Pubcos last month confirmed a 3.5 – 4% increase on product supplies on the back of the increases in raw materials and transport costs.   Technically this should add something like 7p to the price of a pint of bitter or lager with the one major truism that the market just will not stand that level of price rise which is almost now occurring on an annual basis.   As our clients realise, the solution is to take part of the price hit themselves, lower the gross profit margins and only increase the counter price of the product by half of the realistic price.

 

Whilst it is appreciated that it is essential to cushion the blow to the consumer, we have the feeling that the repetition of not being able to pass on the genuine and full price increases, is storing up even further financial hardships in respect of survivability for the trade as it progresses through 2013.

 

2. Office of National Statistics / RPI 

News reaches us from the Office of National Statistics in a pronouncement on 19 March 2013, that the Retail Price Index (RPI) will suddenly be replaced by the RPIJ which stands for ‘Retail Price Index Jevons Method.   It appears that the RPI calculations were both inadequate and inaccurate to truly reflect inflation.   Being announced on the eve of the Budget (the following day) this seems like  classic, well-chosen timing to ‘bury’ bad news.   (Remember Jo Moore?).  Millions have been affected, not least in rail fare increases.   Very few people even noticed the announcement, together with the Publicans Morning Advertiser to whom we sent the details below for them to seek Pubco comments.

 

The Office of National Statistics calculates inflation by looking in detail at the changing price of a representative sample or basket of around 700 goods and services.   The ONS will now refine the long established RPI calculation system for a different formula which, surprise surprise, calculates a final inflation figure that is consistently lower than that which has been long established under the RPI standard calculations.

 

For example, the ONS confirm that in the past 10 years, the basket of prices has increased by 31.9% under RPIJ, compared with 38.1% using RPI.

 

Not that we have the vaguest understanding of the technicalities underlying this startling confession, but it appears that since the RPI was launched in 1947, the average inflation price has been using the “Carli” method.   RPIJ now uses the alternative and more accurate Jevons method.  

 

This takes us directly to the insidious annual rent rises in a huge number of pub leases that are automatically linked to increases in the RPI as it has hitherto been calculated.   It appears that this insidious annual rise over the last 10 years is out of kilter with reality.     Don’t hold your breath hoping for a refund from your Pubco / Brewer.  The rock solid defence is that they have acted in good faith in accordance with established practice which, after all, only changed when the ONS made their pronouncement on 19 March 2013.

 

In February, the RPI was 3.2%.   However, the RPIJ for the same month is actually 2.6%.   Please ensure that you specifically remind your Pubco or Brewer that under the terms of your existing lease, RPI does now not exist and we suppose, a commercial side letter will have to be issued by your freeholder to make the correction into RPIJ.  

 

3.  Consumer Price Index (CPI)

Regarding the reality of RPIJ as detailed above, it was interesting that the Punch Growth leases were heralded as being a significant and cheaper alternative over standard RPI-linked Pubco leases as the automatic annual rent rises were proposed to be linked to CPI.   As it would appear that we have now had the universal replacement of RPI with RPIJ, it is interesting to reflect on how the CPI is actually calculated.   It transpires that the ONS has confirmed that CPI in February rose to 2.8%, its highest level since May 2012 which puts it almost exactly on par with RPIJ which is actually lower at 2.6%.  

 

It still does not excuse the basic system which automatically ratchets up rents, having no regard to the profitability of the property which in the current and continuing recessive times, still is a negative rather than a positive.

 

4.  Planning News

Following our success story in respect of the Phene Arms, Chelsea, acting on behalf of the Royal Borough of Kensington & Chelsea when change of use from pub to residential was refused at a lengthy planning inquiry, two other similar situations have cropped up which again require detailed and comprehensive evidence concerning the viability of closed public houses that traded on a Free of Tie basis.  

 

The two pubs that are going through somewhat similar procedures are the Royal Oak, Bovingdon Green, near Hemel Hempstead and the Halfway House, Box, near Minchinhampton, Gloucestershire.   David Morgan is heading up the expert evidence being presented and future newsletters will update you on progress as it happens.

 

5.  Skills Shortage

One of our Clients in the coastal region of North Wales has a substantial divergence of opinion with Enterprise Inns regarding the rent that shall apply as of last summer.   In an effort to progress matters, David Morgan of M & C and Rob May of Enterprise Inns thought that the best way forwards was to seek a private appointment of a licensed property specialist Chartered Surveyor who could act as Arbitrator.   A diligent search by both of them, trawling through appropriate firms in Chester, Liverpool, Leeds, Manchester and beyond failed to come up with anybody.   The main problem was perceived conflicts of interest.   Virtually all of the large firms employing Chartered Surveyors who have any specialist knowledge of licensed property, seem to have the benefit of corporate instructions, either from Enterprise Inns, or other Pubcos.   Quite naturally Rob May felt that he could not support the appointment of a licensed property specialist whom he perceived acted for tenants.   Impasse!  

 

The north west of England and North Wales now seem to present a considerable problem in the private selection of a suitable arbitrator that can take on pub rent reviews.   The matter has now been placed in the hands of the RICS Dispute Resolution Service who, when previously presented with a similar problem on a pub/hotel rent review on the northern end of Snowdonia National Park, found fit to appoint an arbitrator located just outside Southampton who freely confessed to the tenant when he was undertaking his detailed inspection of the property, that he was quite unfamiliar with the general area!  

 

The second area of skills shortage is that of the practical application of industry knowledge by direct involvement.   It is always helpful at base level to have a Chartered Surveyor who is involved on a day-to-day basis with the ins and outs of the licensed trade.   Knowledge is constantly refined and expanded by such contact and the hurly burly of negotiation either for the landlord, or for the tenant.  Herein lies the next problem.

 

It is very difficult for an arbitrator or an independent expert to hold out “current knowledge” if that individual has either effectively retired from active day-to-day participation in the industry, or is a “professional dispute resolver” which means that they can only be guided by the evidence and opinions presented to them.  

 

If the situation exists that, for example, one side grossly exaggerates their case either upwards or downwards from reality, it is asking a considerable amount of a person who is not involved on a day-to-day basis with intimate knowledge of ins and outs of the trade, to fully appreciate how a case can be manipulated in the promotion of a particular point of view.

 

Technically, the protection against manipulation is the declaration that must be made in dispute resolution by the parties’ representatives, that they are acting as expert evidence, rather than an advocate.   However, that fine line is incredibly difficult to police or enforce.   When does someone’s expert view become the promotion of a particular objective (which is defined as advocacy), rather than just their firmly held opinion.   One QC referred to trying to police the difference as the same as angels dancing on a pinhead.   

 

6.  RICS Guidance Notes

On the 28th February, Simon Clarke and David Morgan gave a detailed presentation to the RICS on the perceived manipulation of RICS Guidance Notes.   It maybe recalled that GN 67/2010 is almost universally referred to in Pubco and Brewery Codes of Practice and almost all rent review letters say that the rent calculated is “in accordance with RICS Guidance Notes and industry benchmarking”.   As highlighted in earlier Newsletters, the problem is that the RICS Guidance Notes are only mandatory as best practice on RICS Members.   Therein lies the problem.  

 

The vast majority of rent review negotiations are undertaken by Pubco and Brewery retail field staff who are not members of the RICS and are thus not bound by the strictures of the RICS Guidance Notes.   That allowed for a distinct and separate take on the implementation of the Guidance Notes which Simon and David highlighted in eight separate areas.   It is considered that in some quarters there is considerable manipulation of the Guidance Notes regarding:

  1. 1.     Structural works disregard – cost equivalence
  2. 2.     Structural works disregard – change in trading potential
  3. 3.     Retrospective Licence to Alter
  4. 4.     Ingoing Cost and Working Capital
  5. 5.     Reasonably Efficient Operator
  6. 6.     Goodwill
  7. 7.     Comparables
  8. 8.     The prime principle.

 

The RICS have informed us that they are “seriously looking into the matter”.   It will be interesting to see how that subsequently links in with the proposed Industry Framework Code.

 

7.  And Finally

 “I’d offer you a beer, but I have only got six cans~”    (Terry Collier, The Likely Lads).

“….could you be persuaded to have a drink dear?”     

“Well OK then, may be just a tiny triple”   (Lucille Ball)

 

 

Best wishes from the Team at M & C

Email:  nigel@morganandclarke.co.uk

Phone: 01285 719292

Alliance Online Catering Equipment – suppliers of Pub and Bar Equipment to the Licensed Industry

Beerline Cleaning, worth reading.

 Pub and Restaurant, Beerline Cleaning

I am running this again, because the company is moving forward rapidly.

I am a confirmed cynic on beer line cleaning, having seen far too many systems that fail to back up the salesman’s claim, to be fair I have also seen a few that do, usually at considerable cost.

The ones that caused me serious concern are the ones using magnets and electrical impulses, the principles are there but the efficiency breaks down, mainly because the majority fail on low volume lines and possibly not enough research has been previously done in adverse conditions.

The yeast is kept in suspension by the electrical or magnetic impulses, but if you don’t have the volume and regular through put the system fails on the lines with the lowest flow.

This following report has far more information than I’ve previously seen on the subject and sounds as though a far more realistic approach has been achieved on a system that should be made to work for all volumes of flow.

BeerSaver – A Microbial Inhibitor System

BeerSaver is a double-patented system, which guarantees 4 weeks minimum between line cleans on ALL draught products including wine.

Over the last 15 years, the BeerSaver system has undergone constant analysis and scrutiny within laboratories and commercial test sites in order to secure its proven performance.

Professor David Quain from the International Centre for Brewing and Distilling at Heriot-Watt University Brewing School has scientifically tested and validated the system.

BeerSaver’s double-patented technology is specifically designed to emit a low voltage pulse wave generated by the digital management console.

This technology, combined with our specially designed, patented coiled pipe, can help you save time between the cleaning of your lines. This low voltage pulse wave fluctuates through the coil, along the entire length of the pipe. It disrupts any deposits that try to attach themselves to the inside of the pipe.

It is these deposits of yeast, sugar and protein that can allow bacteria to feed and multiply.

Research studies have shown that in beer dispense systems, the surface of the pipes are prone to bacterial attachment and accumulation.

Bio-films are then formed as the attached microorganisms secrete extra cellular polymers such as polysaccharides and glycoprotein’s.

It is further established that microbes (such as bacteria and yeasts) embedded in such bio-films are well protected against cleaning and sanitation.

It has further been shown that the places where the bio-films develop are exactly those places that are difficult to clean.

In beer dispense systems it is therefore critical to remove contamination in the pipes before bio-films are able to develop enough to strength to withstand the cleaning process.

This underpins the normal weekly cleaning regime recommended. This enables pipes to be cleaned completely with cleaners, which do not destroy the pipe surface, which would lead to increased anchorage of colonies and therefore bio-film.

The growth varies with the ph level of the beer, the particular hop acids, the alcohol level, degree of fermentation, oxygen content and many other factors. Bio-film development is therefore accelerated by sources of nourishment for the bacteria which enable the generation of higher levels of extra cellular polymers, which develop into bio-films.

Organisms which cause spoilage in beer dispense systems are more active at the places in the system where higher oxygen levels and higher temperatures are prevalent. The critical areas are also areas of ingress in an otherwise closed system for bacteria and wild yeasts. These areas are at the keg connector, the fob meter and severely at the front aperture and the adjacent pipe work.

There are four common types of bacteria that can be found in beer.

Acetobacter is a type of bacteria that produces large quantities of acetic acid and is used to make vinegar. In beer it can cause a sour taste and discolouration.

Lactobacillus bacteria, of which there are about nine different species, produce lactic acid causing a sour taste.

Pectinatus is a type of bacteria causes probably the most easily detectable of problems by the average consumer – the rotten egg smell! It produces acetic, lactic and propionic (causes mould in bread) acids. As well as hydrogen sulphide and dimethyl sulphide, beer that has been broken down by these acids will taste foul, be cloudy and have that rotten egg aroma.

Pedicoccus bacteria can cause the production of diascetyl, a compound that is used to flavour beers. Beer will take on a buttery/butter scotch aroma with higher levels of this compound.

The BeerSaver system was specifically designed to target these common bacteria with view to inhibit their growth period.

The double-patented technology behind the BeerSaver system can be considered quite

simple, yet extremely effective. It comes in two parts, the digital management console and our specially designed coiled pipe. The digital management console is a slim-line box, no bigger in height than a sheet of A5 paper. This is mounted on the cellar wall and generates the signal. This low voltage pulse wave is carried from the console via RCA cables to our patented coiled pipe.

BeerSaver’s specially designed pipe has a thin metal coil set within the wall. This coil runs the entire length of each pipe. This pipe work replaces your existing set up from the flow jet to the keg.

The electro-magnetic wave fluctuates up and down the coiled pipe in a “pulse” like manner. This scientifically proven method initiates the break down of deposits, such as sugar, yeast & protein. All of which are a source of food and habitation for biofilm and bacteria that will build up anywhere throughout the entire length of the pipe.

In normal pipe systems, the bio-film is allowed to cultivate on the inside of the pipe, feeding off sugar, protein & yeast deposits that stick to the inside wall.

This is a breeding ground for bacteria to harvest and grow. Forcing you to clean your lines more frequently. Also by using caustic chemicals that aren’t particularly “eco” friendly, you will slowly erode your pipes, which can lead to pitting, a perfect place for bacteria to settle and breed.

BeerSaver’s microbial inhibitor system uses it’s pulse wave technology to emit this wave through the full length, patented coiled pipe. The pulse wave characteristics “shudder and shake”, reducing the build up of the sugar, protein & yeast on the inside of the pipe.

With this, the bio-film and bacteria haven’t got anywhere to attach themselves, they won’t be able to feed and therefore they will not be able to multiply.

Be erSaver’s microbial inhibitor system will slow down the build up of these commonbacteria.

The system has a proven track record with a client base that is constantly expanding throughout the UK. The product has been scientifically tested and approved for use in America. Currently, Carlsberg Cyprus are running their own scientific tests on the system.

The BeerSaver system will have a noticeable “knock-on” effect in other areas of your business. By reducing your cleaning schedule to a guaranteed minimum of every 4 weeks, your business will be saving on water, gas and chemical bills. The amount of time, effort and wages involved in physically cleaning the lines and not forgetting the amount of beer wastage generated from a weekly line clean.

In previous years the market has been flooded by systems claiming to reduce bacteriaand extend the time between line cleans. These systems have come and gone but unfortunately left a sour taste, tainting the market. BeerSaver is not one of those systems. In the Fifteen years, from concept to product, the system has been through every one of the necessary scientific tests, to validate the product for what it claims to do, which is a very effective and efficient microbial inhibitor.

The scientific reports from Professor David Quain, Beer Symposium document: Assuring The Microbiology Of Draught Beer and the independent report on the application of BeerSaver technology in the assurance of beer hygiene in the on-trade, can be found on the website.

Copy this link into your browser address bar and scroll to the bottom of the page.

http://www.beersaversystems.com/#/bacteria-and-bio-film/4545595640

www.beersaversystems.com

 

 

Alliance Online Catering Equipment – suppliers of Pub and Bar Equipment to the Licensed Industry

 

Howard & Co, April Tax Tips

Pub & Restaurant Tax Tips

Welcome… To April’s Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
If you need further assistance just let us know or you can send us a question for our Question and Answer Section.
We are committed to ensuring all our clients don’t pay a penny more in tax than is necessary.
Please contact us for advice in your own specific circumstances. We’re here to help!
April 2013
· RTI Relaxation
· Loans to Participators Trap
· SEIS Investment Extension
· Cash Basis for Small Businesses
· April Question and Answer Section
· April Key Tax Dates
RTI Relaxation top
The real time information (RTI) system for submitting PAYE information to HMRC must be used by small employers for all pay days on and after 6 April 2013. However, at the last minute the Government has agreed to a temporary relaxation of one of the RTI reporting requirements for employers with fewer than 50 employees.
If you fall into that category, and you pay some employees more frequently than once a month, you can send your RTI report known as full payment submission (FPS), to HMRC when you run your monthly payroll. You would normally have to send in a FPS every time you pay an employee.
However, there are conditions:
– The payroll run must be made before the end of the tax month, i.e. by 5 May for employees paid in April; and – The relaxation also only applies for RTI reports submitted up until 5 October 2013.
Remember, this is not a postponement of RTI, it is a small and temporary change to one reporting rule. You still need to use new or updated payroll software to report payroll data under RTI for all pay dates on or after 6 April 2013.
Loans to Participators Trap top
The 2013 Budget announcements included a brief outline of how the law will be changed to tax loans taken out of owner-managed companies by the shareholders/directors (known as participators). We have now seen the draft legislation so we can give you further details of how the tax law will apply for loans or repayments made on and after 20 March 2013.
Where a participator borrows from his company and repays the loan within nine months of the end of the accounting year in which the loan was taken, there is no tax charge for the company.
However, where the loan is outstanding for longer, the company must pay 25% of the loan balance as corporation tax to HMRC. This corporation tax charge is then repaid when the loan is fully repaid.
Four changes may affect when or if this corporation tax is payable:
1. Thirty day rule Where a loan of £5,000 or more is repaid to the company, but within 30 days amounts totalling £5,000 or more are borrowed by the same borrower or one of his associates, the first loan is treated as not having been repaid and is treated as continuing for the purposes of calculating the corporation tax charge.
2. Intention or arrangements in place Where the loan is £15,000 or more, the thirty day rule is ignored if at the time of the repayment of the first loan, the borrower intends to borrow again from the company or has arrangements in place to do so. If those later loans are made they are treated as a continuation of the first loan.
3. Using a third party Loans channelled from the company through LLPs or partnerships in which the participator is a member are treated as if the loan was made directly to the participator. This also applies if the loan is advanced to a trust of which a participator in the company is a beneficiary, or potential beneficiary.
4. Conferring a benefit This is intended for the situation where an arrangement, perhaps a partnership structure between the company and a participator is used to transfer value from the company to the participator. It is unclear how this will work in practice, but any partnerships involving a company and one of more individuals will have to be reviewed.
SEIS Investment Extension top
The Budget also included an announcement of the extension of capital gains tax (CGT) relief, where the gain is reinvested in new shares issued under the Seed Enterprise Investment Scheme (SEIS). This scheme started on 6 April 2012 and is due to run to 5 April 2017, but the CGT relief was due to apply only for investments made in 2012/13.
The legislation makes it clear that the CGT relief is to be extended for one year, for investments made in 2013/14.
Also the CGT relief for investments made in 2013/14 will be given at 50%, while investments made in 2012/13 are given CGT relief at 100% of the gain reinvested.
Cash Basis for Small Businesses top
The cash basis was also mentioned in the 2013 Budget announcements, but now we have some more details.
In an attempt to simplify accounting and tax reporting for the smallest businesses, from 6 April 2013 small businesses can choose to calculate profits/losses on the basis of the cash received and expenses paid out. This is known as the cash basis, and it ignores debts owed by the business and amounts owing to the business, until those amounts are paid. The normal accounting method is known as the accruals basis.
The cash basis will only be available to businesses which operate as sole-traders or partnerships, and whose turnover is under the VAT registration threshold (£79,000 from 1 April 2013). Some other businesses will be barred from using the cash basis and these include:
– All companies and LLPs; – Farmers using the herd basis; – Any business using profit averaging over several tax years; – Businesses in a mineral extraction trade; and – Lloyd’s underwriters.
Once a business is using the cash basis it can carry on doing so until its annual turnover is twice the VAT registration threshold (£158,000 from April 2013).
Although apparently simple, the cash basis will have some disadvantages:
– The deduction for loan interest paid will be limited to £500 per year; and – Losses can only be carried forward to set against future profits, whereas under the accruals basis losses can be carried back in the first four years of the trade and set off against the trader’s other income.
In addition any unincorporated business, whether or not they are using the cash basis, will be able to use flat rate expenses to replace the calculation of actual costs incurred in these categories of expenses from 6 April 2013:
– Motoring costs (mileage at 45p per mile); – Use of home for business purposes (based on number of hours used per month); and – Private use of part of commercial premises, such as a public house (based on number of occupants who are business owners or their immediate family)
As these flat rates are completely optional, and will vary in effect in each business, we need to discuss whether these flat rates will be suitable for your business.
April Question and Answer Section top
Q. I have put my hairdressing salon up for sale as I can’t face the hassle and cost of RTI. I am self-employed and not VAT registered, but the proceeds from the business sale will take me over the VAT threshold. Do I have to register for VAT and charge VAT on the sale of the business?
A. If you sell the business assets and goodwill together, so that the purchaser can pick up where you stop and carry on the business, it will be treated as being a transfer of a going concern and outside the scope of VAT. So you don’t have to charge VAT on the business sale or register for VAT. More information about transferring a business as a ‘going concern’ is given in the VAT leaflet no. 700/9: Transfer of a business as a going concern.
Q. If my company buys the rights to the intellectual property I create in the form of blogs, websites and online presentations, is that treated as the sale of a capital asset in my hands subject to capital gains tax? If so, can I sell such intellectual property every year for £10,000, so the gain is covered by my annual exemption and I pay no tax?
A. There are two reasons why your plan won’t work: i. You and your company are connected parties. Any transactions between you and the company must be valued at open market value. Is your blog etc. really worth £10,000 on the open market? ii. The Taxman’s view is that transactions involving copyright will generally fall to be taxed as income receipts, not capital gains.
Q. Our son is now old enough to attend nursery. Can my company, as my employer, help out with the nursery fees?
A. Your company can provide you with childcare vouchers to be redeemed at registered child care providers, and the first £55 per week of vouchers will be tax and NI free. If both parents work for the company they can each get £55 worth of child care vouchers per week. However, if you pay tax at 40%, you can only receive £28 per week of vouchers tax fee. Those that pay tax at the new highest rate of 45% (from 6 April 2013) can only receive up to £25 per week of tax free vouchers.
The company must offer childcare vouchers to all it’s employees who work at the same site, it cannot exclude any employees, but employees can opt out. However, only parents with children aged under 16 can qualify for childcare vouchers. There are a number of other rules which are set out in the HMRC booklet E18: How you can help your employees with childcare.
April Key Tax Dates top
5 – End of 2012/13 tax year. Last day to use up your annual exemptions for capital gains tax, inheritance tax and ISA’s
14 – Return and payment of CT61 tax due for quarter to 31 March 2013
19/22 – PAYE/NIC and CIS deductions due for month to 5/4/2013 or quarter 4 of 2012/13 for small employers. Interest will run on any unpaid PAYE/NIC for the tax year 2012/13
30 – Additional daily penalties of £10 per day up to a maximum of £900 for failing to file self assessment tax return due on 31 January 2013
Need Help? top
New Clients Welcome top
Please contact us if we can help you with these or any other tax or accounts matters.
In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
If you are not already a client and are interested in becoming one, we would love to come to meet with you to discuss how we can help and provide you with a competitive quote for our services.
All new client consultations are provided free of charge and without obligation.