UK Spring Budget 2020: Key Tax Changes

Posted in Finance and Capital Markets

UK government unveils a raft of spending measures amid national and global uncertainty.

By Karl Mah

After a somewhat turbulent period that saw the cancellation of the Autumn 2019 Budget due to lingering Brexit uncertainty, the resignation of the former Chancellor of the Exchequer, and the outbreak of COVID-19, it was unsurprising that the UK government elected to avoid making substantive changes to the UK’s business tax system in the Spring Budget 2020.

Several headline announcements — such as the reduction in Entrepreneurs’ Relief and confirmation of the introduction of the new Digital Services Tax — featured as expected, and the budget also outlined several tweaks that are consistent with the government’s political objectives, including increases to capital allowances rates to boost infrastructure, the SDLT surcharge for overseas property buyers, and changes to pension taxation.

Other interesting announcements covered future consultations on the hybrid mismatch rules and UK investment fund taxation, and, more alarmingly, the introduction of an obligation on large businesses to notify HMRC when they take a tax position that HMRC is likely to challenge. Stakeholders hope that the details of this particular proposal turn out to be sensible, rather than an “anti-avoidance” change to the tax code that creates additional cost and confusion for UK business.

Latham & Watkins will continue to monitor the government’s proposals as more details are made available in the coming weeks.

FCA Breaks Ranks in Its Approach to Using Wholesale Data

Posted in Finance and Capital Markets

A Call for Input reveals that the FCA is planning for a post-EU future and examining ethics with regard to MAR.

By Rob Moulton

On 9 March 2020, the Financial Conduct Authority (FCA) issued a Call for Input on the way that wholesale market participants access and use data in the UK. A Call for Input is an opportunity for the FCA to raise whatever questions it likes without having to commit to a view, in order to enable it (at a later stage) to make policy proposals without surprising market participants. This paper largely covers matters already subject to review at the European level, and therefore indicates that the FCA is preparing to make its own policies after the end of the current transitional period. Continue Reading

Minimising and Mitigating Risk in M&A — Trusted Tools and New Solutions

Posted in M&A and Private Equity

By Richard Butterwick, Nick Cline, Robbie McLaren, Terry Charalambous, and Catherine Campbell

In a complex and competitive market, minimising and mitigating risk in M&A is a key concern for deal teams. High demand for assets saw strong deal volumes and values in 2019, following a standout year in 2018. The search for opportunity has brought large corporates face to face with new or rapidly expanding businesses whose risk and compliance processes may not have kept pace with other areas of growth. New risks are gaining in size and profile — meaning companies must remain alert to value-compromising issues and inherited liabilities within targets. Corporate veil cases, as well as big-ticket regulatory fines for competition failures and data protection breaches, all indicate that corporates are in the firing line. Continue Reading

UK MRC Clarifies When Health Data Is Anonymised in Research Context

Posted in Data Protection

Research participants must identify which data sets constitute personal data to ensure compliance with the GDPR.

By Frances Stocks Allen and Mihail Krepchev

The UK Medical Research Council (MRC) has published a useful guidance note on the identifiability, anonymisation, and pseudonymisation of personal data in the context of research activities (the Guidance). The Guidance reminds research organisations that the General Data Protection Regulation (GDPR) applies to health data used in research and contains a number of recommendations that participants in the research process, particularly clinical trial sponsors, should bear in mind. The Guidance has been developed with the participation of the UK privacy regulator, the Information Commissioner’s Office (ICO). Continue Reading

UK Government Releases Details of New ‘Online Harms’ Regime for Online Platforms

Posted in Data Protection

Update confirms the introduction of an active “duty of care” and a dedicated regulator, as part of a comprehensive new online regulatory regime.

By Alain Traill, Rachael Astin, Gail E. Crawford, and Patrick Mitchell

Following a wave of commentary from industry, the social sector, and other organisations, on 11 February 2020 the UK government set out preliminary details of a new regulatory regime to govern content posted on online platforms. The details were released in an initial response to last year’s online harms white paper, with a full response expected this spring. While some changes have been made to the white paper proposals, seemingly in response to concerns raised by industry and other stakeholders, the government has confirmed that it will introduce an active “duty of care” on organisations to prevent certain content from appearing on their platforms.

The proposed new regime mirrors similar steps taken in other jurisdictions, e.g., Australia, to protect against harmful content online. It is also in-line with the direction of travel of platform regulation at a European level, taking into account, for example, changes to the AVMS Directive (EU) 2018/1808 (AVMSD) to regulate video-sharing platform services (VSPs) in relation to protection of minors and harmful content, and the planned EU Digital Services Act, which is likely to introduce changes to EU law regarding the liability of platform providers for content posted using their services. Continue Reading

Green Shoots for the Commercialisation of Cannabis-Based Medicinal Products in the UK?

Posted in Commercial, Life Sciences

By Frances Stocks Allen and Oliver Mobasser

Recent legal and regulatory developments pave the way for an increased commercialisation opportunity in cannabis-based medicines, but complex rules require careful navigation.

The National Institute for Health and Care Excellence (NICE) recommended the reimbursement of two plant-derived cannabis products for the first time on 10 November 2019. This follows Epidyolex becoming the first cannabis-derived medicine to be granted a marketing authorisation by the European Commission when it was approved for the treatment of two rare forms of epilepsy on 23 September 2019. In addition, recent changes to UK law loosen some of the restrictions on cannabis-based products for medicinal use. However, the regulatory regime for medicines containing cannabis-derived ingredients remains complex and nuanced.

Read the full Client Alert to learn more about the latest developments.

What Does Brexit Mean for the Copyright Directive in the UK?

Posted in Brexit, Media and Entertainment

Companies may face a challenging regulatory environment following the EU-wide implementation of the Copyright Directive by 7 June 2021.

By Deborah J. Kirk and Rachael Astin

On 21 January 2020, the UK government confirmed that the UK will not be required to implement the Directive on Copyright in the Digital Single Market 2019/790 (Copyright Directive) and that it has no plans to do so.

The UK left the European Union on 31 January 2020 (Exit Date), and the implementation period will end on 31 December 2020. As the deadline for transposing the Copyright Directive into Member States’ national laws is 7 June 2021, the UK will not be required to implement the Copyright Directive, and the UK government has confirmed that it has no plans to do so. Furthermore, the UK government confirmed that any future changes to the UK copyright framework will be considered as part of the usual domestic policy process. Continue Reading

New Corporate Governance Code for Italian Equity-Listed Issuers

Posted in Finance and Capital Markets

The four-pronged Code aims to encourage issuers in Italy to focus on long-term sustainability and engagement.

By Antonio Coletti and Isabella Porchia

A new edition of the Corporate Governance Code was released on 31 January 2020. The new Code focuses on four essential objectives and principles: sustainability, engagement, proportionality, and simplification.

Sustainability: The new Code intends to encourage Italian equity-listed issuers to adopt strategies based on sustainability. It recommends sustainable success as a priority for company management — defined as long-term value for shareholders and stakeholders — and calls on boards to integrate business plans, internal control and risk management systems, and remuneration policies with appropriate sustainability goals.

Engagement: The new Code recommends that listed issuers develop a dialogue with the market and with investors through specific engagement policies. It assigns a key role to the chairman, who — in agreement with the CEO — is directed to prepare a policy to manage dialogue with investors, which the board will approve and monitor.

Proportionality: The new Code tailors and graduates principles based on the size of the issuer, to promote access to equity capital markets and listing of small- and medium-size companies. Some recommendations are directed at large listed issuers (those with a market capitalisation higher than €1 billion for three consecutive years), while other recommendations apply to issuers with a concentrated ownership controlled by one or more shareholders.

Simplification: The format of the new Code has been simplified. To assist issuers in applying the Code, Q&As based on queries received from issuers will be published on a recurring basis. Continue Reading

No-Poach Prosecutions: A Growing Problem for M&A Deal Teams?

Posted in M&A and Private Equity

M&A deal teams should take note of heightened scrutiny of HR and employment practices by antitrust enforcers in the US and Europe.

By Richard Butterwick, David Little, Elizabeth Prewitt, Sarah Gadd, Joshua Chalkley, Anuj Ghai, Catherine Campbell, and Peter Citron

No-poach, non-solicitation, and wage-fixing agreements — arrangements between companies seeking to agree wages, or prevent or limit the hiring of each other’s employees that are not ancillary and narrowly-tailored to a legitimate transaction such as an M&A deal or joint venture — can lead to significant fines and even criminal sanctions, as well as private damages litigation. Parental liability for European antitrust failings by a group company can arise even in the case of a minority stake, and even if the parent company had no involvement in or awareness of the wrongdoing. Continue Reading