News archive

Interesting article on the debate surrounding the introduction of a specific tax relief for “games firms”.

The article refers to a report by Gartner Inc.  The report stated that it is likely that the games market will grow 10.4% between 2010 and this year.  Spending on video games should increase in coming years so that by 2015 worldwide spending will reach £69.9 billion.

Jim McGovern, Labour MP for Dundee West, is quoted as saying: “This report increases the pressure on the UK Government to start acting to support our computer games industry.  In the last month Ireland has announced it will introduce tax breaks and Pennsylvania became the 17th US state to do the same.”

The present UK coalition Government in its July 2010 emergency Budget decided not to introduce a tax relief for the games industry that the previous UK Government had planned to introduce.

The article from the Courier can be found here.

Pryor v The Chief Constable of Greater Manchester Police, 30 June 2011

English Appeal Court case described by Lord Justice Ward as a “sorry tale” and concerning the police seizure of a vehicle believed to have been driven without a valid insurance certificate.

Mr Pryor purchased a car (a Honda) which he lent to his friend Mr Burton whilst he was abroad. He gave Mr Burton a signed letter confirming that he was the registered owner of the vehicle and stating that Mr Burton had his full permission to drive the vehicle.

Mr Burton was stopped by Greater Manchester Police for using a mobile phone whilst driving. The police asked Mr Burton to produce his licence, MOT and an insurance certificate.  Mr Burton produced the paperwork including the letter from Mr Pryor and a Saga Insurance certificate for his own car (a Ford) which states that:

“The policy holder may also drive with the consent of the owner a motor car not owned by and not hired under a hire purchase or self-drive agreement to the policyholder”

However, this did not satisfy the police who phoned Saga and were informed by them (wrongly as it turned out) that Mr Burton was only insured to drive other cars under his policy if the other vehicle had its own insurance cover.  According to the police computer the Honda had no cover.  The police then seized the Honda under s165A of the Road Traffic Act 1988.

In terms of s165, the police can require a person driving a motor vehicle to produce various documents including a “relevant certificate of insurance”.  In terms of s165A, if the person fails to produce the documents requested and the constable has reason to believe the vehicle is being driven without the documentation in place; the police can seize the vehicle.

Mr Pryor brought a claim against the police for wrongful interference with property.  The claim was dismissed by the District Court on the basis that the issue was whether the police officer had reasonable grounds for believing that Mr Burton was driving without insurance.  Notwithstanding the fact that Mr Burton was driving with permission and with insurance,  what was important whether the police had reasonable grounds for believing that the vehicle was being driven without insurance and the (albeit misleading) information from Saga had provided those reasonable grounds.

However, the Court of Appeal allowed the appeal finding that (in the words of Lord Justice Ward) it was “plain as a pikestaff” that the police had failed to establish grounds for seizure of the Honda and had wrongly interfered with Mr Pryor’s goods.

In order to justify seizure of a vehicle three facts must be present:

1. a constable in uniform must require that a driver produces a relevant certificate of insurance,
2. the driver must fail to produce the relevant certificate, and
3. the constable must have reasonable grounds for believing that the vehicle was being driven without insurance.

The Judgement in the District Court rested on the third element of the test.  However, the Court of Appeal made it clear that that this element of the test only applies if the driver fails to produce the relevant certificate.

The police attempted to argue in court that the “relevant certificate” was the certificate for the Honda not the Ford, however, Lord Justice Ward said that was “simply wrong”. The purpose of the Road Traffic Act is to ensure that users of motor vehicles are insured against third party risks.  Mr Pryor was covered because his policy (for the Ford) extended to his driving, with the consent of the owner, a car not owned by him.  The certificate he produced said exactly that.  Since the certificate he produced demonstrated that he was not guilty of driving without insurance it was plainly a relevant certificate.

As Mr Pryor had not failed to produce the relevant certificate (in terms of the second part of the test), the police constable’s belief, that the certificate did not mean what it said, was neither here nor there.

A noteworthy aside is that the insurance company clearly believed that the cover was only extended if the car being driven was itself insured by its owner.  It will be interesting to see whether this case leads to a rewording of some insurance policies.

A call for evidence has been issued by the Scottish Parliament’s new Scotland Bill Committee.  The deadline is 9 September 2011.

The Committee which now has an SNP majority has also asked for comments on devolving control over Corporation Tax and the Crown Estate to the Scottish Parliament and the role of the Supreme Court.

Given the result of the Scottish General Election it will be interesting to see how the Unionist and Federal parties respond to the proposed amendments to the Scotland Bill.

One issue that needs to be looked at again is whether the income tax proposal is workable.

Also, given that the Scottish Parliament is going to gainhave increased fiscal powers under any political scenario we now need to start seriously at creating a Scottish Exchequer that combines the role of HM Treasury and HM Revenue & Customs.

The Scotland Bill Committee’s webpage and “call for evidence” can be found here.

This is an issue that has been gaining an increasing amount of coverage over the last few years.

The House of Commons Treasury Committee are also looking at this issue.

The Chartered Institution of Taxation have published a report of a recent Treasury Committee hearing on this issue.  It seems that there is general agreement as to the existence of the “tax gap”.  There is as yet no agreement on how we go about measuring it or how to reduce it.

The CIOT report on this can be found here.

Inner House case considering the competency of the Lands Tribunal to discharge or vary conditions in a registrable lease in terms of s90 of the Title Conditions (Scotland) Act 2003.

The Co-operative Group, who were tenants under a 125 year lease of subjects at the Paisley Centre, sought to discharge or vary certain provisions including restrictions on the use of the property and a “keep open” clause contained in the lease.

The Lands Tribunal had rejected Propinvest’s (the landlord) preliminary arguments that it had no jurisdiction to vary or discharge the conditions. However, an extra division of the Inner House held that the Lands Tribunal had “gone too far, too fast and on inadequate foundation” in rejecting Propinvest’s challenge to their jurisdiction.

The Inner house found that the Lands Tribunal had not applied their minds to a significant aspect of the decision in George T Fraser Limited v Aberdeen Harbour (1985). It was clear that the legislature did not intend all title conditions in registrable leases to be susceptible to the Lands Tribunal’s jurisdiction[1] and, in Fraser, the Lord President (Emslie) had[2]: identified two potential areas of limitation:

1)     that the condition must “relate to land”; and

2)     that there must be an obligation. I.e. a burden on an established right.

With regard to the second area of limitation, the court in Fraser had held that the Lands Tribunal had no jurisdiction to interfere with a clause which, by excluding assignees without the landlords consent, essentially defined the tenant’s identity from the outset. Such a clause was not a true burden just an important delimitation of the initial grant.

The Inner House found that, when rejecting Propinvest’s challenge to its jurisdiction, the Lands Tribunal had not considered the second aspect of the Fraser decision and had failed to consider whether Fraser laid down a principle of general application which should have been followed. Fraser was plainly of high authority and it was at least arguable that the court there did seek to identify a principle of general application.

The Inner House sustained Propinvest’s appeal and allowed a proof before answer on all aspects of the dispute including whether the Co-operative Group could bring their application within the proper scope of the Lands Tribunal’s jurisdiction noting that a decision should not be reached without the fullest consideration of the Fraser decision.

The full judgement is available from Scottish Courts here.

 All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

The Scottish Government have published research looking at various methods of charging for development within the planning system in order to fund infrastructure.  Five different models were considered including a ‘blanket’ system similar to the Community Infrastructure Levy used in England.

Although the research determined that all five models were options for Scotland, the ‘blanket’ system was criticised for being short on certainty and not necessarily being tangibly linked to site developments. The models deemed to have the greatest potential were (1) the ‘measured charges’ model which bases the charge on the “infrastructure call” made by the development and depends on up front financing being available for specific phases of the development with payment of the charge being made at the point of build or on unit sales and (2) the ‘negotiated model’ i.e. the present section 75 contribution approach.  Also considered were a ‘central model’ (i.e. state funding for infrastructure) and an ‘innovative model’ which included various approaches such as Tax Increment Financing (TIFs) and Local Asset Backed Vehicles (LBVs).

The full Report is available from the Scottish Government here.

An independent report into elderly care in England, commissioned by the UK Government and headed by Andrew Dilnot, has been released today.

The Dilnot report recommends that a person’s lifetime contribution towards his or her social care costs in England should be capped at £35,000.

The report also recommends that the means-tested threshold in England, above which people are liable for their full care costs, should be increased from £23,250 to £100,000.

The Dilnot report can be found here.

Two of Scotland’s leading economists warned that frontline services such as education and social care will lose out to Edinburgh’s troubled trams project as they raised serious doubts over every single aspect of the funding proposals.

Professor Arthur Midwinter of Edinburgh University Business School told The Herald the council’s plans to raise the extra £173 million needed are “full of questionable assumptions and there is risk in every element”.

In a scathing attack, Professor Arthur Midwinter of Edinburgh University Business School told The Herald the council’s plans to raise the extra £173 million needed are “full of questionable assumptions and there is risk in every element”.

The report from the Herald can be found here.

A former Glasgow city councillor has been banned from making solo visits to his elderly mother in a care home run by Southern Cross after complaining about her treatment.

The report from the Scotsman can be found here.

The chairman of BMA Scotland, Dr Brian Keighley, has questioned whether society can afford the cost of treatments designed to prolong the lives of terminally-ill patients for weeks or months, given the current pressure on health service budgets. Dr Keighley said in some cases tens of thousands of pounds were spent on drugs to extend cancer patients’ lives for relatively short periods He added that such treatments should be looked at ‘critically’ and that for life-prolonging treatments costing thousands of pounds, ‘useful’ longevity, should be the criterion for decision-making.

The article in the Scotland on Sunday can be found here.