I have decided to purchase a four-bed property in London jointly with three other friends so we can live and work in the centre of the city without paying rent. However, one of my friends is not currently a UK resident and we believe we may all be liable for the new non-resident stamp duty land tax surcharge. Is this the case and is there any way around it?
Adam Kay, partner at the accountancy firm Saffery Champness, says the first point to bear in mind is that the rules of the new 2 per cent non-resident surcharge in England and Northern Ireland are not yet final — they form part of the 2021 finance bill which is going through Parliament at the moment. Therefore it is possible — albeit unlikely — that there might be changes.
Nevertheless, the new stamp duty land tax (SDLT) surcharge applies to joint purchasers where any one of the purchasers is a “non-resident”. On the face of it, if you buy a flat jointly with friends and one is not currently a UK resident then, assuming none of the exemptions apply, the surcharge will apply to the entire purchase.
A UK resident for this purpose means someone who has, at the date of the purchase of the property, spent at least 183 of the 365 days leading up to the completion date in the UK. There are special rules for people such as spouses of UK residents, or those in Crown employment.
It is possible to reclaim the 2 per cent surcharge if your friend becomes resident in the UK at a later date. The tax can be reclaimed if there is any 365-day period in the time from one year before to one year after the purchase, during which your friend was present in the UK for 183 days. Very broadly, this means that if your friend moves to the UK to live in the house and stays here for the next six months or so, then the 2 per cent surcharge is refunded.
To obtain a refund you will need to make a claim. The first point of call for such a claim would be the conveyancing solicitor you used to make the purchase. Since they filed your original SDLT return they will be best placed to do this for you.
I would recommend making them aware of this likely requirement to file for a refund in advance, so that you can make sure they have the capability to do it, and also to ensure that you are quoted a fixed fee for the reclaim.
The reclaim will have to be filed with HMRC within two years from the purchase of the property.
There are exemptions to the 2 per cent surcharge for certain purchases, including short leaseholds and properties worth less than £40,000. However, it does not sound as if any of these will apply to you.
My business fits within the gig economy and relies on gig workers to function. Following the Supreme Court ruling on the rights of Uber drivers in February, I am concerned that the legal status of my workforce may have changed. What are the wider implications of the Uber ruling on businesses like mine and how do I go about addressing the legal repercussions?
Clive Rich, founder and chief executive of LawBite, an online legal support platform for small and medium-sized businesses, says much has been written since the landmark Supreme Court decision as to why the court held against Uber. There has been less analysis of what the decision might mean for companies that engage contractors. Small business owners are understandably questioning whether their contractors will now be deemed “workers” too.
The Supreme Court said the starting point for deciding whether someone was a worker was not the contract between the parties, but the legislation that created a worker’s rights. Note, just because a contract says the individual is not a worker does not mean that is the case.
The key factor in deciding whether someone is a worker is likely to be the control exercised over that individual and the reliance of the individual on the company. The greater the control and dependence, the more likely that the individual is a worker, rather than being genuinely self-employed.
In the Uber case, the ride-sharing app company had significant control over its drivers, which was at odds with the self-employed relationship set out in the contracts and policies that the drivers had to agree to. In particular, the drivers were unable to negotiate the terms of the contract they signed, their payment, any passenger refunds, whether they accepted work once they were logged on to the app and how the services were delivered or the communication between the driver and the worker. The Supreme Court took these factors together to find the drivers were workers, dismissing Uber’s appeal.
Companies and organisations that rely on a self-employed workforce should review the arrangements with each member of the workforce: not just any contracts with them but the control you have over what that individual does and when they do it. The crucial point to consider is how dependent they are on you.
If the reality is that the individual has little control over their work, you are faced with a choice: offer them greater control within your business to try to avoid them being found to be a worker, or retain control and either pay the additional costs associated with worker status — paid holiday and the national minimum wage being the key ones — or run the risk of future claims.
Many business owners can be reluctant to give control to others, but ultimately it may benefit your organisation if staff feel they are being given responsibility and rewarded for their efforts. By putting in place good contracts that protect confidentiality, business connections and other business interests, you can give staff greater control, make your business more agile and responsive to client needs and reduce the risk of them being found to be workers.
The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.
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