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Message: <blockquote data-quote="Rachel S" data-source="post: 27075" data-attributes="member: 3442">Coronavirus: How it affects the UK Housing Market - [USER=4295]@Jiraiya[/USER] StoryThe UK property market is grinding to a halt after the government announced its stay-at-home measures: no marketing new homes, house viewing or surveying. Banks including Lloyds, Barclays, and RBS have stopped offering new mortgages unless the customer can commit a substantial amount of principal payment. Mortgage lenders also agreed to offer mortgage payment holidays for up to three months for existing mortgage borrowers. Impacts on businesses and law firmsMortgage loans have always been seen as a stable and crucial source of revenue for banks. Stable as it seems, it is not immune to the macro-economic downturn caused by the coronavirus. The property market freeze undoubtedly adds further pressure on banks amidst recent stock market turmoil. If the use of payment holidays becomes widespread, cash-strapped lenders will face increasing difficulties in meeting their own payment obligations. The market sentiment is reflected in the declining price of mortgage-backed securities(“MBS”) as investors expect more mortgages’ default. Given the unprecedented nature of the property market’s shutdown, law firms specializing in the capital market practice like Freshfields and Clifford Chance are working around the clock with authorities and banks to mitigate the impact of the holiday scheme. Questions mainly revolve around the documentation of MBS. For instance, whether these payment holidays are deemed “arrears” under the common MBS documentation. It is a common term in the MBS documentation that mortgages in arrears for 90 days or more will be deemed in default. This could mean dire legal consequences like repossession, which the Financial Conduct Authority actively warned against recently under the current economic climate. Lenders may have no options if the property market shutdown remains in place for months. The UK government needs to step up as banks do not survive on social goods and law firms can only do so much within the strict confines of contractual agreements. IR35 Legislation Postponed - [USER=3460]@Alice Manners[/USER] The Story Growing business uncertainty surrounding the Covid-19 pandemic has led to a delay in the introduction of new IR35 legislation.The legislation was going to extend the existing IR35 legislation, which ensures those working “off-payroll” but similarly to employees are properly liable to HMRC, to apply to the private as well as the public sector.Set to be introduced on the 6 April 2020, the changes will now not be enacted until April 2021.Impact on Law Firms and Businesses This would have added an additional burden onto businesses and individuals who are already being significantly impacted by the coronavirus. However, some businesses have already offered permanent positions to workers or stopped using the services of contractors in preparation for the change. Some have predicted that businesses will reverse these changes until nearer the new deadline. If anything, businesses will have more time to prepare and law firms more time to provide advice.The deferral has led to an increase in IT companies seeking contractors. With many businesses now forced to operate remotely, relying on an increasing amount of digital infrastructure, these companies may take on workers for specific purposes without the added pressure of employee costs. With many businesses freezing recruitment during this uncertain time, other companies may also use the deferral to follow this route.It is worth considering whether the pandemic could change the way we work. Flexible and freelance working could become more desirable once employers realise how easily it can be facilitated. Will the test under IR35 legislation, looking at whether a person is controlled like an employee, still be fit for purpose next April?LVMH Produces Sanitiser - [USER=3442]@Rachel S[/USER] The story In a bid to meet demand for hand sanitisers, businesses are stepping up. Luxury goods company LVMH is using perfumes and cosmetics production lines while L’Oréal is retooling factories to make millions of units of sanitiser for nursing homes and hospitals.In the UK, independent brewer BrewDog, Psychopomp Microdistillery and 58 Gin are all switching production of alcoholic beverages to sanitiser and are either donating or selling and giving the proceeds to hospital charities. Poland’s biggest oil group Orlen, known for windscreen wiper fluid and industrial oils is planning to sell sanitiser.Bacardi is adapting production across their global sites and is donating sanitiser to frontline workers as well as selling it to partner companies. Alcohol company Pernod Ricard is not only producing sanitisers but agreeing to provide alcohol to companies who can produce sanitiser alike Diageo who will donate two million litres of alcohol to sanitiser manufacturers.Impact on Businesses and Law FirmsFor businesses, alcohol companies may consider how adaptable their production lines are. Hand sanitiser and medical products are in high demand whereas demand for consumer luxuries like expensive alcohol or cosmetics will decrease as economies worldwide fear a recession. Alternatively, as most companies will donate products, corporate philanthropy can strongly bolster a company’s reputation. This is especially interesting as last year’s Business Roundtable redefined the purpose of a corporation to better serve society and not just aim for profit.Law firms will advise on regulatory approval and taxation for producing sanitiser. HMRC in the UK has recently changed requirements for distillers in the UK who no longer need to get approval to produce sanitiser while the FDA in the US has stated it will not take action over entities producing sanitiser, that are not usually licensed. Changes to employee job roles and facility can require consultation and consent and employment lawyers may provide guidance to employers on hours and training if production is at full capacity. Businesses collaborating to produce sanitiser may also raise competition issues and lawyers will need to mitigate this risk when structuring arrangements.</blockquote>

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