Intellectual property and Brexit

The Intellectual Property Office has issued commentary on the future of intellectual property (IP) issues following Brexit. We have copied in blow some of their comments to clarify various issues for companies with existing registered IP, or that have applications in progress.

Trade marks

The UK system for protecting trade mark rights is not affected by the decision to leave the EU. While the UK remains a full member of the EU then EU Trade Marks (EUTM) continue to be valid in the UK. When the UK leaves the EU, an EUTM will continue to be valid in the remaining EU member states.

We recognise that owners of existing EU trade marks want clarity over the coverage of those rights when the UK leaves the EU. We continue to engage closely with right holders and a wide range of stakeholders on this issue. The government is looking at various options and we are discussing the best way forward with users of the system.

Designs

The UK system for protecting registered and unregistered designs is not affected by the decision to leave the EU.

Registered Community Designs (RCD)

While the UK remains a full member of the EU, Registered Community Designs (RCD) continue to be valid in the UK. When the UK leaves the EU, an RCD will cover the remaining EU member states. We recognise that owners of existing RCDs want clarity over the coverage of those rights when the UK leaves the EU. We continue to engage closely with right holders and a wide range of stakeholders on this issue.

The Hague System

The government intends to ratify The Hague Agreement to join this international system in a national capacity. The Hague System for the International Registration of Industrial Designs allows for registration of up to 100 designs in over 66 territories through filing one single international application.

Unregistered designs

While the UK remains a member of the EU, designs, including patterns, may be automatically protected in the EU as ‘unregistered community designs’. This gives your design 3 years protection from copying.

Unregistered protection for designs will continue to exist through the UK unregistered design right and by using copyright. We are discussing options with designers and other users to ensure that the protection provided is fit for purpose.

European patents

The UK’s exit from the EU will not affect the current European patent system, which is governed by the (non-EU) European Patent Convention. UK businesses can continue to apply to the European Patent Office for patent protection which will include the UK. Existing European patents covering the UK are also unaffected.

Copyright

While the UK remains in the EU, our copyright laws will continue to comply with the EU copyright directives, and we will continue to participate in EU negotiations. The continued effect of EU Directives and Regulations following our exit from the EU will depend on the terms of our future relationship.

The UK is a member of a number of international treaties and agreements. This means that UK copyright works (such as music, films, books and photographs) are protected around the world. This will continue to be the case following our exit from the EU.

As readers will observe, there is some certainty in the IPO’s comments, but a lot of the detail is still to be agreed. Watch this space for more news as it develops.

The Intellectual Property Office has issued commentary on the future of intellectual property (IP) issues following Brexit. We have copied in blow some of their comments to clarify various issues for companies with existing registered IP, or that have applications in progress.

Trade marks

The UK system for protecting trade mark rights is not affected by the decision to leave the EU. While the UK remains a full member of the EU then EU Trade Marks (EUTM) continue to be valid in the UK. When the UK leaves the EU, an EUTM will continue to be valid in the remaining EU member states.

We recognise that owners of existing EU trade marks want clarity over the coverage of those rights when the UK leaves the EU. We continue to engage closely with right holders and a wide range of stakeholders on this issue. The government is looking at various options and we are discussing the best way forward with users of the system.

Designs

The UK system for protecting registered and unregistered designs is not affected by the decision to leave the EU.

Registered Community Designs (RCD)

While the UK remains a full member of the EU, Registered Community Designs (RCD) continue to be valid in the UK. When the UK leaves the EU, an RCD will cover the remaining EU member states. We recognise that owners of existing RCDs want clarity over the coverage of those rights when the UK leaves the EU. We continue to engage closely with right holders and a wide range of stakeholders on this issue.

The Hague System

The government intends to ratify The Hague Agreement to join this international system in a national capacity. The Hague System for the International Registration of Industrial Designs allows for registration of up to 100 designs in over 66 territories through filing one single international application.

Unregistered designs

While the UK remains a member of the EU, designs, including patterns, may be automatically protected in the EU as ‘unregistered community designs’. This gives your design 3 years protection from copying.

Unregistered protection for designs will continue to exist through the UK unregistered design right and by using copyright. We are discussing options with designers and other users to ensure that the protection provided is fit for purpose.

European patents

The UK’s exit from the EU will not affect the current European patent system, which is governed by the (non-EU) European Patent Convention. UK businesses can continue to apply to the European Patent Office for patent protection which will include the UK. Existing European patents covering the UK are also unaffected.

Copyright

While the UK remains in the EU, our copyright laws will continue to comply with the EU copyright directives, and we will continue to participate in EU negotiations. The continued effect of EU Directives and Regulations following our exit from the EU will depend on the terms of our future relationship.

The UK is a member of a number of international treaties and agreements. This means that UK copyright works (such as music, films, books and photographs) are protected around the world. This will continue to be the case following our exit from the EU.

As readers will observe, there is some certainty in the IPO’s comments, but a lot of the detail is still to be agreed. Watch this space for more news as it develops.

A further package of support for the businesses and workers affected by Carillion’s liquidation was announced Saturday 3 February, by Business Secretary Greg Clark.

Through delivery partners that include all the major high street lenders, the British Business Bank will provide support to make available up to £100 million of lending to small businesses who may not have the security otherwise needed for conventional bank lending using its Enterprise Finance Guarantee programme.

This will be of benefit to small businesses, including the chain of subcontractors to Carillion, who may not have sufficient assets as security to access conventional loans. These guarantees can be used to support overdraft borrowing and refinancing of existing debt.

The UK’s leading banks have also furthered their commitment to provide support to those affected with UK Finance confirming additional support for personal banking customers concerned about overdraft, mortgage or credit card repayments, as well as further financial support for small businesses to provide short-term relief to help keep them afloat.

Business Secretary Greg Clark said:

We want to signal very clearly to small and medium sized businesses who were owed money by Carillion that they will be supported to continue trading.

The banks have responded to my request by agreeing to support businesses and individuals affected. This further guarantee will help those businesses who may not be able to provide the usual security for a loan.

I will continue to work closely with business organisations, trade unions and banks to actively support those affected by Carillion’s insolvency.

This package is in addition to the more than £200 million already announced by Lloyds Banking Group, HSBC and RBS.

HMRC has stopped thousands of taxpayers from receiving scam text messages, with 90 percent of the most convincing texts now halted before they reach their phones.

The milestone comes during Take Five To Stop Fraud Week, with the tax authority working to raise awareness of the tell-tale signs of fraud ahead of the Self-Assessment deadline.

Fraudsters alleging to be from HMRC send text messages to unsuspecting members of the public. In these messages they will make false claims, such as suggesting they are due a tax rebate. Messages will usually include links to websites that harvest personal information or spread malware. This can in turn lead to identity fraud and the theft of people’s personal savings.

HMRC will never contact customers who are due a tax refund by text message or by email.

Reports of this type of fraud have quickly increased in volume over the last few years. People are 9 times more likely to fall for text message scams than other forms like email because they can appear more legitimate, with many texts displaying ‘HMRC’ as the sender, rather than a phone number.

HMRC, working with public and private partners, began a pilot in April 2017 to combat these messages. The new technology identifies fraud texts with ‘tags’ that suggest they are from HMRC and stops them from being delivered.

Since the pilot began, there has been a 90% reduction in customer reports around the spoofing of these specific HMRC-related tags on SMS and a five-fold reduction in malicious SMS reports. The initiative has helped reduce reports of these scams from over 5,000 in March 2017, before the new programme was introduced, to fewer than 1,000 in December 2017. This progress comes after similar successes in tackling fraudulent emails and websites.

In the last 12 months, HMRC has initiated the removal of 16,000 malicious websites, meaning even if the texts are delivered, the associated phishing website is likely to have been removed.

By introducing technical controls, HMRC has also stopped customers receiving over 300 million emails purporting to come from the tax authority.

HMRC is working with the National Cyber Security Centre to further this work and extend the benefits beyond HMRC customers.

As our regular readers of our newsletter will be aware, the government has back-tracked on their original proposal to digitise taxpayers’ affairs.

The original plan, to have most self-employed traders and landlords uploading accounts and VAT data from April 2018, was scrapped.

The new plan, delayed until April 2019, requires traders registered for VAT, and with turnover above the current £85,000 registration threshold, to upload their VAT figures digitally direct from a HMRC software interface. HMRC has offered, somewhat tongue in cheek, that taxpayers not required under these revised criteria, are non-the-less welcome to upload their VAT numbers this way on a voluntary basis.

The outcome of these changes requires affected businesses to use compatible software – to link with HMRC – from April 2019.

Those VAT traders who are still using a manual record-keeping process, or IT solutions that will not be recognised by HMRC’s systems, will need to upgrade to more suitable software during the next year.

Clients and other VAT registered business owners that are concerned about their readiness for these changes should call for advice. Clients who use our VAT services can be assured that we will use software that is MTD compliant.

Many clubs offer members a range of services for their membership fee. For example, membership may include a members’ magazine. Ordinarily, a magazine subscription should be zero rated for VAT purposes, but when the magazine element is bundled into a general club subscription – that is standard rated for VAT – problems can arise.

HMRC is prone to view the “bundled” price as a standard rated supply, whereas the affected organisation would prefer to separate out the zero-rated element thus reducing the cost to their members.

In a recent case, the Harley Owners Group challenged such a fixed supply argument raised by HMRC. They argued that the members’ magazine was a separate supply and should be considered zero-rated, and the courts agreed.

The delivery of mixed services under an umbrella membership subscription is an area of VAT law that is far from clear. However, HMRC has lost a number of cases recently with a similar outcome to the Harley Owners Club.

With no agreement on tariffs, the UK will be treated as any other non-EU trading nation post Brexit. Consequently, UK importers would be required to make an up-front VAT payment in addition to any customs duties. This VAT payment will rank as input VAT that can be reclaimed from HMRC.

However, a problem will arise if an importer submits VAT returns quarterly. Any VAT paid to HMRC when they import goods will be authenticated by the issue of HMRC’s form C79 (this form is issued monthly). Once issued this can be treated like a VAT invoice and included on the next VAT return.

Accordingly, the importer will not be able to reclaim VAT until this form is received.

Affected businesses therefore need to add the VAT costs each quarter to their cash flow as it could be up to four months until a refund of import VAT paid can be recouped.

It is to be hoped that our government will respond to lobbying on this issue. Perhaps they will allow some form of deferment of the VAT payable or speed up the reclaim process.

A company, Casio Services Ltd (CSL), had been registered with Companies House since June 2016, and after that confirmation by Companies House the directors would no doubt have felt that they could trade with the registered name with no restriction.

Unfortunately, Casio Electronics Co Limited (CECL), a previously registered business disagreed.

CECL were not happy with CSL’s use of the Casio name and applied to the courts to request CSL to change its name. CSL did not contest the application and have been required to do just that, change their company name.

This case is a salutary reminder that registration of a company name at Companies House does not give you exclusive rights to ongoing use of that name if a company previously registered feels that your name is like its own and would allow you to pass off your businesses as associated with it in some way.

1 February 2018 – Due date for corporation tax payable for the year ended 30 April 2017.

19 February 2018 – PAYE and NIC deductions due for month ended 5 February 2018. (If you pay your tax electronically the due date is 22 February 2018)

19 February 2018 – Filing deadline for the CIS300 monthly return for the month ended 5 February 2018.

19 February 2018 – CIS tax deducted for the month ended 5 February 2018 is payable by today.

1 March 2018 – Due date for corporation tax due for the year ended 31 May 2017.

2 March 2018 – Self assessment tax for 2016/17 paid after this date will incur a 5% surcharge.

19 March 2018 – PAYE and NIC deductions due for month ended 5 March 2018. (If you pay your tax electronically the due date is 22 March 2018)

19 March 2018 – Filing deadline for the CIS300 monthly return for the month ended 5 March 2018.

19 March 2018 – CIS tax deducted for the month ended 5 March 2018 is payable by today.

The Princes Trust and Innovate UK have formed a partnership to support young people with business ideas that could become a reality. The nuts and bolts of the scheme are set out below.

Ideas can come from anywhere

The competition – part of the ideas mean business campaign – will help young adults to make their ideas a success, no matter where they come from. Business ideas could be spotting a solution to a problem or a different way of doing things. They could involve:

• changing something for the better in a local community
• a new way of using technology to fix an everyday problem
• a new way to tackle an environmental issue

What support is on offer?

Support is available to young innovators who can commit 15 hours a week to developing their idea.

This award will include:

• an allowance to cover time spent working on the idea
• coaching and mentoring from an innovation champion
• a funding pot for activities or resources, such as travelling to meet customers and partners, training courses, equipment, office space and IT

Who can apply?

To be eligible applicants must:

• be a UK resident that has the right to work in the UK, or is applying for the right to do so
• be unemployed or either working less than 35 hours a week if applying through the online programme, or working less than 16 hours a week if applying through the in-person programme
• not be studying or studying less than 14 hours a week
• be aged between 18 and 30

People currently receiving support from the Prince’s Trust’s in-person Enterprise programme are also eligible to apply.

How to register

Applicants will need to register with The Prince’s Trust, where they will then be able to sign up to attend one of a series of regional events. These events will help young people to develop their ideas and give more information about the application process.

You must attend an event to apply and you will be able to get your costs reimbursed. If you are not able to attend but still want to apply contact younginnovators@ktn-uk.org to discuss.