UK: Professional Practices News: Summer 2013 - Causing A Bit Of A Stir; Change Afoot For Partnerships

FOREWORD - GROWING PAINS

By Giles Murphy

As the UK weather slowly starts to remember it is summer, there are signs that the UK economy has remembered that it is traditionally supposed to grow. While this edition of Professional practices news looks at the economic outlook, it also reminds us of the fragility of any professional practice firm and the warning signs that indicate your firm might be at risk.

Partners in professional firms will also be looking warily at the HMRC consultation into the taxation of partners and the potential impact any changes may have. One area where change is certain is pensions and the so-called auto-enrolment regime. Both taxation and pension changes may have a lasting impact on the net amount partners can withdraw from the business for the services they provide and, therefore, both receive attention in our newsletter.

On a more positive note, we look at how to bring out the best in your partners in relation to business development and at the Brazilian market as a location for expansion of professional practice firms.

If you have any queries on any of the matters covered, please do not hesitate to get in touch.

PROBLEM? WHAT PROBLEM? - SPOTTING FINANCIAL WARNING SIGNS EARLY IS ESSENTIAL FOR SURVIVAL

By Colin Hardman

Colin Hardman examines the warning signs that, if identified early, can greatly improve the recovery prospects of firms in financial difficulty.

An inevitable consequence of the recent economic turmoil is that some professional practices, large and small, are suffering from falling profits and liquidity issues. In extreme cases, this has led to the failure of some firms. For every high-profile failure, such as the administration of Cobbetts LLP earlier this year, there are numerous, less well-reported failures of smaller firms. There has also been a marked increase in professional practices and their lenders seeking restructuring and insolvency advice – a trend that is unlikely to reverse in the near future.

As a further indication of this problem, in our latest annual survey of the legal sector, the greatest concerns to firms were the fragility of the UK economy, pressure on fees and maintaining profitability. Cuts in legal aid, the Jackson reforms and increased competition from 'Tesco law' are also unwelcome contributory factors to a general lack of confidence within the sector.

Common warning signs

The first step to stability and recovery is to identify (and accept) there is a problem. Below are some of the more common warning signs that a firm may be heading for trouble.

  • Lack of clarity and agreement on the firm's strategic direction – The goals of senior/equity partners are often at odds with those of junior/salaried partners, leading to incongruent behaviour.
  • Higher than expected rates of voluntary departure of partners and other key fee-earners – Dissatisfaction with the direction of the practice or perceived unfairness in the reward structure may well lead to the exit of better performing fee earners. Together with a failure to deal with weaker performing staff, this can result in dissatisfied clients and subsequently falling profits and lower billing recovery rates.
  • Inadequate management information systems – Firms should prepare management accounts to assess their trading performance and current financial position (especially lock-up). They should produce an annual budget, apply key performance indicators (financial and non-financial) and short-term cash flow forecasts. These tools are essential when it comes to making the appropriate decisions to maximise profits and control cash.
  • Level of drawings not realigned with lower profits – When profits start falling firms often fail to realign their outgoings, resulting in a depletion of cash reserves or increased reliance on overdraft facilities. A further consequence of this is an imbalance in levels of bank debt compared to partners' capital.
  • One or more new initiatives requiring capital investment – This can include expansion into new territories or service lines – usually slow burners in terms of revenue and profit generation, while being a significant cash drain in the early stages.
  • Passive billing and collection procedures – While lock-up is a contributory factor in many cash- stricken firms, accelerated billing and collection processes can have a dramatically beneficial effect on liquidity in a relatively short period of time, reducing the level of funding required from other sources (especially the bank and the partners themselves).
  • Lack of professional advice and support – Denial and/ or unwillingness to seek professional advice is common among professional practices. While a natural reaction may be to try to resolve issues within the sanctum of the firm, the implications of wrongful trading, particularly when coupled with unlimited liability (if a general partnership), should be a sufficient wake-up call to being more proactive in getting external professional advice.

Identifying and dealing with issues quickly and conveying the subsequent strategy (and progress towards delivering it) to key stakeholders, including the bank and your own staff, will greatly improve the chances of recovery and survival.

CURTAIN TO FALL ON PROFIT MANIPULATION? - STEPS TO PUT A STOP TO THE MISUSE OF PARTNERSHIPS

By Pamela Sayers

Pamela Sayers looks at measures announced in the Budget that affect many businesses involving LLPs and other partnerships.

The increasing use of a mix of corporate structures and LLPs by professional practices to take advantage of differing tax rates has prompted the Government to take action.

Disguised employment and manipulation of profits

Possibly prompted by the Legal Services Act coming into force, the Government has published a consultation on measures to:

  • remove the presumption of self- employment for partners of LLPs, to tackle the disguising of employment relationships through LLPs; and
  • counter the manipulation of profits or losses by LLPs and other partnerships involving companies and/or trusts or other vehicles to achieve a tax advantage.

The consultation process will lead to fresh legislation being enacted next year, likely to be effective from 6 April 2014.

The Government acknowledges that the current tax law deliberately makes all members of an LLP self-employed. It appears that it is not looking to stop this altogether, but rather to refine the circumstances when members will be regarded as self-employed. This would suggest that any change to the legislation is unlikely to be applied retrospectively.

The consultation document addresses the use of corporate partners for tax-avoidance purposes, which includes cases where individual partners benefit directly or indirectly from accessing the low rates of UK corporation tax, currently 23%, reducing to 21% from 1 April 2014 and to 20% from 1 April 2015.

Presumption of self-employment

Government scrutiny of the tax rules for LLPs may also stem from concerns that revenue from employer national insurance contributions (NICs) are being lost due to the difference in rates for self-employed individuals compared to those for employees and their employers. Individuals who have been given LLP member status may in all other respects be treated as an employee. Therefore, HMRC intends to remove the presumption that LLP members are self-employed.

In response to the increased use of LLPs to take advantage of reduced NIC liabilities for LLP members, whose remuneration is currently treated as self-employed remuneration, HMRC is considering providing limits and a targeted anti-avoidance rule (TAAR) on the self-employed status of partners. The changes proposed will apply where a member satisfies either of two conditions, in which case, they will be treated as employed by the LLP rather than self-employed.

Profit or loss allocation arrangements

In response to divergence between higher income tax rates and lower corporation tax rates, there has been an increased use of 'mixed' partnerships (those including individual partners subject to income tax and other partners who are not, such as companies). There has also been an increased use of partnership arrangements to allocate profits, losses or other assets to achieve minimum incidence of tax (for example, losses being allocated to individual partners who have been able to offset those losses against other income taxable at higher income tax rates, or profits allocated to corporate partners which are taxed at lower corporate rates, and other avoidance arrangements).

It is proposed that these opportunities be stopped where the, or a, main purpose of the arrangements is a tax- avoidance purpose. It is recognised that the proposals will catch arrangements dealing with potential future forfeiture conditions for certain remuneration planning, as well as arrangements which seek to use corporates as a means to minimise tax costs associated with financing working capital.

Simplification of partnership tax The Government has also asked the Office of Tax Simplification (OTS) to review ways to simplify the taxation of partnerships. There are a number of areas around the administration of partnership tax issues and disputes that would benefit from improvement. In addition, clarification on the tax transparency aspects of partnerships for a range of taxes and reliefs may also be an area for discussion.

Close company loans to participators

Subject to certain exceptions, the rules on close company loans to participators charge the company lender an amount as if it were corporation tax. The amount payable is equivalent to 25% of the amount of a loan or advance made to an individual who is a participator in the company or an associate of such a participator. It is also payable where a company receives the loan or advance in a fiduciary or representative capacity and is a participator in the close company or an associate of such a participator. Relief from the requirement to pay the amount equivalent to corporation tax (or the right to the repayment of that amount) is available on a claim where the loan or advance is repaid or the debt is released or written off.

The provisions could also apply where an intermediary person, other than the original close company, makes a payment or transfer to an individual or company participator.

Measures effective from 20 March 2013

Three changes to the close company loan to participator rules are proposed to deal with avoidance in this area, effective from 20 March 2013.

  1. The rules will apply where the loan is made to any form of partnership where a participator (or their associate) who is a 'relevant person' is a partner. There is also an extension of this rule for certain trust arrangements.
  2. The rules will apply to arrangements where value is extracted from a close company which is a party to tax-avoidance arrangements and a benefit is conferred (directly or indirectly) on an individual (or their associate) who is a participator in the close company.
  3. There is a 30-day rule to restrict relief for loans or benefits repaid where the amounts repaid and redrawn exceed £5,000 and the amounts redrawn are taken in an accounting period subsequent to the accounting period in which the repayments are made. If the rule applies, the repayments will be treated as repaying the new amounts drawn in preference to the previous advances. If the amounts outstanding are £15,000 or more at the time of repayment and, at the time of repayment, arrangements have been made for a new payment of £5,000 or more to be made, the repayments will be treated as repaying the new amounts drawn in preference to the previous advances whenever made. However, neither of these restrictions applies where an income tax charge arises on the repayment on the person by reference to whom the loan, advance or benefit was a chargeable amount.

Further consultation

The Government will consult later in 2013 on the structure and operation of the tax charge on loans from close companies to their participators. If further legislation is needed, it will be included in the Finance Bill 2014.

Who will be affected?

In relation to professional practices the content of the 2013 Budget and the subsequent partnership consultation document mirror the theme of tackling tax-avoidance. While partnerships and LLPs offer great flexibility as business vehicles, HMRC believes that there has been misuse resulting in unfair tax advantages. We shall have to wait and see whether any fresh legislation will apply to all partnerships or only those with structures in place to artificially reduce tax liabilities. However, we do not believe that the Government is looking to target genuine commercial businesses that have been structured appropriately.

Action required

All participants should be undertaking a review of their current structure to assess the new and proposed changes, together with a review of the status of each individual LLP member.

BUILDING A PARTNER PERFORMANCE MODEL

By Rachel Stone

As part of our series on a balanced approach to measuring partner performance, Rachel Stone moves on to business development and measuring partner activity.

It would seem logical that all partners have business development responsibilities for their team and firm. So we look here at some of the measures you might use as part of your balanced scorecard to assess how partners find and win new clients.

Building a pipeline

Each partner is different in their approach to the business development process. Some are veterans of the cocktail party and networking event, picking up business cards and new connections smoothly as they work the room. Others do far better in one-to-one situations where they can get under the skin of a prospect's business and quickly demonstrate their ability to add value. It's important that each partner knows their own business development strengths and builds these into a strategy for finding and winning new work. Helping partners to focus on their individual business plan and target list can add real value to this. It can give individual partners and departmental partner teams clear direction and momentum, even in difficult economic times. A business development planning tool can also help newer partners build an early prospect pipeline.

Effective measurement of business development activity and outcomes

When it comes to measuring business development activity and outcomes (and it's very rare to see great outcomes without high activity levels), you may wish to consider some of the following questions.

How active is this partner in promoting the firm to our business community?
How successful is this partner's involvement in marketing activity for their team and for the firm as a whole?
How much networking activity does this partner carry out and what comes of it?
Does this partner have a robust process for generating new leads, following up on contacts and managing the conversion of prospects to clients?
What success does this partner have with formal tender situations?
What success does this partner have in informal business development situations where a proposal will suffice?
What new work has this partner won for their team and others in the firm?

Recognising individual styles

In terms of business development, one size rarely fits all and helping partners to identify and maximise the impact of their own style can pay dividends for the individual and the firm. Do not forget that confidence is crucial to the success of most business development activities, so investing in partner support and training is usually a wise move.

SETTING UP IN BRAZIL

By E Camillo Pachikoski, PP&C Nexia and Peter Thorpe

E Camillo Pachikoski of PP&C Nexia, and Peter Thorpe, highlight the key issues that professional firms need to consider if setting up in Brazil.

A relatively stable political and economic environment, strong financial system and increasing demand for professional services has led a growing number of firms to consider setting up in Brazil.

Last year, foreign investment was around US$60bn, with this figure set to rise to over US$80bn in 2013. But there can be significant obstacles to overcome as a result of relatively inflexible rules and legislation.

The regulatory landscape

Regulation surrounding some professions, such as engineering and architecture, is fairly flexible. Firms with a commercial brand are permitted to operate within the country, as are foreign partners, provided at least one professional is resident in Brazil and assumes a technical role. This individual is required to have graduated from a certified institution and be enrolled with the relevant professional council.

By contrast, the Bar Association has acted vigorously against foreign law firms attempting to set up in Brazil. As a result, regulation concerning the practice of law, including advocacy, by foreign law firms is far more restrictive. For example, firms are not allowed to exhibit a commercial brand or the name of partners in the law firm's name. Moreover, practising law is restricted to those professionals resident in Brazil who have graduated from institutions certified by the Professional Council and are enrolled in the Bar Association.

Foreign practice

Foreign consultants who want to consult on the laws related to their own country can obtain authorisation to do so from the regional council of the Bar Association where they intend to practice. Their firms must be made up of foreign consultants only and they are limited to offering those services authorised by the regional council. Private practice in advocacy or practices by means of an instructed lawyer are expressly forbidden.

While some professions in Brazil, e.g. accountancy and audit, are allowed to enter into association agreements, partnership agreements or even company formations, Brazilian lawyers that associate with foreign consultants (or even those that belong to associations involving foreign consultants) could be in violation of Bar Association statute.

Co-operation between Brazilian lawyers and foreign consultants is, however, permitted – although law firms are limited to a relationship based on a 'best-friends' policy where, for example, the Brazilian and foreign law firm serve the same client, but one provides services based on Brazilian law while the other focuses on services related to international law. A variation of this type of relationship might involve the Brazilian law firm maintaining a direct relationship with the client while instructing the international law firm and paying its fees. But such structures can present operational difficulties and may be subject to double taxation.

Company structure

The most straightforward and flexible way to set up a business in Brazil is as a limited liability partnership, also known as a Sociedade Limitada (LTDA). This structure is governed by a 'contrato social' (articles of association). There are no minimum capital requirements, but the firm's capital must be registered at the Brazilian Central Bank in order to be recognised and to allow for profits to be remitted without incurring additional taxes in the future. All firms are taxable on their worldwide income. The capital is divided into quotas or shares, with the foreign firm able to own up to 99.9% of the shares. Any liability is limited to the capital subscribed. Setting up an LTDA in Brazil requires a minimum of two partners, and investors are required to appoint a resident citizen as an attorney.

Tax implications

The Brazilian tax rate is 15%, with taxable income over R$240,000 subject to an additional 10%, plus a so-called 'social contribution' of 9%, resulting in an effective tax rate of slightly less than 34%. Capital gains and losses have no special treatment for corporate income tax purposes and all related party transactions must take place on an arm's length basis.

Resident corporations or non-residents with a permanent establishment (PE) in Brazil are subject to Brazilian corporation tax and income tax rules. Resident corporations are taxed on worldwide profits, with relief for overseas taxes suffered; non-resident PEs are taxed on profits derived from the PE in Brazil. There are three federal taxation system options for the calculation of taxable profits.

  1. Pre-tax profit system is mandatory for firms with an annual gross income of over R$48m and which receive income from outside Brazil.
  2. Presumed profit system applies to those firms whose net income did not exceed R$48m in the previous year.
  3. Unified system for the payment of taxes by small businesses. This simplification is available for businesses with an annual gross income not exceeding R$3.6m and with no partners outside Brazil.

PERSONAL TAX UPDATE

By Nick Osler

Nick Osler provides a checklist of tax-planning issues for partners.

Income tax rates and thresholds

The personal allowance for individuals born after 5 April 1948 increased by £1,335 to £9,440 from 6 April 2013, with the upper threshold of the basic-rate band reducing by £2,360 to £32,010.

For 2014/15, the personal allowance for individuals born after 5 April 1948 will increase to £10,000 – this increase has been brought forward by one year.

As previously announced, the additional rate of income tax has reduced from 50% to 45% from 6 April 2013 and the dividend additional rate reduced from 42.5% to 37.5%.

Cap on tax reliefs

As announced in last year's Budget, a cap on certain income tax reliefs claimed by individuals 'sideways' against general income took effect from 6 April 2013.

The cap will not apply to income tax relief on gift aid, other charitable donations, the enterprise investment scheme (EIS), the Seed EIS (SEIS) losses and overlap relief, nevertheless it will still affect many individuals, especially in relation to qualifying loan interest.

ISAs

The ISA investment allowance for 2013/14 has increased to £11,520. Up to £5,760 can be saved in a cash ISA and the remainder can be invested in a stocks and shares ISA.

The Junior ISA investment allowance and the Child Trust Fund investment allowance for 2013/14 has been raised to £3,720.

SEIS

CGT relief has been extended to gains realised in 2013/14, which are reinvested in one or more SEIS companies, subject to a maximum investment of £100,000 – relief is restricted to 50% of the qualifying investment.

To illustrate...

  • An individual realising gains in 2013/14 is able to reinvest a maximum of £100,000 into a SEIS company in 2013/14 or 2014/15, of which 50% will be exempt from CGT.
  • This compares to the maximum CGT exemption of 100% for gains realised in 2012/13, which were reinvested in 2012/13 or 2013/14.

Pension contributions

The annual allowance for 2013/14 remains at £50,000, together with the ability to use unutilised relief from the previous three tax years, with the lifetime allowance also remaining at £1.5m.

However, both the annual and lifetime allowances are set to reduce to £40,000 and £1.25m, respectively, with effect from 6 April 2014.

CGT – annual exempt amount

The annual exempt amount has increased by £300 to £10,900 for 2013/14. For the previous two tax years, it remained at £10,600.

Inheritance tax – nil-rate band

The freeze on the tax-free nil-rate band for inheritance tax will now be extended for a further three years. The current rate of £325,000 will therefore remain frozen until 2017/18.

OUT WITH THE OLD AND IN WITH THE NEW

By Nick Randall

Changes to UK GAAP will have a major impact on accounting rules for professional practices, says Nick Randall.

On 14 March 2013 the Financial Reporting Council (FRC) issued FRS102, the financial reporting standard applicable in the UK and Republic of Ireland. This new single standard of around 350 pages will replace the multitude of existing UK GAAP accounting standards for accounting periods beginning on or after 1 January 2015, although companies are allowed to adopt the standard earlier if they wish.

The new standard

The new standard will apply to your firm if you are currently applying UK GAAP – unless you are a small company or group, as defined by the Companies Act 2006, and choose to apply the financial reporting standard for smaller entities (FRSSE). If this is the case, you can continue to apply the FRSSE, at least in the short term.

The terminology used in FRS102 has been aligned to IFRS terminology, with the profit and loss account becoming the income statement, the balance sheet becoming the statement of financial position, debtors becoming receivables, creditors becoming payables. Other titles may be used as long as they are not misleading.

Impact on professional practices

  • Financial instruments – under FRS102 financial instruments are classified as either basic (e.g. cash) or other (e.g. investments in equity). There is generally no change to the way that basic financial instruments are accounted for. However, there are differences if you have financial instruments classified as 'other'. For example, under current UK GAAP, forward contracts are not recognised on the balance sheet and are only disclosed in the financial statements. But under FRS102 they are measured at fair value (market value) and included on the balance sheet with movements recognised in the income statement.
  • Defined benefit pension schemes – there is a different recognition basis affecting the amounts recognised in the income statement.
  • Business combinations – there is no use of merger accounting under FRS102 (except for common control transactions) but, thankfully, no requirement to restate past business combinations. More intangible assets could be recognised, reducing the value of goodwill calculated on acquisition. The useful life of goodwill and intangibles is five years, in the absence of any justification for a longer period.
  • Deferred tax – under FRS102 the approach will be a 'timing differences plus' approach – more transactions will have to be considered for deferred tax, such as re-valuation gains.
  • Investment property – if you own investment property it will have to be re-valued to fair value, unless the fair value cannot be measured reliably without undue cost, with movements in the fair value being included in the income statement.

Think ahead

These differences may well have a significant impact on your reported profits and on profits available for distribution, plus values used when measuring loan covenant compliance. You should not only consider the impact of FRS102 on your business now, but also on any transactions, contracts and agreements that you may enter into in the future.

Although 2015 sounds a long way off, in reality this change will have an impact sooner rather than later due to comparatives being required for the prior year and an opening balance sheet for the comparatives. This means that if you have an April year-end, an opening balance sheet as at 30 April 2014 will be required. Therefore, it is worth thinking about how the transition to FRS102 may affect your business as soon as possible.

A BIT OF A BLUR - PENSIONS AUTO-ENROLMENT AND PARTNERS

By Ian Luck

Do partners of LLPs need to be auto-enrolled into a pension scheme? This is one of the many interesting questions raised by the new pension legislation. Ian Luck looks at the rules and recent debate.

Pensions auto-enrolment – a recap

To get more people to save for their retirement the Government has introduced pensions auto-enrolment, requiring every employer to offer a qualifying workplace pension scheme (QWPS) to its employees. The rules came into effect for larger businesses in 2012 and will be implemented in stages according to the size of business by 2018. Employers are required to automatically enrol all eligible jobholders and to make contributions on their behalf. The Pensions Regulator will contact each employer 12 months before the relevant date. There will be heavy penalties for failure to comply.

Even if you already have a workplace pension scheme in place, it needs to be reviewed and possibly changed to ensure it complies. It is also up to the employer to educate new and existing employees about the implications of auto-enrolment and the direct effect it will have on them, making sure that they join the scheme at the correct time.

Who are eligible jobholders?

Eligible jobholders are either 'employees' or 'workers':

  1. working ordinarily in the UK
  2. aged at least 22 but under state pension age
  3. with qualifying earnings payable at or above the income tax threshold over the applicable pay reference period (weekly, monthly, etc).

Included in the definition of 'earnings' are overtime, bonuses, commission and statutory pay for parents and those on sick leave.

A 'worker' is an individual who undertakes to do work or perform services personally for another under a contract for services. There is no single test to assess whether a person is a worker and you may need to review this carefully.

Not all workers will pass the higher test to be considered 'employees' working under a contract of employment. Identifying who qualifies as an employee within an LLP may also be a tricky area. A mutual understanding of obligation between the individual and the employer is usually the key to determining this.

Are partners jobholders?

There have been two recent cases brought before the Court of Appeal looking at this contentious area.

In Tiffin v Lester Aldridge LLP, the court decided that a former fixed-share partner was a member and not an employee as his rights and obligations under the membership agreement (which were different to the terms given to employees) were inconsistent with employment status. However, a salaried partner with an employment contract rather than a membership agreement is an employee and not a member.

In the case of Clyde and Co LLP v Bates von Winkelhof, consideration was given to whether a member could be a worker. The claimant was a former junior equity partner of a law firm receiving a profit-related element of remuneration and a guaranteed pay element, whereas senior equity members received a share of profits only. The court decided that the claimant was not a worker because, as an equity member, she was able to take an active part in the running of the LLP and was not in a subordinate role.

So, while this case law suggests that a partner or member of an LLP is unlikely to be either an employee or a worker, the individual's actual circumstances, including the terms of the agreement they are working under, should be carefully assessed to ensure that this is the case.

ECONOMIC OUTLOOK

By Christopher Bates

The UK economy is showing modest signs of improvement, but it is not out of the woods yet. Chris Bates provides an update on the current outlook.

The Chancellor was handed some positive news for a change when first quarter gross domestic product (GDP) came in at 0.3%, beating expectation but failing to excite equity markets. The figures show that GDP is back to the level it was at the start of 2007, but remains around 2.5% below its previous peak level. More encouraging was the 0.6% rise in services output, which accounts for around 70% of UK GDP.

Real wages continue to fall

A key issue for the economy going forward is the continued decline in real wages, which has weighed heavily on consumption. Declining real wages also remain a key piece in the UK's 'productivity puzzle', where output has fallen but employment growth has remained relatively robust. Firms continue to hire at low wages, taking on more, but not necessarily more productive, workers than they would ordinarily. Add a 15% decline in business investment from the pre-recession high and we can begin to see where the UK's growth problems lie. Unfortunately, the most striking statistic from the Chancellor's March Budget speech was the Office for Budget Responsibility's growth forecast for 2013. This has been slashed to 0.6%, half of what was forecast in December. Growth is expected to pick up to 1.8% in 2014, rising steadily to 2.8% by 2017, although these figures may prove a little too optimistic.

Monetary response?

The key question now is whether the growth figures are weak enough to spring the Monetary Policy Committee into action with further quantitative easing. While there is certainly scope, the Bank of England is not expected to restart its asset purchase programme until new governor Mark Carney takes over the reins on 1 July. What Carney has in store remains to be seen, although talk of a more flexible approach to inflation targeting suggests further monetary stimulus in some form is likely. However, a 'Kuroda-style' entrance, as we have seen in Japan, seems unlikely. We do not expect any radical change in policy until at least the release of August's Inflation Report.

Resilient equity markets

Despite the economic backdrop, UK equity markets have remained resilient. All sectors, excluding mining and oil, have delivered a positive total return for the year to date. Mid- cap stocks have led the way once more, while the FTSE 100 continues to be held back by the poorly performing mining sector. The market has been driven by the outperformance of defensive sectors, however signs that the domestic economic picture may begin to be turning a corner could favour the more cyclical sectors as we enter the summer months. Although appetite for risk has picked up, for now investors are dipping their toes in the shallower end of the risk pool. The breadth and depth of the corporate sector in the UK, combined with favourable valuations and solid dividend yields, have started to make the market appear more attractive compared to other areas of Europe, where the economic outlook remains even more uncertain.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.