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Timestamp: 2019-12-10 04:27:53
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1 EXPLANATORY NOTES Explanatory notes to the Bill, prepared by the Department for Business, Innovation and Skills, are published separately as HL Bill 7 EN. EUROPEAN CONVENTION ON HUMAN RIGHTS Baroness Neville-Rolfe has made the following statement under section 19(1)(a) of the Human Rights Act 1998: In my view the provisions of the Small Business, Enterprise and Employment Bill are compatible with the Convention rights. HL Bill 7 /4
2 CONTENTS PART 1 ACCESS TO FINANCE Assignment of receivables 1 Power to invalidate certain restrictive terms of business contracts 2 Section 1(4)(a): meaning of financial services Business payment practices 3 Companies: duty to publish report on payment practices Financial information about businesses 4 Small and medium sized businesses: information to credit reference agencies Small and medium sized businesses: information to finance platforms 6 Sections 4 and : supplementary 7 Sections 4 to 6: interpretation 8 Disclosure of VAT registration information 9 Offences for the purposes of section 8 Exports Disclosure of exporter information 11 Power of the Secretary of State under section 1 of the EIGA EIGA 1991: further amendments Presentment of cheques etc 13 Electronic paying in of cheques etc Payment systems 14 Powers of the Payment Systems Regulator HL Bill 7 /4
3 ii Small Business, Enterprise and Employment Bill PART 2 REGULATORY REFORM Streamlined company registration 1 Target for streamlined company registration 16 Streamlined company registration: duty to report on progress Review of business appeals procedures 17 Review of regulators complaints and appeals procedures 18 Power to specify regulatory functions 19 Guidance by the Secretary of State Report on investigations under financial regulators complaints scheme Independent Complaints Commissioner: reporting duty Business impact target 21 Duty on Secretary of State to publish business impact target etc 22 Sections 21 and 23 to 2: qualifying regulatory provisions etc 23 Duty on Secretary of State to publish reports 24 Additional matters to be included in reports 2 Appointment of body to verify assessments and lists in reports 26 Amending the business impact target etc 27 Sections 21 to 2 etc: interpretation Secondary legislation: duty to review 28 Duty to review regulatory provisions in secondary legislation 29 Section 28(1)(b): interpretation Section 28(2)(a): provision for review 31 Section 28(2)(b): appropriateness of making provision for review 32 Sections 28 to 31 etc: supplementary Definitions of small and micro business 33 Definitions of small and micro business 34 Small and micro business regulations: further provision Home businesses 3 Exclusion of home businesses from Part 2 of the Landlord and Tenant Act 194 CMA recommendations 36 CMA to publish recommendations on proposals for Westminster legislation Liability of bodies concerned with accounting standards 37 Exemption from liability for bodies concerned with accounting standards etc
4 iii PART 3 PUBLIC SECTOR PROCUREMENT 38 Regulations about procurement 39 Investigation of procurement functions PART 4 THE PUBS CODE ADJUDICATOR AND THE PUBS CODE The Adjudicator The Pubs Code Adjudicator The Pubs Code 41 The Pubs Code 42 Pubs Code: market rent only option for large pub-owning businesses 43 Review of the Pubs Code 44 Inconsistency with Pubs Code etc Arbitration by Adjudicator 4 Referral for arbitration by tied pub tenants 46 Timing of referral for arbitration by tied pub tenants 47 Arbitration commenced by pub-owning businesses 48 Arbitration: supplementary 49 Information about arbitration Investigations by Adjudicator 0 Investigations 1 Investigation reports 2 Forms of enforcement 3 Recommendations 4 Requirements to publish information Financial penalties 6 Recovery of investigation costs 7 Advice 8 Guidance 9 Annual report Advice and guidance by Adjudicator Adjudicator s reporting requirements Funding of Adjudicator 60 Levy funding 61 Loans by Secretary of State
5 iv Small Business, Enterprise and Employment Bill Supervision of Adjudicator 62 Review of Adjudicator and guidance from Secretary of State 63 Abolition of Adjudicator 64 Information to Secretary of State Supplementary 6 Tied pub 66 Pub-owning business 67 Tied pub tenant, landlord, tenancy and licence 68 Power to grant exemptions from Pubs Code 69 Interpretation: other provision 70 Regulations under this Part PART CHILDCARE AND SCHOOLS 71 Funding for free of charge early years provision 72 Exemption from requirement to register as early years provider 73 Childminding other than on domestic premises 74 Registration of childcare: premises PART 6 7 Assessments of effectiveness 76 Qualifications 77 Destinations EDUCATION EVALUATION PART 7 COMPANIES: TRANSPARENCY Register of people with significant control 78 Register of people with significant control 79 Review of provisions about PSC registers Register of interests disclosed 80 Amendment of section 813 of the Companies Act 06 Abolition of share warrants to bearer 81 Abolition of share warrants to bearer 82 Amendment of company s articles to reflect abolition of share warrants 83 Review of section 81 Corporate directors 84 Requirement for all company directors to be natural persons 8 Review of section 84
6 v Shadow directors 86 Application of directors general duties to shadow directors 87 Shadow directors: definition 88 Shadow directors: provision for Northern Ireland PART 8 COMPANY FILING REQUIREMENTS Annual return reform 89 Duty to deliver confirmation statement instead of annual return 90 Section 89: related amendments Additional information on the register 91 Option for companies to keep information on central register 92 Recording of optional information on register Directors dates of birth 93 Protection of information about a person s date of birth Statements of capital etc 94 Contents of statements of capital 9 Public companies: information about aggregate amount paid up on shares Registered office disputes 96 Address of company registered office Director disputes 97 Company filing requirements: consent to act as director or secretary 98 Registrar s duty to inform new directors of entry in register 99 Removal from register of material about directors Accelerated strike-off 0 Reduction in notice periods etc for striking off companies PART 9 DIRECTORS DISQUALIFICATION ETC New grounds for disqualification 1 Convictions abroad 2 Persons instructing unfit director Determining unfitness 3 Determining unfitness and disqualifications: matters to be taken into account
7 vi Small Business, Enterprise and Employment Bill 4 Reports of office-holders on conduct of directors of insolvent companies Director disqualification: other amendments Unfit directors of insolvent companies: extension of period for applying for disqualification order 6 Directors: removal of restriction on application for disqualification order Compensation awards 7 Compensation orders and undertakings Consequential amendments and corresponding provision for Northern Ireland 8 Sections 1 to 7: consequential and related amendments 9 Provision for Northern Ireland corresponding to sections 1 to 8 Bankruptcy: Scotland and Northern Ireland 1 Disqualification as director: bankruptcy, etc in Scotland and Northern Ireland 111 Company Directors Disqualification (Northern Ireland) Order 02: bankruptcy, etc in England and Wales or Scotland 112 Disqualification as insolvency practitioner: bankruptcy, etc in Scotland or Northern Ireland 113 Disqualification as insolvency practitioner in Northern Ireland: bankruptcy, etc in England and Wales or Scotland PART INSOLVENCY Office-holder actions 114 Power for administrator to bring claim for fraudulent or wrongful trading 11 Power for liquidator or administrator to assign causes of action 116 Application of proceeds of office-holder claims Removing requirements to seek sanction 117 Exercise of powers by liquidator: removal of need for sanction 118 Exercise of powers by trustee in bankruptcy: removal of need for sanction Position of creditors 119 Abolition of requirements to hold meetings: company insolvency 1 Abolition of requirements to hold meetings: individual insolvency 121 Ability for creditors to opt not to receive certain notices: company insolvency 122 Ability for creditors to opt not to receive certain notices: individual insolvency 123 Sections 119 to 122: further amendments Administration 124 Extension of administrator s term of office
8 vii 12 Administration: payments to unsecured creditors 126 Administration: sales to connected persons 127 Attachment of floating charges on administration (Scotland) Small debts 128 Creditors not required to prove small debts: company insolvency 129 Creditors not required to prove small debts: individual insolvency Trustees in bankruptcy 1 Trustees in bankruptcy Voluntary arrangements 131 Time limit for challenging IVAs 132 Abolition of fast-track voluntary arrangements Progress reports 133 Voluntary winding-up: progress reports Regulation of insolvency practitioners: amendments to existing regime 134 Recognised professional bodies: recognition 13 Regulatory objectives 136 Oversight of recognised professional bodies 137 Recognised professional bodies: revocation of recognition 138 Court sanction of insolvency practitioners in public interest cases 139 Power for Secretary of State to obtain information 1 Compliance orders Power to establish single regulator of insolvency practitioners 141 Power to establish single regulator of insolvency practitioners 142 Regulations under section 141: designation of existing body 143 Regulations under section 141: timing and supplementary PART 11 EMPLOYMENT Whistleblowing 144 Protected disclosures: reporting requirements Employment tribunals: failure to pay sums 14 Financial penalty for failure to pay sums ordered by employment tribunal etc Employment tribunals: postponements 146 Employment tribunal procedure regulations: postponements
9 viii Small Business, Enterprise and Employment Bill National minimum wage 147 Amount of financial penalty for underpayment of national minimum wage Exclusivity in zero hours contracts 148 Exclusivity terms unenforceable in zero hours contracts Public sector exit payments 149 Regulations in connection with public sector exit payments Section 149(1): further provision 11 Power of Secretary of State to waive repayment requirement PART 12 GENERAL 12 Consequential amendments, repeals and revocations 13 Transitional, transitory or saving provision 14 Supplementary provision about regulations 1 Financial provisions 16 Extent 17 Commencement 18 Short title Schedule 1 The Pubs Code Adjudicator Part 1 The Pubs Code Adjudicator Part 2 Information powers of the Pubs Code Adjudicator Part 3 Amendments of legislation Schedule 2 Registration of childcare: premises Schedule 3 Register of people with significant control Part 1 Duty to obtain information and keep register Part 2 Related amendments Schedule 4 Abolition of share warrants to bearer Part 1 Arrangements for conversion and cancellation of existing share warrants Part 2 Consequential amendments Schedule Option to keep information on central register Part 1 Creation of the option Part 2 Related amendments Schedule 6 Contents of statements of capital Schedule 7 Sections 1 to 7: consequential and related amendments Part 1 Company Directors Disqualification Act 1986 Part 2 Other enactments Schedule 8 Northern Ireland: provision corresponding to sections 1 to 8 Schedule 9 Abolition of requirements to hold meetings; opted-out creditors Part 1 Company insolvency Part 2 Individual insolvency
10 ix Schedule Trustees in bankruptcy Schedule 11 Single regulator of insolvency practitioners: supplementary provision
11 Part 1 Access to finance 1 A BILL TO Make provision about improved access to finance for businesses and individuals; to make provision about regulatory provisions relating to business and certain voluntary and community bodies; to make provision about the exercise of procurement functions by certain public authorities; to make provision for the creation of a Pubs Code and Adjudicator for the regulation of dealings by pub-owning businesses with their tied pub tenants; to make provision about the regulation of the provision of childcare; to make provision about information relating to the evaluation of education; to make provision about the regulation of companies; to make provision about company filing requirements; to make provision about the disqualification from appointments relating to companies; to make provision about insolvency; to make provision about the law relating to employment; and for connected purposes. B E IT ENACTED by the Queen s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows: PART 1 ACCESS TO FINANCE Assignment of receivables 1 Power to invalidate certain restrictive terms of business contracts (1) The appropriate authority may by regulations make provision for the purpose of securing that any non-assignment of receivables term of a relevant contract (a) has no effect; (b) has no effect in relation to persons of a prescribed description; (c) has effect in relation to persons of a prescribed description only for such purposes as may be prescribed. HL Bill 7 /4
12 2 Small Business, Enterprise and Employment Bill Part 1 Access to finance (2) A non-assignment of receivables term of a contract is a term which prohibits or imposes a condition, or other restriction, on the assignment (or, in Scotland, assignation) by a party to the contract of the right to be paid any amount under the contract or any other contract between the parties. (3) A contract is a relevant contract if (a) it is a contract for goods, services or intangible assets (including intellectual property) which is not an excluded financial services contract, and (b) at least one of the parties has entered into it in connection with the carrying on of a business. (4) An excluded financial services contract is a contract which (a) is for financial services (see section 2) or is a regulated agreement within the meaning of the Consumer Credit Act 1974 (see section 189 of that Act); and (b) is of a prescribed description. () Prescribed means prescribed by the regulations. (6) The appropriate authority means (a) in relation to contracts to which the law of Scotland applies, the Scottish Ministers, and (b) in relation to other contracts, the Secretary of State. (7) The power of the Scottish Ministers to make regulations under this section includes power to make such provision as the Scottish Ministers consider appropriate in consequence of the regulations. (8) The power conferred by subsection (7) includes power (a) to make transitional, transitory or saving provision; (b) to amend, repeal, revoke or otherwise modify any provision made by or under an enactment (including an enactment contained in this Act and any enactment passed or made in the same Session as this Act). (9) In subsection (8) enactment includes an Act of the Scottish Parliament. () Regulations under this section (a) if made by the Scottish Ministers, are subject to the affirmative procedure; (b) if made by the Secretary of State, are subject to affirmative resolution procedure. 2 Section 1(4)(a): meaning of financial services (1) In section 1(4)(a) financial services means any service of a financial nature, including (but not limited to) (a) insurance-related services consisting of (i) direct life assurance; (ii) direct insurance other than life assurance; (iii) reinsurance and retrocession; (iv) insurance intermediation, such as brokerage and agency; (v) services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services; (b) banking and other financial services consisting of
13 Part 1 Access to finance 3 (i) accepting deposits and other repayable funds; (ii) lending (including consumer credit, mortgage credit, factoring and financing of commercial transactions); (iii) financial leasing; (iv) payment and money transmission services (including credit, charge and debit cards, travellers cheques and bankers drafts); (v) providing guarantees or commitments; (vi) financial trading (as defined in subsection (2)); (vii) participating in issues of any kind of securities (including underwriting and placement as an agent, whether publicly or privately) and providing services related to such issues; (viii) money brokering; (ix) asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services; (x) settlement and clearing services for financial assets (including securities, derivative products and other negotiable instruments); (xi) providing or transferring financial information, and financial data processing or related software (but only by suppliers of other financial services); (xii) providing advisory and other auxiliary financial services in respect of any activity listed in sub-paragraphs (i) to (xi) (including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy). (2) In subsection (1)(b)(vi) financial trading means trading for own account or for account of customers, whether on an investment exchange, in an over-thecounter market or otherwise, in (a) money market instruments (including cheques, bills and certificates of deposit); (b) foreign exchange; (c) derivative products (including futures and options); (d) exchange rate and interest rate instruments (including products such as swaps and forward rate agreements); (e) transferable securities; (f) other negotiable instruments and financial assets (including bullion) Business payment practices 3 Companies: duty to publish report on payment practices (1) The Secretary of State may by regulations impose a requirement, on such descriptions of companies as may be prescribed, to publish, at such intervals and in such manner as may be prescribed, prescribed information about the company s payment practices and policies relating to relevant contracts of a prescribed description. (2) For the purposes of this section company has the meaning given by section 1(1) of the Companies Act 06 (but see subsection (3)); 4
14 4 Small Business, Enterprise and Employment Bill Part 1 Access to finance a contract is a relevant contract if (a) it is a contract for goods, services or intangible assets (including intellectual property), and (b) the parties to the contract have entered into it in connection with the carrying on of a business; prescribed means prescribed by the regulations. (3) The regulations may not impose a requirement on a company in relation to any time during which (a) it qualifies as a micro-entity for the purposes of section 384A of the Companies Act 06, (b) the small companies regime under that Act applies to it (see section 381 of that Act), or (c) it qualifies as medium-sized for the purposes of section 46 or 466 of that Act. (4) The company s payment practices and policies has such meaning as may be prescribed and the information which may be prescribed may, in particular, include information (a) about the standard payment terms of the company and whether these are part of any code of conduct or code of ethics of the company, (b) about payment terms of the company which are not standard, (c) about the processing and payment of invoices, (d) by reference to such codes of conduct or standards as may be prescribed and as are applicable to companies generally or to companies of a prescribed description, (e) about disputes relating to the payment of invoices, including any dispute resolution mechanism that the company uses, (f) about payments incurred by the company due to late payment of invoices. () The regulations may require that information published in accordance with the regulations must be approved or signed by such description of person as may be prescribed. (6) The regulations may require such of the information required to be published as may be prescribed to be given, in such form as may be prescribed, to prescribed persons. (7) The regulations may make provision for a prescribed breach by a prescribed description of person of a requirement imposed by the regulations to be an offence punishable on summary conviction (a) in England and Wales, by a fine; (b) in Scotland or Northern Ireland, by a fine not exceeding level on the standard scale. (8) Before making regulations under this section the Secretary of State must consult such persons as the Secretary of State considers appropriate. (9) Regulations under this section are subject to affirmative resolution procedure
15 Part 1 Access to finance Financial information about businesses 4 Small and medium sized businesses: information to credit reference agencies (1) The Treasury may make regulations that impose (a) a duty on designated banks to provide information about their small and medium sized business customers to designated credit reference agencies, and (b) a duty on designated credit reference agencies to provide information about small and medium sized businesses to finance providers. (2) The regulations must provide that the duty in subsection (1)(a) only applies where (a) a credit reference agency makes a request to a bank, and (b) the business customer to whom the information relates has agreed to the information being provided to a credit reference agency. (3) The regulations must provide that the duty in subsection (1)(b) only applies where (a) a finance provider makes a request to a credit reference agency, and (b) the business to whom the information relates has agreed to the information being provided to the finance provider. (4) The regulations may provide that the duty in subsection (1)(b) only applies where other conditions are met, such as the finance provider (a) complying with the credit reference agency s terms and conditions, and (b) providing information on its small and medium sized business customers to the credit reference agency (subject to the agreement of those customers). () The regulations must describe the information (a) to which the duty in subsection (1)(a) applies; (b) to which the duty in subsection (1)(b) applies; (c) which may be required as mentioned in subsection (4)(b). (6) The regulations may make provision about (a) how a request for information must be made by a credit reference agency or finance provider; (b) the time period within which information must be provided following a request; (c) the form in which information must be provided; (d) how a business may indicate agreement for the purposes of subsection (2)(b), (3)(b) or (4)(b) (and for the purposes of subsection (2)(b) this may include imposing an obligation on a designated bank to seek agreement). (7) The regulations must make provision for the designation of banks and credit reference agencies by the Treasury, and the regulations may in particular provide for (a) conditions that must be met for a bank or credit reference agency to be designated; (b) considerations that the Treasury may take into account before deciding whether to designate a bank or credit reference agency;
16 6 Small Business, Enterprise and Employment Bill Part 1 Access to finance (c) (d) (e) (f) the Treasury to consider the advice of another person before making a designation; the procedure for designating a bank or credit reference agency; how the list of designated banks and credit reference agencies must be published; the revocation of a designation. Small and medium sized businesses: information to finance platforms (1) Where (a) a small or medium sized business has applied to a designated bank for a loan or other credit facility, and (b) the application has been unsuccessful, the Treasury may by regulations impose a duty on the bank to provide specified information about the business to designated finance platforms. (2) The regulations (a) must provide that the duty only applies where the business to which the information relates agrees to its information being provided to the designated finance platforms; (b) may require a bank (i) to seek the agreement of a business for the purposes of paragraph (a); (ii) to ask the business for any of the specified information that the bank does not already have; (iii) to provide the information to the finance platforms within a specified time period. (3) The regulations may make further provision about the duty in subsection (1), which may in particular include provision about (a) the types of loans and credit facilities that trigger the duty, (b) the circumstances in which an application is to be considered unsuccessful, and (c) the finance platforms to which information must be provided. (4) Where a finance platform has received information by virtue of subsection (1), the Treasury may by regulations (a) impose a duty on the finance platform to provide specified information to all finance providers requesting access to the information, and (b) impose a duty on the finance platform to provide specified information about a particular business to a finance provider where (i) the finance provider has requested information about the business, and (ii) the business has agreed to its information being provided to the finance provider. () Information specified for the purposes of subsection (4)(a) must be in such a form that no individual business, and no person associated with the business, can be identified
17 Part 1 Access to finance 7 (6) The regulations may provide that the duty in subsection (4)(a) or (b) does not apply unless (a) the finance provider or business agrees to the finance platform s terms and conditions; (b) the finance provider complies with specified requirements about the use and disclosure of the information. (7) The regulations may make further provision about the duties in subsection (4)(a) and (b), including in particular provision (a) requiring the finance platform to provide the information within a specified time period; (b) setting out how a request by a finance provider must be made to a finance platform; (c) setting out how a business may indicate agreement for the purposes of subsection (4)(b)(ii); (d) about the time period for which information must be kept by the finance platform; (e) about the removal of information from the finance platform. (8) The regulations may make provision (a) prohibiting finance platforms from charging fees to small and medium sized businesses, or (b) permitting finance platforms to charge fees to small and medium sized businesses. (9) The regulations must make provision for the designation of banks and finance platforms by the Treasury, and the regulations may in particular provide for (a) conditions that must be met for a bank or finance platform to be designated; (b) considerations that the Treasury may take into account before deciding whether to designate a bank or finance platform; (c) the Treasury to consider the advice of another person before making a designation; (d) the procedure for designating a bank or finance platform; (e) how the list of designated banks and finance platforms must be published; (f) the revocation of a designation. () In this section specified means specified or described in the regulations. 6 Sections 4 and : supplementary (1) Regulations under sections 4 and may make provision enabling the Financial Conduct Authority to take action for monitoring and enforcing compliance with the regulations. (2) The regulations may apply, or make provision corresponding to, any of the provisions of the Financial Services and Markets Act 00 or subordinate legislation made under that Act, with or without modification. (3) Those provisions include in particular
18 8 Small Business, Enterprise and Employment Bill Part 1 Access to finance (a) (b) (c) (d) (e) provisions about investigations, including powers of entry and search and criminal offences; provisions for the grant of an injunction (or, in Scotland, an interdict) in relation to a contravention or anticipated contravention; provisions giving the Financial Conduct Authority powers to impose disciplinary measures (including financial penalties) or to give directions; provisions giving a Minister of the Crown (within the meaning of the Ministers of the Crown Act 197) or the Financial Conduct Authority powers to make subordinate legislation; provisions for the Financial Conduct Authority to charge fees. (4) Regulations under sections 4 and may make provision that enables complaints about the activities of designated credit reference agencies or designated finance platforms to be dealt with under the scheme established by Part 16 of the Financial Services and Markets Act 00 (financial ombudsman scheme), and for that purpose the regulations may (a) apply, or make provision corresponding to, any of the provisions of that Part or rules made under that Part (with or without modifications); (b) impose obligations on (i) the Financial Conduct Authority; (ii) the scheme operator (within the meaning of that Part); (iii) an ombudsman (within the meaning of that Part). () Regulations under section 4 may impose a duty on designated credit reference agencies to provide information received by virtue of section 4(1)(a) to the Bank of England, and may allow or require the Bank of England to share that information with persons or for purposes specified or described in the regulations; but the regulations must include provision protecting the confidentiality of information so provided. (6) Regulations under section 4 may provide that a failure to comply with a duty imposed by virtue of section 4(1) may be actionable at the suit of a person who has suffered loss as a result of it (subject to the defences and other incidents applying to actions for breach of statutory duty). (7) Regulations under section 4 may provide that the following provisions apply to designated credit reference agencies in the same way as they apply to credit reference agencies within the meaning of those provisions (a) sections 17 to 160 of the Consumer Credit Act 1974 (duties to disclose and correct information) and regulations made under those sections; (b) section 7 of the Data Protection Act 1998 (right of access to personal data) and regulations made under that section; (c) section 9 of the Data Protection Act 1998 (right of access to personal data where data controller is credit reference agency) and regulations made under that section. (8) Regulations under section 4 may provide a small or medium sized business with the right to apply to a court for an order to rectify, block, erase or destroy data held about the business by a designated credit reference agency. (9) Regulations under section may impose a duty on designated finance platforms to provide statistical information to the Treasury
19 Part 1 Access to finance 9 () The first regulations made under section 4 and the first regulations made under section are subject to affirmative resolution procedure. (11) Any subsequent regulations made under section 4 or are subject to negative resolution procedure. 7 Sections 4 to 6: interpretation (1) For the purposes of sections 4 to 6, a business is a small or medium sized business if (a) it has an annual turnover of less than 2 million, (b) it carries out commercial activities, (c) it does not carry out regulated activities as its principal activity, and (d) it is not owned or controlled by a public authority. Regulations under those sections may make further provision for the purposes of determining which businesses they apply to (including provision about the calculation of turnover and the determination of control). (2) In sections 4 to 6 and this section designated bank means a bank that has been designated by the Treasury by virtue of section 4(7) or (9); designated credit reference agency means a credit reference agency that has been designated by the Treasury by virtue of section 4(7); designated finance platform means a finance platform that has been designated by the Treasury by virtue of section (9); finance platform means a person that provides a service for the exchange of information between finance providers and businesses that require finance; finance provider means a body corporate that lends money or provides credit, or arranges or facilitates the provision of debt or equity finance, in the course of a business (and regulations under sections 4 and may make further provision for the purpose of determining which finance providers they apply to); public authority has the same meaning as in the Freedom of Information Act 00 (see section 3 of that Act); regulated activities has the same meaning as in the Financial Services and Markets Act 00 (see section 22 of that Act); subordinate legislation has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act). (3) The Treasury may by regulations change the figure for the time being specified in subsection (1)(a). (4) Before making regulations under subsection (3) the Treasury must consult such persons as they consider appropriate. () Regulations under subsection (3) are subject to negative resolution procedure
20 Small Business, Enterprise and Employment Bill Part 1 Access to finance 8 Disclosure of VAT registration information (1) The Commissioners for Her Majesty s Revenue and Customs may disclose to a person ( P ) any of the information included in the VAT registration of another person ( V ) if the disclosure is for the purpose of enabling or assisting P to assess (a) V s creditworthiness, (b) V s compliance with regulatory requirements relating to financial matters, or (c) the risk of fraud by V. (2) But subsection (1) does not authorise the Commissioners to disclose any information which is, in the Commissioners view, financial information relating to any business carried on by V. (3) If VAT registration information is disclosed to a person in accordance with subsection (1), that person must not further disclose any of the information unless the Commissioners consent to the disclosure. (4) If VAT registration information is disclosed to a person in accordance with subsection (3) or this subsection, that person must not further disclose any of the information unless the Commissioners consent to the disclosure. () A person does not contravene subsection (3) or (4) by disclosing a financial assessment made wholly or partly in reliance on the VAT registration information, if the financial assessment itself does not include any VAT registration information. (6) If VAT registration information is disclosed to a person in accordance with subsection (1), (3) or (4), that person must not use that information except for the purposes of making a financial assessment. (7) A person does not contravene subsection (6) by using, for any purpose, a financial assessment made wholly or partly in reliance on the VAT registration information. (8) The Commissioners for Her Majesty s Revenue and Customs may make arrangements with any person about disclosures of information to that person (the recipient ) under subsection (1). (9) The arrangements may (in particular) provide for (a) a fee to be payable by the recipient for the disclosure of information; (b) conditions to apply to the recipient in relation to information disclosed (including conditions relating to the transfer, holding and processing of the information); (c) financial penalties to be payable by the recipient for a failure to meet conditions which apply to the recipient under the arrangements. () The Treasury may, by regulations, amend this section so that it authorises the Commissioners to disclose VAT registration information included in a person s VAT registration for additional purposes. (11) In this section financial assessment means an assessment of a kind mentioned in subsection (1)(a), (b) or (c); VAT registration means registration under the Value Added Tax Act 1994;
21 Part 1 Access to finance 11 VAT registration information means information of the kind that the Commissioners are authorised to disclose under subsection (1) (as read with subsection (2)). (12) Regulations under this section are subject to affirmative resolution procedure. 9 Offences for the purposes of section 8 (1) A person commits an offence if the person discloses information in contravention of section 8(3) or (4). (2) It is a defence for a person charged with an offence under subsection (1) to prove that the person reasonably believed that the disclosure of the information was lawful. (3) A person commits an offence if the person uses information in contravention of section 8(6). (4) It is a defence for a person charged with an offence under subsection (3) to prove that the person reasonably believed that the use of the information was lawful. () Section 19(4) to (7) of the Commissioners for Revenue and Customs Act 0 apply to an offence under this section as they apply to an offence under section 19 of that Act. (6) This section is without prejudice to the pursuit of any remedy or the taking of any action in relation to a contravention of section 8(1), (3), (4) or (6) (whether or not this section applies to the contravention). 1 Exports Disclosure of exporter information (1) The Commissioners for Her Majesty s Revenue and Customs may, by regulations, make provision authorising officers of Revenue and Customs to disclose prescribed information about the export of goods from the United Kingdom. (2) In subsection (1) prescribed information means information of a kind that is prescribed in the regulations. (3) But the regulations may only prescribe the following kinds of information (a) the commodity code of goods that have been exported from the United Kingdom (a prescribed code ); (b) a description of the category of goods covered by a prescribed code; (c) the names and addresses of persons who have exported goods covered by a prescribed code; (d) the years and months in which a particular person has exported goods covered by a prescribed code. (4) Regulations under this section may make such provision as the Commissioners think appropriate in connection with the provision authorising officers of Revenue and Customs to disclose prescribed information (including provision about the manner in which information may be disclosed). 2 3
22 12 Small Business, Enterprise and Employment Bill Part 1 Access to finance () In this section commodity code means a code or other identifier applied to a category of goods in connection with the preparation of statistics on exports from the United Kingdom (whether or not it is also applied for other purposes). (6) Regulations under this section are subject to negative resolution procedure. 11 Power of the Secretary of State under section 1 of the EIGA 1991 (1) Section 1 of the Export and Investment Guarantees Act 1991 (assistance in connection with exports of goods and services) is amended as follows. (2) For subsections (1) and (1A) substitute (1) The Secretary of State may make arrangements under this section which the Secretary of State considers are conducive to supporting or developing (whether directly or indirectly) supplies or potential supplies by persons carrying on business in the United Kingdom of goods, services or intangible assets (including intellectual property) to persons carrying on business outside the United Kingdom. (3) After subsection (4) insert () The arrangements that may be made under this section also include the provision of advice or information. (4) For the heading of the section substitute Arrangements for the support and development of supplies, etc. 12 EIGA 1991: further amendments (1) The Export and Investment Guarantees Act 1991 is amended as follows. (2) In subsection (1) of section 6 (limit on the Secretary of State s commitments under the Act) for paragraphs (a) and (b) substitute 67,700 million special drawing rights. (3) In subsection (3) of that section, for paragraphs (a) and (b) substitute 26,0 million special drawing rights. (4) In subsection (4) of that section (a) in paragraph (a) (i) for either of the limits substitute the limit ; (ii) omit,000 million or, as the case may be, ; (b) in paragraph (b) (i) for either of the limits substitute the limit ; (ii) omit 3,000 million or, as the case may be, ; (c) omit but the Secretary of State shall not in respect of any limit exercise the power on more than three occasions. () At the end of subsection (4) of that section, insert after the commencement of section 12 of the Small Business, Enterprise and Employment Act 1. (6) After subsection (4) of that section insert (4A) The Secretary of State must not in respect of either limit mentioned in subsection (4) exercise the power to make an order on more than three occasions
23 Part 1 Access to finance 13 (7) In subsection () of that section (a) omit paragraphs (c) and (d); (b) in paragraph (e) omit in foreign currency. (8) In subsection (6) of that section, for (1)(b) or (3)(b) substitute (1) or (3). (9) In section 7(2) of that Act (reports and returns), leave out in sterling and in foreign currency. () In section 13 of that Act (Export Credits Guarantee Department and Export Guarantees Advisory Council), omit subsection (4). Presentment of cheques etc 13 Electronic paying in of cheques etc (1) The Bills of Exchange Act 1882 is amended as follows. (2) After section 89 insert PART 4A PRESENTMENT OF CHEQUES AND OTHER INSTRUMENTS BY ELECTRONIC MEANS 89A Presentment of instruments by electronic means (1) Presentment for payment of an instrument to which this section applies may be effected by provision of an electronic image of both faces of the instrument, instead of by presenting the physical instrument, where (a) the presentment is made by or to a banker, and (b) the person to whom presentment is made accepts the presentment as effective. This is subject to section 89C. (2) Where presentment for payment is made under subsection (1) (a) any requirement (i) that the physical instrument must be exhibited, presented or delivered on or in connection with presentment or payment (including after presentment or payment or in connection with dishonour for nonpayment), or (ii) as to the day, time or place on or at which presentment of the physical instrument may be or is to be made, and (b) any other requirement which is inconsistent with subsection (1), does not apply. (3) Subsection (2) does not affect any requirement as to the latest time for presentment. (4) References in subsections (2) and (3) to a requirement are to a requirement or prohibition, whether imposed by or under any enactment, by a rule of law or by the instrument in question. () Where an instrument is presented for payment under this section (a) any banker providing the electronic image, 1 2 3
24 14 Small Business, Enterprise and Employment Bill Part 1 Access to finance 89B (b) any banker to whom it is provided, and (c) any banker making payment of the instrument as a result of provision of the electronic image, are subject to the same duties in relation to collection and payment of the instrument as if the physical instrument had been presented. That is subject to any provision made by or under this Part. Instruments to which section 89A applies (1) Subject to subsection (2), section 89A applies to (a) a cheque, or (b) any other bill of exchange or any promissory note or other instrument (i) which is intended by the person creating it to enable a person to obtain payment from a banker indicated in it of the sum so mentioned, (ii) payment of which requires the instrument to be presented, and (iii) which, but for section 89A, could not be presented otherwise than by presenting the physical instrument. (2) Section 89A does not apply to any banknote (within the meaning given in section 8 of the Banking Act 09). (3) The reference in subsection (1) to the person creating an instrument is (a) in the case of a bill of exchange, a reference to the drawer; (b) in the case of a promissory note, a reference to the maker. 89C 89D (4) For the purposes of subsection (1)(b)(i) an indication may be by code or number and need not indicate that payment is intended to be obtained from the banker. Banker s obligation in relation to accepting physical instrument for presentment Provision of an electronic image of an instrument does not constitute presentment of the instrument under section 89A if the arrangements between (a) the banker authorised to collect payment of the instrument on behalf of a customer, and (b) that customer, do not permit the customer to pay in the physical instrument but instead require an electronic image to be provided (whether to that banker or to any other banker). Compensation in cases of presentment by electronic means (1) The Treasury may by regulations make provision for the responsible banker to compensate any person for any loss of a kind specified by the regulations which that person incurs in connection with electronic presentment or purported electronic presentment of an instrument. (2) In subsection (1) electronic presentment or purported electronic presentment of an instrument includes (a) presentment of an instrument to which section 89A applies under that section;
25 Part 1 Access to finance 1 (b) (c) (d) (e) presentment of any other instrument by any means involving provision of an electronic image by which it may be presented for payment; purported presentment for payment by any means involving provision of an electronic image of an instrument that may not be presented for payment in that way; provision, in purported presentment for payment, of (i) an electronic image that purports to be, but is not, an image of a physical instrument (including an image that has been altered electronically), or (ii) an electronic image of an instrument which has no legal effect; or provision, in presentment or purported presentment for payment, of an electronic image which has been stolen. (3) In this section, the responsible banker, in relation to electronic presentment or purported electronic presentment of an instrument, means (a) the banker who is authorised to collect payment of the instrument on a customer s behalf, or (b) if the holder of the instrument is a banker, that banker. (4) In this section (a) references to an instrument include references to an instrument which has no legal effect (whether because it has been fraudulently altered or created, or because it has been discharged, or otherwise); (b) in relation to an electronic image which is not an image of a physical instrument, references to the instrument are to a purported instrument (of which it purports to be an image); and (c) in relation to an instrument which is not a bill of exchange or promissory note, references to the holder are to the payee or indorsee of the instrument who is in possession of it or, if it is payable to bearer, the person in possession of it. () Regulations under this section may in particular make provision for (a) the responsible banker to be required to pay compensation irrespective of fault; (b) the amount of compensation to be reduced by virtue of anything done, or any failure to act, by the person to whom compensation is payable. (6) Nothing in this section or regulations under it is to be taken to (a) prevent the responsible banker claiming a contribution from any other person, or (b) affect any remedy available to the responsible banker in contract or otherwise. (7) Except so far as regulations under this section provide expressly, nothing in this section or regulations under it is to be taken to affect any liability of the responsible banker which exists apart from this section or any such regulations. (8) Regulations under this section may
26 16 Small Business, Enterprise and Employment Bill Part 1 Access to finance (a) include incidental, supplementary and consequential provision; (b) make transitory or transitional provision or savings; (c) make different provision for different cases or circumstances or for different purposes; (d) make provision subject to exceptions. (9) The power to make regulations under this section is exercisable by statutory instrument. () An instrument containing the first regulations to be made under this section may not be made unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament. (11) An instrument containing any other regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament. (3) In section 2(4) (bills of exchange: duties of holder on presentment and payment), at the beginning insert Subject to Part 4A (presentment by electronic means),. (4) Omit sections 74B and 74C (which provide for alternative means of presentment of cheque for payment by banker). () In section 87 (promissory notes: presentment for payment), at the end insert (4) This section is subject to Part 4A (presentment by electronic means). (6) The amendments made by this section have effect in relation to presentment of instruments after it comes into force, including instruments created before that time. Payment systems 14 Powers of the Payment Systems Regulator (1) Part of the Financial Services (Banking Reform) Act 13 (regulation of payment systems) is amended as follows. (2) Section 8 (power to require disposal of interest in payment system) is amended as provided in subsections (3) and (4). (3) In subsection (1), for the words following interest in substitute (a) the operator of a regulated payment system, or (b) an infrastructure provider in relation to such a system, to dispose of all or part of that interest. (4) After subsection (2) insert (2A) The reference in subsection (2) to a restriction or distortion of competition includes, in particular, a restriction or distortion of competition (a) between different operators of payment systems, (b) between different payment services providers, or (c) between different infrastructure providers