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Corporate Review - Remuneration Code, corporate governance and tax reform

31 January 2011

In the December 2010/January 2011 edition of Corporate Review we look at the FSA's amended Remuneration Code, corporate governance changes and tax reforms.

The FSA’s amended Remuneration Code is now in force, implementing tougher rules for banks, building societies and investment firms on bonus deferrals, share-based payments, bonus guarantees, discretionary pension enhancements and severance payments. Other recent corporate governance related developments covered in this issue include the updated voting guidelines issued at the end of last year by NAPF.

In an effort to improve the UK’s tax competitiveness and provide business with certainty over future tax policy, the government has issued details of the major tax reforms it intends to deliver in the next three years. Whether the reforms will achieve the aim of reducing the number of redomiciliations from the UK remains unclear, but we expect businesses will be encouraged by some of the positive developments coming out of the package.

In November, we reported on a tax decision by the ECJ in the first of the “payments and transfers” VAT cases referred from the UK. HMRC has now published its response to the decision, with the result that businesses must now apply VAT to any services which fall within the decision’s scope. This has implications for a wide range of commercial arrangements.

The Court of Appeal decision in the Safeway case has also been handed down, preventing the recovery of damages in respect of a fine related to an investigation into collusion from former directors and employees.

If you would like to receive a full copy of the December 2010/January 2011 edition of Corporate Review please speak to your usual Allen & Overy contact, or email