Whilst the Government is trying to arrest this decline, the Portas Review, which aims to identify what the Government, local authorities and businesses can do to promote the development of more prosperous and diverse high streets, is only just underway and a resurgence in the high street may be some way off.

However, whilst traditional retail suffers, online shopping is booming in the UK.

According to recent statistics published by the Organisation for Economic Co-operation and Development (OECD), the UK has a higher proportion of adults who shop online than any other OECD country. The statistics revealed that 60 per cent of UK adults bought something online in 2011 – twice the average of the OECD’s 34 member states, which include the US, Germany, Australia and France. And UK consumers are spending a lot of money online too: according to the Interactive Media in Retail Group (IMRG), the UK spent £68.2bn on the internet in 2011, which is equivalent to £2,180 for every adult in the country.

And this is not an isolated statistic.

The latest figures from the IMRG Capgemini e-Retail Sales Index reveal that shoppers in the UK spent a total of £6bn online during January 2012, equivalent to £118 per person, reflecting a year-on-year growth of 16 per cent.

When compared with the high-street and wider retail sector, online retail is not just proving resilient in the economic gloom, but is positively flourishing.

An article in the Financial Times this week looked at how manufacturers of household and personal goods in the UK and US are hoping to expand their online presence and are now looking at ways to use social media to target customers. Whilst some companies, such as Heinz, Thorntons and Asos, are already marketing or selling items through their Facebook pages, Reckitt Benckiser has just launched a washing-up liquid product which is exclusively sold on Facebook.

There is no doubt that the use of Facebook can help to develop the retailer-customer relationship; by doing so, it could be argued that retailers’ desire to make the shopping experience more personal is a return to the ‘good old days’ when local shopkeepers in the high street butcher’s or baker’s shop knew their customers by name.

Are we going back to the future?

China is an important growth market for the UK, with its worldwide food and drink imports having continued in a positive trend in July to just under £5bn, up from £4.4bn in June. With 2010 figures for UK food and drink exports to China up 28.5% on 2009 figures, manufacturers are increasingly looking at opportunities in this market.

In a joint initiative with the Food & Drink Exporters Association (FDEA) and UK Trade & Investment (UKTI), FDF’s support will ensure companies benefit from an enhanced and strongly branded UK presence at the show; a specially organised trade development visit for non-exhibiting companies to give them a taste of the market; and a meet the buyer initiative enabling companies to meet key customers from the retail and food service sectors.

Charlotte Lawson, Director of Member Services at FDF, said, “The UK manufactures many of the world’s best loved food and drink brands, and demand for our products abroad continues to grow. China, with its growing middle class, has turned from an export country to an import destination. As a growth market for the UK, China cannot be ignored.

“Working with FDEA and UKTI, FDF wants to help UK food and drink manufacturers take the Chinese market by storm by significantly enhancing the UK presence at the FHC exhibition in Shanghai. We aim to support Britain in her endeavour to double trade with China by 2015 to some 62 billion pounds, by supporting business building initiatives which enable UK food and drink manufacturers to gain access to this market.”

So, the message from the FDF seems clear – the Eastern markets are full of promise – maybe we have heard that said somewhere before? Let’s hope UK businesses can achieve something great in these troubled times.

The High Court agreed with MMP. The franchisee was responsible for the actions of its employee. It disagreed with the franchisee’s  argument that her actions were outside of the course of her employment and were a matter for her private life. This was about an employee who had misused personal data obtained from a CV obtained through her employment.  This was a breach of her employment contract, but MMP was still responsible.

However, the franchisor’s purported termination of the contract was wrongful and that action in itself was a repudiatory breach of contract as it showed an intention not to perform the contract. The reason was that the relevant clause which had been breached said that MMP must not “do anything to adversely affect our name, Trade Marks or other Intellectual Property”.  On a true construction of those words, Antal would have needed to provide evidence that MMP’s conduct had in fact damaged the Antal brand.  It had not provided that evidence.  A mere fear or concern of the harm or reputation that would be done was not sufficient on the wording used in the agreement.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This case should act as a warning to businesses to be careful when selecting and managing their staff.  However, even more stark is the consequence of failing to have an agreement that says what the franchisor or other business thinks it says.  Care should be used before terminating an agreement, or the otherwise innocent party ends up being the wrongful party.  It should also have made the contract wording tighter by talking about damage to its reputation “in the franchisor’s opinion” so that it would not have to attain evidence to prove that the damage did actually occur.”

Anyway, this post is about a different kind of dog…a…wait for it….hot dog.  Sorry, sorry, sorry.

Anyway, the point of this blog is that Manfred Bog, who specialised in selling sausages and chips from three mobile snack bars at weekly markets, won a ruling from the European Court of Justice that he did not have to charge the full rate of VAT.

The court’s reasoning was that his sausages required so little preparation that they did not constitute catering. It found the same rules should apply to popcorn and nachos sold in German cinemas.

VAT is a EU tax, so the effect of this will spread to the UK.  The implications here will be  that caterers, cinemas, and other hot sausage sellers in the UK will need to ensure that they charge the correct amount of VAT and may need to discuss the implications of the case with their local VAT office.

So, when you are staggering home from your football match, pub or other entertainment venue and you are hungry enough that the sausages on sale by the street vendor start to look edible, remember to ask whether they are charging VAT correctly.  Then run.

On a slightly more serious note, those of you that follow VAT rulings will recall the Subway decision (which went the other way – the court held that VAT was to be charged on the supply of subs).   In that case, there was some discussion on the impact of this on rents.  It is entirely conceivable that purveyors of certain foodstuffs from more fixed premises, might not reduce their charges and therefore pocket the difference.  If this affects profits significantly then there might be scope for landlords to argue that rents should increase in the future, especially if there is a turnover rent.

The franchise agreement contained three different provisions in separate sub-clauses: the non-solicitation clause prohibited soliciting clients and staff for one year in respect of the Restricted Area; the non-supply clause prohibited supply of competing goods for one year in respect of the Restricted Area; and the non-compete clause prohibited engaging in a competing business in respect of the Restricted Area. The “Restricted Area” was defined only in the non-compete clause, by reference to the franchise territory but also some other surrounding areas. The agreement also contained a severability clause, which is often used to encourage a judge to treat each provision separately and remove any offending words.

The parties fell into dispute. They did agree that the non-solicitation clause was valid in all of the Restricted Area. However, the non-compete clause would be invalid if it extended to the whole of the Restricted Area as it was too wide. The High Court therefore had to rule on the ability to sever any offending words.

The High Court ruled that it would not sever the Restricted Area in order to save the unenforceable non-compete clause. If the Court would have reduced the wording so that the definition referred just to the original territory, this would have changed the meaning of the defined term in the other sub-clauses (the non-solicitation clause and non-supply clause), which did not need changing in order to make them enforceable. Therefore it was not possible to sever.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This case shows the danger of using the same defined term, and particularly defining the term itself, within particular sub-clauses if the intention by drafting separate sub-clauses is that offending unenforceable sub-clauses may be severed with the rest left intact.”

If you miss the deadline it could be costly, as paper returns filed after this date could mean a £100 penalty.

An alternative to paper-filing is to file your return online, which benefits from a January deadline.

If you would like assistance in preparing and filing your tax returns, please contact James Odds on 01923 202020 or james.odds@mablaw.com.

The High Court sided with P. The level of know-how and assistance provided by P to its franchisees totally justified the restrictive covenants. The restrictive covenants were no more than necessary to protect P’s business. Those provisions were therefore not void at common law or contrary to competition law as they were essential to maintain P’s goodwill. The injunction was justified and the other side’s claim for damages was dismissed.

The High Court said that Kall Kwik breached a duty in negligence to MGB, causing harm. Because this was a case of financial loss, MGB had to show that there sufficient proximity (or closeness) in their relationship, the loss was reasonably foreseeable as a consequence of a breach, and it was just and reasonable in all the circumstances to impose a duty of care. MGB succeeded in doing that. Kall Kwik had assumed a responsibility in acting as an adviser in helping MGB over the financial issues associated with the franchise, and it had breached that duty. All in all, the High Court decided that it was fair to hold Kall Kwik liable.

The High Court came to this conclusion despite two exclusions of liability. In the franchise agreement itself, there was an exclusion of liability, but this related to the claim for misrepresentation in inducing MGB to enter into the agreement and not for negligence in relation to performance of the agreement itself. In addition, Kall Kwik had produced a cash flow document (which contained the figure of £15,000 for the re-fitting costs) that had a disclaimer against responsibility for the contents except in the case of fraud and there was a note advising recipients to carry out their own verification of the contents; however, the Court said it was not the cash flow on which MGB had relied but the discussions about fitting costs.

MGB also successfully claimed against Kall Kwik for breaching an ancillary agreement to the main franchise agreement because of Kall Kwik’s failure to transfer certain customer data as promised.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: ‘Franchisees often enter into one-sided franchise agreements just to have the opportunity to share in the success enjoyed by the franchisor. The franchisor generally helps the franchisee to establish its business so that the relationship ends up being a win-win situation for both of them. Inevitably, the franchisor gives the franchisee assistance and advice. Even if the franchise agreement is one-sided, this case shows that the franchisee may be able to claim under the legal head of tort rather than breach of contract. From a franchisor’s point of view, they should look at their agreements and ensure that their liability clauses are drafted as widely as possible to seek to limit liability for claims made against them under tort.’