CPA Bulletin

www.cpa.uk.net CPA Bulletin > November 2021 41 Q&As: 1 q&a s You will find late cancellations addressed in clause 24(c) of the 2021 Model Conditions, (as was in the 2011 Model Conditions); and should highlight the clause to your customer when you send the full terms to them. We are currently in dispute with a customer regarding a “late cancellation” and the associated costs that have arisen as a result. The operated plant was booked for a Sunday evening and our customer cancelled the booking on the Friday evening at 8pm. We have accrued internal costs and supplier costs as a result. Our customer has requested our terms and conditions, and in particular which clause addresses late cancellations. We have been looking through them; but cannot immediately see any reference to cancellations. Can you let me knowwhere this can be found within the terms? The current position is that construction plant cannot run on rebated fuel from 1st April 2022 for construction related activities. However, if the plant is used for other activities, i.e., forestry, then it would appear that it can run on rebated fuel. HM Revenue and Customs (HMRC) has circulated their latest draft guidance which specifies when red diesel can be used, i.e., in forestry or agricultural activities. However, HMRC are currently stating that if the machine is being used for both agricultural and construction purposes; then in this situation, the owner will either have to completely flush out the tank of red diesel, and switch to white; or run the machine entirely on white diesel irrespective of its intended use. I must emphasise that this is still a draft document, but we are uncertain whether there will be any significant changes prior to the finished guidance is circulated by HMRC. You can read more about this on page 26. With the Government deciding to limit those companies and industries who will be entitled to use rebated fuel (red diesel) fromApril 2022, will plant in the construction industry still qualify to use red diesel? We are a plant-hire company based in England, who is intending to hire to another English company which is based in Belfast. Are you aware of any contractual complications that would apply when using the Model Conditions? No, I cannot foresee any problems with hiring to an English company based in Belfast. What may be of concern with contractual arrangements is understanding the procedural steps should a dispute arise. Within clause 36 of the 2021 Model Conditions (as was clause 35 of the 2011 Model Conditions), it states that jurisdiction will be wherever the site is within the UK, so Northern Irish law will apply. However, as both companies are English, then should a dispute arise, there may need to be a discussion on whether Northern Irish law will apply to the dispute, or as both companies are English, if English/Welsh law will apply. I am wondering if you could clarify the position when supplying plant to the customer under CPA Model Conditions, in particular, if it is damaged whether we can charge the customer the plant’s market value or replacement (new) value? When an item of plant has been hired to a customer under the Model Conditions, and during the hire period it is then stolen or damaged beyond its economic repair, then within clause 13(b) of either the 2021 or 2011 Model Conditions, the customer has to ‘make good’ for that loss, i.e., put the owner back into the position before the plant was stolen or irreparably damaged. So, the value of that loss is dependent on the age/state/condition of the plant which was originally supplied. In most instances this would mean that the customer is charged for the plant’s market value, rather than the value of a brand new replacement machine.