Insurance Premium Tax (IPT) and minimum wages are changing or have changed in UK. Does this constitute as change in Law? I had preliminary investigation and findings are that the above are going through primary legislation and does interpret as change in Law. There is a provision in the Contract (8 yrs Term Maintenance Contract) to uplift SoR using BCIS price index but please let me know your view on this whether we need to treat as Change in Law (then is a CE) or part of Price index.
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If secondary option X2 changes in the law has been selected then a change in the law is a compensation event.
The guidance notes states that only changes which affect the Contractors costs are included e.g. employment tax, import duties, custom payments. It goes on to state that law covers national or state statute, ordinance, decree, regulation (including building or safety regulations) and a by law of a local or other duly constituted authority or other delegated legislation. The IPT is covered by the Finance Act 1994 (sections 48-74 and schedules 6A, 7 and 7A, as amended by the Finance Acts 1997, 1998,1999, 2003, 2007, 2008, 2009 and 2010), which is the primary legislation establishing the principles of IPT
The Chancellor stated in the 2015 summer budget that IPT will increase from 6% to 9.5% from November 2015. So if this increase affects the Contractors Costs and secondary Option X2 is in the contract then this is a compensation event if the change occurs after the Contract Date.
The National Minimum Wage Regulations 2015 No. 621 is a Statutory Instruments so would fall under statute. So again would be a compensation event if the change occurs after the Contract Date.
BCIS have a number of indices but the principle is the same they cover a group of costs associated with a sector which will usually include wages increases etc. The wages element is likely therefore to be only one part of the indices along with Plant and Materials, etc.
If option X1 inflation and option x2 are included in the contract they both would apply.