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The EU Deforestation Regulation (EUDR): A New Era for Supply Chains – Is Your Business Ready?

The EU Deforestation-Free Regulation (EUDR) will reshape global trade. It aims to curb deforestation and forest degradation linked to EU consumption.

The EUDR applies to both EU and non-EU companies and covers products placed on the EU market or exported from it. Companies placing certain commodities or products on the EU market will need to prove they are deforestation-free – or face significant compliance risks.

The EUDR came into force on 29 June 2023 and its obligations are applied in phases with large and medium companies subject to the Regulation from 30 December 2025 and small and micro companies subject to compliance from 30 June 2026.

Who’s Affected?

The EUDR applies to seven key commodities – cattle, cocoa, coffee, palm oil, rubber, soy, and wood – plus a wide range of derived products like leather, chocolate, furniture, cosmetics, and printed goods.

Even businesses not directly trading these goods – from banks to hospitality providers to construction firms – will be affected as stakeholders demand deforestation-free sourcing.

Compliance

Companies must conduct due diligence, including providing geolocation data for their supply chains and submit a mandatory Due Diligence Statement (DDS) to an EU database.

But this isn’t just about importers and exporters. Manufacturers, retailers, investors, and logistics providers will all feel the impact, with obligations and expectations rippling through entire supply chains.

Why Companies Need to Act Now

Meeting EUDR obligations isn’t just a box-ticking exercise. Businesses will need to:

• Map supply chains down to farm or plot level
• Collect and verify data on origin and deforestation status
• Submit compliance statements via the EU Information System
• Update policies, contracts and training
• Align ESG reporting with frameworks like CSRD and the German Supply Chain Act

Those who delay risk supply chain disruption, regulatory investigations, and reputational damage as well as potential fines of up to 4% of the businesses EU turnover in the preceding year and confiscation of the covered products or the revenues gained from them.

How We Can Help

At Quastels, we guide businesses through the EUDR’s complexities and turn compliance into a competitive advantage:

• Regulatory Guidance – tailored advice on EUDR obligations
• Contractual Safeguards – drafting supplier clauses and updating agreements
• Due Diligence Frameworks – designing robust compliance systems
• Risk Management – mitigating liability and handling disputes
• Training & Policy Development – empowering your teams to stay ahead

The Bottom Line

The EUDR represents a major shift in sustainability and supply chain governance. Businesses that prepare will not only mitigate risk but also strengthen brand reputation, investor confidence, and customer trust.

Is Your Organisation Ready?

Let’s talk about how we can help build a deforestation-free compliance strategy. Contact our ESG team via the form below.

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Protecting Your Business: Are Your Restrictive Covenants Likely to Stand Up in Court?

This article was published in the September/October 2025 edition of London Business Matters.

An employee leaves your employment. Within two weeks, they’re sitting at a competitor’s desk, calling your best clients, armed with your pricing strategy and inside knowledge of your company. You might think your ‘iron-clad’ contract will stop them. However, unless your restrictive covenants have been thought through carefully and well drafted, you could find they’re not worth the paper they’re printed on.

Clauses such as non-compete, non-solicitation and event confidentiality terms protecting specific information after employment ends, can be vital in protecting your client relationships, know-how, and commercial strategy.

Restrictive Covenants are generally considered anti-competitive, and the law aims to balance the right to protect your business with an employee’s right to earn a living; only clauses that go no further than are ‘necessary’ will be enforceable.

What will a court look at?

1. Legitimate business interests. The restriction must protect something genuinely valuable to your business, such as trade secrets, client connections, or workforce stability. Preventing competition for its own sake will not pass the test.
2. Reasonableness of scope. Restrictions must be proportionate in terms of duration and geography.
3. Tailored to the activity. Senior executives may warrant broader restrictions than junior staff. Generic ‘cut and paste’ clauses will often fail to persuade a court legitimate business interests that need protecting.

Common pitfalls

All too often, businesses rely on template documentation or blanket clauses that try to cover every eventuality. Overreach is dangerous; if even part of the covenant is too wide, the entire clause can be struck out.

Practical steps

• Be precise and define the information you are seeking to protect: name companies or the nature of a business which is competitive or territories which you wish to protect rather than using vague, sweeping terms.
• Audit at key stages: review restrictions when roles change or when broader access to business information is given.
• Consider garden leave: keeping a departing employee out of the market during their notice period can buy valuable time.
• Move fast: if you suspect a breach, prompt action is vital in demonstrating to a court the risks your business faces.

Properly drafted and well considered restrictive covenants are key in protecting business interests. Not giving them the time and respect they deserve will only see hard earned business advantages slip away to competitors.

To discuss the contents of this article, please contact Dipti Shah via the form below.

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Deemed Ownership in SDLT: Lessons from the Angela Rayner Case

A Political Storm Over Property Tax

Deputy Prime Minister Angela Rayner has found herself at the centre of a tax controversy involving the underpayment of Stamp Duty Land Tax (SDLT).

The issue arose after she purchased a flat in Hove in May 2025, paying standard SDLT rates on the £800,000 transaction. However, it later emerged that she had previously transferred her share of the family home, which she purchased in April 2016 with her then-husband Mark, into a trust for their disabled son. Under complex deeming provisions in SDLT legislation, Rayner is treated as still owning that property for SDLT purposes, thereby triggering the 5% surcharge applied to second homes or additional properties.

Though the trust had been established by court order and she had said that she had relied on professional advice from “a conveyancer and two experts in trust law”, Rayner ultimately admitted under-paying stamp duty by £40,000, referred herself to the independent ethics adviser and began discussions with HMRC about settling the shortfall. It is worth adding that the conveyancing firm had since denied that they gave additional SDLT advice and relied on Rayner’s instructions to compute the SDLT due. Now, with confirmation that she breached the ministerial code and her resignation confirmed, her political career appears to be in tatters.

Her case illustrates how technical tax provisions can entrap even high-profile public figures and highlights the importance of understanding deemed ownership rules under Schedule 4ZA of the Finance Act 2003.

Deemed Interests Under Schedule 4ZA of the Finance Act 2003

The additional SDLT surcharge on second homes is governed by Schedule 4ZA of the Finance Act 2003. Under paragraph 8, individuals may be deemed to hold a “major interest” in residential property even when they do not hold legal title personally.

Specifically:

“A person is treated as having a major interest in a dwelling if it is held in trust for a child (under 18) of the person, or of the person’s spouse or civil partner.”

In practical terms, this means that if a parent places a property into a trust for their minor child, even if done by court order, they may still be treated as owning it when calculating SDLT on future purchases. This can inadvertently trigger the 5% surcharge for owning multiple properties.

This provision aims to prevent tax avoidance through indirect ownership structures. However, it also catches entirely legitimate trust arrangements, including those established for the care of vulnerable or disabled minors.

Trusts for Vulnerable People: No SDLT Exemption

There is a common misconception that trusts for disabled beneficiaries enjoy broad tax exemptions. While Capital Gains Tax and Inheritance Tax rules provide favourable treatment for vulnerable beneficiary trusts, SDLT does not follow suit. HMRC’s SDLT Manual makes it clear that:

• A parent is deemed to have an interest in property held in trust for their minor child, regardless of disability.
• This applies whether or not the parent is a trustee.
• Court-ordered trusts do not override the deeming rules.

The Rayner Example

Angela Rayner purchased a property in Hove in May 2025 and paid standard SDLT, having transferred her prior home into a trust for her disabled son. However, under paragraph 8, she was deemed to still have an interest in that first property, meaning the higher SDLT rate should have applied.

Although Rayner notes she had relied upon professional advice from “a conveyancer and two experts in trust law”, HMRC’s position is clear: deemed ownership applies regardless of intent or legal title, and ignorance of the rule is no defence.

The Risk of Inadvertent Non-Compliance

Rayner’s case is not unique. Many individuals overlook these deeming provisions, particularly when trusts are set up for personal or protective reasons rather than for tax planning.

Key risks include:

• Unwitting underpayment of SDLT when purchasing a new property.
• Exposure to interest and penalties from HMRC (up to 30% in careless cases).
• Reputational damage, particularly for individuals in public office or regulated professions.

Even more critically, individuals acting as trustees, whether appointed by court or voluntarily, have a legal duty to be aware of the nature and effect of the trust agreement. Trustees are expected to understand their legal obligations, the structure of the trust, and the property held within it. This fiduciary responsibility extends beyond the administration of the trust itself and includes awareness of any tax implications that may arise when the trustee acts in a personal capacity, such as when purchasing property. Where a trustee fails to disclose a trust interest that could affect SDLT treatment, they may be deemed negligent, even if acting in good faith.

This highlights a broader issue which is that conveyancers can only act on what they are told. A buyer who omits material information, such as a role in a trust that holds residential property, risks incorrect SDLT treatment and exposure to penalties, regardless of their interest.

Conclusion

The Angela Rayner case has brought public attention to a corner of tax law that can have substantial consequences. The SDLT deeming rules are not concerned with fairness or intent; they apply automatically and without exemption. Legal and tax professionals advising on family trusts, particularly involving minors or disabled beneficiaries, must have a working knowledge of these provisions, and importantly, trustees, especially as the buyer of a residential property, must be aware of the need to disclose any interest (direct or deemed) in other properties, including trust-held ones to their conveyancers.

As the Rayner case shows, the cost of oversight is not just financial, but reputational.

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