Wednesday, 5 October 2011

Red Tape day

From Accounting Web

1 October is often called "Red Tape Day" because of the new regulations that come into effect on that day. Here is a roundup of relevant changes for businesses and their advisers.

Company annual returns

Companies House will adopt the 2007 version of the UK SIC codes. The latest version will introduce five-digit codes to classify company business activities, rather than the existing four digits. All companies filing an annual return on or after 1 October will need to use the new codes, which will be asked of you when filing in your annual return via WebFiling. If you use the new codes prior to 1 October, Companies House will automatically convert the code, but this is not encouraged. Further details: Companies House filing errors: Check and check again

Aside from the Annual Return, other forms that will be using the SIC 2007 version after 1 October are: SE FM01, SE FM02, SE FM03, SE FM04, SE FM05, SE TR02, and SE TR03. The new regulations also contain changes to shareholder details required on the annual return. Unlisted companies must 'provide a full list of all shareholders on the first annual return following incorporation and on every third annual return thereafter. Any details of transfers of shares that have taken place during the year will be required for intervening annual returns. Listed companies must provide name and address details of shareholders who hold 5% or more of the company’s share capital. Those companies subject to the FSA's DTR5 Vote Holder and Issuer Notification Rules (whose share register is available online on the National Storage Mechanism) do not have to provide Companies House with the same details.

Agency worker rights

After some last minute posturing, agency workers will indeed see their benefit rights extended from 1 October. Once agency staff have completed 12 continuous weeks of service, they will gain similar rights to permanent staff including pay, overtime, shift allowances, maternity rights, holiday pay and individual performance-bonuses. However, agency workers will still not be able to enjoy benefits such as occupational sick pay, redundancy pay and health insurance. It was the talks between the TUC and the government that led to the benefit extension. The Agency Workers Regulations apply to hirers and companies involved in the supply of temporary agency workers, either directly or indirectly in England, Wales and Scotland.

National Minimum Wage

Adding to the employment regulation changes will be a change in the National Minimum Wage, applicable to all in the UK. The following rates will be effective from October 1:

£6.08 an hour for workers aged 21 and over
£4.98 an hour for workers aged 18-20
£3.68 an hour for workers aged below 18 who are no longer of compulsory school age

For apprentices, £2.60 per hour must be paid to apprentices who are under the age of 19, or for those over 19 or over and in the first 12 months of their apprenticeship.

Abolition of default retirement age

With effect from 1 October, the default retirement age (DPA) of 65 was repealed by the Employment Equality (Age) Regulations that prohibit age discrimination in the workplace. Further guidance can be found on the BIS website and in the ACAS guide, Retirement Process and the removal of the Default Retirement Age.

Carrier Bag levy

A 5p charge is being introduced by the Welsh Assembly on single-use carrier bags for customers in Wales. The charge is compulsory and is also applicable to retailers outside Wales who deliver to customers in Wales when using single carrier bags. BusinessZone reported that business groups have reacted angrily to the new regulations. Non Rhys, Wales Policy Manager at FSB, told the BBC: “Not all retail businesses will have had the packs from the Welsh Government because there's not a list of all the retailers in Wales, so we have been trying to contact as many businesses as possible. But there will be some small businesses that do not know."

The new regulations will be published on the legislation.gov.uk website on October 1.

Tuesday, 4 October 2011

Employment Law update from EMW Law

The Chancellor, George Osborne, in this week’s speech at the Conservative Party Conference announced 2 significant reforms to current Employment Law, including:

from 6 April 2012 increasing the length of service an employee must have before bringing a claim for unfair dismissal from 1 year to 2 years; and
workers having to pay fees in order to bring a claim at the Employment Tribunal. Although the exact detail of how this will work has not yet been provided it has been stated that the fees will be set at £250 to lodge an application and £1,000 payable when the hearing is listed; both of which could be increased in the event that the value of the claim is over £30,000.00. However, where the claim is successful the fees will be refunded, and claimants with insufficient means will have the fees waived.

Purpose of the reforms

Such changes to the law have been made in an attempt to discourage speculative claims being made in the Employment Tribunal. The Government claims that the reforms will save UK businesses £6 million per annum and decrease the number of claims made by 2,000 a year.

Potential consequences

Several issues may arise out of these changes to the law.

Firstly, in relation to how the fees will be waived, if the test for a fee-waiver is simply that they need to be in receipt of income support, then most ex-employees will automatically qualify for the waiver, but those still in work would be required to pay. Such a policy could therefore arguably be seen to encourage individuals to remain unemployed, rather than attempt to mitigate their losses and find employment elsewhere.

Secondly, in relation to the increase in qualifying time, there has been some discussion as to whether this will actually reduce the number of claims being made at the Tribunal. Individuals with less than 2 years service could seek to bring a claim under alternative jurisdictions (e.g. under discrimination legislation), where no service requirement exists. Furthermore, there may also be a sharp increase in employees resigning and bringing constructive dismissal claims in the lead up to April 2012 in circumstances where they have between 1 and 2 years service and believe that they will be dismissed shortly after the reforms come into force.

Lastly, there has been some concern that the reforms will encourage employers to maintain a high turnover of staff, providing employees with less job security, so that they are unable to qualify to bring a claim for unfair dismissal.

Monday, 3 October 2011

The Euro

Just been told by a client that a friend of his who works for De La Rue (the security printers) that they've been ordered to print billions of Deutsch Marks by the German Government. Could be they are getting ready to abandon the Euro...........

Harristick

HARRISTICK Ends Tax Red Tape Misery

Small businesses owners across Northamptonshire are finding more time to run and grow their business thanks to a new USB-based solution.

Harris & Co’s innovative new service enables micro and small businesses to ditch red tape, save time and slash their bookkeeping costs.

No longer do businesses have to slave over long and tedious tax forms - they simply sign up at www.harrisandco.biz and get Harris & Co to do the hard work:

Harris & Co sends each businesses a Harristick USB memory stick containing some simple pre-prepared electronic record sheets
Businesses simply list their sales and purchases - it can take as little as just 15 minutes a month - then email them back to Harris & Co
Harris & Co calculates each businesses' VAT, wages, business tax and personal tax.

Harris & Co launched the 'Harristick ' solution after realising that small firms across a wide range of sectors needed much cheaper and simpler accountancy services than the market currently offers.

Harristick’s service starts from £85 + VAT per month - half the cost the market currently charges many start-ups and small firms.

It covers not just VAT returns but also wages, annual accounts and "everything else the average small business needs".

Each Harristick contains four electronic record sheets: sales invoices, purchase invoices, cash receipts and cash payments.

They also come with lots of other useful calculators and information relating to items such expenses/mileage claims, payroll and personal tax.

Principal Phil Harris said: "The feedback has been very positive. Our clients like the simplicity of it - and they certainly like the fact that it is a fixed monthly fee.

"We started our business in my spare bedroom and are still a small business ourselves so we know the challenges that start-ups and small businesses face. Even so, we did extensive research with our clients to ensure that our new service meets their needs.

"This has been developed with small businesses for small businesses."

Principal Phil Harris said: "It's simple - we worry so you don't have to.

"We take care of all your dealings with HM Revenue & Customs and Companies House - including VAT returns, tax returns, annual returns and wages paperwork.

"That frees up your time and allows you to concentrate on running your business."

Harris & Co provides businesses across Northamptonshire with professional, high quality accountancy services in a friendly, approachable way.

For more information, contact Phil Harris at Harris & Co, 01604 660661

http://www.harrisandco.biz

EIS scheme extended

£100m tax break to help fast-growing small firms

Following the green light from the European commission, the chancellor is to go ahead with proposals floated in the 2011 budget to expand the Enterprise Investment Scheme (EIS).

The plan involves raising the income tax relief from 20% to 30% for EIS investments, backdated to April 2011, and doubling investor limits to £1m, which will come into effect in April 2012.

Osborne said: "We want to make the UK the best place to start, finance and grow a business. These changes will give a bigger tax break to those who take risks for growth and jobs in Britain by investing in the small companies that have the potential to be fast growing."

The Treasury said high-growth companies account for only 6% of businesses in the UK employing more than 10 people, but in the past three years had been responsible for creating 54% of all jobs in firms with more than 10 staff.

Friday, 30 September 2011

IR35 only collects £220000 in tax

The Professional Contractors Group (PCG) has called on the government to explain why IR35 was retained after it yielded just £220,000 in the last tax year.
HMRC admitted, in response to a freedom of information request, that IR35 status enquiries fell from 158 in 2006/2007 to 23 in 2010/2011. The tax yield also highlights a dramatic reduction from more than £1.9m five years ago to £219,180 this year.
John Brazier, managing director of PCG, referred to IR35 as an unwarranted measure introduced by the previous government. He said: “These figures confirm what PCG has always said, that the tax yield from IR35 is minimal and that the stress and damage done to the UK’s 1.4m genuine freelance businesses is completely unnecessary.
“It is now time for the decision makers to explain more clearly to freelancers and the public why the risk to the exchequer would be simply too great if IR35 was abolished or suspended," Brazier added.
As directed in the Budget this year, the administration of IR35 is being reviewed and it is hoped that the government will address the issue later in the year.
Chris Bryce, PCG chairman and IR35 Forum member, added: “He [the Chancellor] has a great opportunity in the November statement to release businesses from this ridiculous burden and free up HMRC resource to work on better things."
IR35 status enquiries: 6 April 2006 to 5 April 2011
HMRC confirmed that the number of reviews opened in the last five years, where the Intermediaries Legislation (IR35) was identified as a risk, was:

6 April 2006 to 5 April 2007: 158
6 April 2007 to 5 April 2008: 104
6 April 2008 to 5 April 2009: 25
6 April 2009 to 5 April 2010: 12
6 April 2010 to 5 April 2011: 23

The Revenue also provided the tax yield received for the requested years: