| Enews - January 2007 | |||||||||
Introduction Welcome to the first enews of 2007. This month we include details of some important legislation which extends the requirements for companies and Limited Liability Partnerships to provide certain information on their websites and electronic versions of documents. We also include our usual round up of news. Please browse through this month’s articles using the links below and contact us if any issues or questions arise. |
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Changes required to websites and electronic documents
The government has recently issued new legislation extending the requirements for companies and Limited Liability Partnerships (LLPs) to provide certain particulars about themselves on their websites and in electronic versions of all documents. The new legislation became effective from 1 January 2007 and there are penalties for those who do not comply. The changes mean that companies and LLPs must disclose their name, place of registration, registered number and the address of their registered office on their websites. This information must already be included on business letters and order forms. The new legislation extends the requirements to include this information to such documents in electronic format. As so many of us now conduct business correspondence by email, this has implications for the amount of information that must be included. Please do get in touch if you want any more clarification on this.
EU enlargement - Bulgaria and Romania HMRC have reminded businesses that Bulgaria and Romania joined the EU on 1 January 2007. This means that, from that date, all VAT registered businesses will need to include any trade with these countries in boxes 8 and 9 of their VAT returns. Similarly, businesses that are registered for Intrastat will need to include this trade on their monthly Supplementary Declaration forms (SDs). The change may mean that some businesses become liable to submit SDs for the first time. Intrastat forms have to be completed where either acquisitions or dispatches with other EU countries exceed the annual limit. The limit was raised to £260,000 from 1 January 2007.
Tax inspectors to receive bonuses The Times has reported that Tax Inspectors are to be encouraged to collect more money by being given bonuses linked to the amount of revenue they bring in. We hope this won’t mean that HMRC pursue tax settlements just to raise money, as opposed to identifying actual errors.
Pensions Bill More people than ever would be entitled to a full basic state pension as a result of measures included in the new Pensions Bill, which had its second reading in the middle of January. Secretary of State for Work and Pensions, John Hutton, said ‘This Bill would create a more generous, fairer state system. It would be of particular benefit to women and carers, who often lose out in the current system.’ According to the Department for Work and Pensions, the reforms included in the Bill should mean that around three quarters of women would be entitled to a full basic state pension in 2010, compared to around 50% if the system was not reformed. By 2020 around 90% of women would have a full entitlement.
Refunds of voluntary national insurance contributions Paymaster General Dawn Primarolo and Pensions Reform Minister James Purnell have announced that people who have made voluntary National Insurance Contributions to make up for gaps in their records may be able to claim a refund if they made the contributions since 25 May 2006. Paymaster General Dawn Primarolo said: ‘The state pension reforms will make the system fairer to all. The Government also wants to ensure that it is fair to people who have paid voluntary National Insurance Contributions. That is why I am announcing that where individuals have continued to make voluntary National Insurance Contributions since 25 May 2006, but would have chosen not to do so had they been aware of the Government's intention to reduce the number of qualifying years required for a full basic State Pension to 30, they may be entitled to a refund.’ The administrative procedures for handling refunds have not yet been finalised and we will keep you informed of developments on this.
Minimum holiday entitlement set to rise Jim Fitzpatrick, Employment Minister, has announced the government's proposal to increase workers' holiday entitlement from 20 days per year to 28. Research has shown that up to six million workers would benefit from an extra eight days holiday each year under the plans. Currently some employers include the eight bank holidays as part of workers' 20 day annual leave entitlement. This minimum entitlement is pro-rated for part time workers. The DTI is planning a second public consultation on the implementation of the changes. The proposal is to increase the statutory annual leave entitlement in two stages, rising from 20 to 24 days on 1 October 2007, and from 24 to 28 days on 1 October 2008. The DTI has already consulted widely on the increase and has sought the views of business and trade bodies. The cost to business is expected to be around 0.4% of the wages bill.
Fines for non payment of the National Minimum Wage Trade and Industry Secretary Alistair Darling has announced that employers who refuse to pay the minimum wage could face a £200 fine for every worker they underpay. Employers already have to pay back arrears they owe to the worker and now those who refuse to pay up will be penalised. Alistair Darling said, ‘Workers have the right to a decent minimum wage and we are determined they get it. To those employers avoiding the minimum wage the message is don't pay it and you'll pay the fine. In the last year alone the government's enforcement teams across the UK helped over 25,000 workers get more than £3m back in unpaid wages.’ Where employees complain they are not getting the minimum wage, HMRC investigate the employer. If the complaint is upheld and the employer will not pay then a warning is given. The employer must repay the arrears within seven days, if they do not they risk a fine.
Three point penalties for illegal use of mobile phones Transport Secretary Douglas Alexander has announced that motorists face tough new penalties for breaking the law by using a hand-held mobile phone while driving from 27 February 2007. From that date, the fixed penalty will include the award of three penalty points as well as doubling the fine to £60. The government is planning an extensive press campaign to raise awareness of the new penalty. The provision of a hands-free kit in an employee’s car or an employer provided company car is generally not a benefit in kind, as long as the equipment remains the property of the employer. Please do get in touch if you would like any more information on this.
Homeworking costs for the self employed HMRC have revised their guidance on the deductibility of household expenses for those people who work from home on a self employed basis. This has always been a complex area and case law has meant that the rules were at least very confusing! The guidance appears to represent a relaxation of the rules and also offers some clarification and examples of the costs which are deductible.
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