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March 2010
Forum of
Private Business is calling on the
Government to prioritise the needs
of small firms when drafting new
legislation.
More than £700m of affordable, easy
access funding from the European
Investment Bank has been approved
for nearly 3,000 businesses in the
UK, the Government has revealed.
New fathers will be able to take up
to six months of paternity leave,
under plans outlined by the
Government.
Draft legislation to extend
maternity leave to 20 weeks on full
pay has been given the go-ahead by
the European Parliament committee.
A group of MPs has expressed further
opposition to Government plans to
impose a new 'broadband tax' on UK
householders.
The Chancellor is being urged to
scrap ‘complex and costly’ proposals
on the tax treatment of pension
contributions.
Meanwhile, a host of business groups
have joined forces to lobby against
the proposed rise in national
insurance contributions planned for
April 2011.
Go to
February 2010 News Stories
Go to
January 2010 News Stories
March 2010
News Stories
Legislators "neglecting small
firms", argues FPB
The Government is being urged
to prioritise the needs of small
firms when drafting new
legislation.
The call came from the Forum
of Private Business (FPB) and
follows the publication of a
Government report on the impact
of policy-making on enterprise.
Responding to the˜Thinking
Business in Policy" interim
report review, the FPB said it
believes legislators devise new
policies with large companies in
mind. It added that
policy-makers often fail to
consider the implications that
new rules and regulations will
have for the UK's smaller firms,
many of which employ very few
people.
With small firms typically
having less time, money and
resources to interpret and
implement new legislation, the
lobby group warns that SMEs will
find it ˜increasingly difficult"
to compete with their larger
competitors.
The FPB highlighted the
impending Equality Bill as an
example of the disproportionate
consideration that is given when
drafting policies.
While the Government
estimates that the average SME
will need just an hour to
interpret a section of the new
legislation, the FPB predicts
that a typical business owner
who has little experience of
complex legal documents will
take much longer.
Commenting, the FPB Policy
Representative, Matthew Goodman,
said: ˜We believe that, through
improved understanding of the
nature of small businesses and
by making much more accurate
assessments of the implications
of the legislation,
decision-makers can make
informed judgements about the
advantages and disadvantages of
policies."
Policy-makers should also
consider how their policies are
going to boost the UK economy.
It's not enough simply to
consider the social benefits of
legislation without giving
thought to the bigger picture.
Many businesses feel they are
often seen as those which should
automatically pay for attempts
at influencing social change.
Small businesses 'benefit
from £700m of funding
More than
£700m of affordable, easy
access funding from the
European Investment Bank (EIB)
has been approved for nearly
3,000 businesses in the UK,
the Government has
revealed.
The 2008
Pre-Budget Report announced
that up to £4bn of EIB
finance had been secured for
funding SME capital
investment between 2008 and
2011. Participating banks
have secured £1.39bn of
funding and approved £726m
of loans, covering 2,769
small firms.
Small and
medium-sized enterprises (SMEs)
can access the funds through
participating national
banks, which lend the
finance on a matched funds
basis.
Ian
Pearson, economic secretary
to the Treasury, said,
'Support for
SMEs
is key to driving growth in
the UK, so I am delighted
that small businesses are
benefiting from this
finance. I want to encourage
all businesses to get in
touch with their local banks
to find out if they can get
access to this funding; it
is an easy process and
certainly worth pursuing'.
The
Federation of Small
Businesses (FSB) welcomed
the news, but urged
non-participating banks to
take part in the scheme in
order to assist more small
businesses through the
recovery.
Paternity leave set to
extend to six months
New
fathers will be able to
take up to six months of
paternity leave, under
plans outlined by the
Government. Men are
currently entitled to
take up to two weeks of
paid paternity leave,
while women are granted
up to nine months of
paid maternity leave,
and a further three
months of unpaid leave.
The proposals would
allow a woman to
transfer the final six
months of her leave, if
she returns to work
after the initial six
months.
Equality Minister
Harriet Harman said that
the plans would give
families more choice and
flexibility, and allow
fathers to play a bigger
part in bringing up
their children.
Business groups have
given mixed reactions to
the news, with some
warning that additional
regulations will hit
businesses which are
already under pressure
as a result of the
recession.
However, the TUC has
welcomed the proposals,
which it says will 'help
millions of people' to
balance their work and
family life. The plans
are expected to come
into effect for parents
of children due on or
after 3 April 2011.
Plans to extend paid
maternity leave
passed by EU
Draft legislation to
extend maternity
leave to 20 weeks on
full pay has been
given the go-ahead
by the European
Parliament
committee.
Under current
European rules
pregnant women are
entitled to receive
their full salary
for 14 weeks of
their leave. New
mothers in the UK
may take a year off
work, with the first
six weeks on 90% pay
followed by 33 weeks
on the statutory
maternity pay rate.
The remainder of the
leave is unpaid.
The proposals, which
will go before the
full European
Parliament in March,
have prompted
concern from the
British Government
and business
leaders.
Experts predict that
the Treasury may be
forced to find an
extra £2 billion if
the EU plans become
law.
Commenting, the UK's
Employment Relations
Minister, Lord
Young, said: ˜A
substantial increase
in maternity leave
paid at full or
near-full pay risks
undermining this
delicate balance at
a time when
economies across the
EU can least afford
it."
Meanwhile, a
spokesman for the
Institute of
Directors said the
directive was a
˜massive worry" for
the organisation.
New broadband
tax 'will not
benefit the
majority'
A group of MPs
has expressed
further
opposition to
Government plans
to impose a new
'broadband tax'
on UK
householders.
Under the plans,
which form part
of the Digital
Equality Bill,
those
householders
with fixed
telephone lines
will have to pay
a levy of 50p a
month, which
will be put
towards funding
ultra-fast
broadband
services.
The aim is to
provide a
minimum speed of
2Mbps across
Britain by 2012,
with most parts
of the country
receiving 'next
generation'
ultra-fast
access by 2017.
The Government
believes that
upgrading the
UK's digital
networks will
drive further
investment, and
will
particularly
benefit rural
areas.
However, the
Business
Innovation and
Skills
Committee, a
cross-party
group of MPs,
has warned that
the majority of
the people who
would be paying
the tax will not
actually benefit
from the faster
service.
Describing the
tax as
'ill-directed',
the group is
arguing that the
Government
should focus on
making basic
broadband
available to
everyone, and
allow the market
to deliver
higher speeds.
Darling urged to
reform pension
tax proposals
The Government
is being urged
to scrap its ‘complex
and costly"
proposals
on the tax
treatment of
pension
contributions.
The call came
from the
National
Association of
Pension Funds (NAPF),
which has warned
that the
Chancellor's
plans to tax the
pension
contributions of
high earners
will do
˜enormous harm"
to company
pension
provision.
"Senior
executives, who
have
responsibility
for company
pension
provision [will]
opt out of their
company
provision due to
the new tax
regime, with the
result that they
become less
engaged with the
benefits of
offering a good
pension." the
NAPF said.
From April 2011
it is proposed
that individuals
earning more
than £130,000
will not only
have their usual
tax relief on
their pension
contributions
reduced, but
they will also
be taxed on the
value of the
contributions
made by their
employers.
The NAPF claims
the changes
could affect
many people
outside of the
Governments
target income
group and result
in ˜unfair
consequences".
In its
submission ahead
of the 2010
Budget Report,
the trade body
has outlined a
number of
alternative
measures which
it says will
simplify the
system and avoid
unjust effects.
It recommends
reducing the
value of the
annual pension
allowance of
£245,000 a year
to a range of
between £45,000
and £60,000. It
added that this
would
work with the
grain of
existing
pensions
tax policy, yet
allow the
Government to
raise
much-needed
additional tax
revenues.
Business groups
unite to oppose
NICs increase
A host of
business groups
have joined
forces to lobby
against the
proposed rise in
national
insurance
contributions (NICs)
planned for
April 2011.
In a letter of
petition,
organisations
including the
Confederation of
British Industry
(CBI),
Federation of
Small Businesses
(FSB) and
British Chambers
of Commerce
(BCC), are
calling on the
Government to
scrap the
planned increase
in NICs.
The heads of the
Chartered
Institute of
Personnel and
Development,
Forum of Private
Business,
Institute of
Directors,
Recruitment
Employment
Confederation
and British
Retail
Consortium have
also pledged
their support to
the campaign.
Last year the
Government
announced plans
to increase NICs
by 1% in an
effort to close
the UK's budget
deficit.
However, the
business
community has
criticised the
move, arguing
that the rise
amounts to a
˜tax on jobs"
and could
undermine the
nascent economic
recovery.
The petition
states: ˜We urge
the Government
to work with
business groups
to find
alternative ways
to close the
UK's budget
deficit -
beginning with a
credible plan to
reduce
inefficiency in
public sector
spending. Any
Government has
to realise that
additional taxes
on businesses,
especially
small-and
medium-sized
companies, must
be a last
resort, not an
easy way
forward."
Commenting on
the coalition,
John Wright, FSB
National
Chairman, said:
˜This
petition will
tell Government
that real action
needs to be
taken to really
help tackle
unemployment.
The rise in
National
Insurance is a
tax on jobs and
will cost the
country in
thousands of
jobs, as well as
prevent small
firms from
taking on more
members of staff
at this crucial
time in the
country's
economic
recovery."
The petition can
be viewed in
full at
www.no-nics-rise.co.uk.
The final
numbers will be
presented ahead
of the
Chancellor's
Budget, which is
expected to be
delivered later
this month.
February 2010
HMRC system ‘issuing wrong tax
codes’, warns tax body
Individuals
could be paying more tax later
this year after HM Revenue and
Customs (HMRC) sent out
incorrect tax codes, experts
have claimed.The Chartered
Institute of Taxation (CIOT) has
warned that the introduction of
HMRC’s
new computer system could result
in ‘huge numbers of people’
being issued the wrong
information.
In the worst
cases, the organisation
estimates that taxpayers could
be asked to pay up to £108 extra
a month. With around 25 million
tax codes sent out ahead of the
new tax year, the CIOT is urging
the Revenue to do more to alert
people to the potential
problem.
‘Most people
on PAYE are used to assuming
that what the taxman sends them
is correct,’ said the
CIOT’s
Andrew Hubbard. ‘But this year,
many of them are being given
wrong information, and unless
they spot it and tell HMRC,
their employer will receive the
wrong information too. ‘They
could get a nasty shock when
they open their April pay packet
and see it is as much as a
hundred pounds lighter than they
are expecting,’ he added.
HMRC’s
new computer system combines
information on National
Insurance and PAYE for the first
time. Whilst the CIOT has
highlighted flaws in the system,
the Revenue insists the new
process ‘is improving the
accuracy of the PAYE so that
more people than ever before are
correctly taxed’.
‘There will
be some incorrect tax codes as
there always are at this time of
year,’ said a HMRC spokesman.
‘But the coding notice tells
people what the code relates to
and tells them to contact us if
it is wrong’.
UK recession 'comes to an end'
The UK
recession has officially ended,
figures from the Office for
National Statistics (ONS) have
confirmed. The organisation
revealed that the UK came out of
recession in the final quarter
of 2009, growing by 0.1% in the
three months to December.
The UK
entered recession in the second
quarter of 2008, and went on to
experience the longest period of
recession since 1955, when
quarterly figures were first
recorded. Recently unemployment
was also seen to fall for the
first time in 18 months.
However, experts believe that
the economy still faces
difficult times ahead, and have
warned that care must be taken
to avoid a 'double dip' later in
the year.
The UK is
among the last of the major
economies to have remained in
recession, with France and
Germany emerging from recession
last summer.
Record number of taxpayers
filing returns online
The
popularity of online filing has
increased again this year, with
the number of taxpayers choosing
to file their self-assessment
tax returns online hitting a new
record. In the run-up to the 31
January online filing deadline,
6.5 million people had filed
their returns via the internet,
compared with 5.8 million last
year. HM Revenue & Customs
(HMRC) received the higher
number of submissions between
4pm and 5pm on 29 January, when
a total of 39,512 returns were
filed. Those who failed to meet
the self-assessment deadline
will face an automatic penalty
of £100.
Meanwhile,
HMRC has issued a warning
regarding a recent upsurge in an
email
phishing scam, in which
taxpayers are informed that they
are due a tax refund and asked
to submit their bank or credit
card details via an online form.
HMRC has emphasised that it will
only ever inform customers of a
tax refund by post, and is
urging people to forward any
suspicious emails to
phishing@hmrc.gsi.gov.uk for
further investigation.
We can help
with all your tax planning
needs, including assisting with
completing your tax returns.
Please contact us for further
advice.
Retailers ‘mitigate impact
of VAT increase’
Falling food
price inflation and heavy
discounting by retailers
helped to mitigate the
impact of January’s VAT
increase, according to the
British Retail Consortium (BRC).
While the price of food rose
at an annual 2.9% last
month, this was down from
the 3.7% increase recorded
in December. Overall
shop price inflation climbed
by 2.3% in January, but this
was lower than anticipated,
the BRC-Nielsen Shop Price
Index found.
The standard
rate of VAT reverted to
17.5% on 1 January 2010
following a thirteen-month
reduction to 15%. Many
retailers responded by
cutting prices in an effort
to offset the tax rise and
boost post-Christmas sales.
Commenting
on the data, the BRC's
director general, Stephen
Robertson, said: ‘January's
VAT increase was lost among
a huge number of discounts
and promotions. We would
have expected non-food
inflation to be higher
because of the VAT rate
reversal, but many shops
held off passing the extra
costs onto their
customers.’
He added:
‘Fierce competition, in the
face of weakening consumer
demand and uncertainty about
the recovery, is keeping
shop prices down.’
Equality commission launches
proposals to benefit older
workers
The
Equality and Human Rights
Commission (EHRC) has
launched a series of
proposals aimed at
fundamentally changing
employment policies and
increasing opportunities for
older workers.
Featuring
among the proposals is a
call to scrap the default
retirement age. Under
existing laws, workers can
be forced to retire when
they reach the age of 65,
and although staff may make
a request to remain in work,
employers are not obliged to
keep them on.
The EHRC
believes that the economy
would benefit significantly
from the proposal, citing
recent research from the
National Institute of
Economic and Social Research
which suggests that
extending working lives by
18 months would inject an
additional £15bn into the UK
economy. Meanwhile, a survey
carried out by the
commission has revealed that
a significant proportion of
workers plan to keep working
beyond the state pension
age, although many older
workers are being offered
lower level, part-time
work.
The EHRC
is calling for the right to
request flexible working to
be extended to all employees
to accommodate the needs of
older workers, and for
recruitment practices to be
overhauled in order to
prevent discrimination and
improve training
opportunities.
The
proposals follow a previous
decision by the Government
to bring forward its review
of the default retirement
age.
Business group calls for
moratorium on 'costly
employment law'
A new
report from the British
Chambers of Commerce (BCC)
has suggested that
forthcoming employment
regulations and taxes will
cost UK firms as much as
£25.6bn over the course of
the next four years.
The
business group warns that a
series of new regulations,
scheduled to come into
effect between April 2010
and April 2014, could
threaten the progress of job
creation and economic
recovery in the UK.
The BCC
highlighted the cost of
employer national insurance
contributions as a
particular issue.
Meanwhile, other costly
regulations highlighted by
the organisation include the
Equality Bill, the Agency
Workers Directive, and
Pensions Reform.
The BCC
is calling for a three-year
moratorium on new employment
laws in the UK, and is also
urging the Government to
lead a campaign for an EU-wide
moratorium.
David
Frost, BCC Director General,
said, 'The cost of employing
people must be reduced if
future governments are
serious about giving
businesses the freedom to
create jobs and drive our
economic recovery'.
January 2010
Revenue creates new Minimum Wage
enforcement team
90%
of
firms
‘close
defined
benefit
schemes
Boiler
scrappage
scheme
comes
into
effect
Revenue creates new Minimum Wage
enforcement team
HM
Revenue
&
Customs
(HMRC)
has
created
a
new
enforcement
team
to
crack
down
on
employers
who
are
failing
to
pay
their
workers
the
National
Minimum
Wage
(NMW).
The
Dynamic
Response
Team
will
concentrate
on
the
most
high-profile
and
complex
cases,
including
those
where
employers
seek
to
undercut
their
competitors
by
paying
migrant
workers
at
less
than
the
statutory
rate.
Specialist
officers
will
work
with
in
conjunction
with
other
Government
departments
and
local
authorities
to
deal
with
employers
who
are
not
complying
with
the
regulations.
Business
minister
Pat
McFadden
said,
'The
Government
and
HMRC
are
doing
more
than
ever
to
make
sure
that
those
entitled
to
the
minimum
wage
are
receiving
it.
'Evasion
hurts
both
workers
and
responsible
employers
who
play
by
the
rules
so
we
are
stepping
up
our
fight
against
nonpayment
of
the
minimum
wage.
The
current
minimum
wage
rates
are
£5.80
an
hour
for
adults,
£4.83
for
those
aged
18-21,
and
£3.57
for
16
to
17-year-olds.
90%
of
firms
‘close
defined
benefit
schemes
Quality
pensions
in
the
private
sector
are
in
rapid
decline,
with
nine
out
of
10
defined
benefit
schemes
now
closed
to
new
entrants.
Those
are
the
findings
of a
new
report
conducted
by
the
Association
of
Consulting
Actuaries
(ACA).
Meanwhile,
the
study
found
that
18%
of
schemes
are
closed
to
future
accruals
from
members.
At
the
time
the
research
was
carried
out
91%
of
schemes
were
in
deficit,
with
the
average
ongoing
funding
level
at
79%.
ACA
chairman,
Keith
Barton,
said
these
were
‘worrying
times
for
all
those
looking
to
retire
in
the
years
ahead.
He
added:
“Just
6%
of
employers
responding
to
the
survey
say
they
feel
the
Government's
stated
policy
of
supporting
quality
workplace
pensions
is
working,
down
from
38%
two
years
ago.
Of
the
309
firms
quizzed,
24%
are
considering
cutting
benefits
when
they
have
to
enrol
all
staff
in
workplace
pensions
in
2012.”
Commenting,
a
spokesperson
for
the
Department
for
Work
and
Pensions
said:
‘We
are
also
supporting
good
quality
pension
provision
through
our
deregulatory
review.
We
have
eased
the
burden
of
revaluation
and
indexation
which
has
the
potential
to
save
employers
about
£250m
per
year
on
average
in
the
longer
term.
Boiler
scrappage
scheme
comes
into
effect
The
new
'boiler
scrappage
scheme',
which
offers
households
in
England
money
off
the
cost
of
purchasing
a
new
boiler,
has
come
into
effect.
The
scheme
was
announced
by
Chancellor
Alistair
Darling
in
the
Pre-Budget
Report,
with
the
aim
of
helping
to
cut
carbon
emissions,
reduce
household
energy
bills,
and
support
jobs
within
the
energy
industry.
The
boiler
scrappage
scheme
offers
up
to
125,000
households
a
contribution
of
£400
towards
to
the
cost
of
upgrading
their
boiler
to a
high
efficiency
A-rated
boiler,
or a
renewable
heating
technology.
In
order
to
qualify
for
the
scheme,
householders
must
have
a
boiler
that
is
at
least
G-rated.
To
apply
for
the
cashback
voucher,
they
must
first
obtain
a
quote
for
a
new
boiler
from
a
qualified
installer,
and
then
send
details
of
their
existing
boiler,
the
planned
replacement
and
the
proposed
installer
to
the
Energy
Saving
Trust
(EST).
More
information
on
the
scheme
is
available
from
the
EST
website:
www.energysavingtrust.org.uk.
For
further
information
please
contact
us
on
0845
330
4031
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