Interesting News

News Bulletins

July 2009 - E-NEWS

In this month’s e-news we report on some forthcoming changes to the intestacy rules.

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.

• Enterprise Finance Guarantee Scheme Shows Signs Of Making A Difference
• Filing Tax Returns Online To Be Made Compulsory
• Advisory Fuel Rates
• Employees Accrue Holiday Pay While on Sick Leave
• HMRC New Disclosure Opportunity
• HMRC PAYE Services Interruption
• Tax Credits Renewal Deadline
• Extra Paternity Leave Put on Hold
• HMRC Warn of Fraudulent Email
• One in Five Businesses Admit Data Protection Breaches

ENTERPRISE FINANCE GUARANTEE SCHEME SHOWS SIGNS OF MAKING A DIFFERENCE

Despite negative stories in the national media,  HWB has assisted in obtaining new loans under the government’s Enterprise Finance Guarantee Scheme – an indication that this particular new measure to stimulate bank lending is beginning to show signs of making a difference to companies in the south.

As a result, Romsey-based Merryhill Envirotec is starting the new financial year on a positive note with a £300K loan secured from The Royal Bank of Scotland to facilitate the company’s plans for growth.

Critics of the flagship scheme cite a complicated application process but Merryhill’s success proves that money is now being advanced to companies with strong business models.

Scrutiny of a company’s accounts and forecasts is part and parcel of any funding application and it goes without saying that both the bank and the Department for Business, Enterprise and Regulatory Reform (BERR) need to be 100% satisfied that any business they are asked to support is well managed and can prove its viability.

When it comes to making an application under the new scheme, there’s no doubt that producing regular management accounts assists greatly, not least because they form the basis of the projections that are required by the bank.

In Merryhill’s case, the future looks bright. As one of the UK’s foremost specialists in asbestos and hazardous material removal, Merryhill Envirotec director of business development, Paul Fox, cites the company as a classic example of a good, strong business which required funding in order to realise its growth potential.

“Although Merryhill operates several levels down the procurement chain, the downturn in the housing market and increase in the number of other construction projects being put on hold started to take its toll from a cash flow perspective and company needed to ascertain the best way of restructuring its finances and raising new capital to secure the broad, solid line of financing so crucial to its continued success,” he explains.

“Working with HWB and RBS resulted in a strategic decision to make use of the EFGS initiative as soon as it was announced and Merryhill is now in a position to keep developing its business, focus on the future and concentrate on securing a further year of growth.”

Meanwhile, HWB reports strong interest in the scheme from existing clients and new enquirers and is progressing a number of further applications on behalf of companies with a broad spectrum of business interests. 

If you would like to discuss the above in more detail or require more information about the Enterprise Finance Guarantee Scheme please do not hesitate click here to contact us.

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FILING TAX RETURNS ONLINE TO BE MADE COMPULSORY

Over the next few years, the government will be changing the way business owners have to manage and pay some taxes, and making it compulsory to file certain returns and forms online.

The taxes that are moving to compulsory online filing are:

• end-of-year and in-year PAYE (Pay As You Earn) forms for employers
• VAT
• Corporation Tax

It is already possible to manage all of the above taxes online and many businesses do, but a timetable has now been put in place for filing online to become compulsory – so it makes sense to start getting used to the systems now.

For businesses with 50 or more employees, it is already mandatory to deliver certain information online. Smaller firms will have to file their end-of-year forms online by April 2010 at the latest, and filing in-year forms will become compulsory from April 2011.

VAT management will be switching to online filing and electronic payment only from April 2010, for companies registered on or after that date, as well as any company with a turnover of £100,000 or above.

Company Tax Returns and supporting documents need to be supplied in Extensible Business Reporting Language (XBRL) from 31 March 2011, relating to periods ending on 1 April 2010 or later. Individual companies are responsible for ensuring their software systems can cope with this, and tax returns not in the correct format will be treated as not having been delivered.

HWB Accountants is used to working with the latest technology and is already working to help clients adjust to the new systems. For more advice about filing and paying tax online, please click here to contact us.

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ADVISORY FUEL RATES

To reflect the changes in fuel prices, HMRC have issued new advisory fuel rates for employees driving employer provided cars.  These take effect for all journeys undertaken from 1 July 2009 so employers wishing to use the new rates should advise affected employees and update any expense forms as soon as possible.

Employers may use the new rates prior to 1 July if their systems allow. The rates in brackets are those previously applicable.

Other points to be aware of about the advisory fuel rates:

• employers do not need a dispensation to use these rates.
• employees driving employer provided cars are not entitled to use them to claim a deduction if employers reimburse them at lower rates. Such claims should be based on actual costs incurred.
• the advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.

If you would like to discuss your car policy, please click here to contact us.

Internet link: HMRC advisory fuel rates

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EMPLOYEES ACCRUE HOLIDAY PAY WHILE ON SICK LEAVE

The House of Lords has ruled in the case of Stringer v HMRC that workers who are refused holiday pay while on sick leave can make a claim to an employment tribunal for an unauthorised deduction from wages (under the Employment Rights Act 1996).

This decision follows the ruling in January, by the European Court of Justice (ECJ), that employees do accrue paid holiday for their entire sick leave, and must be allowed to take it on their return to work or be paid in lieu of their entitlement if their employment ends. The ECJ ruling did not comply with the UK’s existing Working Time Regulations, which require employees to use their four weeks statutory leave in the holiday year or lose it. The House of Lords has now ruled that the ECJ decision does indeed apply in the UK.

This is a complex area so please do get in touch if you need any clarification.

Internet links: BERR guidance and Personnel Today article

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HMRC NEW DISCLOSURE OPPORTUNITY

HMRC have announced some details of the New Disclosure Opportunity (NDO) which is due to take place this autumn. In order to encourage taxpayers to disclose an undeclared offshore account the penalty level has been set at 10%. HMRC hope that the low penalty will encourage taxpayers to come forward. HMRC are currently liaising with various banks to obtain details for offshore account holders.

The key points of the NDO, as set out on the Chartered Institute of Taxation website, are as follows:

“The key messages provided by HMRC are as follows:

• The New Disclosure Opportunity (NDO) is for people with unpaid tax connected to an offshore account and will run from the autumn 2009 until March 2010. It will give the offshore account holders one final opportunity to disclose, and put their affairs in order.
• Penalty of 10% for full disclosure if no previous opportunity. Higher for full disclosure if you had the chance under previous opportunity.
• HMRC is seeking to obtain details of offshore accounts and assets from hundreds of financial institutions. This ensures HMRC will be able to pursue those who choose not to disclose tax owed as quickly as possible.
• During the disclosure period, all account holders will know that HMRC has, or will soon have, their details. We have already successfully applied to get details from a number of banks.”

We will keep you informed of developments in this area, meanwhile if you have any concerns please do get in touch.

Internet link: CIOT article

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HMRC PAYE SERVICES INTERRUPTION

HMRC are advising taxpayers and employers that, as part of its ongoing plans “to improve customer service and efficiency”, they are in the process of changing the way they process PAYE records. In order to make all PAYE records available on one computer system they are undertaking a major IT upgrade.

They are advising that there will be temporary service interruptions from 12 June 2009 and that this may take some time as it will continue until “the new service is available to all trained staff and while we bring outstanding records up to date”. Apparently some parts of the PAYE service will be temporarily unavailable, as will the National Insurance Computer System.
 
HMRC have advised that although they will be able to provide general advice during this time they will not be able to answer specific queries relating to individual National Insurance records or recent PAYE changes. This may result in delays issuing refunds or new PAYE coding notices to individuals.

HMRC have advised that the Department for Work and Pensions will be similarly disrupted which may affect benefit claimants.

Internet link: HMRC computer upgrade

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TAX CREDITS RENEWAL DEADLINE

Tax credits are state benefits which are generally available to lower income families. However, entitlement to the credits is significantly increased where individuals pay for childcare or suffer a drop in normal levels of income perhaps due to incurring trading losses or redundancy.

Individuals who have already claimed tax credits for 2008/09 have to finalise their provisional award, which would have originally been based on their 2007/08 income, and advise HMRC of any changes in their circumstances for 2008/09. This procedure is known as the renewals process. The deadline for the submission of tax credit renewals is 31 July 2009.

HMRC have been busily advertising the renewals process in the national press and on their website. Claimants need to be aware that the payment of tax credits will stop at the end of July if they have not renewed their applications by that date.

If you need any help with the completion of your form or any advice on tax credits generally please do get in touch.

Internet link: HMRC tax credit renewals

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EXTRA PATERNITY LEAVE PUT ON HOLD

Proposals to introduce six months’ paid paternity leave for new fathers have been put on hold by the government in the light of the current economic climate.

The plans would have seen parents being able to share the 12 months maternity leave between them. Plans to extend the current statutory paid maternity pay from nine months to 12 have also been put on hold.

A spokesperson for the Department for Business, Enterprise and Regulatory Reform issued the following statement:

“We have not yet announced a date for extending maternity and paternity rights. We are continuing to review the appropriateness of all new regulations due to come into force in the current economic climate.  It is only right that in tough economic times we look afresh at the costs and benefits of new regulations.”

This announcement means that new father’s will not be able to take six months' paid leave to look after their baby, allowing the mother to return to work early. Many businesses will be relieved that this change is not being introduced in the current economic climate.

Internet link: Telegraph article

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HMRC WARN OF FRAUDULENT EMAIL

HMRC are warning that an email is currently being sent to some taxpayers advising them that HMRC have “approved them to receive monies”. Apparently the email states that this is as a result of an HMRC program on 15 June 2009.

HMRC are advising that this is not a genuine email and taxpayers should not act on it.

Internet link: HMRC security fraud attempts

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ONE IN FIVE BUSINESSES ADMIT DATA PROTECTION BREACHES

A survey of over 500 SMEs carried out by the British Standards Institution (BSI) has found that nearly one in five businesses has unwittingly breached the Data Protection Act (DPA) at least once.

Almost 50% of businesses said they had breached the DPA on several occasions and an additional 18% said they were not sure whether they had or not.

A "breach" could refer to the illegal transfer of information to a third party, failure to hold information securely or neglect of other legal obligations.

The survey provides a snapshot of how UK businesses manage the personal information they hold on staff and customers, including sensitive data such as racial or ethnic origin, trade union membership and criminal proceedings. It was carried out to mark the publication of a new British Standard on data protection which will help organizations put in place a framework for maintaining and improving compliance with data protection legislation and good practice.

The survey also found that:

• 65% of businesses provide no data protection training for their staff;
• nearly half of those surveyed admit that there is no one in their business with specific responsibility for data protection;
• 15% of businesses are not confident that their data sharing practices conform to the DPA and, worryingly, almost 5% of these frequently share data regardless;
• 18% of businesses said that data protection is less of a priority in the current economic climate. 

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