Welcome to Focus On… our monthly business bulletin looking at issues relevant to particular sectors and topics of interest.

If you would like to discuss any aspect of our services, please contact Richard Grayson, Managing Partner at Nicholsons, at richard.grayson@nicholsonsca.co.uk or phone 0845 27 66 555.

April 2015

A new step-by-step guide to help small businesses get ready for their automatic enrolment duties has been launched by the Pensions Regulator.

The online guide, written specifically for employers with between one and 50 staff, explains how to complete key tasks such as knowing when to be ready, providing a

point of contact for the regulator, checking who needs to be enrolled and creating a plan of action. It also contains information tailored to the needs of employers of carers and director-only companies.

The Pensions Regulator’s executive director for automatic enrolment Charles Counsell said: “We are determined to do all we can to reach out to all small and micro businesses preparing for their automatic enrolment duties. We want to make the process as simple as possible so that employers can avoid the risk of non-compliance.

“Our new online 11-step guide is a key part of a wide package of measures we are rolling out to give more than a million employers all the information they need, written and produced in a way that makes sense to them.

“Our message to employers is ensure you know when your automatic enrolment duties begin and start planning in good time.”

Around 1.5 mill ion small and micro businesses will also receive letters from the Pensions Regulator in the coming months as part of a UK-wide campaign to alert employers to their duties.

The regulator said that most small businesses were expected to turn to their professional advisers for help with auto-enrolment and it will also be providing additional online information for advisers.

Regulator issues new auto-enrolment guide

The Information Commissioner has told businesses they need to do more to inform consumers about the way their information is being shared.

Christopher Graham’s comments on 18 March followed a survey of 1,575 people on data protection matters, which found that 85 per cent were concerned about how their personal information was passed or sold to other organisations.

It also found that 77 per cent of respondents were concerned about organisations not keeping their personal details secure.

Mr Graham said: “Providing people with enough information to understand how their details will be used is a basic principle of data protection. While the vast majority of

companies are meeting the letter of the law…most people remain concerned about how their information is being shared. This situation is not good for consumers, or for businesses.

“We are set for a new data protection framework in the next three years, but there are still basic things that organisations can be doing today, not only to comply with the current legislation, but also to prepare for the future regulatory landscape.

“Businesses should take the results of our survey as a prompt to address consumers’ concerns and provide clearer information to explain when people’s details will be shared and with whom. Getting these basics right today will not only improve consumer trust but also help a business along the road to future compliance.”

Consumers ‘concerned over sharing of personal data’

Businesses and families have been given assurances by the three main political parties that they will not increase VAT.

Shadow Chancellor Ed Balls said on 24 March: “The next Labour government will not raise VAT”, describing it as “an unfair tax” that hit pensioners and the poorest hardest.

The following day, he announced: “We will make it clear in our manifesto that Labour will not in the next parliament be raising national insurance.”

On the same day, during Prime Minister’s Questions, David Cameron, in response to Labour leader Ed Miliband asking whether he would rule out a rise in VAT, said: “Straight answers deserve straight questions and the answer is yes”.

Earlier in the week, Chancellor George Osborne had told the Treasury Committee of MPs that the Conservatives did “not need to increase VAT” but Mr Balls said that he had failed to give “a cast iron guarantee” that the tax would not be increased.

In the same week, Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, said that under his party’s plans, there was no need to raise income tax, national insurance, VAT or corporation tax.

The standard rate of VAT has remained at 20 per cent since January 2011. It had been reduced to 17.5 per cent in January 2010.

Parties pledge not to raise VAT

Businesses are reminded that from 1 April 2015, one single unified rate of corporation tax of 20 per cent applies.

The rate applies to all companies other than those with oil and gas ring fenced profits.

Under the old regime, if a company had profits of more than £1.5 million it paid corporation tax at 21 per cent, with the tax payable at 20 per cent on profits of less

than £300,000, with marginal relief applied between the two limits. Where associated companies were in place, the profits were divided between these.

Following unification of the corporation tax rates, the associated companies rules have been simplified by replacing them with a simpler 51 per cent group test, which will be used in relation to Patent Box, capital allowances long life assets, quarterly

instalment payments, where there is an upper limit for profits above which a company must pay tax by instalments, and ring fenced profits of oil and gas companies, where there will continue to be more than one rate of corporation tax.

From 1 April 2015, a company will be defined as an associated company if one is a 51 per cent subsidiary of another or both are 51 per cent subsidiaries of the same company.

Single corporation tax rate takes effect

A ban on paperclips in an office and the cancellation of a custard pie fight were among hundreds of issues reported to health and safety myth busters.

The Department of Work and Pensions announced on 25 March that more than 600 people had approached the Health and Safety Executive’s (HSE) Myth Busters Challenge Panel in its first three years after being told that health and safety stopped them from doing something. To date, more than 350 cases have been considered and the HSE’s findings published on its website.

In the vast majority of cases, the HSE panel confirmed that health and safety regulations did not require the activity to be banned.

Work and Pensions Minister Lord Freud said: “People have had enough of bizarre health and safety excuses. For too long businesses have been consumed by red tape and confusion, often feeling they needed to go beyond the requirements of the law, but it’s never been easier to understand the rules

and make the right choice, without diluting protection for workers.”

Other issues raised with the HSE panel included the cancellation of a school production because the lighting operator had not attended a ladder training course and sheep and cow droppings in a field preventing a Scout group from camping.

Meanwhile, a report published on 24 March revealed that the HSE had reduced health and safety legislation overall by 50 per cent.

The report said: “Business response to these reforms has been strongly positive and they have been achieved without reducing health and safety protection for workers.

“Most recently, the passage of the Deregulation Act 2015 has put in place the final piece of the jigsaw. It provides the next government with the means to exempt from health and safety law some 1.8 million self-employed jobs in occupations that present no potential risk to others.”

Experts throw out ‘bizarre’ health and safety excuses

A “radical” review of business rates could bring in major changes to the way the annual charge is paid on 1.8 million properties in England.

Chief Secretary to the Treasury Danny Alexander announced the review on 16 March. It is due to report back by the 2016 Budget on issues including the structure of the current system, how businesses use property, what the UK can learn from other countries about local business taxes and how the business rates regime could be modernised to better reflect changes in the value of property.

Mr Alexander said: “Our system of business rates was created nearly 30 years ago. Since that time, the worlds of commerce and industry have changed beyond recognition. I’ve been impressed by the representations made by the business community and I know that business rates are a considerable cost.

“The government has taken measures to help businesses by capping rates and introducing reliefs for smaller businesses. But now the time has come for a radical review of this important tax. We want to ensure the business rates system is fair, efficient and effective.”

From 1 April 2015, assistance with business rates includes an increase in the discount for smaller retail premises with a rateable value of £50,000 or below to £1,500 until 31 March 2016.

Small business rate relief has also been doubled for a further year to 31 March 2016 ensuring 385,000 small businesses pay no rates at all.

The government has issued a discussion paper seeking views on the issue, with a deadline of 12 June.

Business rates review launched

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Tax experts have given a cautious welcome to plans for digital tax accounts, saying that paper returns must remain an option.

The 2015 Budget on 18 March included plans for what it called “a radical simplification of the tax system” that would see annual tax returns scrapped.

It said that the government would transform the tax system over the lifetime of the next Parliament by introducing digital tax accounts, removing the need for filing yearly returns. The move would enable millions of individuals and businesses to see and manage their tax affairs online.

The Low Incomes Tax Reform Group (LITRG), an initiative of the Charted Institute of Taxation, said that digital accounts could make it easier to comply with tax obligations but that filling in a paper return must always be an option.

LITRG chairman Anthony Thomas said:

“Replacing the annual tax return exercise with a digital tax account, which HMRC (HM Revenue & Customs) can ‘pre-populate’ with data they hold about the taxpayer, has the potential to make interacting with them easier and processing taxpayer information cheaper and more efficient.

“But it is essential to retain the ability to choose between digital and more traditional channels of communication, such as paper. For the substantial minority who have never accessed the internet, paper must remain a valid option and not an afterthought. No-one should be forced to file online to comply with their tax obligations.”

Mr Thomas said that a key advantage of a primarily digital system would be the opportunity to get rid of “the complex, unwieldy and disproportionate system of automatic penalties for late return filing, which currently imposes the same penal regime on the confused and error-prone as on the deliberately non-compliant.”

Give taxpayers choice on returns, say experts

Large companies will be made to publish their payment practices, as part of a government drive to level the playing field for small business.

Under measures announced on 20 March, from April 2016 large companies would be required to publish their payment practices twice a year, disclosing details including:

• payment terms• the average time taken to pay• the proportion of invoices paid beyond

agreed terms• the proportion of invoices paid in 30 days

or less, between 31 to 60 days and beyond 60 days

• any late payment interest owed and paid.

Information would be published at a central location such as a publicly accessible online portal, which would also enable data to be collected on issues such as dispute resolution

processes, e-invoicing, supply chain finance and preferred supplier lists.

Companies would also be required to report on their membership of codes of practice such as the government-backed Prompt Payment Code, which promotes 30-day terms as standard, with a 60-day maximum limit. In the 18 March Budget, the government announced that the scope of the code would be extended to consider other poor payment practices.

Business Minister Matthew Hancock said: “These new rules will make poor payment performance a boardroom reputational issue for companies and help change the culture once and for all.

“These new reporting requirements also mean large companies will have to publicly declare whether financial incentives are required to join or remain on supplier lists.”

Big companies told to publish payment practices