September 2007

Points to Ponder

Welcome to our thirty second newsletter – produced during September 2007 and issued in October 2007, to keep you up to date with some of the changes in Income tax, National Insurance and VAT along with compliance regulations for businesses, plus other oddments that have caught our eye. If you would like a copy of any past newsletters, please call and we can either send or e-mail them to you.

Directors’ Duties & Responsibilities – changes in the Companies Act

From 1^st October 2007, directors have additional obligations by law. The most significant statement is that the director has a “duty to promote the success of the company, for the benefit of all its shareholders.” This seems obvious but the statement is linked to covering the interests of the company’s employees, the company’s impact on the community and the environment and forecasting the likely long term consequences of any decision. So how are you supposed to monitor this? The whole thing seems just more red tape to tie up employment law. An additional change is that small companies are no longer required to hold an AGM. We shall continue with our AGM meetings, as it seems a fair excuse to go out for a meal on the company!

No Smoking

Local authorities now have “Smoke Enforcement Officers” to monitor the new no smoking law. Shouldn’t they be called “No Smoking Enforcement Officers”? How much extra will this cost us in Council Tax?

Health and safety regulations and training

Any business with 5 or more workers, including sub-contractors, owners and part-timers, must have a written Health and Safety Policy and have carried out risk assessments as well as nominating and training a first aider and a fire marshal. Although yet again this is more red tape, it is a necessity. St. John Ambulance runs extremely good courses. If there is an accident or injury at work you may find that your insurance company could refuse to pay out if the correct policies and procedures were not in place at the time.

Offshore disclosure

We know of a couple of our clients who received letters from their banks, stating that HMRC had been informed that an offshore accounts was being operated by a UK resident. Has anyone else had a letter or holds an undeclared offshore account? The repercussions from this will go on for a long time.

CIS Changes and fines

The new regulations came in to force in April 2007. Although HMRC has said that it will not be imposing non-compliance fines until October, non-compliance now WILL affect your future registration. Any former gross certificates are reviewed annually by the Revenue’s computer and failure to comply on any three occasions over a variety of regulations will result in your gross status being revoked. Reapplication cannot be lodged for 12 months after gross certification is withdrawn. There is also the possibility that non-gross certified subcontractors who fail to keep their Self Assessment returns up to date and on time may be relegated to the non-verified category of 30% deductions. We have received official notification that fines will be imposed from 19^th October, and they will cover all late returns as of that date.

Spam e-mails

Just don’t open these, or they will multiply. If you’re not sure of a message’s content, delete it unread.

From previous newsletters

Rent-a-room

This allowance has been around since Maggie Thatcher and was introduced to encourage people with homes larger than they needed to provide housing to single people. Then, as now, there was a shortage of accommodation in the inner cities for young people. Although the allowance has not gone up much, it still gives £4,250 of tax-free income. You must be letting a room or rooms in your main or only residence and these rooms must not be a self-contained unit, such as a “granny annex”. If you receive more than this, you can opt to be taxed just on the excess, rather than provide detailed accounts of income and expenditure relating to the accommodation.

Another discrimination banned under the Equality Act 2006

We have anti-age, sex, religion, and disabled legislation but now we also have “anti-philosophical belief” legislation.

Increase in the right to paid holidays.

The Working Time Regulations 1998 state that employees should receive no less than 4 weeks’ paid holiday a year, equating to 20 days for a full-time employee. These 20 days include bank holidays. With effect from 1^st October 2007, this is going to increase to 4.8 weeks or 24 days for a full-timer and then on 1^st April 2009, increases again to 5.6 weeks or 28 days for a full-timer. These days will still include bank holidays and be pro-rata’d for part-timers. This serves to increase overheads yet more.

Employing your children.

This idea has several advantages; children learn work ethics before they have to stand on their own in the workplace and their wages are tax –deductible. There are strict laws on hours and rates of pay, but providing your children are recorded on your payroll and you can show that they actually do earn their pay, changing their pocket money into salaries is legal.

National Minimum Wage

Following the previous note, the minimum hourly wage rates from 1^st October 2007 will be for 16 – 17 year olds (Development Rate) £3.40; for 18 – 21 year olds (Youth Rate) £4.60 and for workers aged 22 and over (Main Rate) £5.52.

Directors’ Guarantees.

Many self-employed business people chose to incorporate for several reasons, but the most common is the belief that it will protect their personal assets if the business fails. This is not the case if you sign a director’s guarantee.

Carrying cash

From 15^th June 2007, anyone carrying 10,000 Euros or any currency equivalent must declare it to HMRC at the point of arrival in or departure from the UK. This doesn’t include movements within the EU. This regulation has slipped in under the Money Laundering Regulations but is being enforced by HMRC and the Police under the Proceeds of Crime Act.

Mastermind – name all the countries in the EU

If you can’t answer this question you need a copy of last month’s newsletter!

HIPS and EPC’s – do you need ‘em?

Home Information Packs or an Energy Performance Certificates.

Cash in hand and no VAT – who is the real criminal?

If you suggest to a trader that you will pay cash for no VAT, and they accept and then commit the fraudulent evasion of tax, you are equally guilty as being the instigator of the crime; if the trader gets caught then so may you.

Changes in details for your VAT registration.

Please remember that any changes affecting your VAT registration must be passed on to HMRC within 30 days of that change.

Finally a personal note from Sue

Sue Jackson-Scott & Stuart Towner

117 Church Lane, Chessington, Surrey KT9 2DP

Telephone & Facsimile 0208-397 6599

e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

or This email address is being protected from spambots. You need JavaScript enabled to view it.

After quite a while, we have decided to get married. As we are running away to Gretna Green, we can’t invite you all to the wedding, but you are invited to a celebration on 1^st December at our home any time between noon and midnight. Food will be provided, just bring yourselves and your favourite tipple.

R.S.V.P. by letter or e-mail to the above address please.