Welcome to the June 2009 Newsletter from Connolly Accountants Ltd

The Government has this month announced it will extend its 'top-up' credit insurance scheme to enable more businesses to benefit from the initiative. It follows claims that the original terms of the scheme were limited and failed to provide adequate support to smaller firms.

Meanwhile, plans to give fathers up to six months of paternity leave have been suspended to help employers through the economic crisis. While the decision has been applauded by employment bodies, campaign groups have accused ministers of undermining the equalities agenda.


Visit the tax strategies section of our website. Now updated for 2009/10, it's packed full of useful information and pointers.


Boost for business as trade credit insurance scheme extended

The Government has announced that eligibility for its £5 billion trade credit insurance top-up scheme has been backdated.

Launched on 1 May, the scheme is designed to provide support to firms that have experienced a sudden reduction in their credit insurance cover during the recession.

Under its original terms, companies who have had their cover reduced since April this year have been able to purchase six months of top-up cover. However, following feedback from business groups, eligibility has now been extended to include suppliers whose cover has been reduced since 1 October 2008.

Confirming the decision, Business Secretary, Lord Mandelson, said: 'This extension will give more small and medium sized businesses flexibility to respond to a reduction in their credit insurance cover. We are acting decisively to help more businesses and allow them the breathing space to adjust their business models in response to the current climate.'

The changes come in the wake of criticism that the original terms of the scheme did not provide adequate support to smaller firms, many of which would not qualify for the initiative.

While the scheme is still unavailable to businesses that have had their insurance withdrawn completely, the new terms mean that companies whose cover has been removed and then partially reinstated will now be eligible to apply.

The extension has been welcomed by the business community. 'This change, which the CBI called for, gives more help to those businesses left vulnerable without sufficient trade credit insurance cover since the Autumn,' commented CBI Director General, Richard Lambert.

'Restoring confidence is critical to improving the economy, and this gives companies more certainty about their ability to trade.'

The British Chambers of Commerce also gave its backing to the revisions, although it urged the Government to act 'swiftly and efficiently' to help struggling businesses.

Figures from the Department for Business, Innovation and Skills (BIS) reveal that just 13 top-up applications were received in May, worth £718,000.

The scheme is scheduled to run until 31 December 2009. For more information and details of participating insurers, click here.


Plans to extend paternity leave 'put on hold'

Plans to give fathers extended paternity leave have been suspended in a bid to help employers during the recession, the Government has revealed.

Proposals announced in 2005 would see parents afforded the right to share a year of parental leave to care for their newborn child, with fathers allowed to take six months off after the mother’s first six months of leave.

However the changes, which were scheduled to be introduced later this year, have now been put on hold and no alternative implementation date has yet been agreed.

A spokeswoman for the BIS said: 'It is only right that in the current economic climate we look afresh at the costs and terms of the new regulations with the caveat of regulatory burden.'

The decision has been welcomed by the Chartered Institute of Personnel and Development (CIPD). 'What would have been cumbersome in good times could become the straw that breaks the camel's back in a recession – and could damage the long-term business case for better work-life balance,' commented CIPD adviser, Mike Emmott.

He added: 'The recession-inspired shelving of the existing proposals must be used by politicians and business leaders to come up with workable proposals that balance competing demands in a way that works for business.'

However David Bartlett, deputy chief executive of The Fatherhood Institute, has criticised the move. He argued: 'There is a strong argument for implementing these changes whether or not we are in a recession.'

Meanwhile Katherine Rake, director of the Fawcett Society, has accused Lord Mandelson of 'undermining the equalities agenda'.

Under the current rules, fathers are entitled to two weeks of paternity leave, which are usually taken shortly after the baby is born.


ESSENTIAL TAX DATES AND DEADLINES

Click here for key tax deadlines for the coming month.


QUOTE OF THE MONTH

'The appointment of enterprise champion Sir Alan, with his stature and no-nonsense approach, should help compel the banks to lend fairly to viable small firms.'
John Wright, National Chairman of the Federation of Small Businesses, welcomes the appointment of business tycoon Sir Alan Sugar as the Government's new enterprise tsar.


WEBSITE OF THE MONTH

www.thebusinessnetworkonline.com
The new online networking and trading facility from the British Chambers of Commerce.


ON OUR WEBSITE

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