Welcome to the January 2010 Newsletter from Connolly Accountants Ltd

Business representatives are this month applauding the Government's decision to give small businesses extra time to comply with the forthcoming changes to the pension regime. Billed as the 'most radical change to workplace entitlements since the introduction of the national minimum wage', the reforms will require all employers to enrol staff in a pension scheme, starting from 2012.

Meanwhile, opinions remain mixed over the likely pace of the economic recovery. While the Office for National Statistics has confirmed that the UK is now out of recession, the British Chambers of Commerce has warned that progress remains weak.


A New Year health check

Now is the perfect time to take a fresh look at your business and financial planning needs. Whether you are looking to review your business strategies or maximise your personal wealth, why not contact us for a New Year planning review?


Small firms granted concession over pension reforms

Small businesses are to be given more time to comply with the forthcoming changes to the pensions regime, the Government has announced.

From October 2012, businesses will be required by law to pay into a workplace pension scheme for their employees as part of a shake-up of the pensions system.

Under the new regulations, employees will be automatically enrolled in a workplace scheme unless they choose to opt out.

However, the Secretary of State for Work and Pensions, Yvette Cooper, recently confirmed that the enforcement of the new rules will be staggered over several years, according to the size of the firm.

While companies with over 120,000 staff must comply from October 2012, smaller businesses will be phased in over the following three years. Organisations with fewer than 50 employees will be given until 2016 to meet the new rules.

In addition, the minimum employer contribution – which is set to reach 3% by 2017 – will also be phased in, to give small businesses time to adjust to the change.

The Forum of Private Business (FPB) has welcomed the Government's decision to stage the implementation process, although it has expressed concerns over the long-term impact the changes would have on the corporate community.

'We were listened to and our initial fears that these compulsory pensions contributions would hit small businesses too quickly for them to adjust have, to some degree, been addressed,' said Nick Palin, the FPB's Director of Human Resources. 'However, there remain serious concerns that small firms […] will ultimately bear the brunt of the pensions crisis and that job creation will suffer as a result.'

One option that will be available to employers is the Government-backed National Employment Savings Trust (Nest), which was announced earlier this month. The Nest scheme – previously referred to as Personal Accounts – will be run by a not-for-profit trustee corporation, and its launch will begin in 2011.

Meanwhile, individuals are being reminded that from 6 April 2010, the minimum age for drawing a private pension is increasing from 50 to 55. There are two broad exceptions: where ill-health has resulted in early retirement and where members have a protected lower retirement age.

We can help with your retirement planning strategies – please contact us for more information and advice.


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. It is among the last of the major economies to have remained in recession, with France and Germany emerging from recession last summer.

Business groups have expressed mixed views regarding a potential recovery, with the British Chambers of Commerce warning that while the economy is showing positive signs, progress remains weak.

Meanwhile, the Governor of the Bank of England has warned that there will be a 'long period of healing' as the UK claws its way back from the recession.

In a speech at the University of Exeter, Mervyn King stressed that the patience of UK households will be 'sorely tried', with an increase in inflation likely during the first half of the year as well as possible tax rises.

King also said that the pace of economic recovery remained uncertain. 'Over the next few months, the data are likely to be dancing particularly vigorously under the influence of the reversal of the VAT cut, a turnaround in the stock cycle and even the effects of the recent cold weather,' he commented.


ESSENTIAL TAX DATES AND DEADLINES

31 January: First self assessment payment on account for 2009/10.

Capital gains tax payment for 2008/09.

Balancing payment – 2008/09 income tax/class 4 NICs.

Last day to renew 2009/10 tax credits.

Deadline for amending 2007/08 Tax Return.

Last day to file the 2009 Tax Return online.

For more information on key tax dates and deadlines, visit our 2009/10 Tax Calendar.


QUOTE OF THE MONTH

'In order for businesses to get on with creating jobs for mothers and fathers, the constant threat of tinkering to employment law – from both parties – must stop.'

Dr Adam Marshall, from the British Chambers of Commerce, commenting on recent proposals from political parties to extend the rights of working parents.


WEBSITE OF THE MONTH

www.energysavingtrust.org.uk

Offering a range of energy-saving tips and strategies, including information on the new boiler scrappage scheme.


ON OUR WEBSITE

Essential business planning advice

For tips and advice on all aspects of business planning, visit the Your Business section.

The latest tax information

View the 2009/10 tax rates and allowances, plus a host of other tax information here.

Business group calls for moratorium on 'costly employment law'
The British Chambers of Commerce has called for a three-year moratorium on new employment law, warning that forthcoming regulations will cost £25.6bn over the next four years.
Click here for the full story

Tax amnesty for medical professionals labelled 'unfair'
Tax experts have labelled the new Tax Health Plan for medical professionals 'unfair' and are urging the Revenue to offer a similar scheme to all taxpayers.
Click here for the full story

Government gives go-ahead for supermarket watchdog
A new ombudsman is to be created to oversee relations between large retailers and their suppliers, the Government has confirmed.
Click here for the full story

Duty change comes into effect
The threshold at which duty is charged on goods imported from outside the European Union has been increased.
Click here for the full story

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.
Click here for the full story