Welcome to the June 2011 Newsletter from Connolly Accountants Ltd

UK businesses are being urged to prepare for the introduction of the Bribery Act, which comes into force on 1 July 2011. Under the Act, it will be a corporate offence if a firm fails to prevent bribery by persons working on its behalf. Yet despite this, a new study has found that many top level personnel are not fully aware of the changes.

Meanwhile, HMRC has revealed details of its latest campaigns to clamp down on tax evasion. Private tutors and traders who use e-marketplace sites such as e-Bay will be amongst those targeted when the taxman begins his latest trawl to recoup unpaid tax.


Businesses urged to prepare for the Bribery Act

Businesses are being urged to get ready for the Bribery Act after a new study found that a significant number of firms have not made adequate preparations for its introduction.

According to research from Thomson Reuters, 39% of businesses claimed that senior executives and board members are not fully aware of the new regulations, despite the Act stipulating the need for 'top level commitment'.

Yet overall, two-thirds are confident that any disruptions caused by new procedures will not impact their bottom line.

'This seems reasonable, given that implementation of the Act should simply be an extension of existing procedures and controls,' said Stacey English, head of Regulatory Intelligence at Thomson Reuters. 'However, there is no room for complacency and many firms still have a lot of work to do.'

Introduced towards the end of the last Parliament, the Bribery Act 2010 comes into effect on 1 July 2011. It covers bribery which takes place in the UK and overseas, by employees and third parties employed by the organisation.

The Act outlines four offences of bribery and introduces a new corporate offence of bribery. It also raises the maximum penalty for bribery from seven to 10 years imprisonment and/or an unlimited fine. In summary, it provides:

  • a general offence of active bribery, which prohibits giving someone a financial or other advantage to induce them to perform their duty improperly
  • a general offence of passive bribery, which prohibits requesting, receiving or accepting a bribe
  • an offence of bribing a foreign public official in order to win business, keep business or gain a business advantage for the organisation
  • an offence relating to failure by a business to prevent a person associated with it from committing the above offences on its behalf in order to win business, keep business or gain a business advantage for the organisation.

However, an organisation will have a full defence against the corporate offence if it can show that it had 'adequate procedures' in place to prevent an act of bribery.

The official guidance notes from the Ministry of Justice (MoJ) state that these procedures should be proportionate to the organisation's bribery risks. What counts as 'adequate' will therefore depend on the nature of the business, as well as its size and complexity.

Our article - 'The Bribery Act: what your business needs to know' - includes an overview of the new legislation as well as handy tips to help your business prepare for the new regulations. Copies of the official MoJ guidance can be found at www.justice.gov.uk.


HMRC targets e-traders in new tax campaign

HMRC is to launch a series of new campaigns to tackle tax avoidance, it has announced.

One of the campaigns will target those who use e-marketplace sites such as e-Bay, Amazon and Gumtree to buy and sell goods as a trade or business.

While occasional sellers are unlikely to be liable to tax, people earning a living as self-employed traders may need to pay income tax, national insurance and VAT.

Meanwhile, private tutors and dance and fitness coaches who are able to earn either a main or secondary income from their expertise will also be the subject of a HMRC campaign to recoup unpaid tax.

According to reports, a similar campaign last year against doctors and dentists netted the taxman around £10 million, while two earlier amnesties for offshore accounts generated £500 million.

HMRC said it also intends to build on its plumbers' campaign and 'give an opportunity to another group of tradespeople to come forward and declare unpaid tax'.

It confirmed that it would be using 'cutting-edge tools' including a 'web robot' to search the internet and find targeted information about specified people and companies.

'By being open about our areas of interest for the coming year we hope to maximise that exchange of information and ensure we reduce the tax gap and help customers pay what they owe,' commented Mike Wells, HMRC's Director of Risk and Intelligence.

Meanwhile Gary Ashford, of the Chartered Institute of Taxation (CIOT), said: 'The news […] that HMRC has launched 16 criminal investigations off the back of earlier campaigns shows that the taxman is taking a very tough line against suspected tax evaders. It will be important for HMRC to explain to e-traders the borderline between an individual selling one's own surplus belongings and moving into trading'.

If you have any concerns about the issues raised here, please do not hesitate to contact us.


ESSENTIAL TAX DATES AND DEADLINES

30 June End of CT61 quarterly period.

Annual adjustment for VAT partial exemption calculations (March VAT year end).

6 July Deadline for submission of Form 42 (transactions in shares and securities).

Deadline for submission of EMI40 (EMI Annual Return).

File Taxed Award Scheme Returns, file P11Ds, P11D(b)s and P9Ds. Issue copies of P11Ds or P9Ds to employees.

14 Due date for income tax for the CT61 period to 30 June 2011.

19/22 Quarter 1 2011/12 PAYE remittance due.

Final date for payment of 2010/11 Class 1A NICs.

For more information on key tax dates and deadlines, visit our 2011/12 Tax Calendar.


QUOTE OF THE MONTH

'Forget the bashing and the blaming. We are talking about enabling or disabling our recovery - it's now that serious. Businesses and the banks need to take a critical inward look and accept that the days of easy credit have gone.'

Phil Orford, Chief Executive of the Forum of Private Business (FPB), calls for banks and businesses to unite to help boost the UK's economic recovery.


WEBSITE OF THE MONTH

www.brand-i.org

A new free directory which enables shoppers to search for authorised stockists of a particular brand


ON OUR WEBSITE

2011/12 tax and financial strategies

Discover how to maximise your business and personal wealth with our 2011/12 guide to tax and financial planning.

Useful advice for businesses

For advice on all aspects of owning and running a business, visit our business guides.

'Limitless' domain suffixes to be made available
From next year, internet address names will be able to end with almost any word and be in any language, after the global internet body Icann voted to dramatically increase the number of possible domain endings.
Click here for the full story

HMRC warns of tax credit email scams
HMRC has warned of a surge in the number of 'phishing' e-mails from fraudsters, ahead of the 31 July deadline for people to submit their tax credit renewal forms.
Click here for the full story

Money laundering changes 'to reduce burden on business'
The Treasury has published its recommendations for improving the Money Laundering Regulations and reducing the burden on British businesses.
Click here for the full story

Cutting NICs 'would boost small business employment'
Reducing national insurance contributions (NICs) would encourage small firms to take on more staff, a leading business group has said.
Click here for the full story

New advisory fuel rates are issued
HM Revenue & Customs (HMRC) has published new advisory fuel rates, which apply to all relevant journeys made on or after 1 June 2011.
Click here for the full story