Welcome to the October 2011 Newsletter from Connolly Accountants Ltd

Business groups have been keen to put forward their key concerns as the Autumn Statement approaches, with many organisations calling on Chancellor George Osborne to implement measures to support businesses and stimulate growth, including a reduction in national insurance contributions and a scrapping of the 50p rate of income tax.

Meanwhile, 1 October saw the introduction of a raft of new employment laws, including new rights for agency workers, an increase in the National Minimum Wage, and the final scrapping of the default retirement age. Perhaps more welcome news for some business groups was the announcement of plans to reform the employment tribunal system, with the qualifying period for making an unfair dismissal claim set to double from one to two years.


Business groups set out their stall ahead of Autumn Statement

Further cuts to corporation tax and a scrapping of the 50p rate of income tax are among key requests submitted to the Chancellor by the UK's business groups, ahead of the 2011 Autumn Statement.

Tax cuts targeted at business and Britain's top earners would help to kick-start the UK's ailing economy, according to a report from the Centre for Policy Studies, which claimed that the best approach to boosting growth is to improve the UK's competitiveness by lowering specific taxes and undertaking regulatory reform.

Specifically, the think-tank called on the Chancellor to scrap the 50p top rate of income tax, coupled with a reduction in employer national insurance contributions and additional cuts to the main rate of corporation tax.

The Federation of Small Businesses is urging the Government to tackle rising unemployment by extending the national insurance holiday to existing businesses in the UK, which have fewer than four employees and which employ up to three additional members of staff. The group is also seeking to encourage spending by means of a targeted VAT cut, which would see VAT in the construction and tourism sectors reduced to 5% for a period of one year.

Meanwhile, the UK's leading manufacturers' organisation, the EEF, called for measures to help boost business growth as a matter of urgency. In the short term, the organisation is seeking the introduction of 100% first year capital allowances for a limited period of two years, a reform of R&D tax credits, an extension of the Business Growth Fund, a rethink of the proposals on Equal Pay Audits and employment tribunal fines, and a clarification on the legal status on apprenticeships.

Terry Scuoler, EEF Chief Executive, said, 'Timely and targeted measures are required now to boost investment and growth. Last year, the biggest threat to growth came from our fiscal deficit. Today the biggest threat to reducing that deficit comes from weak growth. Failure to act now will only make the future challenges even bigger and risks undermining our hard-won fiscal credibility'.

Prime Minister David Cameron insisted that the Government will not be revising its austerity programme, although the Chancellor did outline plans to introduce a new multibillion-pound 'credit easing' scheme in a bid to help small businesses gain access to finance.
Speaking at the Conservative party conference, Osborne revealed that the Treasury will purchase companies' corporate bonds, thereby generating much-needed cash for struggling firms.

Further details are expected when the Chancellor makes his Autumn Statement at the end of November.

The Autumn Statement will be on 29 November and we will be providing a summary of the key announcements on our website the following morning.


New employment laws come into effect

The latest round of employment regulations has now come into effect, including a 15p increase in the National Minimum Wage, new rights for agency workers, and the final abolishment of the default retirement age.

National Minimum Wage

With effect from 1 October, the main rate of the minimum wage, which applies to adults aged 21 or over, has increased to £6.08 an hour. The development rate, which applies to those aged 18 to 20, has risen to £4.98 an hour and the rate for 16 and 17 year olds has climbed to £3.68 an hour. Meanwhile, the apprentice rate has increased to £2.60.

Temporary agency workers

1 October also saw the introduction of new rights to pay and benefits for agency workers. Those who have completed 12 weeks of service in the same role with an employer will be entitled to many of the same employment and working conditions as other staff, including pay, overtime payments and holiday entitlements. Temporary workers will also be able to enjoy certain staff facilities, including childcare facilities, canteens and transport services, from the first day of their employment.

Retirement and pensions

Finally, the default retirement age has now been fully abolished, making it illegal for employers to force staff to retire once they reach the age of 65, on the grounds of age alone.

A phasing out of the default retirement age began in April this year, and employers who wish to enforce retirement will now have to objectively justify their decision.

Unfair dismissal

Meanwhile, the Government has announced changes to the rules on unfair dismissal, which could save British businesses nearly £6 million a year.

From 1 April 2012, employees will only qualify for the right to claim unfair dismissal after two years of employment, rather than one. In addition, a fee system will be introduced for those employees who wish to raise a tribunal claim, with a view to reducing the number of 'vexatious' claims.

With effect from April 2013, employees must pay a £250 application fee, with a further charge of £1,000 if a hearing is granted. If successful, the money will be refunded to the claimant.


ESSENTIAL TAX DATES AND DEADLINES

1 November: £100 penalty if 2011 paper Tax Return not yet filed. Additional penalties may apply for further delay.

Please ensure you are retaining your documents for the 2012 Tax Return.

2 November: Submission date of P46(Car) for quarter to 5 October.

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


QUOTE OF THE MONTH

'Right now, temporary tax cuts or more spending are two sides of exactly the same coin, a coin that has to be borrowed. More debt that has to be paid off.'

Chancellor George Osborne, speaking at the Conservative party conference earlier this month.


WEBSITE OF THE MONTH

http://www.contractsfinder.co.uk/

A free service for businesses, government buyers and the public offering information on contract opportunities.


ON OUR WEBSITE

Hot topic: New rights for agency workers

The Agency Workers Directive introduces significant new employment rights for temporary workers. Read our guide to the changes here

Top tax strategies for you and your business

Make the most of your business and personal wealth with our 2011/12 guide to tax and financial planning.

'Millions of taxpayers' set for rebate
As many as six million taxpayers will be entitled to a tax rebate in the coming months, HM Revenue & Customs has confirmed.
Click here for the full story

Second rise in state pension age delayed by six months
The Government has delayed its plans to increase the state pension age to 66, following concerns that many thousands of women will have to wait longer to collect their pensions.
Click here for the full story

Record number of fines issued to late filers
The number of fines issued for late Tax Returns has reached a record high, according to recent press reports.
Click here for the full story

Government launches new online patent service
The Intellectual Property Office has launched a new online patent information system, which could save businesses nearly £100,000 a year.
Click here for the full story

New credit easing scheme to 'help struggling businesses'
The Chancellor has outlined plans to introduce a new multibillion-pound 'credit easing' scheme in a bid to help small businesses gain access to finance.
Click here for the full story