Welcome to the October 2012 Newsletter from Connolly Accountants Ltd

The Government has hailed the introduction of 'landmark' changes to workplace pensions, which start to take effect from 1 October. According to official figures, the new pension auto-enrolment scheme will mean that some 600,000 more people will be saving into a workplace pension by the end of 2012.

Meanwhile, thousands of businesses are set to benefit from an overhaul of health and safety legislation from April 2013. Under the plans, shops, offices, pubs and clubs will be exempted from routine health and safety inspections as part of a Government drive to minimise the red tape burden on small firms.


Retirement savings set to rise as Government hails 'landmark' pension changes

Over half a million more people will be saving into a workplace pension scheme by the end of the year, according to official estimates.

With the first pension auto-enrolments taking place in October, the Department for Work and Pensions (DWP) has published further details on the number of people likely to be signed up during the initial stages.

It estimates that 380,000 workers will be enrolled in October, a total of 420,000 will be participating in the scheme by the end of November and around 600,000 workers will be signed up by the end of the year.

Auto-enrolment is being phased in from 1 October 2012 and will start with firms employing more than 120,000 workers. All other firms will be given staging dates over the next six years, with the smallest businesses required to commence auto-enrolment by 2018.

Under the 'landmark' scheme, employers will be required to automatically enrol all eligible employees into a qualifying scheme and pay a minimum contribution into the fund, unless an employee chooses to opt out.

Compulsory contributions will be phased in, starting at 1% before eventually rising to 3%. Employees will also contribute to their pension scheme - this will start at 1% of their salary, before eventually rising to 4%.

Iain Duncan Smith, secretary of state for work and pensions, said: 'Automatic enrolment will get up to 9 million more people saving into a workplace pension, and for many it will be the first time they have had the opportunity to save'.

Despite auto-enrolment being billed as the most significant change to workplace pensions for decades, a recent survey by Scottish Widows suggests that 52% of adults are 'completely unaware' of the forthcoming reforms.

Lynn Graves of Scottish Widows described the findings as 'shocking' and called on the media to 'play a pivotal role in educating people' about the changes.

Commenting, a Department for Work and Pensions spokesperson said: 'We will boost awareness of automatic enrolment with our national campaign which includes television advertising from later this month'.

Auto-enrolment: key points

  • Workers must be aged between 22 years and the State Pension Age, working or ordinarily working in the UK, and not already in a qualifying pension scheme
  • In addition, employees must be earning at least £8,105 a year (2012/13)
  • Minimum employer and employee contributions will be based on 'qualifying earnings' between £5,564 and £42,475 (2012/13)
  • Employees can choose to 'opt out' of the scheme

The new rules will require careful consideration. For further information visit the hot topics section of our website, or to discuss how the changes may affect you, please contact us.


'Thousands of businesses' to benefit from regulation cuts

Many thousands of businesses are set to benefit from a radical overhaul of health and safety regulations with effect from April 2013, the Government has announced.

Under the plans, shops, offices, pubs and clubs will be exempted from routine health and safety inspections, which will apply only to those businesses in high risk sectors such as construction or food production, those which experience an incident, or those with a poor health and safety record.

New legislation will also be introduced to protect firms against so-called 'compensation culture' claims, where businesses can automatically be held liable for civil damages, even when they have not acted negligently.

Finally, the Government aims to further reduce the red tape burden, by abolishing or reducing at least 3,000 existing regulations through the Red Tape Challenge process.

Business Secretary Vince Cable said: 'In these tough times, businesses need to focus all their energies on creating jobs and growth, not being tied up in unnecessary red tape. I've listened to those concerns and we're determined to put common sense back into areas like health and safety, which will reduce costs and fear of burdensome inspections'.

Business groups have welcomed the announcement. Alexander Ehmann of the Institute of Directors commented, 'Today's announcements are good news if they are the beginning, not the end of the deregulation story. Excessive regulation costs time and money, both of which businesses would rather spend on developing new products, hiring staff and building up British business both here and abroad'.

Meanwhile Katja Hall, Chief Policy Director at the Confederation of British Industry (CBI) said: 'Given that half of firms say health and safety checks are a burden, and they are disproportionately costly for smaller firms, freeing low-risk businesses from tick-box inspections makes obvious sense'.

However, some trade unions have expressed concern that the changes will compromise safety and could have 'lethal consequences' for workers and the public.


ESSENTIAL TAX DATES AND DEADLINES

1 October
Due date for payment of Corporation Tax for period ended 31 December 2011.

5 October
Individuals/trustees must notify HMRC of new sources of income/chargeability in 2011/12 if a Tax Return has not been received.

14 October
Due date for income tax for the CT61 quarter to 30 September 2012.

19/22 October
Quarter 2 2012/13 PAYE remittance due.

31 October
Deadline for paper submission of 2012 Tax Return without incurring penalties.

For more key tax dates and deadlines visit our 2012/13 Tax Calendar.

QUOTE OF THE MONTH

'The creation of a business bank won't have an instant impact, but it will underpin future jobs, investment and confidence, and create a decisive legacy for this government.'

John Longworth, Director General of the British Chambers of Commerce, welcomes plans to create a state-backed bank for small businesses


WEBSITE OF THE MONTH

www.thepensionsregulator.gov.uk

Detailed information on the pension auto-enrolment reforms, as well as the staging dates for employers


ON OUR WEBSITE

Essential business advice
Our website contains a wide range of information on successfully managing your business. Visit the Your Business area of our website to find out more.

2012/13 Tax Strategies
For a host of financial planning tips and strategies, visit our 2012/13 Tax Strategies Guide.

One in three SMEs 'remain unaware' of new RTI regime
One in three small and medium-sized businesses remain unaware of the impact that the new Real Time Information (RTI) regime will have on their firm, according to recent research.
Click here for the full story

HMRC nets additional £500m from UK's richest taxpayers
HM Revenue & Customs (HMRC) has collected an additional £500 million in tax from the UK’s wealthiest individuals, according to new data.
Click here for the full story

Chancellor sets date for 2012 Autumn Statement
Chancellor George Osborne has confirmed that the 2012 Autumn Statement will be delivered at 12.30pm on Wednesday 5 December.
Click here for the full story

Businesses and homeowners to 'benefit from shake-up of planning laws'
Businesses and homeowners are set to benefit from a shake-up of the planning regulations under Government plans designed to boost the construction industry.
Click here for the full story

Business groups welcome plans for state-backed small business bank
Business groups have welcomed Government proposals to introduce a new state-backed small business bank, in a bid to tackle the ongoing difficulties faced by small firms seeking credit.
Click here for the full story