Welcome to the November 2007 Newsletter from Connolly Accountants Ltd

This month the Government revealed that key provisions under the Companies Act 2006 will be postponed from October 2008 to 2009. The delay has sparked mixed reactions in the business world.

Meanwhile, the Court of Appeal has ruled that HM Revenue and Customs owes a duty of care to the taxpayer for errors it makes when processing their documents. The landmark court ruling will undoubtedly have major implications for HMRC staff and will affect similar cases that may arise in the future. The ruling was shortly followed by the news that HMRC has mislaid the details of 25 million child benefit claimants.

Key provisions under Companies Act to be delayed

The implementation of key legislative reforms under the Companies Act 2006 has been delayed because important updates to systems and processes may not be ready on time.

In a statement to the House of Commons earlier this month, the Minister for Competitiveness, Stephen Timms, declared that selected provisions of the Act will be postponed from October 2008 to October 2009.

Outlining the reasons behind the delay, Mr Timms said that although Companies House had ‘made considerable progress with the necessary changes’, there remained a ‘great deal of work’ to be completed.

‘The Government recognise that business needs certainty about the implementation timetable, and has therefore decided that the commencement date for most of the provisions due to be commenced on 1 October 2008 should be put back to 1 October 2009,’ said Mr Timms.

The announcement comes five weeks after the most recent phase of changes was implemented.

Measures affected by the delay include those relating to company formation, share capital, company and business names, and directors’ residential addresses. A selected number of changes are to go ahead as planned in October next year.

The Companies Act, which received Royal Assent on 8 November 2006, aims to modernise and simplify company law and thereby reduce the red tape burden faced by businesses.

Meanwhile, the delay has sparked mixed reactions from the business world.

The Forum of Private Business (FPB) has welcomed the 12 month delay, claiming the postponement will help smaller firms by giving them more time to fully comply with the new legislation.

In a letter addressed to the Government, the FPB’s campaigns manager, Matt Hardman, wrote: ‘The process of turning legislation into regulation is often rushed and, as a consequence, the cost in terms of compliance, for smaller businesses in particular, can be severe.’

‘The FPB will now have more time to brief its members on the changes coming into force and will be able to signpost them to the appropriate guidance. We see this as a positive step towards the Government listening to, and taking on board, the needs of smaller businesses,’ he continued.

However, corporate services firm Jordans has criticised the decision to delay key elements of the Act, claiming it will ‘cost businesses money and add to the mounting confusion.’

The Government is due to make a further statement finalising the implementation dates in December.

You can view the current timetable by clicking on the following link: www.berr.gov.uk/files/file42238.doc.

Please contact us for more information on the Companies Act and how it may affect your business.


Taxpayers may sue HMRC following court ruling

A landmark court ruling has found that HM Revenue and Customs (HMRC) owes a duty of care to the taxpayer for errors it makes, repealing the decision made in an earlier High Court ruling in 2006.

The Court of Appeal found HMRC liable for a series of mistakes it made when processing builder Neil Martin’s Construction Industry Scheme application in 1999. As a result of the errors Mr Martin lost £500,000 and experienced severe disruption to his business.

The court unanimously agreed that HMRC owed a duty of care to the claimant under common law, creating a precedent that will affect future judgments and has major implications for the Government body, whose staff regularly assist taxpayers in completing HMRC forms.

The Professional Contractors Group (PCG) welcomed the verdict in Martin’s case.

‘PCG still believes that a duty of care should be placed on HMRC so that its aggressive and often inept investigations of innocent taxpayers can no longer cause them material harm,’ said John Brazier, PCG’s managing director.

HMRC may still appeal the decision in the House of Lords.

We can advise you on all your tax planning needs and help with completing HMRC documentation. Contact us for further assistance - we will be pleased to help you.


ESSENTIAL TAX DATES AND DEADLINES

Click here for key tax deadlines for the coming month.


QUOTE OF THE MONTH

‘It is wholly unacceptable in this day and age that it appears that women in comparable positions do not receive the same rewards as their male counterparts’.
Miles Templeman, director general of the Institute of Directors, on reports that the pay gap between male and female directors has widened.


WEBSITE OF THE MONTH

www.ico.gov.uk
The official Information Commissioner’s Office website, offering information and advice on data protection and other related issues


ON OUR WEBSITE

Business advice at your fingertips
For a range of information on key issues affecting your business, visit our business guides.

Personal tax information and guidance
Access a variety of information on personal taxation issues by visiting the ‘Your Money’ section of our website

Key tax rates and information
For a wealth of up-to-date tax information, click here

Businesses face 'severe' penalties for illegal workers
New penalties for businesses that employ illegal migrant workers have been announced by the Government.
Click here for the full story

HIPs to be required for all properties
Home Information Packs (HIPs) will be required for all properties sold from 14 December 2007, the Government has revealed.
Click here for the full story

25 million records lost in data security breach
Two computer discs containing the personal details of around 25 million people have been lost in the post by HM Revenue and Customs, Alistair Darling has told MPs.
Click here for the full story

'Tougher' private equity rules criticised by unions
Private equity firms are expected to face tougher guidelines to improve their ‘openness’ following a review due out later today.
Click here for the full story

Government to review flexible working
The Government is to consider extending flexible working rights for parents of older children, it has been revealed.
Click here for the full story