New Minimum Holiday Entitlement

October has been a busy month for changes in legislation. One of these is the increase in holiday entitlement from 24 to 28 days (5.6 weeks) including bank holidays.

The 28 day entitlement applies to those of us working a full 5 day week. This is applied pro rata to those on part time hours. (For example, 22.4 days, for anyone on a four day week).

Other holiday pay basics are as follows:

• Holiday starts to accrue as soon as an employee begins work.
• The employer can control when the holdiay is taken.
• Employees are entitled to normal pay whilst on holiday.
• When an employee leaves, they are entitled to be paid for holiday accrued but not taken.
• Bank & public holidays can be included in the annual entitlement.
• An employee continues to be entitled to their holiday leave throughout their ordinary and additional maternity leave, paternity leave and adoption leave.

New National Minimum Wage From 1 October 2009

The National Minimum Wage has increased, again, from the beginning of this month.

New rates from that date are as follows;

• For workers aged 22 or over: £5.80 per hour
• For workers aged 18 - 21, inclusive: £4.83 per hour
• For workers aged under 18 (but above compulsory school age): £3.57 per hour

Almost all workers are entitled to NMW, but there are some groups who are not.

• Self employed people
• Apprentices under the age of 19
• Apprentices aged 19 years or over, but only for the first year of their apprenticeship
• Children who are still of compulsory school age.

So, if you're an employee, you should now be paid at least these hourly rates. As an employer, you need to be aware of the rates, to ensure you are keeping up with your legislative responsibilities.

Companies Act 2006, Introduces Complete Set of New Companies House Forms

From 1 October 2009, the Companies Act 2006 has introduced a set of new forms for conducting day to day company business.

These new forms cover everything from Annual Returns to changes in directors, registered office, accounting reference date etc.

Those of us familiar with the completion of a Form 363 (Annual Return) will now be doing so on a Form AR01. The original Form 288(a) (Appointment of Director / Secretary) has now been replaced by a Form AP01 (Director), AP02 (Appointment of Corporate Director), AP03 (Secretary) and AP04 (Corporate Secretary). (Good to see, another Government Department helping to simplify administration. Hmmmm).

A full list of the new Companies Act 2006 forms is available on the following link (including details of the original 2005 Act forms they are replacing).:

www.companieshouse.gov.uk/forms/formsOnline.shtml#Company

Full details of the new Companies Act implications can be found at:

www.companieshouse.gov.uk/companiesAct/companiesAct.shtml

VAT Changes For Online Payment & Filing

In a bid to move ever closer to the phasing out of paper filing, HMRC have announced new Government proposals as follows:

• From 1 April 2010, all VAT registered businesses with an annual turnover of £100,000 or more (excluding VAT) must file their tax returns online and pay electronically.
  
• From that same date, all businesses newly registering for VAT, whatever their turnover, must file their returns online and pay electronically.
  

Paper returns will still be an option for the remaining VAT registered businesses, but this will be reviewed More information can be found on the HMRC web site, at http://www.hmrc.gov.uk/vat/start/register/signup-online.htm

Changes To Banking Services And Making Payments To HMRC

During 2009, H M Revenue & Customs are moving over to new banking arrangements.

The banking details are as follows:

Current Bank Account Details:

Account Name: HMRC VAT

Sort Code: 10 00 00

Account Number: 52055000

New Bank Account Details:

Account Name: HMRC VAT

Sort Code: 08 32 00

Account Number: 11963155

If you use online banking, and have stored templates or transactions, that you use when making your current VAT payments, you may need to update these to reflect the changes.

More information or guidance can be found at http://hmrc.gov.uk/payinghmrc/

HMRC Introduces Standard 'Benchmark' Scale Rates For Subsistence

On 2 April 2009, HMRC issued Brief 24/09 covering the new scale rates for day subsistence. (Day rates only, overnight allowances are unaffected).

Their aim is to cover allowable travelling expenses, paid to employees, free of Tax & NI.

Introduction

HM Revenue & Customs (HMRC) has introduced an advisory system of benchmark scale rates which employers can use to make subsistence payments to employees who incur allowable business travel expenses free of tax and National Insurance contributions (NICs). The new advisory system was implemented from 6 April 2009.

The advisory system only covers benchmark scale rates for day subsistence payments. If an employer wishes to pay subsistence to employees who have to stay overnight they can either reimburse the actual cost incurred by the employee or agree a tailored scale rate to cover meals and other expenses in a dispensation with HMRC.

The brief sets out the framework for the system.

Overview

Under the current rules an employer is required to notify HMRC of all expenses paid to an employee, even where those expenses would be allowable, unless they have a dispensation. A dispensation is an agreement between HMRC and an employer which allows the employer to pay an agreed rate for allowable expenses without the need to report the expenses to HMRC. An employer may apply for a dispensation by submitting a completed form P11DX. As part of this process, where business travel expenses are paid, the employer often agrees scale rates for travel and subsistence expenses with HMRC that broadly match the allowable expenditure incurred by its employees on business travel.

HMRC currently expects employers to conduct a sampling exercise before it will agree to a particular rate being included within a dispensation. The aim of the exercise is to identify a reasonable level of allowable expenditure that reflects the most common level of spending.
HMRC recognises that a sampling exercise can be burdensome and expensive for employers. It has therefore introduced an advisory system of benchmark scale rates for day subsistence payments that an employer can use without having to carry out a sampling exercise.

As part of this new approach, in response to concerns from some employers and professional advisers about consistency between what is agreed for different employers, HMRC also proposes to standardise the different scale rates that it will agree with employers.

Benchmark system/rules

Under the benchmark system, HMRC has set advisory scale rates for particular day subsistence expenses that it will accept for all employers. As long as the employee has incurred subsistence expenses while travelling on an allowable business journey, employers will be able to make tax and NICs free subsistence payments up to the advisory rates without agreeing them with HMRC. Employers wishing to use the benchmark scale rates for subsistence payments will simply need to notify HMRC of their intention by ticking the appropriate statement/box on form P11DX before starting to use the system.

The rates that can be used will be:

Breakfast rate (irregular early starters only) - A rate of up to £5.00 may be paid where a worker leaves home earlier than usual and before 6.00 am and incurs a cost on breakfast taken away from his home. If the employee regularly leaves home before 6.00 am because, for example, he works an early shift he would not be entitled to use the breakfast benchmark scale rate.

One meal rate (Five hour rate) - A rate of up to £5.00 may be paid where the worker has been away from his home/normal place of work for a period of at least five hours and has incurred a cost on a meal.

Two meal rate (Ten hour rate) - A rate of up to £10.00 may be paid where the worker has been away from his home/normal place of work for a period of at least ten hours and has incurred a cost on a meal or meals.

Late evening meal rate (irregular late finishers only) - A rate of up to £15.00 may be paid where the employee has to work later than usual, finishes work after 8.00 pm having worked his normal day and has to buy a meal which he would usually have at home.
If the employee is paid an allowance under the five or ten hour rule, the late meal allowance could still be paid if he finishes work after 8.00 pm and buys a meal that he would usually have at home. However, if the employee regularly finishes work late because, for example, he normally works the afternoon or evening shift, he would not be entitled to use the late evening meal rate.

Particular issues and exemptions

Payments in excess of the benchmark rates

The benchmark rates are the maximum tax and NICs free amounts that could be paid by employers who choose to use this system. An employer could pay less than this rate if it wants to do so. If a higher amount is paid without agreeing a tailored scale rate with HMRC, the excess should be subject to tax and NICs.

Qualifying conditions

Benchmark scale rates must only be used where all the qualifying conditions are met.

The qualifying conditions are:

• the travel must be in the performance of an employee’s duties or to a temporary place of work

• the employee should be absent from his normal place of work or home for a continuous period in excess of five hours or ten hours

• the employee should have incurred a cost on a meal (food and drink) after starting the journey
Early starter and late finisher ratesThe early starter and late finisher rates are for use in exceptional circumstances only and not intended for employees with regular early or late work patterns.

Tax and NICs free scale rate payments must be limited to three meal rates in one day (or 24 hour period). A meal is defined as a combination of food and drink.

Where employees are required to start early or finish late on a regular basis, the over five hours or over ten hours rates could be paid provided all the other qualifying rules are satisfied.

Working Rule Agreements

Benchmark scale rates would not apply to employees covered by Working Rule Agreements, for which separate specific rates are already set for particular occupations.

Friends and Family Allowance

Some existing dispensations also include a tax free scale rate for staying with family and friends when employees are required to stay overnight on business. HMRC has reviewed this policy and concluded that there is no legal basis for giving tax relief because it is not linked to any specific underlying expense. Therefore, a scale rate for staying with family and friends will not be included within the advisory system or given in any new dispensations. All agreed tax and NICs free scale rates in existing dispensations covering such an allowance will be withdrawn when the dispensation comes up for review.

Questions and answers

What you have to do if you want to pay scale rates to your employees?

You should apply to HMRC for a dispensation. You need to complete a form P11DX, which is the form used by employers to apply for a dispensation, and submit it to HMRC. On the form you need to indicate with a tick against the appropriate statement under 'Travel and Subsistence' that you intend using HMRC’s benchmark scale rates to reimburse your employees’ subsistence payments. By ticking this box you would be merely notifying HMRC that you intend paying HMRC’s benchmark scale rates for day subsistence and that you have adequate management processes in place to ensure that payments are only made where all the qualifying conditions are met. If you want to apply to include other items of allowable expenditure in a dispensation for example fees and subscriptions, laundry, telephone charges, etc, you need to tick the appropriate boxes and supply the requested information on the form.

When can you pay a scale rate?

Scale rate payments may be made to employees who necessarily travel in the performance of their duties or have to travel to a temporary place of work. The statutory rules are in Section 336 to 342 of Income Tax (Earnings and Pensions) Act 2003. Where the employer agrees a scale rate in a dispensation, the scale rate may also be taken into account for NIC purposes.
Guidance on how the employment income travel expense rules work can be found in HMRC’s Booklet 490. This booklet will be updated shortly to reflect the new scale rates system available to employers from April 2009.

When must you not pay tax and NICs free scale rates?

Tax and NICs free scale rates must not be paid where the employee is not travelling on a qualifying business journey. For example, when on a journey that involves ordinary commuting (or similar to ordinary commuting), or private travel.
Additionally, no tax and NICs free payment should be made if an employee does not incur an expense on meals after leaving home or his normal place of work, even if the journey was a qualifying business journey. This means that employees who do not buy a meal or who take a packed lunch from home are not entitled to a tax and NICs free payment.

Do employers have to use the benchmark scale rates?

Employers do not have to use the benchmark rates. They can reimburse their employees’ actual expenditure or apply to HMRC to agree a scale rate appropriate for their business needs in a dispensation. However, where an employer wants to use a higher scale rate, it will have to undertake a sampling exercise to show the higher rates are in line with what its employees’ typically spend on subsistence and agree the rate with HMRC.

What records would an employer need to keep?

An employer will need to keep sufficient records to be able to demonstrate that the employee was entitled to the payment. An employer also needs to be able to demonstrate that routine checks are undertaken to ensure that the travel expenses rules are being followed.

What happens to existing dispensations?

Existing dispensations will remain in force until they come up for review in accordance with HMRC’s rolling review programme, usually on a five year cycle. When the existing dispensation comes up for review the employer can choose to switch to benchmark scale rates or apply to continue to use a tailored rate. Where a new dispensation is requested the employer will have to go through the process of undertaking a statistically valid sampling exercise.

Uprating benchmark scale rates

HMRC will review the rates annually and consider revising them when there has been a change in the scale rate of plus or minus 10 per cent based on the Consumer Price Index from when it was last revised.

How has HMRC arrived at the benchmark scale rates in question?

HMRC reviewed the scale rates agreed for a number of employers, both large and small, and based the rates on the most commonly agreed rates.
Why not have higher benchmark rates for London or other locations where prices are more expensive?The benchmark rates are linked to what employers typically reimburse their employees and it would not be possible to break this down between different locations. Personal expenditure on subsistence varies significantly between employees even when working at the same location.

If an employer typically reimburses more than the benchmark rates then it will remain open to them to agree a higher rate with HMRC or to reimburse actual expenditure.

Companies Act 2006 Kicks In From 1 October 2009

The Companies Act 2006 has made a number of changes, many of which will affect us, as small businesses, and some of which have already been actioned.

Where Are We Now?

The following changes have already taken place. (Some are optional, others are not).

You Must:

• be aged 16 or over to be appointed a director.

You Do Not Need To:

• appoint a company secretary, if you are a private company (though you can still do so, if you wish).
• hold an annual general meeting, if you are a private company, again, unless you opt to do so.
• have a unanimous vote for resolutions. Subject to articles, if you are a private company. Members may agree in writing to resolutions.
• get a court order to make capital reductions as a private company - they can be supported by a solvency statement instead.

What We Can Look Forward To:

• Directors address protected from disclosure. From 1 October, each director will have a service address, and a usual residential address. The former will be in the public domain, with the latter only being available to public authorities and credit reference agencies. Initially, the director's residential address will automatically become the service address, though you will be able to specify an alternative address (such as the company's registered office) on the Companies House website.
• Also, there will be an alternative address for the company to specify where its registers can be made available for public inspection. This can either be the registered office, or a single alternative inspection location (SAIL).
• A number of changes have been made to make it easier to set up a limited company..
• There will be changes to company articles for new companies. They will include the company's objects and liabilities - which were previously in the memorandum. Copies of model articles are available on the Companies House website.
• Any ammendments to the company's articles must be notified to Companies House, within 15 days. Failure to do so is a criminal offence, carrying a civil penalty of £200.

Also remember; all Companies House accounts filing deadlines have been reduced, by one month to 9 months (private companies) and 6 months (public companies). This applies to all accounting periods beginning on, or after, 6 April 2008.

Failure to comply will result in a fine of up to £1,500.

From 1 October 2009, all original Companies House forms are being replaced. Watch this space for a future blog post on this particular change.

In the interim, you can check out the new provisions of the Act on the following link, including transitional provisions, and downloadable versions of the new forms.:

http://www.companieshouse.gov.uk/companiesAct/companiesAct.shtml

Companies House has produced guidance notes, in a variety of formats, giving step by step instructions on how to form a limited company.

Blackberry Users 'Work An Extra 15 Hours A Week'

New research finds that staff with mobile technology such as Blackberries work an extra 15 hours a week as they constantly check emails even out of the office.

A survey of over 600 employees revealed many were turning into workaholics because of the ability to receive and send messages and work online even when they were at home.
Employment law firm Peninsula said the working week was being extended to around 55 hours for many people and urged employers to make sure their staff were not breaching working time regulations.

Managing director Peter Bone said: "It is important for staff to spend quality time away from the office, spending time with the family, or undertaking recreational activities rather than tapping away responding to client emails or deadlines so that they keep a healthy work/life balance.

"Bosses should encourage staff not to work from home unless necessary. Inform staff that they should limit working from home. If they are happy to work away then ensure they agree to opt out of the maximum working week and have this signed. Limit the extent to which employees are using their devices when they choose to do so; unrested employees will be less productive during the working day."

"The recession has forced everyone to become more productive and for those with access to work at home, this is an opportunity for them to catch up or get ahead. With email on tap, employees with smartphones are able to respond a lot quicker and also get themselves prepared for the working day ahead by checking their email first thing.

"Employees should be encouraged to take appropriate rest breaks if they do choose to continue working out of hours. Having a well rested employee with a good work/life balance is a lot more useful than a tired employee that put one too many hours in the night before."

Source: Business Matters Magazine

www.bmmagazine.co.uk

Home Business Uncovered

Home business website, Enterprise Nation, is going on a national road trip to produce a documentary on the rise of home business in the UK.

Starting in Scotland on Monday 14th September, a crew of three will travel south to interview home business owners and talk to experts and politicians, with the team expecting to meet over 400 businesses at events and meet-ups over the course of the week.

More than 2 million businesses are run full time from home but the documentary will also take a closer look at what Enterprise Nation has termed the ‘Working 5 to 9’ trend that is seeing millions of people hold down a day job and build a business at nights and weekends. It’s a way of easing out of insecure employment, into self-employment.

Founder of Enterprise Nation, Emma Jones, says:
‘Streets are buzzing with people starting and growing their own business. Amazing businesses that utilise the best of technology to make and sell niche products and services. We’ll be revealing the stories of people turning business dreams into reality and showing that home business is truly the bright spot of the UK economy. Yet we don’t think enough is being done to allow home business to flourish – and it remains almost a hidden sector - so we’ll be calling for action from policy makers and politicians and recording their response.”

The Enterprise Nation team will visit home business hotspots in Scotland, North East, London, South West and return home to the West Midlands on Friday 18th September. They will film by day and at night host get-togethers for anyone starting and growing a business from home. They will also show how to work whilst on the move in a trip that’s sponsored by communications company, Orange.

The documentary will be aired on Friday 20th November – a date that marks the UK’s first ever Home Enterprise Day, held as part of Global Entrepreneurship Week. The first people to see footage will be delegates at the Enterprise Nation Conference.

As Jones says:
“Visitors to the conference may not be surprised by what they see as they are living and breathing home business owners but for those in Government and large organisations this documentary will uncover the incredible entrepreneurial activity underway. It will also call on them to act. Home business is Britain’s best-kept secret and its story needs to be told!”

Over 60% of new businesses were launched from home in 2008. The attraction is lower costs, no commute and being on hand for friends and family. Sectors range from fashion design and food production through to IT and business services with whole families coming together to make these businesses a success and growing profits through outsourcing and sub-contracting.


Media notes

Full details of the roadtrip and registration for meet-ups is online at http://www.enterprisenation.com/

Updates are being posted to Twitter at www.twitter.com/e_nation

The Home Business Roadtrip starts in Scotland on Monday 14th September and travels south. Dates and locations are:

Monday 14th September – Scotland
Tuesday 15th September – North East
Wednesday 16th September – London
Thursday 17th September – South West
Friday 18th September – West Midlands

The trip is being sponsored by Orange, supported by One North East, Business Link for London and Enterprise HQ, with accommodation generously provided by Malmaison Hotels

The crew will be:

Emma Jones, Founder, Enterprise Nation
Tim Sargent, Mint Video
Nick Clark, 1st Class Travel

The documentary will be aired at the Enterprise Nation Conference on Home Enterprise Day, Friday 20th November. Home Enterprise Day is part of Global Entrepreneurship Week http://www.gew.org.uk/

For media enquiries, please contact:

Marisa Harrison, Tadpole PR
Marisa@tadpolepr.co.uk
Tel: 01743 741161 Fax: 01743 741161 Mobile: 07767608563

Emma Jones
emma@enterprisenation.com
0789 9871698

Last Chance To Be Ex Directory On Your Mobile Phone

As many of you may have heard, there is a new mobile phone directory being introduced shortly, called; '118 800'.

Many will welcome this, but others are concerned that their mobile number will now be available to anyone looking to use it, which could mean being swamped by unsolicited messages and calls.

It is extremely easy to unsubscribe, but it must be done before the begining of next week, to make sure that you are ex directory.

Removal has been recommended by the BBC;
http://news.bbc.co.uk/1/hi/programmes/working_lunch/8091621.stm and you may wish to pass this on to friends, family and colleagues.

To remove your number from the directory, click on the link below. You will need your mobile number with you, as they will text you a code.

http://www.118800.co.uk/

Click on; 'Ex Directory' on the top right hand side, and follow the straight forward instructions.

**Update** Looks like people are registering in droves. Shortly after posting this, the 118800 site posted a 'Service Suspended' notice, as follows:

"The 118 800 service for mobile phone connections is currently unavailable - from this website and by phone - whilst we undertake major developments to our 'Beta Service' to improve the experience for our customers. We'll be back as soon as possible with the new improved service.

All ex-directory requests made by people in our directory to date are being processed. There will be no need to resend these requests. And we will take further ex-directory requests when the service resumes. We will not be taking ex-directory requests by phone or text whilst the service is not operational.

Please do not call us on 118 800 for anything other than landline directory enquiry requests as you will be charged for the call.

Sorry for any inconvenience caused"

Coincidence? I doubt it. What's the odds the service will be restored 5 minutes before deadline, thereby preventing many people from registering as ex directory? Let's hope they prove me wrong, but I wont hold my breath.

Tax Credits Renewal Pack Due At The End of This Month

Your tax credits are awarded for a tax year. You are required to renew your claim after the end of each year so that your payments will continue. HMRC need to check whether they have paid you the right money during the year and whether they will carry on paying you the same amount of money going forward.

The Tax Credits Cycle

When you first make a claim for tax credits, any payments you get are based on your income from the last tax year, and your current personal circumstances. A tax year runs from 6 April one year to 5 April the next. So if you're making a claim because you've just had a baby, HMRC will take this into account along with your income for the year that ended on 5 April 2009.
The tax credit payments you get throughout the year are temporary or 'provisional' until you confirm your actual income and circumstances as part of the renewals process.
It is important that you tell HMRC about any changes to your circumstances straight away as it could affect the amount of money you should be getting. For example, you must tell them within one month if you split up from your partner, or if you start working fewer hours. Otherwise you might not get all the money you should - or you may end up getting too much and may have to pay it back.
When you tell them about a change, they will send you an award notice confirming the new information provided by you, and any changes to your payments. It is important that you check each award notice you get carefully using the checklist that came with it, and let them know if anything is incomplete, missing or wrong within one month.
After the end of each year they ask you to renew - or in some cases they will automatically renew your claim. This helps them to check that the payments we've made to you are correct, and to set your payments for the coming year.
Sometimes they will have paid you too much (an overpayment) or not enough (an underpayment). If this happens, they will either make an adjustment to your payments, or if you have been paid too much but you're no longer getting tax credits, they will ask you to make a direct payment - a one off payment for the full amount.

Why Is It Important To Renew?

It's important to renew so that you can:

· check that we have the right information
· make sure your income is still within the limits for getting tax credits
· tell HMRC if anything has changed
· continue to get all the money you're entitled to

If you don't renew your tax credits, you may only receive payments for a limited period after the end of the tax year and you'll have to repay any overpayment from the previous year as well as any money paid to you since 6 April.

How To Renew

HMRC will send you a renewal pack between April and June which you must respond to. You don't have to complete any paperwork if you don't want to, you can renew by phone.
The renewal pack includes an Annual Review notice which tells you what to do to renew your tax credits. Most people will also get an Annual Declaration form in their pack as well.
It's important you read the Annual Review notice carefully - it will tell you how to renew your tax credits.

You must:

· check the information provided on your Annual Review notice
· tell HMRC if anything has changed

You may also be asked to give details of your income in the last tax year on the Annual Declaration form.

You can return the information by either:
· calling the Tax Credit Helpline on 0845 300 3900
· completing the Annual Declaration form - if you were sent one, and returning it in the envelope provided.

If you've only got an Annual Review notice, you don't need to do anything if:

· nothing has changed in your personal situation
· your income is still in the limits shown in the notice
· there are no mistakes or missing details in the notice

Your tax credits will be automatically renewed.

Who Will Receive A Renewal Pack?

You will receive a renewal pack even if you claimed tax credits but didn't get them because your income is too high (a nil award), and even if you only got tax credits for part of the year.
If you have made more than one tax credits claim during the year, you will be sent a separate renewal pack for each claim. You must fill in each one separately.

What Happens If You Don't Renew?

If you don't renew, your payments will stop and you will have to pay back any overpayment from the previous year as well as any money paid to you since 6 April.
The deadline for all replies is shown on your Annual Review form - usually 31 July. Don't wait for the deadline. The sooner you check your details and tell HMRC of any changes, the sooner they can make sure you get the money you're entitled to.

Why You Need To Tell HMRC About Changes

You should tell them about changes in your personal circumstances straight away. You could lose money if you don't as tax credits can only be backdated by up to three months. For example if you have a baby on 12 June, but do not tell us until 12 October, we will only backdate your payments until 12 July.

Contact the Tax Credit Office

If you need more help you can call the Tax Credit Helpline, which is open from 8.00 am to 8.00 pm every day except Christmas Day, Boxing Day, and New Year's Day. The numbers you can ring are:

· telephone 0845 300 3900
· textphone 0845 300 3909 - if you are deaf or have a hearing or speech impairment.

If you’re calling from overseas you can also contact the Tax Credit Office on Tel + 44 289 053 8192.