Monthly Archives: April 2013

Employment Particulars

The government has updated the template of written employment particulars.

The template is an example of a written statement of employment particulars which meets the requirements of employment law.

Where an employee is employed for more than a month the employer must give them a written statement of employment particulars.

Internet link: Government Publications

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Increase in NMW rates

The Government has announced increases in the NMW rates which will come into effect on 1 October 2013:

  • the adult rate will increase by 12p to £6.31 an hour
  • the rate for 18-20 year olds will increase by 5p to £5.03 an hour
  • the rate for 16-17 year olds will increase by 4p to £3.72 an hour
  • the apprentice rate will increase by 3p to £2.68 an hour and
  • the accommodation offset increases from the current £4.82 to £4.91.

Katja Hall, CBI Chief Policy Director, said:

‘Pay restraint has been crucial in creating jobs in this tough economic climate.’

‘The LPC has struck a careful balance in setting the rates given sluggish growth, particularly in recommending a cautious approach to youth pay.’

‘The LPC will need to monitor the impact of raising the adult rate very carefully. Given average earnings this year are already lower than expected, we must make sure the minimum wage doesn’t limit jobs in key sectors, by outstripping pay across the rest of the workforce.’

‘The law is clear that employers must pay apprentices the legal minimum wage. It is right that ministers tighten up compliance and enforcement.’

Internet links: Press release CBI press release

Successful recovery of VAT on deal fees

Cloud Electronic Holdings has successfully reclaimed VAT charges at a tax tribunal after being advised by us.

The tribunal ruled that Cloud Electronic Holdings could recover VAT on professional fees charged by solicitors and corporate finance advisors during a management buy-out of Cloud Electronics Ltd., of Staniforth Road, Sheffield.

The company took professional advice from us before challenging the tax authorities.

The tribunal heard that HMRC had refused Cloud Electronic Holdings’ claim for recovery of VAT because the holding company, set up to handle the buy-out, could not have incurred the costs because it hadn’t been incorporated when the deal advisors were appointed.

HMRC contended that the deal advice had been provided to the individuals buying the company and/or their financiers.

The Tribunal concluded that the professional firms had advised the holding company and not its individuals and that their invoices were dated after its incorporation and VAT registration.

Chris Hill, Partner, said: “This was something of a landmark case and we were pleased to be able to make a contribution to its successful outcome. The ruling could be important for newly created businesses and holding companies because it could mean that in certain situations they can reclaim VAT on deal fees.”

Chris Hill

Chris Hill – Partner
T: 0114 266 7141
E: cih@hawsons.co.uk

Global business increasing in Sheffield area

A growing number of overseas companies are seeking advice about setting up in the Sheffield region, a tax specialist says today.

Peter Kennan, a partner with Sheffield-based independent chartered accountants and specialist business advisers Hawsons, of Glossop Road, points to an increase in requests to his firm for assistance, coupled with more local enterprises looking to expand operations abroad, as being a healthy sign that global activity is boosting the area’s economy.

Hawsons is a member of HLB International, a network of independent accounting firms and business advisers whose participating firms in over 100 countries provide strategic, business and taxation advice.

But, for all the opportunities, Peter adds, there are challenges and pitfalls for companies wanting to come to the UK and also for those in our area intending to grow business abroad.

“The laws in the UK that regulate business and taxes are numerous and complex and so before any overseas businesses invest, they have to properly consider the best structure.

“The main challenge for our local companies entering foreign markets lies in the increasingly aggressive attitude of tax authorities around the world to protect their tax base. There is also a tendency for authorities to make unilateral decisions, often ending in the potential for double taxation.”

But, he says, companies shouldn’t be put off because the potential benefits are considerable and difficulties can be easily overcome with the right advice.

Peter Kennan

For further information, Peter can be contacted on 0114 266 7141 or                                                  e-mail:pjk@hawsons.co.uk

RTI ‘relaxation’ for small employers

HMRC have announced that, for some smaller employers, they will relax the reporting requirement for RTI that payments to employees should be reported on or before the amount is paid to the employee.

The relaxation for small employers (those with fewer than 50 employees) who pay employees weekly, or more frequently, but only process their payroll monthly may need longer to adapt to reporting PAYE information in real time. HMRC have therefore agreed a relaxation of reporting arrangements for these small employers.

Until 5 October 2013 employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run but no later than the end of the tax month.

HMRC have also advised that they:

‘will continue to work with employer representatives during the summer to assess and understand the impact of RTI on the smallest businesses and consider whether they can make improvements to real time reporting which will address their concerns without compromising the benefits of RTI or the success of the Department for Work & Pension’s Universal Credit.

 

HMRC have also made available some guidance on exceptions to reporting PAYE information ‘on or before’ paying an employee which can be found at http://www.hmrc.gov.uk/payerti/on-or-before.pdf

Please do contact us if you would like any further help or advice on payroll procedures.

Internet links:    HMRC RTI news

Data loss could be ruinous

A warning that Sheffield area companies could be hit by crippling fines and have their reputations ruined for losing confidential data even when it isn’t their fault and no harm resulted from the loss was issued today by an IT expert.

In the first eleven months of 2012, twenty organisations in the UK have been fined a total of £2.4m for data losses and many other companies are at risk, says Charles Kavazy, Director of IT Services at Sheffield based independent chartered accountants and specialist business advisers Hawsons, of Glossop Road.

He adds: “In almost all of the cases, nobody was harmed by the loss but the reasons the fines were so high is because the Data Protection Act states that organisations need to ensure a level of security for their data appropriate to the harm that might result from data loss. The fines are based, therefore, not on the harm or loss or damage that has occurred but the harm or loss or damage which might occur.”

“Another misconception”, Charles says, “is that if another company loses your information, the responsibility rests with that company. This is incorrect.”

“If, for example, one of your outsourced IT, pension, health or other providers loses your data, it is you who will be fined by the Information Commissioner’s Office and not your outsourced supplier. It is your responsibility to ensure that your suppliers apply a level of security appropriate to the harm that might result from any loss.”

If you feel you might be at risk from data loss and would like help in mitigating the risk, contact Charles on 0114 266 7141 or e-mail: ck@hawsons.co.uk