Monthly Archives: March 2014

Shared Parental Leave and Pay

The Government has issued the draft regulations for Shared Parental Leave and Pay which are expected to become law from 1 October 2014 and will apply to babies due from April 2015.

The draft regulations set out the new statutory shared parental pay entitlements for parents. The press release states that:

The Act will also help people to better balance their work and home life with the following measures:

  • From April 2015, mothers, fathers and adopters can opt to share parental leave around their child’s birth or placement. This gives families more choice over taking leave in the first year – dads and mothers’ partners can take up to a year, or parents can take several months at the same time;
  • From 1 October 2014, prospective fathers or a mother’s partner can take time off to attend up to two antenatal appointments;
  • Adoption leave and pay will reflect entitlements available to birth parents from April 2015 – no qualifying period for leave; enhanced pay to 90% of salary for the first 6 weeks; and time off to attend introductory appointments. Intended parents in surrogacy and “foster to adopt” arrangements will also qualify for adoption leave and pay;
  • Extending the right to request flexible working to all employees from 30 June 2014;
  • Replacing the current statutory procedure, through which employers consider flexible working requests, with a duty on employers to consider requests in a ‘reasonable’ manner.’

Employment Relations Minister Jenny Willott said:

‘Current workplace arrangements have not kept up with the times. The Children and Families Act will bring the way new parents balance their working and home lives into the 21st century.

Internet link: BIS press release

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Research and Development (R&D) relief

R&D relief gives additional tax relief to companies for expenditure incurred on R&D projects that seek to achieve an advance in science or technology. For an SME company which incurs losses when conducting R&D activity, a tax credit can be claimed by way of a cash sum paid by HMRC.

From 1 April 2014 the rate of the R&D payable tax credit will be increased from 11% to 14.5%.

Internet link: Gov.uk Budget

Doubling of the Annual Investment Allowance

The Annual Investment Allowance (AIA) provides a 100% deduction for the cost of most plant and machinery (not cars) purchased by a business up to an annual limit and is available to most businesses. Where businesses spend more than the annual limit, any additional qualifying expenditure generally attracts an annual writing down allowance of only 18% or 8% depending on the type of asset.

The maximum amount of the AIA was increased to £250,000 from £25,000 for the period from 1 January 2013 to 31 December 2014. The amount of the AIA is further increased to £500,000 from 1 April 2014 for companies or 6 April 2014 for unincorporated businesses until 31 December 2015. The AIA will return to £25,000 after this date.

The Government has stated that the increased AIA will mean that up to 99.8% of businesses could receive 100% upfront relief on their qualifying investment in plant and machinery.

If you would like further information on how this may affect your business please do get in touch.

Internet link: Gov.uk Budget

Budget 2014

The Chancellor delivered his Budget Speech on Wednesday 19 March and set the scene for the announcements stating that:

 ‘If you’re a maker, a doer or a saver: this Budget is for you.’

Main Budget tax proposals:

  • The starting rate band for savings will be increased from April 2015 and the current 10% tax rate reduced to nil.
  • Individual Savings Accounts (ISAs) are to be simplified by merging the cash and stocks ISAs together with a significant increase in the investment limit from 1 July 2014.
  • Radical changes are to be made to the pensions regime including removing the restrictions on access to pension pots so there will no longer be a requirement to buy an annuity.
  • The Annual Investment Allowance is to be doubled to £500,000 until 31 December 2015.
  • An increase will be made in the R&D tax credit available to loss making SMEs to 14.5%.

We have included articles on these main proposals. However please do get in touch if you would like further information on Budget announcements.

Internet link: Gov.uk website