Enews - May 2007


Introduction

As normal in the world of tax and business, May has been a busy month.

In this month we report on lots of consultation, from Additional Paternity Leave and pay for fathers to Health and Safety responsibilities for company directors. We also include our usual round up of news.

Please browse through this month’s articles using the links below and contact us if any issues or questions arise.

Enews quicklinks

Additional paid paternity leave

Health and Safety

Further National Minimum Wage penalties

Charities guide

New cash declaration rules

Farepak ruling

Smoke free from 1 July

Reduced rate VAT for products to give up smoking

Injury Costs Recovery Scheme Home information packs delayed


Additional paid paternity leave

The rules for maternity pay and leave are complex and things may be set to become more complicated for employers and more generous for employees.

At present mothers who meet pay and length of service criteria will be entitled to a year off work, nine months of which is paid Statutory Maternity Pay ( SMP ). For most women all but the first six weeks of their SMP is paid at £112.75 a week.

The government propose to increase the payment period for SMP to a year, to match the leave period, and allow six months of this pay and leave to be transferred from the mother to the father as Additional Paternity Leave ( APL ) and pay.

The government has opened further consultation on the introduction of APL and pay for fathers. The consultation deals with some of the practical aspects of the scheme’s administration including:
  • the notification by the father and mother to the father’s employer that he intends to take APL and pay (notification will not be made to the mother’s employer)
  • the form of the notice and the notice period required, and
  • the procedures where the mother and father’s circumstances change and they want to amend the proposed leave dates.
The government has stated its intention to keep the APL and pay scheme as straightforward as possible for employers and employees.  

The government’s goal is to bring in APL and pay at the same time as extending SMP from 39 weeks to 52 weeks which they hope to achieve by the end of this parliament. This will mean that both parents could choose to take an equal amount of paid leave. The earliest proposed date that APL and pay will be implemented will be for babies due on or after 5 April 2009 .


To have your say in the consultation or read more about the proposals visit the link below.


Internet Link: DTI consultation


Health and Safety

The Institute of Directors and the Health and Safety Commission ( HSC) are asking for help in the production of new, authoritative guidance setting out what is expected of directors.

One of the aims of the HSC, which has responsibility for workplace health and safety regulation in the UK, is to ensure that all organisations with boards have an understanding of their responsibilities for health and safety.


The HSC last issued guidance for directors back in 2001 and felt it was time for new guidance to help get the health and safety message over to directors.


The closing date for taking part in the consultation is Friday 22 June and the HSC hope to have the new guidance available in autumn 2007.




Further National Minimum Wage penalties

Alistair Darling, the Trade and Industry Secretary, has announced that the government is to target employers with new fines if they pay below the National Minimum Wage (NMW).

Proposals include fixed penalty fines, linked to the number of workers underpaid, and that for the first time businesses would have to pay interest, or other payments, to underpaid workers in addition to repaying arrears. This would mean that employees would no longer be giving ‘interest free loans’ to their employers.

Alistair Darling said:


"Paying less than the minimum isn't only unfair to the workers - it's unfair to the vast majority of employers who obey the law, because it lets rogue businesses undercut them.”

The main NMW rate is currently £5.35 an hour and rises to £5.52 in October 2007.


The government has helped thousands of workers recover over £22 million in unpaid wages, but up to now, employers have not been penalised, as long as they pay the arrears when they are caught. If they refuse to pay increases or back pay, employers already face fines. Typically the penalty for underpaying one employee is more than £200 with much higher penalties being possible.


Internet Link: Press release NMW fines


Charities guide

A concise guide for small charities has been issued. The Cabinet Office and Charity Commission have launched 'Charities Act 2006 - what trustees need to know', which is being marketed as a concise guide to the biggest shake up of charity law for centuries. The guide is primarily aimed at those running small charities to enable them to make the most of the new laws.

The press release states:


‘……the implementation of the Act will put in place a more flexible legal framework which will allow charities of all sizes to focus more on their beneficiaries and build on the high levels of public trust they have earned.’


Dame Suzi Leather, Chair of the Charity Commission, said:


'The Act provides opportunities for all and this guide is an essential tool in helping smaller charities make the most of the options on offer. From the new flexibilities to the public benefit requirement, it covers the range of choices available in a clear and accessible way.'


The government is currently in the process of implementing the Act.



New cash declaration rules

HMRC have announced new rules applying to people coming to or leaving the UK. From 15 June 2007, people travelling to or from a country outside the European Union (EU) will need to declare any sums of cash of 10,000 Euros or more (or the equivalent in another currency) to HMRC. There is no requirement to declare cash if travel is to or from another EU country.

This change is part of the EU’s efforts to prevent money laundering and HMRC have issued a leaflet explaining the new rules. The declaration must be made on forms which will be available at ports and airports.

‘Cash’ covers currency notes and coins, bankers’ drafts and cheques of any kind, including travellers’ cheques. Penalties can be charged for failing to declare the money or providing incomplete or incorrect information and, in addition, HMRC can seize cash of £1,000 or more if they have reasonable grounds to suspect it is the proceeds of, or is intended for use in, unlawful conduct. There is a right of appeal against seizure and any seized cash cannot be kept for more than 48 hours without a court order.

To read the HMRC guidance and press release, please use the links below.

Internet Links: Press release HMRC leaflet


Farepak ruling

Following industry agreement, the new Christmas Pre-payments Authority has been set up to prevent a repeat of the Farepak collapse. The new body will be responsible for overseeing schemes to ring-fence the money of Christmas hamper savers.

Consumer Minister, Ian McCartney, told the National Conference of the Family Fund that the Family Fund's Deputy Chief Executive, Derek Walpole, will be appointed Chairman of the new Christmas Pre-payments Authority.

He also announced that Suzy Hall, of the campaign group Unfairpak, which campaigned for those families who lost their Christmas savings, has agreed to take on the role of Director of Consumer Affairs.


Mr McCartney said:


"Derek's involvement is a huge boost to the new industry watchdog and I know he will do a fantastic job. Derek will be joined by Suzy Hall of Unfairpak, who has accepted the position of Director of Consumer Affairs. Suzy's experience in campaigning for the victims of Farepak will stand her in great stead in her new role. The inaugural meeting of the new trade association will be held soon, signalling a fresh start for the hamper industry."


The government gained industry agreement to set up the new Authority following the much publicised collapse of Farepak, which saw thousands of families lose their Christmas savings.


Internet Link: Press release


Smoke free from 1 July

In last month’s enews we reported that, as a result of provisions in the Health Act 2006, enclosed public places and workplaces have to be smoke free from Sunday 1 July 2007. This date applies to England only.

According to a survey published by the Department of Health a smoky atmosphere is the main reason for avoiding a pub or bar. The survey also showed a high level of support for smoke free legislation.

The results of the survey of 1,700 adults are interesting. 36% of people gave a smoke-filled atmosphere as the main deterrent for going to a bar or pub and 67% of people would rather spend the evening in a smoke free venue, than one where smoking is allowed. 91% (including 83% of smokers) now consider smoking in a non-smoking place unacceptable.

Public Health Minister, Caroline Flint, recently said:

"With only 50 days to go until England goes smokefree our aim is to ensure that everyone is aware of the new law, how it will affect them and what they need to do to prepare. Our snapshot survey shows that the majority of people know that smokefree legislation is coming, but almost half the population are not aware it comes into effect on 1 July.”

To make sure you are complying with the rules visit the Smokefree England link below.



Reduced rate VAT for products to give up smoking

‘Over the counter’ sales of smoking cessation products, such as chewing gum and nicotine patches, will be subject to the reduced rate of VAT of 5%. The reduced rate will apply for a period of one year only from 1 July 2007. The dispensing of prescription items will unaffected by this change.

This temporary reduction in the VAT rate from 1 July 2007 coincides with the introduction of smoke free public and work places in England.


Internet Link: HMRC budget announcement


Injury Costs Recovery Scheme

The NHS Injury Costs Recovery (ICR) scheme came into force earlier this year and expands the cases where the NHS can reclaim the cost of treating injured patients where personal injury compensation is paid. The ICR scheme replaced the previous Road Traffic Act scheme.

The ICR scheme is more wide ranging than the previous scheme which, in 2005/06 recovered £120 million. As it takes on average 18 months to settle claims it will take some time before the full impact of the new scheme is known.

The ICR scheme seeks to recover charges where a personal injury compensation payment has been made and the injured person has:
  • received NHS treatment at a NHS hospital as a result of the injury
  • been provided with NHS ambulance services as a result of the injury
  • received treatment at a NHS hospital and has been provided with NHS ambulance services.
To read more about the scheme use the link below.



Home information packs delayed

The date for introducing Home Information Packs (Hips) in England and Wales has been put back to 1 August 2007 and will initially apply to homes with at least four bedrooms. The packs, which will contain useful information for any buyer, were due to become compulsory from 1 June 2007. Scotland is due to introduce its own version of the pack in 2008.

The whole idea of the packs has received a mixed response as some feel that it will add extra expense and red tape to the house selling process. Others have argued that it brings much needed transparency.

The packs are to contain information that will be useful to any potential buyer. Copies of title deeds, any recent planning permission or building consent given on the property, a local area search and an energy performance certificate will all be in the pack.

The main reason given for the delay is that there needed to be more assessors in place to produce enough energy performance certificates - as many as 2,000 more than are currently accredited. Once more assessors are trained, the requirement to have a Hip will be extended to smaller properties.

Another change is that sellers will not have to a Hip in place before putting their property up for sale.


Internet Link: BBC news item