A year of shared leave for new parents to start by April 2015

29 Nov 2013

The Government has proposed to introduce shared leave for parents after the birth of their child.

Current maternity leave is 52 weeks, but from April it will be possible to split this leave – excluding the first two weeks of the mother’s recovery – between parents. Deputy Prime Minister Nick Clegg claims that this set up will give mothers the chance to continue their careers and allow fathers to be ‘more hands-on parents’. Anybody deciding to take the total annual leave of six months will retain their legal rights to return to their job.

However the Institute of Directors have labelled these new rights as a ‘nightmare’ that would ‘heap yet more burdens on struggling employers.’ Alexander Ehmann, deputy director of policy said that ‘The proposed system is considerably more complex and unwieldy than the current laws and employers will – once again – have to absorb the cost of adapting and implementing this new system.’

In the hope of dispelling fears for small businesses, employers will have to agree the proposed pattern of time off before an agreement is made and they continue to retain the right to demand it be taken in one continuous block.

Frances O’Grady, the TUC general secretary said that the step was ‘welcome’ but would be unaffordable ‘unless it is backed up with better pay’.

Personal debt ‘reaches £1.43 trillion’

27 Nov 2013

A new report has suggested that almost nine million Britons are living with ‘serious debt problems’.

Personal borrowing now stands at an estimated £1.43 trillion, according to the latest figures from the Bank of England, and a recent survey from the Money Advice Service warns that many individuals are failing to seek appropriate financial advice.

The report revealed that 18% of adult Britons consider themselves to have serious financial problems, having been at least three months behind with their bills in the last six months, or feeling that their debts are a ‘heavy burden’.

More than four million of those affected have been struggling to pay their bills for more than a year, while 48% reported that they struggle to afford basic necessities.

The areas of the UK  most affected by high levels of personal debt are Hull, Nottingham, Manchester, Knowsley and Liverpool. In all of these areas more than 40% of the population were found to be ‘over-indebted’.

Those affected are from a diverse group, with levels of knowledge and skill sets ranging widely.

We can help to ensure that you are making the most of your personal finances. Please contact us for further information.

Business group welcomes plans to reduce company reporting requirements

26 Nov 2013

The Institute of Directors (IoD) has welcomed Government plans to reduce company reporting requirements, which it says will be of particular benefit to small and medium-sized companies.

Responding to a recent Government consultation on simplifying the filing process and removing duplication, the IoD argued that many smaller companies can find dealing with the existing annual reporting requirements a challenge, especially as they often lack administrative resources.

Dr Roger Barker, Director of Corporate Governance at the IoD, commented, ‘In a digital age, the requirement for all companies to submit an annual return to Companies House looks increasingly outdated. Companies should be able to update their information online in real-time. The challenge for Companies House is to deliver a cost-effective online platform that makes it easy to submit and access company information’.

The IoD has also called on the Government to take action to resolve the problem of inaccurate or disputed information held on the UK company register, without the need to resort to legal action.

Inheritance tax numbers ‘to double by 2016/17’

25 Nov 2013

The number of families liable to inheritance tax (IHT) is likely to double by 2016/17, experts have warned, fuelling calls for the Chancellor to review the controversial tax.

According to some analysts, the number of estates caught by IHT is expected to rise from 21,000 last year to 42,000 in 2016/17.

The IHT nil-rate band (or tax-free threshold) has been frozen at £325,000 since 2009, and the Government has announced that it will remain at this level until at least April 2018.

However, house prices are climbing faster than previously anticipated, with recent statistics suggesting that prices could rise by 25.2% by the end of 2018. This is likely to lead to a sharp increase in the volume of estates being dragged into the IHT net.

‘Inheritance is a deeply unfair double tax that punishes families simply for having the misfortune of losing a loved one,’ commented Matthew Sinclair, chief executive of the TaxPayers’ Alliance.

A Treasury spokesperson said: ‘Over 96% of all estates do not have to pay inheritance tax. Since 2009, the value of core estate assets such as domestic property has fluctuated significantly. Despite this, the number of estates paying tax has remained at less than 4% for over four years’.

We can advise on strategies to help mitigate your IHT liability – please contact us for advice.

Gift Aid system at risk, says National Audit Office report

25 Nov 2013

A report from the National Audit Office (NAO) has revealed that the Gift Aid system was being exposed to criminals who falsified donations or set up fake charities.

HM Revenue and Customs (HMRC) said its ‘crude’ estimate of yearly tax lost was around £170m; either through fraud, avoidance or error.

Gift Aid is worth £1bn or 2% of UK charities’ income every year.  

The tax authority has been placing more emphasis on dealing with fraudulent claims since 2009, the report said. There are estimates that its work saved £63m in potential tax losses that were created from abuse of relief on donations in 2012/13 – a four-fold increase since 2009/10.

Previously, HMRC focused on processing Gift Aid claims efficiently so that charities would receive the money quickly.

A government spokesman said, ‘This is a longstanding relief and we want to make sure it keeps pace with changes in the way people donate. We have recently consulted with the sector on modernising Gift Aid and we work closely with charities to make it as easy as possible for them to claim tax relief.

‘However, it is important too that appropriate controls are in place’.

Autumn Statement ‘must capitalise on growing optimism’

21 Nov 2013

The Federation of Small Businesses (FSB) has urged Chancellor George Osborne to build on growing economic optimism in his forthcoming Autumn Statement, by taking action on energy costs and business rates.

While welcoming the Government’s recent business measures, including the new Employment Allowance, the FSB has called for further action on business rates, which it says pose a ‘significant cost’ for small firms, some of which pay more in rates than in rent.

The business group also wants to see the introduction of reforms that would make it easier for small businesses to get a competitive energy deal, in the face of recent announcements of above inflation price increases by many of the leading energy companies.

John Allan, FSB National Chairman, said, ‘For the first time in many years we were able to write to the Chancellor with our proposals for the Autumn Statement against an encouraging economic background. As the economy strengthens, we are only too conscious of the urgency to implement reforms in areas such as business rates, energy and banking’.

Meanwhile, the Forum of Private Business has highlighted the issues of cash flow and business costs in its submission to the Chancellor, calling for concrete action on late payment as well as steps to make it easier for small businesses to access alternative forms of finance, together with a call for a freeze on business rates until 2014.

MPs call for stamp duty threshold to rise to £500,000

20 Nov 2013

A group of Conservative MPs has called for the stamp duty threshold to be raised to £500,000, together with an increase in the higher rate income tax threshold.

Stamp duty is currently payable at an initial rate of 1% on residential properties worth more than £125,000, and rises in a series of stages to a maximum of 7% for properties worth over £2m.

However, the Free Enterprise Group believes that the tax should be scrapped for all properties worth less than £500,000.

Recent reports suggest that many middle-income households are at risk of tripping into the 3% stamp duty band as a result of recovery in the UK housing market.

The organisation is also urging the Government to raise the higher rate income tax threshold, over which income is taxed at 40%, from £32,011 to £50,000.

The group has also called on Chancellor George Osborne to freeze business rates for a period of three years, echoing the calls of many business groups in their submissions to the Chancellor ahead of the 2013 Autumn Statement on 5 December.