Tax Finance & Legal Cttee

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Tax Finance & Legal Committee

The information contained on Southampton and Fareham Chamber of Commerce web pages is for general guidance only and is in no way a substitute for seeking professional advice on your specific circumstances

Chairman - Marc Cumberlege

Oiling the Wheels of Commerce

The Bribery Act 2010 was passed in the “wash up” just before the election and guidance is awaited from Government as to what ‘adequate procedures’ a company can put in place to use in its defense. There are four offences under the Act; an offence aimed at the payer of a bribe; an offence aimed at the recipient of a bribe; an offence of bribing a foreign public official and a corporate offence of failing to prevent bribery. It is essential that businesses have company guidelines in place before the Act becomes effective.

A Chamber of Commerce Seminar is being planned for the autumn and we would like to know now if you would be interested in attending - see page 9 of July Chamber News which you can read on our web site under News at http://www.soton-chamber.co.uk/uploads/File/C%20of%20C%20News%20Issue_47_July10_72dpi.pdf

Britain Re-opens for Business

The British Chambers of Commerce reports that 40 additional regulations have been added to its Business Barometer since 2009, with the costs to business rising by £11 billion to £88.3 billion in a single year. The Business Secretary, Vince Cable, recently announced an Action Plan to bring an end to excessive regulation of business before it is even adopted and the creation of a new Cabinet “Star Chamber” that will lead the Government’s drive to reduce regulation which is stifling growth, especially of small businesses.

On 1 July Nick Clegg, Deputy Prime Minister, announced the “Re-opening of Britain for Business” and the launch of a web site
to “restore Britain’s traditions of freedom and fairness and free our society of unnecessary laws and regulations – both for individuals and businesses.” If you would like to contribute ideas directly, you can do so by visiting http://yourfreedom.hmg.gov.uk/. Alternatively, if you would like to contribute to the Chamber of Commerce’s response to this initiative on behalf of our business members, please email Kristine.salomon-olsen@hampshirechamber.co.uk

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Fit Notes and Getting Back to Work

Health and wellbeing issues for staff can bring particular challenges for small business managers and the new Fit Note which has replaced the Sick Note means that a degree of occupational health guidance on returning to work could be useful to both doctors and employers. Telephone numbers and online support can be found at:
http://www.workingforhealth.gov.uk/Initiatives/OccupationalHealth/Default.aspx

An Introduction to Work Based Pension Changes

As an employer, even with only one member of staff, you are likely to be affected by the reforms to work based pensions which are designed to encourage more people to save for their retirement. The reforms will be introduced in stages from October 2012 depending on number of employees. To help you prepare for this, a 4 page guide by The Pensions Reguloator is now available at:
http://www.thepensionsregulator.gov.uk/employers.aspx

Important VAT changes if you trade with foreign businesses

If your company trades with foreign businesses, you need to understand important changes to the VAT rules which have applied to all EU businesses from January 2010. They’re complicated, but some of them are good news!

Good news

There are now fewer occasions when you’ll need to charge VAT on your services to your foreign business customers, and there are fewer occasions when your foreign suppliers will need to charge foreign VAT to you.
If you are still charged foreign VAT, make sure that your supplier has applied the new rules correctly. If they have, you will now make a special claim (i.e. not on your normal VAT return) to HMRC to reclaim the foreign VAT; which should be a lot easier than dealing with the other country as was previously the case.

Bad news

There will be more occasions when you have to account for reverse charge VAT.
You now have to tell HMRC (on European Sales Lists or ESLs) about supplies of services you make to foreign businesses in the EU and there are very tight deadlines to do this. These returns used to only be for supplies of goods.
You still have to charge VAT, where applicable, to your private foreign customers.
There are penalties if you get it wrong!

Tax is complicated, so please always seek specific advice.

Useful links are:
HMRC: Cross-border VAT changes 2010
HMRC: Notice 741A Place of Supply of Services
HMRC: VAT helpline

Chris Ricketts BSc FCA CTA email: chris@rickettsandco.co.uk
Director of Ricketts & Co. Ltd, Chartered Accountants & Chartered Tax Advisers
and a member of the Chamber’s Tax Finance & Legal Committee.

National Minimum Wage (NMW)

Hourly Rates applicable from 1 October 2009:

Adult Rate – age 21 and over £5.80
Development Rate – age 18-21 years £4.83
Age 16-17 years £3.57

Tips, Service Charges and Gratuities from 1 October 2009

Under the current law, tips, service charges and gratuities paid by an employer through its payroll can generally be taken into account when calculating whether an employer has paid the national minimum wage (NMW) to an employee. There are two situations where such payments cannot be taken into account: (1) if the tips, service charges or gratuities are paid by customers directly to the worker; and (2) where they are paid to a troncmaster (for example the head waiter in a restaurant) who then distributes them to the workers.

In July 2008, the Government announced its intention to make changes to the law so that tips, service charges and gratuities could no longer be taken into account when deciding if a worker has received the NMW. Following a consultation, the announcement was made that the proposals will be given legal effect and that a new industry code of best practice will also be produced. So, from 01 October 2009, the law will be amended so that tips, gratuities and service changes can no longer be taken into account when deciding if a worker has received the NMW.

Clive Dobbin, LLP Partner, Employment Department, Paris Smith LLP

Further information is available at:

http://www.hmrc.gov.uk/nmw/help.htm and

http://www.berr.gov.uk/whatwedo/employment/pay/index.html

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