Business News - July 2006

Last month we reported on the proposed inheritance tax (IHT) changes for trusts. The professional bodies are lobbying HMRC and the government to reconsider the rules and we will keep you in touch with developments. If you have a trust, created before Budget day, there is no need to take any immediate action as the IHT charges will not generally take effect until 2008.

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Last month we updated you on reaction to the surprise announcement, made on Budget Day, of the proposal to bring forward the tax return submission deadline from 31 January to 30 September for paper returns and 30 November for electronic ones. The professional bodies have been campaigning against the recommendations made as part of Lord Carter’s review.

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The long awaited White Paper was released on 25 May. It contains many proposals which would change the pensions system quite radically.

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Carers and working parents should benefit from the introduction of some new legislation as part of the Work and Families Act.

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In recent months, HMRC have begun to take a very hard line with the reclassification of subcontractors to employment status. The effects of this can be bad enough for a business but it now appears that HMRC are taking a much harder line.

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Employers are looking for older workers, with 70% of employers currently trying to find staff over the age of 55, says a new survey by the Chartered Institute of Personnel and Development (CIPD). The report also found that over 30% of businesses were trying to recruit employees over the pension age.

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The current entitlement of a minimum 20 days paid holiday was introduced in 1998. However, the 20 day period can include the 8 permanent Bank Holidays leaving staff with as little as only 12 non-statutory days a year. The government is proposing to increase these minimum holiday entitlements. The proposals would mean that employers would be prevented from forcing staff to take Bank Holidays as part of their annual leave entitlement.

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HMRC have published a guide for new employers. The pack includes details of how to register with HMRC, how to set up and manage a payroll system, and how to file the relevant tax returns.

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Small businesses (those with less than 50 employees) will be able to claim back the salary costs of employees taking part in the government’s ‘Train to Gain’ programme. The programme is designed to improve the basic literacy and computer skills of employees in the workplace. The programme is not yet available in all areas of the UK but is set to be rolled out across the country by August 2006.

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HMRC are using a search engine device to track down traders who sell large quantities of goods on eBay and don’t declare their earnings. Also, HMRC are looking for those traders who are not VAT registered.

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