News Archive - June 2012
Automatic pension enrolment: Employer duties outlined in guidance - 26.6.2012
The Pensions Regulator has published guidance for businesses that will be subject to automatic pension enrolment duties which are being phased in from this October.
The document outlines its policy for employers who must comply with the automatic enrolment duties, and also details its enforcement strategy for those who fail to do so.
Over the next few years, all eligible private sector employees must be automatically enrolled into a workplace pension scheme, with employers required to contribute to each individual's pension fund, in a Government bid to encourage more workers to save for their retirement.
The scheme is being rolled out from this October, when the largest firms will be required to enrol all eligible employees. Small companies will follow suit at gradual staging dates until it is compulsory for all firms to do so from 1 January 2016.
The regulator said: "The underlying aim of this strategy is to have in place effective systems to maximise employers' compliance with their duties (under the Pensions Act 2008) and to ensure non-compliance is held at an absolute minimum, to safeguard workers ability to save in a pension scheme."
The main objectives of its strategy are to establish and maintain a 'pro-compliance' culture amongst businesses and to educate all employers so that they are aware of their obligations.
In its commitment to preparing employers for auto enrolment, the Pensions Regulator will:
- Notify employers at 12 and three months prior to their staging date
- Work with the pensions industry to provide pension products that work with the auto enrolment duties
- Help employers communicate with their pension advisors
- Produce guidance material to provide information and guidance
- Provide a contact centre as a single point of call for queries
- Make the process of registration simple for employers to minimise administrative burdens
The Pensions Regulator warned it would be 'tough' but 'fair' with non-compliant employers, saying it would consider the circumstances of each business that fails to meet its obligations and work with them to help get them compliant.
Please contact us to find out how we can help your business prepare for the 2012 pension reforms.
The document outlines its policy for employers who must comply with the automatic enrolment duties, and also details its enforcement strategy for those who fail to do so.
Over the next few years, all eligible private sector employees must be automatically enrolled into a workplace pension scheme, with employers required to contribute to each individual's pension fund, in a Government bid to encourage more workers to save for their retirement.
The scheme is being rolled out from this October, when the largest firms will be required to enrol all eligible employees. Small companies will follow suit at gradual staging dates until it is compulsory for all firms to do so from 1 January 2016.
The regulator said: "The underlying aim of this strategy is to have in place effective systems to maximise employers' compliance with their duties (under the Pensions Act 2008) and to ensure non-compliance is held at an absolute minimum, to safeguard workers ability to save in a pension scheme."
The main objectives of its strategy are to establish and maintain a 'pro-compliance' culture amongst businesses and to educate all employers so that they are aware of their obligations.
In its commitment to preparing employers for auto enrolment, the Pensions Regulator will:
- Notify employers at 12 and three months prior to their staging date
- Work with the pensions industry to provide pension products that work with the auto enrolment duties
- Help employers communicate with their pension advisors
- Produce guidance material to provide information and guidance
- Provide a contact centre as a single point of call for queries
- Make the process of registration simple for employers to minimise administrative burdens
The Pensions Regulator warned it would be 'tough' but 'fair' with non-compliant employers, saying it would consider the circumstances of each business that fails to meet its obligations and work with them to help get them compliant.
Please contact us to find out how we can help your business prepare for the 2012 pension reforms.
Workers to reclaim holiday if they fall sick on leave - 25.6.2012
Workers who fall ill whilst on holiday will have a legal right to take additional paid leave at a later date, the European Court of Justice (ECJ) has ruled.
The ECJ's Working Time Directive legislation has been clarified following an appeal by a Spanish trade union against a group of department stores last week.
It clarified that a worker who becomes unfit for work during annual leave is entitled to a same duration of leave at a later point, 'irrespective of the point at which the incapacity for work arose.'
The extended legislation means that workers who fall ill towards the end of the year would be able to carry over unused leave into the next accounting year, as long as a sick note is provided. A previous ruling had already said that workers who fall sick before the start of scheduled holiday could also take their leave at another time.
The court said: "The purpose of entitlement to paid annual leave is to enable the worker to rest and enjoy a period of relaxation and leisure.
The purpose of entitlement to sick leave is different, since it enables a worker to recover from an illness that has caused him to be unfit for work.
There is speculation as to when the legislation will be implemented in Britain, with an EU source telling the BBC that the ruling had 'full immediate effect' across the EU, 'regardless of the type or size of employer'. The Government, however, is yet to comment.
The Working Time Directive also includes legislation relating to working hours, and although there are opt-out clauses on parts of the directive, there is no exemption on sick pay and holiday.
The Daily Telegraph warned the move could cost UK businesses more than £100 million a year.
Speaking to the BBC, the Confederation of British Industry (CBI) said that 'as a result of earlier ECJ judgments, this change has already happened in the UK, bringing along headaches for employers'.
Guy Bailey, CBI head of employment and employee relations, said that 'with the rules currently under discussion again in Brussels, the CBI would like to see the judgments reversed, so that the directive is focused on the health and safety of the workforce, as originally intended'
The ECJ's Working Time Directive legislation has been clarified following an appeal by a Spanish trade union against a group of department stores last week.
It clarified that a worker who becomes unfit for work during annual leave is entitled to a same duration of leave at a later point, 'irrespective of the point at which the incapacity for work arose.'
The extended legislation means that workers who fall ill towards the end of the year would be able to carry over unused leave into the next accounting year, as long as a sick note is provided. A previous ruling had already said that workers who fall sick before the start of scheduled holiday could also take their leave at another time.
The court said: "The purpose of entitlement to paid annual leave is to enable the worker to rest and enjoy a period of relaxation and leisure.
The purpose of entitlement to sick leave is different, since it enables a worker to recover from an illness that has caused him to be unfit for work.
There is speculation as to when the legislation will be implemented in Britain, with an EU source telling the BBC that the ruling had 'full immediate effect' across the EU, 'regardless of the type or size of employer'. The Government, however, is yet to comment.
The Working Time Directive also includes legislation relating to working hours, and although there are opt-out clauses on parts of the directive, there is no exemption on sick pay and holiday.
The Daily Telegraph warned the move could cost UK businesses more than £100 million a year.
Speaking to the BBC, the Confederation of British Industry (CBI) said that 'as a result of earlier ECJ judgments, this change has already happened in the UK, bringing along headaches for employers'.
Guy Bailey, CBI head of employment and employee relations, said that 'with the rules currently under discussion again in Brussels, the CBI would like to see the judgments reversed, so that the directive is focused on the health and safety of the workforce, as originally intended'
Online retail market to reach £77bn in 2012 - 19.6.2012
The value of the UK's online retail market is set to grow by £77 billion this year, according to figures by the Interactive Media Retail Group (IMRG).
The forecast places the UK online sales market second to the US in terms of market value.
According to IMRG, the UK online market remains competitive and attractive to consumers in the EU, with 30 per cent of all cross border trade in Europe currently going through UK retailers. This means the UK exports more than the rest of Europe's e-retailers combined.
The Department for Business Innovation and Skills (BIS) said the outlook 'further strengthened the UK's position as a global leader' in online sales.
With 228,000 online retail businesses operating in the UK last year, IMRG's managing director John Andrews said online retail was a 'big business' which could see the number grow to 1.5 million by 2015.
The £77 billion expected from the online retail sector over the coming year indicates a slight slowing of growth at 13 per cent, compared to 14 per cent recorded for the previous year, and 20 per cent for the year 2011/12.
Last year, strong performances came from the clothing, health and beauty, alcohol and home and garden sectors, with consumers spending an estimated £76bn shopping online.
Electrical items, gifts and travel products bought online fared less well. While online clothing sales have consistently performed well, sales have in fact slowed over the past few months.
Sales via mobile devices also gained momentum, growing from 0.4 per cent of e-retail sales at the start of 2010, to 5.3 per cent this year. IMRG found 2.6 per cent of visits to e-retail sites were through mobile phones in 2010, increasing to 8.2 per cent in 2011.
IMRG's CEO James Roper said: "With the on-going global economic downturn and the UK slipping back into recession in 2012, it can be difficult to find genuine signs of positive growth in business but the e-retail market continues to deliver it.
Over the 12 years that our Index has been measuring the market we've seen over £360bn spent at UK online retailers, and the industry is on track to record double-digit growth again this year.
This puts UK retailers on an excellent footing to expand into cross-border markets as e-retail becomes more and more international to the benefit of people all over the world.
Online retail will be one of the main topics of discussion at the British Business Embassy on 9 August, where 3,000 business leaders will be invited to explore ways of boosting business in the UK
We can help design and construct your website, please contact us for further details.
The forecast places the UK online sales market second to the US in terms of market value.
According to IMRG, the UK online market remains competitive and attractive to consumers in the EU, with 30 per cent of all cross border trade in Europe currently going through UK retailers. This means the UK exports more than the rest of Europe's e-retailers combined.
The Department for Business Innovation and Skills (BIS) said the outlook 'further strengthened the UK's position as a global leader' in online sales.
With 228,000 online retail businesses operating in the UK last year, IMRG's managing director John Andrews said online retail was a 'big business' which could see the number grow to 1.5 million by 2015.
The £77 billion expected from the online retail sector over the coming year indicates a slight slowing of growth at 13 per cent, compared to 14 per cent recorded for the previous year, and 20 per cent for the year 2011/12.
Last year, strong performances came from the clothing, health and beauty, alcohol and home and garden sectors, with consumers spending an estimated £76bn shopping online.
Electrical items, gifts and travel products bought online fared less well. While online clothing sales have consistently performed well, sales have in fact slowed over the past few months.
Sales via mobile devices also gained momentum, growing from 0.4 per cent of e-retail sales at the start of 2010, to 5.3 per cent this year. IMRG found 2.6 per cent of visits to e-retail sites were through mobile phones in 2010, increasing to 8.2 per cent in 2011.
IMRG's CEO James Roper said: "With the on-going global economic downturn and the UK slipping back into recession in 2012, it can be difficult to find genuine signs of positive growth in business but the e-retail market continues to deliver it.
Over the 12 years that our Index has been measuring the market we've seen over £360bn spent at UK online retailers, and the industry is on track to record double-digit growth again this year.
This puts UK retailers on an excellent footing to expand into cross-border markets as e-retail becomes more and more international to the benefit of people all over the world.
Online retail will be one of the main topics of discussion at the British Business Embassy on 9 August, where 3,000 business leaders will be invited to explore ways of boosting business in the UK
We can help design and construct your website, please contact us for further details.
Employers to be given greater powers to remove staff - 14.6.2012
The Government has announced plans to introduce new legislation making it easier for firms to dismiss under-performing workers.
The new 'settlement agreements' would enable employers to fast-track staff out of the business by asking them to leave in return for an agreed pay off - a move the Government believes will benefit both employers and employees.
It is hoped the measure will minimise the number workplace disputes being taken to tribunals, which can often be an expensive and lengthy process.
Making the announcement at the second reading of the Enterprise and Regulatory Reform Bill, Business secretary Vince Cable said it would provide flexibility for employers and boost business confidence to take on new staff.
He said: "This Bill is an important part of this Government's plan for long-term growth: fostering enterprise, supporting business and creating jobs."
Settlement agreements are smart, fair and pro-business reforms which deliver results for employees and employers. It empowers employers by enabling them to keep their workforce flexible and encouraging alternative ways of solving workplace problems rather than resorting to a tribunal. But crucially it does so in a way that keeps the necessary protections for employees in place.
The agreements are already available for some employers in certain circumstances but the Government wants to encourage more businesses, including SMEs, to use them. Businesses that offer settlement agreements before a dispute arises will be legally protected against unfair dismissal cases which are taken to a tribunal.
Under the proposals, employees would receive a letter outlining what kind of payment would be expected. They would, however, still be able to reject a settlement agreement offer and take the case to a tribunal if they wish.
Business groups, including the manufacturers' association EEF, have welcomed the move saying it will bring more certainty to businesses.
The British Chambers of Commerce (BCC) director of policy Adam Marshall, said: "For businesses, reforms to employment law must deliver clarity, simplicity and lower costs. The proposal to beef up settlement agreements will offer many employers the certainty and security they crave. That is provided that any offer made to end a contractual relationship with an employee cannot be used against them in employment tribunal proceedings."
The new 'settlement agreements' would enable employers to fast-track staff out of the business by asking them to leave in return for an agreed pay off - a move the Government believes will benefit both employers and employees.
It is hoped the measure will minimise the number workplace disputes being taken to tribunals, which can often be an expensive and lengthy process.
Making the announcement at the second reading of the Enterprise and Regulatory Reform Bill, Business secretary Vince Cable said it would provide flexibility for employers and boost business confidence to take on new staff.
He said: "This Bill is an important part of this Government's plan for long-term growth: fostering enterprise, supporting business and creating jobs."
Settlement agreements are smart, fair and pro-business reforms which deliver results for employees and employers. It empowers employers by enabling them to keep their workforce flexible and encouraging alternative ways of solving workplace problems rather than resorting to a tribunal. But crucially it does so in a way that keeps the necessary protections for employees in place.
The agreements are already available for some employers in certain circumstances but the Government wants to encourage more businesses, including SMEs, to use them. Businesses that offer settlement agreements before a dispute arises will be legally protected against unfair dismissal cases which are taken to a tribunal.
Under the proposals, employees would receive a letter outlining what kind of payment would be expected. They would, however, still be able to reject a settlement agreement offer and take the case to a tribunal if they wish.
Business groups, including the manufacturers' association EEF, have welcomed the move saying it will bring more certainty to businesses.
The British Chambers of Commerce (BCC) director of policy Adam Marshall, said: "For businesses, reforms to employment law must deliver clarity, simplicity and lower costs. The proposal to beef up settlement agreements will offer many employers the certainty and security they crave. That is provided that any offer made to end a contractual relationship with an employee cannot be used against them in employment tribunal proceedings."
Change in website cookie law unsettles businesses - 11.6.2012
UK businesses have voiced concern over new EU laws that affect the ways websites store personal user data, following last minute legislation alterations.
The Privacy and Electronic Communication Regulations Act 2011, which came into effect on 26 May 2012, dictates that users must consent to the use of files known as cookies being stored on their computer. Cookies are widely used to analyse a user's internet behaviour allowing for more personalised website usage such as targeted advertising campaigns.
The rules have been designed to protect the privacy of internet users prompted in part by concerns about online tracking of individuals.
The Information Commissioner's Office (ICO), which enforces the law in the UK, has however been criticised for legislation amendments made in the eleventh hour which allow websites to seek 'implied consent' from users - meaning they (users) do not have to make an explicit choice.
It had initially said that users must specifically choose to opt-in to the cookie agreement. The changes, however, now mean that users who continue to use a site will automatically agree to have cookies stored on their device and their personal information gathered.
Stephen Pattison, director of the International Chamber of Commerce (ICC) warned last year that the 'vagueness' of the directive would create 'real ambiguity' for website owners.
Neil Lathwood, technical director of UKFast said the last minute change had impacted on smaller companies.
"It takes a significant amount of effort to put a system of full consent into place and it is far beyond the realms of most SMEs," he
said.
Those who have invested the time and money to set up pop-ups or banners have now been told that 'implied consent' is compliant with the law, making their well-meaning efforts pointless and probably costly.
Guidance from the ICO now states that those setting cookies must:
- Tell users about the use of cookies
- Explain what cookies do
- Obtain consent, or implied consent, to store a cookie on a user's device.
The ICO's stance on implied consent as stated in their guidance notes reads: "For implied consent to work there has to be some action taken by the consenting individual from which their consent can be inferred."
The key point, however, is that when taking this action the individual has to have a reasonable understanding that by doing so they are agreeing to cookies being set.
The ICO can fine businesses up to £500,000 for failing to comply, although the Financial Times recently reported that three in four businesses in the UK have yet to implement the new regulations.
The ICO said it will continue to help businesses comply with the law providing site owners were making genuine progress towards compliance.
The Privacy and Electronic Communication Regulations Act 2011, which came into effect on 26 May 2012, dictates that users must consent to the use of files known as cookies being stored on their computer. Cookies are widely used to analyse a user's internet behaviour allowing for more personalised website usage such as targeted advertising campaigns.
The rules have been designed to protect the privacy of internet users prompted in part by concerns about online tracking of individuals.
The Information Commissioner's Office (ICO), which enforces the law in the UK, has however been criticised for legislation amendments made in the eleventh hour which allow websites to seek 'implied consent' from users - meaning they (users) do not have to make an explicit choice.
It had initially said that users must specifically choose to opt-in to the cookie agreement. The changes, however, now mean that users who continue to use a site will automatically agree to have cookies stored on their device and their personal information gathered.
Stephen Pattison, director of the International Chamber of Commerce (ICC) warned last year that the 'vagueness' of the directive would create 'real ambiguity' for website owners.
Neil Lathwood, technical director of UKFast said the last minute change had impacted on smaller companies.
"It takes a significant amount of effort to put a system of full consent into place and it is far beyond the realms of most SMEs," he
said.
Those who have invested the time and money to set up pop-ups or banners have now been told that 'implied consent' is compliant with the law, making their well-meaning efforts pointless and probably costly.
Guidance from the ICO now states that those setting cookies must:
- Tell users about the use of cookies
- Explain what cookies do
- Obtain consent, or implied consent, to store a cookie on a user's device.
The ICO's stance on implied consent as stated in their guidance notes reads: "For implied consent to work there has to be some action taken by the consenting individual from which their consent can be inferred."
The key point, however, is that when taking this action the individual has to have a reasonable understanding that by doing so they are agreeing to cookies being set.
The ICO can fine businesses up to £500,000 for failing to comply, although the Financial Times recently reported that three in four businesses in the UK have yet to implement the new regulations.
The ICO said it will continue to help businesses comply with the law providing site owners were making genuine progress towards compliance.
Six new taskforces launched by HMRC - 7.6.2012
HMRC has launched six new taskforces with the aim of recovering up to £23 million from traders who fail to pay the taxes they owe.
The latest taskforces, which target specific 'high risk' sectors in certain areas around the UK, form part of HMRC's wider plans to launch 30 more over the coming tax year.
The specialist teams will undertake intensive investigative activity by carrying out spot checks and examining business records. It will particularly focus on:
- Indoor and outdoor market traders in London
- Taxi firms in Yorkshire and East Midlands
- Property landlords in East Anglia, London, Yorkshire
- Restaurants in the Midlands.
Exchequer secretary David Gauke said: "We have made it clear that we will not tolerate tax evasion - everyone needs to pay the taxes they owe in full.
We are determined to crack down on the minority who choose to break the rules. It is not fair that at a time when most hard-working people are paying the right tax, others are trying to get out of paying what they should.
HMRC is on target to collect more than £50 million as a result of the 12 taskforces it launched in the past year, which targeted sectors such as fast food outlets, scrap metal dealers and landlords.
The three-fold increase in the number of taskforces forms part of the Government's £917 million step-up to tackle tax evasion and fraud.
In addition to its taskforces, HMRC also launches various campaigns throughout the year allowing those who may not have paid the correct amount tax to come forward and settle their affairs. It is to plan three future campaigns in 2012 targeting direct sellers -such as door-to-door sales -, missing self-assessment tax returns and the home improvement sector.
We can help you to get your tax affairs in order, please contact us to find out more.
The latest taskforces, which target specific 'high risk' sectors in certain areas around the UK, form part of HMRC's wider plans to launch 30 more over the coming tax year.
The specialist teams will undertake intensive investigative activity by carrying out spot checks and examining business records. It will particularly focus on:
- Indoor and outdoor market traders in London
- Taxi firms in Yorkshire and East Midlands
- Property landlords in East Anglia, London, Yorkshire
- Restaurants in the Midlands.
Exchequer secretary David Gauke said: "We have made it clear that we will not tolerate tax evasion - everyone needs to pay the taxes they owe in full.
We are determined to crack down on the minority who choose to break the rules. It is not fair that at a time when most hard-working people are paying the right tax, others are trying to get out of paying what they should.
HMRC is on target to collect more than £50 million as a result of the 12 taskforces it launched in the past year, which targeted sectors such as fast food outlets, scrap metal dealers and landlords.
The three-fold increase in the number of taskforces forms part of the Government's £917 million step-up to tackle tax evasion and fraud.
In addition to its taskforces, HMRC also launches various campaigns throughout the year allowing those who may not have paid the correct amount tax to come forward and settle their affairs. It is to plan three future campaigns in 2012 targeting direct sellers -such as door-to-door sales -, missing self-assessment tax returns and the home improvement sector.
We can help you to get your tax affairs in order, please contact us to find out more.
A third of SMEs unaware of business partner debts - 1.6.2012
Small businesses are being urged to check the financial status of business partners and suppliers before doing business with them.
The warning from 192.com comes following its survey which found that one in three SMEs were unaware of a business partner's debt, while a third said they had been lied to about the state of a company's finances.
Over one in five SMEs said they had found themselves caught in financially unsound business relationships after failing to study company credit reports.
It also revealed that 77 per cent of SMEs had not researched a partner's financial history by obtaining a business credit report. Such reports detail a businesses' financial health by outlining county court judgements - a legal notice of a company's failure to pay debt - which stay on the register for six years.
Dominic Blackburn of 192.com said: "We advise business to use a company credit report to find out whether a potential business partner can service its debts, pay its suppliers on time, and maintain stability at board level."
Outstanding charges against a company were cited as the most troubling aspect of a company credit report, followed by previous county court judgements and poor working capital.
Just under half of respondents also said that a company who had changed its name several times would also be a cause for concern while the unreliability of business suppliers had also been a problem for SMEs.
Key findings from the research found that:
- 32 per cent had not been told about the state of a company's finances.
- 22 had experienced a financially unstable business partnership.
- 70 per cent of businesses would be troubled by outstanding charges against a company.
- 65 per cent would be concerned by county court judgments.
- More than half would be put off by a company's poor working capital.
We can help monitor your business finances. Contact us to find out more.
