Tougher Penalties for Health and Safety Offences

December 2008

New legislation under the Health and Safety Offences Act 2008 will increase penalties and provide courts with greater sentencing powers for those who flout health and safety legislation.

The Act will increase the maximum level of penalties that can be imposed by the lower courts on those who breach health and safety regulations from £5,000 to £20,000. It also increases the range of offences for which an individual can be imprisoned. The legislation, which received Royal Assent on 16 October 2008, will come into force in January 2009.

DWP Minister Lord McKenzie said:

“It is generally accepted that the level of fines for some health and safety offences is too low. These changes will ensure that sentences can now be more easily set at a level to deter businesses that do not take their health and safety management responsibilities seriously and further encourage employers and others to comply with the law.

Furthermore, by extending the £20,000 maximum fine to the lower courts and making imprisonment an option, more cases will be resolved in the lower courts and justice will be faster, less costly and more efficient.”

Internet link: DWP press release

Standard Rate VAT

December 2008

The standard rate of VAT will be reduced from 17.5% to 15% for the period 1 December 2008 to 31 December 2009. The rate will then revert to 17.5%. No changes have been made to the 5% reduced rate or the 0% rate.

The government will introduce ‘anti-forestalling legislation’ to prevent abuse of the reduction in the standard rate of VAT.

The percentages applicable to those businesses operating the flat rate scheme will be reduced with effect from 1 December 2008.

The transition to the new rate will cause issues for all businesses.  We have provided a link to HMRC guidance but please do get in touch if you would like some help in this area.

We are also including HMRC’s guide for consumers, so you are aware of how the changes will impact you personally.

Internet links: HMRC VAT changes HMRC detailed guide HMRC consumer guide

Taxation of Business Travel

December 2008

Further details have been provided on the changes to the capital allowance treatment of cars.  The changes will have effect from 1 April 2009 for corporation tax purposes and 6 April 2009 for income tax. The special rules that restrict the amount of capital allowances for cars costing more than £12,000 will be abolished.

  • Expenditure on cars with CO2 emissions of 160gm/km or below will be allocated to the plant and machinery ‘pool’ (ie will obtain 20% writing down allowances (WDA)).
  • Expenditure on cars with CO2 emissions above 160gm/km will be allocated to the ‘special rate pool’ (ie will obtain 10% WDA).
  • Cars that have an element of non-business use will continue to be dealt with in a single asset pool to enable the private use adjustment to be made, but for expenditure incurred from April 2009 onwards the rate of WDA will be determined by the car’s CO2 emissions.

Expenditure incurred before April 2009 will, in general, continue to be subject to the existing ‘expensive’ car rules for a transitional period of around five years. Any expenditure remaining in a single asset pool (unless there is any non-business use of the car) will be transferred to the main capital allowances pool.

Please do get in touch if you would like more information on how these changes will affect you.

Internet link: HMRC and cars

Parties for Employees

December 2008

Are you planning a party for your staff? Make sure you are clear on the tax implications.

The good news is that, unlike entertaining customers, employee entertaining costs are generally allowable against the profits of the business.

What about the employees themselves? Is it a perk of their jobs and will they be subject to tax?

Generally, as long as the total costs of employee annual functions in a tax year are less than £150 per head there will be no tax implications for the employees themselves. In considering this limit make sure you have included all the costs, which may include not only the meal itself but also any drinks, transport and accommodation that you provide.

If the costs are above the £150 per head limit then do get in touch so we can advise you how best to deal with them.

Internet link: HMRC guidance

Pension Forecast

December 2008

Do you know how much your state pension could be when you retire? The Pensions Service will provide a forecast of this information either by letter or an online email service.

As detailed on their website “a State Pension forecast gives you in today’s money values:

  • an estimate of basic and additional State Pension you may get based on your National Insurance Contributions so far and
  • an estimate of basic and additional State Pension you may get when you claim your State Pension.

If you would like any help with pension advice please get in touch.

Internet link: Pensions service forecast