| Enews - October 2006 | ||||||||
Introduction This month we report on further guidance on the pensions’ legislation and the deferral of the introduction of the age discrimination legislation in respect of pension scheme entitlements. We also include our usual round up of news. Please browse through this month’s articles and get in touch if we can help. |
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Pension aspects of age legislation delayed
We have previously reported that the Employment Equality (Age) Regulations 2006 took effect from 1 October 2006. These regulations introduce significant changes to recruitment, appraisal, promotion, redundancy and retirement procedures. The Department for Work and Pensions (DWP) has announced that the pension aspects of the regulations will not now be implemented until 1 December. The delay is designed to give businesses a further two months to review their pension arrangements and consider whether any changes need to be made. The DWP has agreed to consult with employers informally to help them decide whether or not they need to amend their existing arrangements.
Stamps available online We reported a couple of months ago on the changes to the postal charging system which introduced pricing by size and weight. The Royal Mail has now introduced a new shopping facility for stamps which is aimed at people working from home. To purchase the ‘stamps’ users go online and select first, second or international deliveries and pay by credit card. The ‘stamps’ are in the form of a barcode, without the usual Queen’s head. The ‘stamp’ can be printed directly onto an envelope. Alternatively you could print onto a sticky label or paper and attach it to the letter or package to be posted. The Post Office hopes that the new service, available 24 hours a day, will reduce counter queues!
Payroll online filing incentive available HMRC have advised small employers who successfully filed their 2005/06 payroll end of year returns, P35 and P14s, online that they can now reduce their next PAYE payment by the £250 incentive payment. They advise that this can be done without waiting for HMRC confirmation that the amount is due. Apparently they have encountered problems with issuing the online notifications that the incentive is due. They hope to sort out their technical difficulties as soon as possible but say that employers are entitled to ‘self serve’ the £250 payment.
Are you or your employees late for work? A study carried out by Manchester University has found that the average worker is late for work once a month which is a problem for many businesses. The study has found that a ‘carrot and stick’ approach by business owners is the right way to discourage lateness by employees. The survey suggests that higher wages and performance-related pay act as an incentive and that those employees who receive a ‘telling off’ for lateness are also more likely to make it to work on time. Apparently those individuals who are happy at work are also less likely to be late.
Women go it alone An increasing number of women are setting up their own businesses after becoming mothers, according the report produced by the London School of Economics and Yellow Pages. The report shows that many women choose to start businesses in the baby food and children’s clothing sectors. Some of the reports finding were:
VAT fuel charge set to rise The EC has finally agreed the UK’s proposal to align the output VAT charge with the benefit in kind charge on the provision of private fuel assessable on the individual. The proposals and legislation were announced in the 2005 Budget and will be implemented from May 2007. The output charge is payable by VAT registered businesses which allow their employees to claim all the fuel expenses on their company cars and reclaim VAT on the full amount of fuel purchased without making an adjustment for the for private use. The output charge is currently a maximum of £75.66 per quarter and may rise significantly for those cars which have the highest CO2 emissions. We are still awaiting details of how the legislation will work in practice and we will keep you informed of developments.
Benefits in kind on private use of computer equipment The Finance Act 2006 abolished the £500 tax exemption for the private use of computer equipment provided by an employer to an employee. This removed a tax-free incentive by which employers had been able to offer their employees tax-free home use of computer and related equipment such as scanners and printers. The reason for the withdrawal of the incentive was that some employers had been using the exemption to provide their employees with packages including MP3 players and games consoles. HMRC have now updated their guidance on what they regard as insignificant private use by an employee and the circumstances under which a taxable benefit in kind would arise on the use of computers and related equipment. They have also included guidance on the provision by employers to employees of home internet access.
Pensions warning Tony Hobman, chief executive of the Pensions Regulator, has warned companies not to sell or abandon their final salary pension funds without proper provision for meeting their deficits, which are estimated to be more than £100bn. He advised that corporate deals to transfer company pension schemes to new specialist vehicles could result in employers abandoning schemes without fully meeting their obligations to members. The Regulator advised that it has already been approached by pension scheme advisers with proposals to transfer company retirement plans in such a way that the existing employer would avoid having to meet its full obligations. David Norgrove, chairman of the Pensions Regulator, told The Daily Telegraph that Tony Hobman’s speech is "a warning shot across the bows to employers and pension scheme trustees to be exceedingly careful before transferring pension funds to another company”.
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