Newsletter – November 2013

In this month’s enews we report that HMRC have announced a new approach to Business Records Checks and that research shows that many employers fail to pay employment tribunal awards.

Please contact us if you would like any further details on any of the issues covered.


Employers fail to pay tribunal awards

According to government commissioned research into the outcome of employment tribunals more than 50% of those awarded payments do not receive their full award.

The study by IFF Research found 49% of claimants had received payment in full and another 16% had received part of their award and over a third had been paid no compensation at all. The most common reason for non-payment was business insolvency.

The government is considering giving judges the power to require employers to pay deposits in advance of employment tribunals.

Employment Relations Minister Jo Swinson said:

‘We are determined to clamp down on businesses who fail to pay out. Far too many cases are not being resolved leaving people out of pocket. Taking an employer to tribunal is a stressful enough process without having to face the possibility of not getting what you are entitled to if you win your case.’

‘Whilst this is primarily about justice for individuals, it is also important that there is a level playing field for the majority of honest employers who follow the rules. Rogue employers should not be allowed to simply get away with not paying.’

‘We will look closely at how we can tighten things up to make sure that people get what they are owed. This includes potentially making changes to the employment tribunal rules to give judges the power to demand deposits from businesses who they think might not pay up.’

‘We are also considering fixed penalty notices for late payment and naming and shaming employers who fail to pay out. And we need to make sure that people are aware how they can take enforcement action if they are not paid what they are due.’

Internet link: Press release

HMRC new approach to Business Records Checks

HMRC have announced that they are changing their Business Record Check (BRC) activity to ensure ‘it better targets help to those who are likely to have inadequate records’.

According to the HMRC press release:

‘Customers whose records were not adequate on first inspection, and who received follow up visits, all improved their record-keeping standard. HMRC have not had to charge any penalties.’

‘In the latest phase of BRC, many of the customers contacted by HMRC have been keeping records correctly. So HMRC wants to explore how to better target this activity.’

‘From 4 November 2013, HMRC’s BRC activity in the Edinburgh, Glasgow, Leeds, Bradford and Stockport areas will explore new ways of using the checks. As part of this, HMRC will evaluate new risk processes and ensure new approaches are cost effective and fit with its wider compliance activity.

HMRC will also work with tax agents’ representatives to review the benchmarks of what good record-keeping should be. Many tax agents already do much to improve their clients’ record-keeping and HMRC wants to work with them to improve standards.’

‘For customers outside the development areas HMRC will continue with existing BRCs until they are completed.’

If you are contacted by HMRC regarding your records please do get in touch.

Internet link: BRC

Autumn Statement

The government has announced that the Autumn Statement will now take place on 5 December 2013.

We will update you on pertinent announcements.

Internet link: News

Labour Market Statistics

The Office for National Statistics has announced that:

  • The employment rate for those aged from 16 to 64 for July to September 2013 was 71.8%, up 0.3% from April to June 2013. There were 29.95 million people in employment aged 16 and over, up 177,000 from April to June 2013.
  • The unemployment rate for July to September 2013 was 7.6% of the economically active population, down 0.2% from April to June 2013. There were 2.47 million unemployed people, down 48,000 from April to June 2013.
  • Between July to September 2012 and July to September 2013 total pay rose by 0.7% and regular pay rose by 0.8%.

Neil Carberry, CBI Director of Employment and Skills, said:

‘Further signs of recovery can clearly be seen in these jobs figures. Unemployment is falling faster and businesses have taken on 124,000 more employees in full-time work.’

‘It is really pleasing to see more regions benefiting from job creation.’

‘It’s clear that pay restraint is continuing to underpin employment growth. We expect wages to pick up next year, but sustained growth must come first to protect jobs.’

Internet links: ONS CBI press release

HMRC reveal deliberate defaulters

HMRC publishes details of deliberate tax defaulters, those people who have received penalties either for:

  • deliberate errors in their tax returns or
  • deliberately failing to comply with their tax obligations.

To view the latest list please visit the HMRC website link below and look for the latest list.

Internet link: HMRC defaulters

Parties for employees

With the season for office parties fast approaching we thought it would be a good idea to remind you of the tax implications. The good news is that, unlike entertaining customers, the costs of entertaining employees are generally allowable against the profits of the business.

But what about the tax consequences for the employees themselves? Is it a perk of their jobs and will they have to pay tax on a benefit?

Generally, as long as the total costs of all employee annual functions in a tax year are less than £150 per attendee (VAT inclusive) 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, entertainment, transport and accommodation that you provide.

If the costs are above the £150 limit then the full cost will be taxable on the employee. In that case do get in touch so we can advise you how best to deal with them.

Internet link: HMRC guidance

Pension scheme charges consultation

Government consultation proposes to cap annual charges that are applied to pension schemes at between 0.75% and 1.0% a year.

While the average charge on new pension schemes is around 0.51% the Office of Fair Trading estimates that there are over 186,000 pension pots with £2.65bn assets that are subject to an annual charge of above 1%.

The government is also consulting on measures to increase transparency in the pensions sector and make it easier for employers to compare pension schemes.

Minister for Pensions Steve Webb said:

‘The government believes that enough is enough on charges. People need to know they are getting value for money when they save into a pension and not being ripped off by excessive charges. We are consulting on a cap on pension charges. A range of options will be on the table including an outright ban on all charges above 0.75% per year.’

With Pensions Auto Enrolment being rolled out to all employers please do get in touch if we can help you to get to grips with the obligations.

Internet links: Press release consultation