Red Tape Day: What it means for you
All the new business regulations you need to be aware of from the first of this year’s common commencement dates
Today’s an important day for businesses to take note of. It’s the first of the government’s bi-annual Red Tape days, or if you want to use the catchier official title – common commencement dates (CCD).
The government introduced the CCD to simplify the enactment process; under the old system, laws were introduced in dribs and drabs throughout the year – a nightmare for business owners, who had to deal with constant legislative changes.
Now, there are two CCDs – April 6 and October 1 – and the bulk of new business legislation comes into effect on one of these two days. Today’s CCD is particularly significant, because the government has introduced a number of major changes to employment and accounting legislation in recent months, and they’re all coming into force at once.
Some of the new legislation has actually been in force for the past few days; the government tends to introduce financial legislation on April 1, so a number of changes actually took effect last Friday. However, for simplicity, we’ve grouped all the changes together under today’s CCD.
Here is a summary of the most crucial changes coming into force today – and what they mean for you.
The change. All corporation tax returns must now be submitted online.
What it means. As you’ve probably guessed, you won’t be able to pay your corporation tax on paper anymore. If you run a limited company you’ll have to sign up for HMRC online services, and then activate the corporation tax online service; you’ll need your firm’s corporation tax reference handy, as well as either your Companies House registration number, or the postcode of your business address.
Read this guide from the HMRC website for more information on how, and where, to set up the online service.
Income tax self-assessment penalties
The change. The new regime for late filing and late payment of income tax through self-assessment increases the penalties significantly. A return filed six months late could attract a penalty in excess of £1,300.
What it means. Under the new rules, you will receive an initial penalty of £100 if your self-assessment return is one day overdue – whether or not you have any tax to pay. You will then be charged an automatic daily penalty of £10, up to a maximum of £900; after that there will be a further penalty amounting to 5% of the total tax due, or £300 – whichever is greater.
In the most serious cases, you could be forced to pay a fine equating to 100% of the tax due. So it pays to get your self-assessment return in promptly! Visit HMRC’s dedicated tax return pages if you need to find out more.
The change. New fathers will be able to take up to six months additional paternity leave.
What it means. Up until now, employed fathers have been able to take two weeks off following the birth of the baby, while mothers have been able to take 52 weeks. But now the leave can be split.
The new system allows fathers in work to take an additional 26 weeks’ off if the mother is returning to work before her allowance ends. The extended leave can be taken any time from 20 weeks after the child is born, and must be finished by the child’s first birthday.
The new regulations apply in the cases of all babies born on or after April 3 2011, and the father has to have been employed with the same company for at least 26 weeks before the qualifying week – around 15 weeks before the baby is due.
For more information, please visit the Directgov website.
The change. It is now legal for an employer to prioritise “protected characteristics” when choosing between two candidates of equal merit.
What it means. If an employer feels a particular minority group is under-represented in their company’s workplace, they have the right to use positive discrimination when choosing between two candidates who are otherwise inseparable.
This means that, in cases where two candidates are neck-and-neck for a particular post, the employer has the right to choose the person in a minority on the grounds of race, gender, or sexual orientation.
The change. The default retirement age is no more – from today, employees will no longer have to retire when they hit 65.
What it means. This legislation is much more complicated than it seems at first glance. An employer can still ask an employee to retire at 65; however, there has to be clear evidence that the employee’s ability to do their job is compromised by their age.
However, any compulsory retirements which were already in progress on or before April 5 can still go through – provided the employee reaches the retirement age on or before September 30 2011.
For more information on all the new changes which have come into effect, go to the Businesslink website.