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Welcome to the DPC round up of the latest business news for our clients for 18th November 2024.
Please contact us if you want to talk with out team of experienced Stoke-on-Trent accountants about how these updates affect your business. We are here to support you!
THIS WEEK…
Making work more flexible, more secure and more family-friendly
Since coming into power, the Labour government has made its Make Work Pay plan a centrepiece of their policies. As a result, we have already seen a number of changes being proposed and implemented. This includes the new Employment Rights Bill which is currently making its way through Parliamentary processes.
The government’s Make Work Pay policy paper makes interesting reading on what it intends to do.
The paper outlines how the UK has seen a productivity slowdown in recent years that is more pronounced than other advanced economies. They attribute much of this to issues with the labour market, both in workers feeling insecure and businesses struggling to find the right staff when they need them.
The Plan to Make Work Pay is therefore designed to modernise the UK labour market and address the challenges the economy is facing. Principally the plan aims to make work more flexible, more secure and more family-friendly. This will help to support more people to stay in work.
Bringing people back to town centres?
Next month, councils across England will be given new powers to transform high streets by tackling long-term empty shops. Starting from 2 December, High Street Rental Auctions (HSRAs) powers will allow local authorities to auction leases for persistently vacant commercial properties, a move that is hoped will bring new businesses and community groups back to once-busy centres.
Through HSRAs, councils can take action if a property remains empty for more than 365 days within a two-year period. By auctioning leases for up to five years, this policy aims to prevent disengaged landlords from sitting on empty properties, which contribute to the decline of high streets. Local authorities will need to first try to engage with the landlord to resolve the vacancy before putting a property to rental auction.
According to data quoted by the government, one in seven high street shops are currently closed. So, this initiative could provide a helpful boost, creating jobs and driving foot traffic back to town centres.
Making the rates system more transparent
The Valuation Office Agency (VOA) has announced plans to share more detailed information on business rates valuations, making the system more transparent for ratepayers across England. Starting in 2026, businesses will have access to tailored information about their properties, and by 2029, they will be able to see specific valuation details and evidence.
Carolyn Bartlett, Chief Strategy and Transformation Officer at the VOA, noted that while ratepayers generally desire more transparency, some have concerns about data confidentiality. “We’ve balanced the desire for greater transparency from some with the concerns of others about the confidentiality of their data,” Bartlett explained.
Having more detailed information available may make it easier to detect whether an error has been made on your business property valuation.
Remember to check each employee’s right to work in the UK before they begin employment
A recent case involving a former company director in Hartlepool and Guisborough underlines the importance of checking employees’ right to work in the UK. Edris Ali, 39, who previously ran a pizza restaurant and a car wash, was banned as a director for ten years after hiring six illegal workers from Iran, Sudan, and Cote d’Ivoire. The workers were discovered during Immigration Enforcement visits, leading to substantial fines and legal action against Ali.
Ali employed two individuals without work authorisation at Tasty Pizza restaurant in Hartlepool and a further four at Bubbles Car Valeting in Guisborough. His actions resulted in penalties of £20,000 and £60,000, respectively, for the businesses, alongside the ten-year ban from company directorship.
HMRC follow Bank of England’s lead
Following the Bank of England’s decision to reduce the base rate from 5% to 4.75%, HM Revenue and Customs (HMRC) have announced a reduction in their late payment interest rates.
HMRC interest rates track the base rate. Late payment interest (payable if you pay tax late) is set at base rate plus 2.5%. Repayment interest (which HMRC pay you on refunds or overpayments) is set at base rate minus 1%, with a minimum rate of 0.5%.
Therefore, the late payment interest rate will reduce to 7.25%. Repayment interest will reduce to 3.75%.
Numerous employment reforms to be rolled out
The government published the Employment Rights Bill in October, which is intended to help deliver economic security and growth to businesses, workers and communities across the UK.
The bill will bring forward 28 individual employment reforms, from ending exploitative zero hours contracts and fire and rehire practices to establishing day one rights for paternity, parental and bereavement leave for millions of workers. Statutory sick pay will also be strengthened, removing the lower earnings limit for all workers and cutting out the waiting period before sick pay kicks in. The existing two-year qualifying period for protections from unfair dismissal will be removed, ensuring that all workers have a right to these protections from day one on the job.
In a new ruling, tips must go to the workers
As of 1st October, the Employment (Allocation of Tips) Act came into force that ensures workers keep 100% of the tips, gratuities, and service charges they earn. While many employers already pass on tips to staff, this new legislation will close loopholes so that all tips go directly to workers.
Under the new law, employers are legally required to pass all tips, gratuities, and service charges on to their staff without making any deductions. This means that if a customer leaves a tip, whether it’s in cash or through card payments, it must go to the workers.
Businesses that fail to follow these rules could face serious consequences. Workers now have the right to take their employer to an employment tribunal if they believe their tips have been unfairly withheld. This means that employers could be ordered to pay fines or compensation to affected staff members.
Closing the tax gap and streamlining administration?
As part of a series of announcements made in recent weeks by the Chancellor, the government is making a push for greater use of electronic invoicing (e-invoicing).
HM Revenue and Customs (HMRC) will soon launch a consultation on encouraging the wider use of e-invoicing, with the goal of simplifying business transactions and reducing administrative burdens but perhaps especially, reducing errors in tax returns so that HMRC can ‘close the tax gap’.
While there are clearly advantages for HMRC in businesses using e-invoices, it’s also fair to say that they can benefit businesses too.
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