Financial Monitor (May 2007)
No Smoking in the workplace
From 1 July 2007 employers will have to prohibit and take active steps to prevent smoking in the workplace. It will no longer be possible to have smoking rooms on the premises.
A sign must be displayed at each entrance to the premises showing the international No Smoking symbol and stating “No smoking. It is against the law to smoke on these premises”. A no smoking policy must be implemented and communicated clearly to all employees.
If employers do not take reasonable steps to implement the smoking ban then they face a fine of £2,500. Failure to display one of the new no smoking signs renders the employer liable to a fine of £200.
Similar restrictions apply to smoking in company cars when passengers are carried.
Taxable Pay Tables on CD-ROM
The new Taxable Pay Tables, incorporating the budget changes, to be used from 18 May 2007 are available on the updated edition of the Employer’s CD-ROM. HM Revenue and Customs have not automatically provided employers with these new tables in booklet form.
Official rate of interest
The “official rate” of interest, used in calculating the benefit in kind charge on interest free and low interest director and staff loans (above £5,000) and on living accommodation (costing more than £75,000) provided for an employee or director have been set at 6.25% for the tax year 2007/08. This is the first change for some years, the rate being 5% since 5 April 2002.
National minimum wage increases
The Department for Trade and Industry has confirmed that the main rate for the National Minimum Wage will rise to £5.52 per hour (currently £5.35) with effect from 1 October 2007. The rate for 18-21 year olds will rise to £4.60 (currently £4.45) and for qualifying 16 and 17 year olds from £3.30 to £3.40.
How to prevent cold calls
Unwanted telephone calls from sales people can disrupt your working day, or intrude on your leisure time at home. There is however, a solution and that is to register with the Telephone Preference Service (TPS).
Businesses, charities and voluntary organisations are all prohibited from ‘cold calling’ telephone subscribers registered with the TPS. Registration is free and can cover both land lines and mobile numbers. Anyone can register, either online at www.tpsonline.org.uk or by calling 0845 070 0707.
There are three schemes: the TPS itself for householders and unincorporated businesses, the Corporate TPS for companies and the Fax Preference Service (FPS) for fax numbers. The main difference is that Corporate TPS registrations have to be renewed annually.
The unwanted calls generally stop about three or four weeks after registration.
New limits for Redundancy Pay
With effect from 1 February 2007 the maximum statutory amount payable as redundancy pay has increased from £290 to £310 per week. In addition employees who are 18 and have two years continuous employment can claim redundancy pay and there is no upper age limit for claims, so those aged over 65 can now claim.
Real Estate Investment Trust
A new, tax effective way for people to invest in property whilst not having to be direct owners was introduced on 1 January 2007. A number of long standing property groups have converted into Real Estate Investment Trusts (REIT) to take advantage of the new rules. The REIT does not generally pay any tax itself on either its income or gains from its property activities. The distributions to shareholders are taxed as if they were direct owners of the property and they suffer tax at 22% currently which is deducted at source from the distribution. Unlike a dividend tax credit, this credit can be repaid if it exceeds the taxpayer's liability. No tax deduction is made for investments through an ISA or Child Trust Fund.
Capital gains tax is payable in the normal way when investors dispose of their shares in a REIT.
Those wishing to consider such investments should take advice from an appropriately qualified Financial Adviser to ensure that suitable investments are selected.
Forms P11D and Class 1A Contributions
We would like to remind clients that all forms P11D for the year ended 5 April 2007 should be submitted to HM Revenue and Customs and copies should be provided to employees by 6 July 2007. In addition, Class 1A national insurance on benefits in kind should be paid by 19 July 2007. Penalties will be charged if forms P11D are not submitted by 19 July 2007 which for businesses with less than 50 employees start at £100 for each month or part thereof that the returns are late.
Those clients for whom we prepare returns and who have provided us with the necessary information will receive the returns for approval within the next four weeks if they have not received them already.
Declaring cash on entering or leaving the UK
From 15 June 2007 people travelling to or from a country outside the EEC will need to declare any sums of 'cash' they are carrying in excess of 10,000 euros or the equivalent in another currency. The term ‘cash’ covers currency, banker’s drafts, cheques, travellers’ cheques etc. Penalties of up to £5,000 can be charged for failing to declare the 'cash'. Forms to enable declarations to be made will be available at ports and airports.
Whilst every care has been taken in the preparation of these notes we can accept no responsibility for errors or omissions contained in them or for any loss arising from their use unless we have been consulted professionally prior to any action being taken.
UHY Wingfield Slater
Wellington House, 39 Wellington Street, Sheffield S1 1XB
Tel: 0114 275 1544 Facsimile: 0114 275 1366 Email: info@uhy-wingfieldslater.com Web Site: www.uhy-wingfieldslater.com
Registered to carry on audit work and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales
A member of the UHY Hacker Young Group of independent UK partnerships. A member of UHY, an international association of independent accounting and consulting firms.
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