Tag Archive | "regulations"

Is there a glimmer of hope in otherwise dismal economic times?

You cannot have failed to notice that there’s been a bit of trouble brewing in the Eurozone recently.

The UK’s membership of the European Union has never suited everybody and sure enough, the “Get out of Europe” brigade is having a field day.

Since we joined the EU, it’s been quick to impose thousands of regulations on us, many of which are expensive to implement and heap pointless bureaucracy on British businesses.

Take the Agency Workers Directive for example. The CBI warned that 250,000 jobs could be at stake if it was implemented and Open Europe has estimated that 80% of those affected will be in the UK. Furthermore, the impact assessment conducted by the Government estimated that it would cost British businesses £3.7 billion to prepare for AWR.

Then we have health and safety regulations. It has been estimated that health and safety regulations have cost the British economy £176 billion over the last thirteen years and 71% of that can be attributed to legislation from the EU. That’s almost £125 billion the UK has spent courtesy of the bureaucrats in Brussels.

If countries continue to muddle through the current crisis, the chances are that nations like Greece, Italy, Japan, Portugal and Spain plunge back into recession. There would also be a 70% chance of that happening in the UK.

Amid all the chaos it would have been easy to miss one piece of good news from the ONS! The UK CPI inflation rate dropped to 4.8% and the RPI fell to 5.2% last month; both down 0.2 percentage points. The Bank of England now expects inflation will drop to under 2% within the next 18 months. That will be something to look forward to!

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Home workers have an increased sense of honesty

A new study by the Ethisphere Institute and Jones Lang LaSalle has discovered that businesses that allow staff to work from home will benefit from increased employee honesty.

The two companies researched more than 200 firms, including contractor accountants, and 68% of them said they did allow employees to work remotely. When it comes to breaking rules, 11% of home workers were found to have been guilty, but this rose to 36% of office-based employees.

Mark Ohringer, the executive VP of Jones Lang LaSalle, said it’s easy to see why home based workers do not get embroiled in some of the distractions that cause trouble in the workplace.

It has been suggested that the responsibility that comes with working from home leads many people to become more security conscious and maintain a higher standard of honesty and discretion.

The CIPD’s employee relations adviser, Mike Emmott, recently said that working from home can bring many benefits to firms and provide them with a competitive edge.

However, XpertHR has warned that small businesses that let employees work from home must still take heed of their health and safety obligations.

Bar Huberman, the employment law editor for XpertHR, explained that it was a myth that companies are not responsible for the health and safety of their home-based employees. People working from home have nearly the same protection by law as those who work in an employers’ premises. Employers still need to ensure that the home workplace complies with health and safety regulations.

Huberman made her comments after it was disclosed that tens of thousands of workers in London will work from home when the Olympics are in progress to avoid congesting the transport network.

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Should online accountants review their privacy policies?

Analyst firm Gartner has predicted that a lot of businesses will concentrate on revising their privacy policies next year in the wake of ever-advancing technology.

The firm expects more than 50% of companies to tweak, or update, their existing policies to fit new regulations and the increased threat of cyber crime. Data breaches will more than likely be at the forefront of many privacy officers’ minds, Gartner suggests. However, it went on to say that the majority of companies should have adequate controls in place already and should only need to devote around 10% of their time to data security issues.

The second most likely area for privacy officers to focus on is location-based services such as cloud computing. The remote nature of these services makes them at odds with privacy. Another task will be to evaluate and create a process for determining the sensitivity of different sorts of information, but as with data security, once a process is established, it should only take around 10% of people’s time to maintain.

Finally, Gartner warns privacy officers that they must take the ever-changing regulatory environment into consideration and ensure they adjust company policies without getting too distracted by the changes.

Meanwhile, Stuart Hibbert, the chief executive of icomplete.com, has been extolling the benefits of cloud computing services. He explained that the cloud can provide businesses with low cost, high levels of functionality.

The biggest benefit of taking to the cloud is that you don’t need to buy your own servers, set the system up or back it up at the end of the day. It’s available 24/7 at a very small price. Hibbert also claimed that businesses will see increased productivity if they move to the cloud because users spend less time chasing people up.

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Flexible working and parental leave reforms could harm SMEs

The UK government has pledged to reduce red tape and yet its latest proposals to change parental leave and flexible working will increase bureaucracy, according to the FSB.

The Federation of Small Businesses has expressed its concern that the coalition’s plans to introduce changes to parental leave and extend flexible working will damage small businesses.

Although the FSB has been calling for reform of the parental leave regulations, the government’s proposed solution of allowing parents to take chunks of leave, instead of one block, would make it far more complicated to administer.

The government has launched a consultation on the proposals and the FSB will be contributing by expressing the opinion of small businesses.

The FSB’s national chairman, John Walker, said that despite promising to ease the burden of red tape, the government plans to introduce additional complexity which will make things even more time confusing and complicated for small businesses.

It will be extremely onerous for small firms and limited company contractors to organise workloads and cover for an employee who decides to take parental leave in chunks rather than a continuous block of time. The majority of small businesses already allow flexible working and the FSB urges the government not to make it mandatory for employers to consider requests for flexible working after a 26 week qualifying period as it would pile yet more red tape on them.

David Cameron wants the private sector to drive the economic recovery but changes to these regulations could further deter small businesses from hiring more staff, Walker concluded.

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Will accountants for contractors take on the Red Tape Challenge?

Since the coalition launched its Red Tape Challenge website, more than 6,000 responses have been received, according to government data.

Businesses and limited company contractors have been invited to submit their comments on current and forthcoming legislation to give the government an opportunity to adapt the regulations before they are implemented.

A lot of the published statements have called for changes in the retail environment and industry sector champion, Dr Kevin Hawkins, urges consumers, suppliers and trade associations to visit the site and express their concerns and solutions. He described the Red Tape Challenge website as a chance “too good to miss”.

He went on to say that this is the first time the government has given those at the sharp end of complex regulation the chance to be heard. This is a golden opportunity for business owners to tell politicians about the bureaucracy that wastes time and money and suggest ways to improve things for both themselves and their customers.

The business secretary, Vince Cable, says that unless ministers can come up with strong reasons why an item of unpopular regulation should remain, government departments will scrap it.

Amongst other legislation up for debate, the website contains 278 environment regulations, 264 concerning pensions and 151 that cover employment law.

The portal has already received concerns over the Care Quality Commission agency and health and safety guidance.

One man wrote that the CQC does not understand that dentists operate small businesses and do not have the staff to spend hours filling in forms and undertaking compliance audits. He went on to point out that too much reliance is put on box ticking exercises and the government doesn’t seem to appreciate that professional staff are regulated and are committed to providing the highest possible standards.

The owner of a small construction company recommended a rethink over the work time allowable for the use of steps and ladders.

However, not everybody is happy about this new government initiative. One lady asked why the public was being asked to contribute their views when MPs are paid to sort out these problems.

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Business confidence weak in areas reliant on public sector

Small businesses and contractor accountants are now less confident in their ability to create new jobs, according to research conducted by the FPB.

The end of last year was hard for the small business community and more of them than expected reduced their headcount. The immediate outlook is a little more encouraging and fewer SMEs expect to cut their payroll. However, business confidence is still weak in areas that depend heavily on the public sector. In Northern Ireland, confidence levels are at -25% and in Wales -11%.

22% of small businesses intend to hire new employees this year but this figure is well down on the 30% who were optimistic of growing their workforce when asked last December.

Two thirds of those planning to hire, expect to take on ready-trained employees whilst a third think they will have to devote time to training their new recruits.

37% of respondents to the survey expressed concerns about whether new employees would be able to fit in, 36% worried about the cost and amount of time needed to comply with employment regulations and a similar percentage said the lack of specialist or technical skills amongst new-hires made them anxious.

John Walker, the chairman of the FPB, said it was worrying that more small businesses than anticipated had to make staff redundant, especially with female and youth unemployment edging towards 1 million.

Small businesses need the government to give them a hand if they are to pick up the fallout from the austerity drive, he pointed out.

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Could contractor accountants get tax qualifications from HMRC?

Accountants for contractors might be pleased to hear that tax professionals working for HMRC are going to be able to study for Tax Professional Qualifications in a new scheme accredited by Manchester Metropolitan University.

The scheme will run in parallel to the existing partnership between the Revenue and the AAT for TPQs at foundation level.

The permanent secretary for tax, Dave Hartnett, confirmed that HMRC is establishing an academy for tax professionals to ensure standards in the department are raised. Staff will benefit from better and faster access to the skills they need and the link-up with Manchester Metropolitan University is another vital step towards achieving this goal.

Mike Falvey, HMRC’s chief people officer, said he thought this was a great opportunity for the Revenue and its tax professionals to improve the service it provides to its customers and stakeholders and to become recognised as a centre for tax professionalism.

The MMU’s accredited Tax Professional Qualifications will give external validity and recognition for HMRC’s higher level tax qualifications. The University’s Business School is already a leader in providing employer-based training. Tesco, PwC and Bank of New York Mellon are amongst its clients.

The TPQs are delivered in flexible modules that test amongst other things, communication, dispute resolution and negotiation.

The UK has become swamped by new tax legislation in recent years and accountants and business owners have been quick to point out that HMRC staff don’t understand some of the regulations. Hopefully these new qualifications will enable the Revenue’s tax professionals to comprehensively answer queries in the future.

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Will new visa stop skilled accountants for contractors coming to the UK?

John Hayes, from the law firm Irwin Mitchell, has suggested that UK employers may find it more difficult to attract top talent once the government’s cap on Tier 1 migrant workers comes into force.

The immigration minister, Damian Green, announced earlier this month that a new points based system for Tier 1 visas will come into operation on April 6th. 1,000 visas will be made available to exceptionally talented migrant workers in the fields of art, science and humanities. People who are awarded the visas will be allowed to stay in the UK for a period of three years and four months and will be given the option to apply for an extension to remain for an additional two years. After five years in the UK, the visa holder would be entitled to settle here.

Employers are already predicting that the 1,000 cap will cause practical problems, Hayes said. Although we do not know the full details of how these new visas will work, we do know that an accredited competent organisation will have to endorse that an applicant possesses an exceptional skill. Furthermore, people who obtain these exceptional skill visas will be exempt from the maintenance and English language restrictions, which will make them more attractive.

Any foreign nationals who are currently in the UK on a skilled worker visa and want to change to a highly skilled visa should be aware that the deadline for applications is April the 5th.

The new regulations could encourage more transatlantic start-ups to set up in the UK. People coming to Britain from non-EU countries will be granted faster settlement rights if are investing in excess of £5 million in a British based enterprise.

In April, the government is introducing a new visitor visa for prospective entrepreneurs. This will allow them to come to the UK in order to secure funding and start up their venture in advance of obtaining the full tier 1 visa.

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Businesses are reasonably confident but consumers are not

New research from KPMG shows that whilst the majority of UK companies are optimistic about the prospects for the future, the complexity of rules and regulations are still a barrier to growth.

YouGov conducted the survey of more than 500 firms and discovered that 72% of companies think there is an opportunity for their business to grow despite the government’s austerity measures.

56% of businesses are still confident about the general outlook for their company and 47% said overseas opportunities are helping UK firms compete better globally. 26% of the survey’s respondents also reported an increased production capacity.

60% of businesses and limited company contractors said they were concerned how the budget would impact their firm and 52% highlighted the fact that complicated rules and regulations restricted their ability to grow. 43% of business owners are also still concerned that it is hard to access funding from the banks.

KPMG’s head of UK markets, Malcolm Edge, said businesses agree that the government needs to do more to encourage growth. Companies need the assurance that something will be done to reduce bureaucracy and provide support to help companies achieve sustainable growth.

Whilst businesses are generally optimistic, the opposite is true of consumers. The most recent report from Nationwide shows a significant fall on consumer confidence last month.

The chief economist at Nationwide, Robert Gardner, said consumer confidence has now fallen to its lowest level since the institution started its regular survey.

There are many factors that could be contributing to this, he continued. We still have a fragile labour market, high unemployment and a weak growth in salaries. There is little sign of inflation easing and disposable incomes have been hit by rising fuel costs and the increase in VAT. The economic recovery is still sluggish and there was not much positive news last month to boost consumer’s confidence, he concluded.

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Who are the enemies of contractor accountants?

David Cameron has attacked the people he considers to be the enemies of enterprise that are threatening to hold back British businesses.

Speaking at the Conservative spring conference in Cardiff, the PM repeated his commitment to the promotion of economic growth. Cameron said that as well as having a positive social impact, new enterprises are good for the economy. He did however admit that we have our work cut out to encourage people to form a limited company.

For more than 10 years, the enemies of enterprise have taxed, regulated, smothered, crushed and generally got in the way, he said.

George Osborne’s budget later this month will lay out specific measures to help business start-ups. These could include the removal of bureaucracy and the easing of regulations.

Meanwhile, existing companies are confused about the requirements of the new senior accounting officer legislation adding compliance costs to their existing financial burden. However, Deloitte says most are in a good position to comply.

According to Deloitte’s research, 11% of organisations have complete confidence in their compliance, although 69% expect to file an unqualified certificate. The areas that are causing most concern are VAT, PAYE, corporation tax and excise duties.

The new rules mean that senior financial officers now have to certify annually that their company systems are fit for tax reporting purposes. The legislation only affects companies with a turnover in excess of £200 million.

HMRC had assured companies that the sign-off would not lead to increased costs, 50% of respondents claimed the costs had been significant. 13% did admit that the increased cost of compliance has been set off in part by the savings they discovered during the review process.

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Companies are completely confused by government regulations

The continual changes to employment and tax regulations are leaving companies confused, stifling the country’s competitiveness and hindering job creation.

61% of businesses are unclear as to what is classed as tax avoidance and what constitutes legitimate tax planning and 33% believe they are treat as guilty by HMRC until they can prove their innocence, according to BDO LLP.

A large proportion of UK companies think the current tax framework is to complex and the situation is made worse by HMRC’s aggressive stance. Companies feel they now need to spend more time on their tax affairs instead of focusing on growing their business. Dealing with the Revenue has become more of a burden in the last five years, according to 65% of business leaders and 88% think things would be much easier if the tax rules were simplified.

Employers also have to fight their way through a ridiculous amount of employment legislation. David Frost, the director general of the British Chamber of Commerce, said that there was a growing consensus that employment law is weighted in favour of employees. A lot of employee rights have been implemented as a result of EU legislation but European labour markets are very different to ours.

The UK government should be prioritising job creation as this will lead to future prosperity. Mr. Frost said the coalition must desist from implementing any new employment laws for the next three years and cancel the 1% increase in employer NICs in order to encourage companies to recruit more staff.

Over the next four years, BCC estimates show that new legislation and tax will cost UK employers £25.6 billion.

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Are contractor accountants held back by employment legislation?

Contractor accountants should be aware that the government is planning to overhaul the UK’s employment laws in order to help the economic recovery.

One of the proposals, which has already provoked fury, is to allow firms to fire employees who are underperforming during their first two years of employment, without the threat of facing an unfair dismissal tribunal. Under the current regulations, an employee can seek redress from an employment tribunal if they are sacked after 12 months.

The coalition is also looking into the system of tribunals at present. Business groups, such as the BCC are urging for immediate reform but the TUC suggested that workers could be discouraged from seeking justice if major changes are implemented.

Union leaders are also concerned that increasing the qualifying period to two years could give a green light to unscrupulous employers to break the law.

The coalition is likely to launch a consultation into the future of tribunals after business groups complained that there was a 56% increase in the number of cases in 2010.

One possible solution would be to charge claimants a deposit of up to £500 which would be refunded if the case was successful. But the TUC argues that this will deter low-paid workers from seeking justice.

Meanwhile, Vince Cable, the business secretary, has been asked to look into whether small businesses could be exempted from some employment regulations but any such changes could see the government in hot water from the EU.

David Cameron wants to see new jobs created this year in order to boost the economic recovery and whilst large companies have promised to do exactly that, smaller firms need more encouragement. Reforming the employment tribunal system and reducing the red tape for small businesses could go a long way towards providing it said David Frost from the BCC.

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Vince Cable celebrates Global Entrepreneurs Week

The government is determined to get rid of quangos and yet advisory groups are already popping up around the small business regulations and tax issues that affect contractor accountants and their clients.

On Monday, Vince Cable, the business secretary, created the Entrepreneurs’ Forum to advise the coalition on business and enterprise policies. The group, which is made up of high profile entrepreneurs, will meet four times a year to give informal and personal advice. 16 entrepreneurs have already been appointed to the forum, including Jan Fletcher and Sarah Tremellen, and there may be up to 10 more members.

Setting up the Entrepreneurs Forum was one of the ways Vince Cable marked the start of Global Entrepreneurship Week. He also created a new business mentoring network. The network consists of around 40,000 business mentors who will help start-up enterprises across the country access information and advice on running a successful business.

The business secretary called on firms around the country to join the mentoring network. People who have started up their own successful company have to be the best mentors for new start-ups, he commented.

Cable also remarked that start-up businesses and limited company contractors are going to be important to the country’s overall economic recovery. He said that not only do start-ups create jobs, they stimulate innovation and provide competition for existing businesses which encourages them to increase productivity.

Recently, the government confirmed that the Enterprise Finance Guarantee scheme will continue for the next four years. About £2 billion will be made available to firms through the scheme.

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