Wednesday, 4 April 2012

Stamp price rises to soar

Royal Mail has announced steep rises in the prices of stamps from 30 April 2012.

The price of a first class stamp for a standard letter will rise from 46p to 60p and the cost of a second class stamp for a standard letter will rise from 36p to 50p.

The announcement, on 27 March, followed a decision by Ofcom on a new regulatory framework for Royal Mail after Ofcom said Royal Mail’s financial position put the viability of its universal service – its obligation to deliver mail to every UK address every working day – at risk.

Royal Mail said the price increases were needed to put the universal service on a sound, sustainable and secure basis.

Moya Greene, Royal Mail chief executive officer, said: “We know how hard it is for households and businesses when our economy is as tough as it is now. No-one likes to raise prices in the current economic climate but, regretfully, we have no option.”

Royal Mail said that UK businesses that use meters benefited from discounts of up to 38 per cent on stamp prices and that even after the increases, first class prices for letters sent in this way would be around four per cent lower in real terms than in the early 1980s and second class prices around 13 per cent lower in real terms.

But Forum of Private Business chief executive Phil Orford said:  “This will merely prove to be yet another increase in the cost of doing business for SMEs.

"We will certainly be looking over the shoulder of Royal Mail to ensure they don't punish the wealth-creating businesses by above-inflation increases. The quickest way for the Royal Mail to decline further is by pricing businesses out of their service.

For low income households, Royal Mail will keep stamps for letters for Christmas 2012 at the same price as in 2011. Households on pension credit and employment and support allowance (or incapacity benefit) will be able to buy up to three books of 12 stamps – 36 stamps in total – from any Post Office branch from 6 November until the last posting dates before Christmas.

If you want more information then please contact accountants in Lichfield.   

Link: Royal Mail announcement

Self-employed plumber jailed for tax evasion

A man has been jailed for 12 months for evading £91,000 of income tax and national insurance during ten years of trading as a self-employed plumber.

David Williams, 53, was sentenced on 27 March at Wolverhampton Crown Court. Mr Williams, of Rowley Regis, Sandwell, admitted charges of evasion of income tax, contrary to the Taxes Management Act 1970. He had been arrested in September last year after an HM Revenue & Customs (HMRC) investigation found thousands of pounds in cash at his home.

HMRC targeted plumbers in a special campaign in 2011. Nine more plumbers have been arrested and investigations are ongoing.

Other such disclosure campaigns have focused on offshore investments, medical professionals, private tutors and coaches, companies not paying VAT, electricians and online marketplace traders.

More than £500 million has been raised from these campaigns and more than £110 million from follow-up activity by HMRC.

Adrian Farley, assistant director of criminal investigation for HMRC, said: “We will not hesitate to investigate those we suspect of evading tax. I would ask anyone with information about people who may be involved in tax evasion to contact the Tax Evasion Hotline on 0800 788 887.”

Anyone wishing to make a voluntary disclosure of unpaid tax under one of the HMRC’s current campaigns can do so via

If you want more information then please contact accountants in Lichfield.   

Be prepared for Diamond Jubilee, employers told

Employers are being urged to plan ahead for the Queen's Diamond Jubilee holiday in June.

To mark the occasion, the last bank holiday in May has been moved to Monday, 4 June 2012 and there will be an extra bank holiday on Tuesday, 5 June.

Now Acas has reminded employers to plan ahead to avoid last minute leave request clashes or short-term absences.

Acas national helpline manager Stewart Gee said: "With two bank holidays at the beginning of June, employers may receive more requests for time off.

“We're already getting calls to the Acas helpline from employers seeking advice. It's important to be as fair and consistent as possible by having a policy on how to manage time off and leave requests so employees can join in the celebrations and employers can maintain morale at work." Acas says employers need to bear in mind the following points:
  • there is no statutory right to bank/public holidays, so the announcement of an extra bank holiday does not increase any entitlement to holiday under the Working Time Regulations.

  • whether an employee will benefit from the additional bank holiday will depend on the wording of their contract. For example, a contract that entitles a worker to, 20 days annual leave in addition to all statutory, bank and public holidays, would potentially give the worker an extra day's paid holiday. But if public holidays are listed by name, in a contract, a worker may not be automatically entitled to the extra public holiday.

  • there is no legal right to be paid any extra for working a bank holiday. This will depend on the terms of the employment contract.
If you want more information then please contact accountants in Lichfield.  

Link: Diamond Jubilee guidance for businesses

Auto-enrolment threshold to be aligned with tax

The government has announced that automatic pension enrolment rates are to be aligned with tax and national insurance thresholds, to streamline administration for businesses.

In October, the largest employers will be the first to start automatically enrolling employees into qualifying workplace pension schemes and making contributions to the schemes, to which employees who opt to stay in will also contribute. The roll-out programme will continue until 2018, by which time all new employers will be coming on stream automatically.

Announcing the measure on 26 March, Minister for Pensions Steve Webb said there had been an “overwhelming response” to the government’s consultation on the issue to align the automatic enrolment trigger with existing payroll thresholds.

He said: “This will help firms make a success of these reforms, as they will be able to better understand who is eligible to be enrolled.

"These changes strike the right balance between getting as many people into workplace pension saving as possible and ensuring that we do not enrol some people who would not financially benefit from saving.

“People who are excluded from automatic enrolment will still be able to opt themselves in, benefiting from a contribution from their employer.

Employers will therefore pay contributions on employees' earnings between £5,564 and £42,475 at 2012-13 rates. A worker will be automatically enrolled into a workplace pension scheme if they earn more than £8,105 per year, the same threshold above which they pay income tax.

The rates will be reviewed by the government each tax year.

If you want more information then please contact accountants in Lichfield. 

Link: Automatic enrolment guidance

HSE delays move to reclaim costs

The Health and Safety Executive (HSE) has delayed the introduction of a scheme under which it would recover its costs from businesses that break health and safety laws.

The HSE said on 15 March that the Fee for Intervention (FFI) cost recovery scheme would not now start in April 2012, as originally planned. It said it would be introduced at “the next available opportunity”, likely to be October 2012.

The scheme sets out to recover costs from those who break health and safety laws for the time and effort HSE spends on investigating and taking enforcement action. Businesses that comply with the law will not face any charge.

Gordon MacDonald, HSE's programme director, said: "The government has agreed that it is right that those who break the law should pay their fair share of the costs to put things right - and not the public purse.

"Discussions are still taking place on the technical details of the scheme, which we expect to conclude soon. Therefore, FFI will not be introduced in April but at the next available opportunity, which is likely to be October 2012."

HSE said it would be using the extra time to work further with businesses to improve their understanding of the scheme and how it will affect them. It is also trialling the new processes and procedures involved in operating the scheme.

Detailed guidance for employers and organisations will be available on HSE's website ahead of implementation.

If you want more information then please contact accountants in Lichfield.

Link: Background information on cost recovery scheme

R&D tax credit consultation launched

The government has launched a consultation on the new above the line (ATL) research and development (R&D) tax credit for larger companies, to help shape the way it should work when it is introduced in April 2013.

The new credit was originally announced by the government in the autumn of 2011 and flagged up by Chancellor George Osborne in his 21 March Budget.

Launching the consultation on 27 March, David Gauke, Exchequer Secretary to the Treasury, said:  “The ATL credit for R&D will encourage large company research and development, and ensure that the UK continues to be one of the most attractive places in the world to undertake R&D.”

The new ATL credit will be recorded in companies’ accounts as a reduction in the cost of R&D – i.e. as an ‘above’ the tax line – which will bring UK support for R&D into line with countries including France, Canada, Ireland.

It will be calculated as a percentage of the company’s R&D spend and Budget 2012 announced that the minimum rate would be 9.1 per cent before tax.

Loss-making companies will also be able to claim a payable credit. With the existing R&D tax credit, businesses must wait until they enter profit before they benefit from government support.

The small company R&D tax credit rate will rise from 200 per cent to 225 per cent from April 2012.

Existing R&D tax credit schemes provide around £1 billion a year support to around 9,000 companies carrying out over £10 billion of R&D expenditure.

If you want more information then please contact accountants in Lichfield.

Link: Consultation details