On 1 October 2007 a number of changes to UK legislation come into play that may affect your business. This article from SmallBusiness.co.uk gives a round up of the changes that are most relevant to SMEs.
New national minimum wage (NMW) rates
On or after 1 October 2007, you will have to pay all eligible workers – home workers, part-time workers, casual workers, agency workers and people who work on short-term contracts - at least the following:
£5.52 an hour to adult workers aged 22 and above
£4.60 an hour to workers aged 18-21
£3.40 an hour to workers aged below 18 who are no longer of compulsory school age
£4.30 a day or a total of £30.10 per week can be offset from the minimum wage rate if you provide accommodation for your workers
The NMW will not apply to training-related work experience in three new categories where workers are taking part in:
The Programme Led Apprenticeships scheme in England
The European Community Leonardo da Vinci programme
The European Community Youth in Action Programme
The NMW will also not apply to workers who are over compulsory school age and who are undertaking a full- or part-time further education course and who are required, as part of that course, to attend a period of work experience not exceeding one year.
Increase in the statutory holiday entitlement
From 1 October 2007, the statutory minimum annual holiday entitlement will rise from four weeks (20 days for those working a five day week) to 4.8 weeks (24 days).
Employees will be entitled to the increase in full as soon as they start work, but you will be able to restrict the rate at which they take leave in their first year of employment.
You can include time off for bank and public holidays in the entitlement.
You must calculate the increases proportionally, depending on when your leave year starts. You can round up partial days to the nearest full day or leave them as such. You will not be allowed to round down a partial day.
If both you and an employee agree to the arrangement, you will be allowed to carry over some or all of the additional holiday to the following year.
Changes to VAT invoicing
The following change only affects businesses selling to business customers in other Member States of the EU and/or those who use Margin Schemes, which allow you to calculate the VAT on the difference (or margin) between the buying price and the selling price of goods, rather than on the full value of the goods you sell, to avoid double taxation.
If you are in this group, from 1 October you must use sequential numbering to identify the invoices you issue. You can use both numbers and letters and each must form part of a unique and consecutive series. If you cancel an invoice, you must keep a copy of it to show that you have not broken the numbering sequence.
If you supply goods that are exempt, zero-rated or meet reverse charge criteria in the UK to businesses in other EU Member States, you will have to indicate on the invoices the reason for the exemption, or the requirement of the customer to pay the VAT.
Companies Act 2006
Additional sections of the Companies Act 2006 come into force, including the following:
A statutory statement of directors' duties will set out the duties and responsibilities of directors. For example, they will have to promote the long-term success of the company while considering factors such as the environment, community and employees.
The directors of medium-sized and large private companies and all public companies must - as now - include a business review in their reports.
There will no longer be a requirement for private companies to hold annual general meetings.
Raising the minimum legal age for tobacco sales
From 1 October 2007, you must not sell cigarettes, cigarette papers or any other tobacco products to anyone younger than 18.
To comply with the law, you must replace 16 with 18 in the signs in retail premises and on vending machines. The new signs must display:
In retail premises - "It is illegal to sell tobacco products to anyone under the age of 18"
On vending machines - "This machine is only for the use of people aged 18 or over"
For a full list of the upcoming changes visit www.businesslink.gov.uk
