Woman whose babies are due on or after 6 April 2003 are to be entitled to maternity leave of up to one year. As an employee can choose to start her maternity leave up to 11 weeks before the baby is due, the new rules can apply from the 19 January 2003. The pay period for maternity leave has also been increased from 18 to 26 weeks.

Statutory Paternity Pay and Leave

The new entitlement to Statutory Maternity Pay and Leave begins on or after 6 April 2003. Paternity pay and leave cover a period of two weeks and are available to the biological father of a child or to the mother’s partner or husband.

Statutory Adoption Pay and Leave (SAP)

This new measure becomes available from 6 April 2003. SAP is payable for 26 weeks and leave is available for up to one year in total. If a couple are jointly adopting a child, one member of the couple can choose to have SAP whilst the other can elect to have Statutory Maternity Pay and Leave. If you require any further information on the new provisions please give us a call.

Statutory Sick Pay and short term contract workers

From 1 October employees including those with short-term contracts for less than three months may be entitled to Statutory Sick Pay provided the standard guidelines for qualification are met. If you require any further information on this matter please give us a call.

New minimum wage rate

The new minimum wage rates become effective from 1 October 2002. These are Ł3.60 per hour for the development rate and Ł4.20 for the main rate.

Disabled employees

The rules regarding the provision by employers of special equipment in disabled employees’ homes to enable them to carry out their duties have been changed to remove the possibility of a tax charge on the employee. This type of equipment is now fully exempt from tax.

Deductibility of interest payments

The Advocate General of the European Court of Justice, in a preliminary ruling in the Bosal Holdings case has recommended that the tax deduction should be available to a European Union parent company borrowing funds to finance a European Union subsidiary, even if that subsidiary does not have a source of income in that European state.

If the European Court follows the recommendation it is likely that tax relief granted to a UK parent of a UK group would have to be extended to the UK parents of European Union companies. This could include, for example, loss relief on capital taxes deferred.

The decision of the European Court of Justice is due in December.

Controlled foreign companies – Ireland

Regulations have been placed before the House of Commons to effect the change in treatment of Irish companies.

From 11 October 2002 Irish companies will no longer be automatically exempt from the controlled foreign company (CFC) legislation.

The CFC legislation is a complicated area of tax law. If you think your business might be affected by the change please give us a call to discuss the potential implications.

Corporation tax on chargeable gains

The retail price index for August 2002 is 176.4.

National Insurance contributions appeals

The new legislation governing appeals against NIC-related decisions come into effect from 8 October 2002.

The regulations give the contributor a definite right of appeal in certain areas, the main ones being:

· Directions given to employers to prevent loss where the compliance officer believes pay practices are designed to avoid or mitigate NICs;

· Decisions on whether claims for refunds can be made late because of reasonable excuse;

· Decisions on whether late payments or unpaid contributions can count towards contributory benefit or pension entitlement.

VAT – three year cap and retrospective claims

Customs are now allowing a retrospective transitional period for claims, which were, or could have been, made before 31 March 1997.

If you made a claim for overpayment of VAT before 31 March 1997 relating to overpayments before 4 December 1996 and that claim was capped at three years, the claim can now be resubmitted. If you were aware before 31 March 1997 that you had overpaid VAT but had not submitted a claim you may now be able to do so.

If you think this change might affect you please call us to discuss the implications.

VAT – bad debt relief

The changes to the law covering bad debt relief will be introduced on 1 January 2003.

The main changes are that businesses claiming bad debt relief will be required to issue notification of their claim to customers. Businesses will also have to monitor the time they take to pay their suppliers and repay input tax if they have not settled within six months of the relevant date.

VAT – new export system

If you are involved in making third country exports or you make export declarations to Customs, you have to be able to communicate electronically with Customs by 27 October 2002.

If you have not yet asked to put in place the necessary systems and procedures then you need to take action immediately. If you require any assistance in this matter please contact us.

Transfer relief and variation of a will

Where there is a variation of a will or intestacy within two years of death, the Capital Taxes Office now accepts that taper relief runs from the date of death and not that of the variation.

Website and e-mail advertising and selling

New regulations which took effect from 21 August, governing e-commerce and covering the provision of information, electronic marketing and contracts, require businesses with commercial websites to make changes ranging from extending contract details to electronically acknowledging orders.

Failure to comply could result in the cancellation of orders or, from 23 October, “stop now” orders being issued which if ignored could lead to imprisonment or fines.

The requirements include:

· Provide your full name and contact details, including postal and e-mail addresses to allow customers to get in touch quickly;

· Provide, if applicable, your VAT number and details of any trade associations you belong to;

· Give a clear indication of prices if you refer to them, with details of any associated taxes and delivery costs;

· Clarify what steps are involved to conclude a contract, and the point at which the purchaser is committed to it;

· Acknowledge receipt of an order electronically and without delay;

· Give customers the chance to check an order and correct any errors before placing it;

· Make sure customers can store and reproduce any terms and conditions you supply, for example, by putting them in a format which can be saved on a computer and then printed out;

· Tell customers how they can access any codes of conduct relevant to that particular order;

· Make sure electronic communications promoting goods or services – such as a marketing e-mail - are clearly identifiable as commercial communications;

· Make sure recipients can identify unsolicited marketing e-mails immediately, perhaps by putting “unsolicited advertisement” in the header;

· Clearly identify any discounts or promotions on your website or in e-mails, ensuring any qualifying conditions are accessible and clear.

The DTI has published business guides, but these have been criticised for being too general. The DTI website carries more information on how to comply with the new regulations. The booklet “Guidance for Small Businesses on the Regulations” can be accessed as either a Word document or pdf file.