Regulation date nearing #6April Each yea

Regulation date nearing #6April

Each year, the government introduces regulatory changes affecting businesses on two common commencement dates. These dates are 6 April and 1 October.

There are a number of changes due to come into force in April 2011. What follows is a summary, but not an exhaustive list, of the more important new rules with which businesses will need to comply.

Some changes have a bearing on the financial year and, as a consequence, may be effective from 1 April.

Corporation Tax

The main rate of corporation tax drops from 28 per cent to 26 per cent, while the small profits rate drops from 21 per cent to 20 per cent, both for the financial year that begins on 1 April.

Electronic filing for corporation tax

As from 1 April 2011, all companies and organisations must file their company tax returns online in the iXBRL format. This covers any accounting period ending after 31 March 2010. What’s more, they must make their payments electronically too.

The rules on how to calculate corporation tax have not altered, nor has the return itself.

Any company or group that is required to put together accounts under the terms of the 2006 Companies Act must now do so using the Inline eXtensible Business Reporting Language or iXBRL. The format is designed specially for business reporting. Information that relates to the period of the company tax return must be tagged accordingly. Unincorporated organisations such as charities, clubs or societies, or a charity that is incorporated under the Charities Act, must file their computations using iXBRL.

In the case of groups of companies, the individual companies must submit their returns in the iXBRL format. Should a parent company be required to put together group accounts in addition to separate accounts, these must also be filed in iXBRL. However, the consolidated accounts need to include the same details about the parent company as the individual accounts would have done.

The new rules apply to the filing of year-end P35 and P14 forms and in-year P45 and P46 forms.

All corporation tax payments, and related payments such as the interest charged on overdue payments and late filing penalties, must be made electronically. Online that means direct debit, using debit or credit cards on the BillPay service, or using a bank’s or building society’s internet service. Offline electronic methods include BACS, CHAPS or a telephone banking service.

There are only two exemptions from the new rules. These are companies whose directors and company secretary are members of a religious faith whose beliefs run contrary to using electronic communications, and companies that are subject to a winding up order or are in administrative receivership.

Industry taxes

As from 1 April, the rates that apply to Landfill Tax, the Aggregate Levy and the Climate Change Levy increase as appropriate.

Stamp Duty Land Tax

A new rate of SDLT of 5 per cent applies to the sale of residential properties of a value of £1 million or higher. However, this does not cover non-residential or mixed-use properties. Where contracts were embarked upon before 25 March 2010 but were not completed by 6 April 2011, it is likely that the new charge will not apply.

Employment regulations

Extra paternity leave

As from 3 April, there are important changes to paternity leave and pay.

New fathers gain the right to additional paternity leave and pay (APL&P) if their partner gives birth on or after 3 April 2011.

Additional paternity leave (APL) means a father can take up to 26 weeks’ leave to care for the child.

Under the new regulations, parents have the option of dividing maternity leave between them. Fathers have the legal right to take up the final three months of paid maternity leave due the mother provided she returns to work. They will be paid the statutory maternity pay per week for the three-month period.

They will also have the chance to take a further three…

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