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Bereavement leave for parents who lose a child

By P&A Knowledge Team • 19 October 2017 • Posted in Employment Law

The Parental Bereavement (Leave and Pay) Bill has been published by the government. Although the Bill is a Private Members’ Bill, it has the full support of the government and therefore the Bill and its explanatory notes have been prepared by the government with the consent of the relevant MP. It is due to have its second reading in the House of Commons on 20 October 2017.

The Bill provides a right for employed parents to be absent from work for two weeks following the death of a child under the age of 18. All employed parents who meet the eligibility conditions will be entitled to this leave, regardless of how long they have worked for their employer.

The Bill also provides that those eligible parents who have at least 26 weeks' continuous service with their employer by the end of the week before the week of the child’s death will be entitled to receive parental bereavement pay during their bereavement leave, to be paid at the statutory flat rate (currently £140.98 per week) or 90% of average weekly earnings, whichever is lower. In line with other entitlements to statutory pay, the Bill enables employers to claim back parental bereavement pay from the government.

Finally, parents taking parental bereavement leave will have the same employment protections as those associated with other forms of family-related leave. This includes retaining their existing terms and conditions of employment during parental bereavement leave (except for pay) and protection from detriment or dismissal as a result of having taken leave.

Currently, there is no legal obligation on employers to allow parents paid time off work to grieve following the death of a child. Compassionate leave is entirely at the discretion of the employer. The only statutory right is to a “reasonable” amount of unpaid time off to deal with an emergency involving a dependant, including making arrangements following the death of a dependant. The introduction of a specific statutory entitlement to parental bereavement leave and pay will therefore set a minimum standard for employers and employees.

The Bill applies in England, Wales and Scotland and it is anticipated that its provisions will come into force in 2020.

HMRC to stop accepting personal credit cards

By P&A Knowledge Team • 18 October 2017 • Posted in General

HMRC has confirmed that they will no longer accept payments with a personal credit card from 13 January 2018. This includes payments for income tax, PAYE, VAT and many other taxes. This is due to the implementation of the EU second Payment Services Directive (PSDII). This legislation makes a number of reforms to the way payments by debit and credit cards, direct debit, credit transfers, standing orders and other digital payments are made.

One of the main changes as a result of this new legislation will be the removal of extra charges for making payments by credit cards. This practice known as ‘surcharging’ is common across a wide range of businesses including some local councils and government agencies. These changes will bring an end to this practice and force companies to choose between absorbing the costs associated with accepting credit card payments or to stop accepting credit cards.

Currently, if you use a personal Visa or MasterCard credit card to make payments to HMRC, this will incur the lowest card charges.

Planning note

HMRC will continue to accept payments by debit card or corporate credit cards as well as all other payment methods. Payments by corporate credit cards will continue to be accepted with fees of at least 1.5% depending on the type of card used. HMRC is also removing the option of making a payment through a Post Office from 15 December 2017.

Inactive companies and Corporation Tax

By P&A Knowledge Team • 18 October 2017 • Posted in Corporation Tax

There are a number of scenarios where HMRC would consider a company or organisation to be inactive for Corporation Tax (CT) purposes. This is a different categorisation to a 'dormant' company and usually happens when a company has not commenced trading.

A company, whilst not yet active for CT purposes, can still carry out activities (known as ‘pre-trading activities’) or incur costs (known as ‘pre-trading expenditure’).

HMRC’s guidance states that activities or expenditure that are not considered trading by HMRC for CT purposes include:

  • preliminary activities such as writing a business plan or negotiating contracts
  • preliminary expenditure such as incurring costs with a view to deciding whether to start a business

When a company has previously traded and then stops it would normally be considered dormant. A company can stay dormant indefinitely, however there are associated costs and certain filing obligations. This might be done if a company is restructuring its operations or wants to retain a company name, brand or trademark.

Planning note

The costs of restarting a dormant company are typically less than winding up a dormant company and restarting at some future date with a new company.

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