Health and safety on the road

Hands up all those employers who take a fairly relaxed approach to health and safety, because they think their work place is really quite a safe place, maybe an office?

Well consider this……

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It is estimated that one third of all road traffic accidents involve someone who is ‘at work’!

Maybe you are thinking that providing all vehicles have a valid MOT certificate and the driver has a valid licence, then as employer you have done all you need to do – think again!

Health and safety law applies to ‘on the road’ working activities just as it applies to other work activities. If you send employees out onto the road, even if its only occassionally, then you have a legal duty to consider the risks they face as part of your health and safety system. Guidance is available from the HSE website.



By Jeremy Scott, Head of Regulatory and Corporate Defence at Langleys

Leading Lincoln law firm Langleys is alerting employers to the ruling in a recent case in which a company was fined £30,000 for breaches of health and safety legislation relating to the death of an employee who fell asleep at the wheel.

The driver was involved in an accident whilst driving home following a third consecutive shift of nearly 20 hours. The case is thought to be the first of its kind in the UK where the company in question was convicted even though their employee died outside working hours, on his commute home.

The Court in the ‘Produce Connection’ case found that the potato company had failed to monitor their employees’ working hours. The court heard that the driver was thought to be suffering from “chronic fatigue” and had subsequently fallen asleep at the wheel. The company was ordered to pay the fine, together with costs of £24,000, after admitting two breaches of health and safety law.

This case demonstrates the need for employers to seriously think about the impact of driver fatigue, during both working hours and also on the commute home. A number of recent and current investigations show that the police and HSE will be jointly investigating accidents with a view to including not only the employee who was driving, but also the employer, in any subsequent prosecution. Company directors and other senior employees could find themselves in the dock facing not only large fines but also a prison sentence following the increase in penalties under the Health and Safety (Offences) Act 2008, which has only recently come into force.

Langleys would advise employers to carry out appropriate risk assessments both in relation to employees and also in respect of each vehicle used and each journey undertaken. Thereafter they need to set up policies relating to driving, making it clear that any breach constitutes a disciplinary offence, provide ongoing training and back this up with relevant training records

The guiding principle here has to be that employers should periodically review driver fatigue, both during ‘at work’ driving, and during commuting, and develop measures to guard against it.

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Minimum wage increased from 1 October 2009

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New minimum wage rates will apply from 1 October 2009. These show a small increase from the 2008 rates, the increases having been proposed while the rate of inflation was considerably higher than now.

The new rates and rates of increase are :

  • Full rate (age 22 and over) – new rate £5.80 per hour; old rate £5.73 per hour; increase 1.2%
  • 18 – 21 rate – new rate £4.83 per hour; old rate £4.77 per hour; increase 1.25%
  • Youth rate – new rate £3.57 per hour; old rate £3.53 per hour; increase 1.1%

More information on the minimum wage is available from the HMRC website which has a dedicated National Minimum Wage area.

HM Revenue & Customs are responsible for monitoring the National Minimum Wage. It is they who will fine you if you fail to pay the correct rates. Currently fines are 50% of the underpayment due to workers subject to a minimum £100 fine and maximum £5,000 fine.

From 1 October 2009 employers cannot use tips to make up wages to the National Minimum Wage, regardless of whether employees receive them through the payroll or in some other way.

VAT number verification

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The European Commission have enhanced their on-line service which allows taxpayers to check if the VAT number given to them by a potential supplier or customer is valid.

The on-line service has been updated to allow taxpayers to obtain a certificate to prove that they checked that a VAT registration number was valid at a given time and date.  This system has been designed primarily to protect taxpayers who become innocently involved in a chain of fraudulent transactions such as carousel fraud.

The certificate will provide valuable evidence for a taxpayer to prove that they acted in good faith should HMRC challenge input tax recovery or seek payment of lost VAT.

The new on-line system will also be useful to businesses who zero-rate sales to businesses in other EU countries.  Specifically in meeting one of the conditions for zero-rating which states that your customer must be VAT registered.

The on-line service is available at the following address:

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Chilcare and Child Tax Credits

In order to qualify for Child Tax Credits (CTC’s) the person responsible for taking care of your children (child) had to be registered with the Childcare Approval Scheme.


From 18 July 2009 the Childcare Approval Scheme ceased to exist and all childcare providers approved under this scheme (for example a nanny or foster carer working as a childminder) must either become registered with Ofsted or they will become unregistered providers.

Taxpayers who are affected by this change are advised to check with their childcare provider to see what they have done or plan to do.

It is no longer possible to claim tax credits unless the childcare provider is registered with Ofsted from 18 July 2009.

If a childcare provider does not intend to register with Ofsted, an alternative registered provider would need to be used in order to be able to claim or continue claiming the childcare element of tax credits.

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Make the most of capital allowances

The rules on capital allowances have been changed and are now generous towards most small businesses. If you are thinking of investing in assets that qualify for the Annual Investment Allowance (AIA) during 2009-10 it is worth bearing in mind the additional relief you can claim to take advantage of the 40% First Year Allowance (FYA) that is available for one year to 5 April 2010 (1 April 2010 if you trade as a company.)

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For most businesses the only assets that do not qualify for the AIA or the FYA are motor cars. Although don’t forget that if you buy a car with CO2 emissions under 110g/km a special 100% allowance can be claimed.

The AIA allows you to write off 100% of qualifying expenditure during 2009-10 up to a total spend of £50,000.

But what happens if you spend more than £50,000? Let’s say you invested £80,000 during 2009-10 in assets that qualify for the AIA and FYA. You would be eligible to claim the maximum £50,000 AIA and a 40% FYA on the excess. This would make your potential, combined claim £62,000, or an overall 78% tax write down in one year.

Even if the claims created net tax losses in 2009-10 this may enable your business to recover some of the tax paid in the previous three years.

Please call if you need more information on this topic, particularly, does your intended investment in new equipment qualify for these reliefs?

Employment Law – new vetting scheme

Changes to employment law are underway. From the 12 October 2009 new measures are being introduced to vet the suitability of persons working with children or vulnerable adults.

It is to be called the Vetting and Barring Scheme (VBS) and will be

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administered by a new public body to be called the Independent Safeguarding Authority (ISA).

From July 2010 all new employees can register with the ISA.

From November 2010 all new employees and volunteers must register before they start work. Until they have registered they cannot be legally employed.

Failure to comply with the new registration demands could possibly result in custodial sentences for the employee and the employer!

A range of useful online tools, posters and leaflets can be downloaded from the ISA web site at .

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Construction subcontractors in the firing line

CHICAGO - APRIL 23:  (L-R) Eric Gant, Rudy Vaz...HMRC have indicated that they are considering reclassifying self-employed construction workers as employed. They have actually launched a consultation process with interested parties. Reclassified workers would be taxed through the PAYE system regardl

ess of the length or brevity of each employment assignment.

HMRC are convinced that a significant number of construction workers are taxed as if self-employed even though they are providing their ser

vices to contractors effectively as if they were employees.

HMRC are calling this status issue “false self-employment”. HM

RC plan to introduce legislation to protect income tax and national insurance revenue that they feel is being lost.

The consultation document that HMRC have published assumes that these changes will happen and simply seeks input as to how such changes should be introduced.

Comments on this proposal have to be sent to HMRC before the 12 October 2009; so change, if it is coming, may not be that far away!

What happens to my pension fund if I die?

The quick, or perhaps not so quick answer to this question can be found in the small print of your pension fund rules and regulations. The tax position and the practical answers tend to fall into the following broad headings

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Up to age 75 you will have a degree of flexibility in the way in which you chose to take benefits from your fund. After age 75 you will be required to crystallise your fund – draw an income from your fund or buy an annuity. Interestingly after age 75 you also lose the right to take a tax free lump sum.

Usually you can crystallise your pension fund from age 50 (until 5 April 2010), 55 after 5 April 2010. In the event of your death before age 75 your dependents have two choices:

  • your spouse, civil partner or other dependents can use your fund to provide a pension. Any pension received would be taxed as earned income in the usual way, or
  • your beneficiaries could elect to take the entire fund less a tax charge of 35%.

Once you have taken an annuity (i.e. you have purchased the right to a guaranteed income for the rest of your life) when you do die the right to the income ceases unless:

  • the annuity provides for a guaranteed minimum period of payment and part of that minimum period is unexpired, or
  • the annuity provides for a spouse or civil partner’s pension.

In all cases once an annuity is purchased the right to recover any of the pension fund surrendered is lost.

After age 75 the situation is a little more complex!

If an annuity is purchased the above comments still apply. However it is possible to take an alternatively secured pension, an ASP, This provides for an income, a pension, but does not require you to part company with your pension fund. If you die whilst taking an ASP the following choices apply:

  • the fund may be used to provide a pension for a spouse, civil partner or other dependent, subject to tax.
  • on the subsequent death of the spouse, civil partner or other dependent the fund can be passed to a charity with no tax charge.
  • if the fund is not passed to a charity it is subject to inheritance tax (at 40%). The residual 60% then remains unallocated. The legislation is unclear on how the unallocated fund can be used or indeed how long it remains unallocated. However if the pension scheme rules allow, it may be possible to add additional members and benefit them accordingly.

So the answer to the question, what happens to your pension fund when you die, is complicated. If you need clarification regarding your own scheme have a word with the Independent Financial Advisor who set the scheme up for you. If you need advice on the tax consequences we would be happy to take a look for you.

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New rules at Companies House

If you are a company director, from the 1 October 2009 you can protect your home address from disclosure.

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If you would like take advantage of this new concession you need to register a service address, which could be your registered office address, with Companies House. This can be done online from the 1 October 2009. All clients can use our address as their registered office, although this is for Companies House and HMRC correspondence only and not for general business purposes.

If you take no action your home address will be taken as your service address until changed.

Just a quick reminder that other recent changes include:

1. You must be aged 16 or over to be appointed as a director.

2. You no longer have to appoint a company secretary, although you can do so if you wish.

3. You no longer need to hold an AGM unless you opt to do so.

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