Small business legislation is a colossal subject area and new regulations are being introduced in 2009. Below is a summary of some of the main forthcoming regulations that might affect you and your business.
• Extension to holiday entitlement - Parts of the Working Time (Amendment) Regulations 2007 come into force in April 2009, increasing statutory leave from 4.8 weeks’ paid annual leave to 5.6 weeks. Bank and public holidays can be included in a worker’s minimum holiday entitlement; alternatively they can be offered in addition to the minimum entitlement.
• The Health and Safety Offences Act 2008 - The Act comes into force on 16 January and will increase penalties and provide courts with greater sentencing powers for those who breach health and safety legislation. The Act raises the maximum penalties that can be imposed for breaching health and safety regulations and broadens the range of offences for which individuals can be imprisoned.
• VAT Flat Rate Scheme entry - With effect from 1 April 2009, the test that requires a business to check that its total income is less than £187,500 for entry into the VAT Flat Rate Scheme will be removed. Instead, eligibility to join the scheme will be determined solely by the taxable turnover of the business, which must be less than £150,000.
• Corporation tax - The 2008 Budget revealed somewhat controversial plans to raise small business corporation tax to 22% in April 2009, up from 21% in 2008. The Chancellor announced in the Pre-Budget Report back in November 2008 that he would postpone the rise until 2010. The stalemate scenario affects businesses with profits of up to £300,000, which could provide some welcome relief for small firms.
• Extension of trading loss carry back - Usually, a company can carry back a trading loss that occurs in an accounting period for 12 months and offset the loss using profits gained from any source. New rules for 2009 mean that companies can carry back their trading losses for up to three years, in certain circumstances, and for accounting periods that end between 24 November 2008 and 23 November 2009. Unincorporated businesses can make a claim for trading losses for the tax year 2008-09.
• Empty property rate relief - The Pre-Budget Report brought both good and bad news regarding empty property rates. The good news is that properties with a rateable value below £15,000 are exempt from paying business rates. The bad news is that, after months of campaigning by businesses and the property sector to get the unpopular empty property levy scrapped, the tax remains in place, affecting owners of vacant properties that have a rateable value of £15,000 or more.