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Peter Arrowsmith FCA outlines a selection of NIC matters, and highlights a Potential Trap for Businesses upon Incorporation.

New EC Regulations

EC Regulations 987/2009 and 988/2009 were at last published on 30 October 2009. The former sets out the procedure for implementing Reg 883/2004 and the latter amends the 2004 Regs. Publication paves the way for the 2004 Regs to at last be implemented on 1 May 2010 as most recently planned. Advance publication of six months is necessary before implementation, so the last possible publication date was Saturday 31st October which was met on the very last working day possible without there being another delay in the timetable.

Swine 'Flu

HM Revenue and Customs is asking employers, during the swine 'flu pandemic, to consider evidence other than a doctor's certificate as proof of an employee's illness. This will help reduce the burden on employees. Employers are also free to decide to extend the self-certification period (usually seven days) if they feel that this is appropriate. Employers who operate an occupational sick pay scheme and have their own rules about sickness evidence are also being encouraged to operate similar relaxations.

New Credits Appealable

Decisions in respect of entitlement to the new credits that will replace Home Responsibilities Protection next April will carry full appeal rights following the Pensions Act 2007 (Supplementary Provision) Order 2009 (SI 2009/2715).

Tip of the Month - November 2009

Over past years many unincorporated businesses have become limited companies. Where car operating leases were running, these will have been subsumed into the new company - though often without strict contractual requirements having been observed. Often the fact that fuel was included and being paid for by the company was overlooked with Class 1A liabilities remaining outstanding. Alternatively, and more worryingly, where the leases were not novated then the payment of the monthly charges by the company of personal liabilities will have attracted a Class 1 charge (subject to business use). Such liabilities are often uncovered on employer compliance visits, so please don't be surprised.

Whilst the leases extant at the time of the big upsurge in incorporations will have run their course by now, you need to ensure that your clients have entered into new contracts correctly with the new company and that the correct benefits are accounted for as regards both tax and NIC. That is unless it is preferred to keep the cars out of the company altogether in which case the rentals should either be paid for privately or charged to an in-credit current or loan account and the contracts should be personal contracts and not company contracts.

The above is taken from 'NIC Newsletter' (02/11/2009), and is reproduced with the kind permission of Peter Arrowsmith FCA, who retains the copyright.