Welcome to the September 2009 Newsletter from Connolly Accountants & Business Advisors

Employers are set to face a raft of new regulations, following the announcement of Government plans to allow fathers to take six months of paternity leave, together with a recent ruling by the European Court of Justice that employees who are taken ill while on holiday can reclassify their time off as sick leave.

Meanwhile, 1 October sees the introduction of a number of changes to the National Minimum Wage regulations. As well as a rise in rates, employers will be banned from using tips and service charges to bring the wages of bar and restaurant workers up to statutory levels.

And finally, a reminder that the final parts of the Companies Act 2006 will come into effect on 1 October, including key changes to the documentation for forming and administering companies. Companies House forms will also be changing; the new forms will be available to download from our website from 1 October.

Fathers to be given new paternity rights

Fathers will gain the right to take six months' paternity leave under new plans announced by the Government.

The proposals will see parents afforded the right to share a year of parental leave to care for their newborn child, with fathers allowed to take six months off after the mother's first six months of leave.

The changes will take effect for parents of children due on or after 3 April 2011.

Harriet Harman, Minister for Women and Equality, said the new rights would give 'families radically more choice and flexibility' and enable 'fathers to play a bigger part in bringing up their children.'

The Government has yet to fix a date for its plans to extend mothers' maternity leave from nine months to a year.

Commenting on the shared leave proposals, Miles Templeman, Director General of the Institute of Directors, said: 'We strongly support new paternity leave rights for fathers, providing the Government ensures that the new system is simple for businesses to administer and there is no overall increase in the total amount of paid and unpaid leave parents can take.'

Meanwhile, David Frost, Director General of the British Chambers of Commerce, said: ‘This is not the time to do it. It is a huge burden to plan for both a male and a female employee being away.'

However, the Government anticipates that the new rules will have a ‘minimal' impact on businesses.

Changes to the National Minimum Wage

October sees the introduction of a number of changes to the National Minimum Wage (NMW) regulations.

Main adult rate to rise
The NMW rates increase with effect from 1 October 2009, following recommendations by the Low Pay Commission (LPC), which reviews NMW rates on an annual basis on behalf of the Government.

Furthermore, employers who are found to be in breach of the NMW legislation are now subject to automatic penalties, ranging from £100 to £5,000. This is in addition to the wages already owed to the employee. From October 2010, 21-year-olds will be included in the main adult rate of the NMW.

Tips and service charges
In addition, from 1 October 2009 employers will be banned from using tips and service charges to bring the wages of bar and restaurant workers up to the statutory levels.

A recent case in the Court of Appeal concluded that employers must not take into account tips, gratuities, service charges or cover charges when paying the NMW, unless these are paid to employees through the employer's payroll.

Apprenticeship pay
Meanwhile, the Government has asked the LPC to consider introducing a minimum wage for apprentices. Under the current legislation, apprentices aged 18 years or less are exempt from the NMW, as are those aged 19 or older who are in the first year of their apprenticeship. From August this year Learning and Skills Council apprentices are guaranteed a weekly pay rate of £95.

The LPC has been asked to report its recommendations to the Prime Minister and Secretary of State for Business, Innovation and Skills by the end of February 2010.

For more information on the National Minimum Wage changes, please visit our Hot Topics section.


1 October: Due date for payment of Corporation Tax for period ended 31 December 2008.

5 October: Individuals/trustees must notify HMRC of new sources of income/chargeability in 2008/09 if a Tax Return has not been received.

14 October: Due date for income tax for the CT61 quarter to 30 September 2009.

19/22 October: Quarter 2 2009/10 PAYE remittance due.

31 October: Last day to file 2009 paper Tax Return.

For more information on key tax dates and deadlines, visit our 2009/10 Tax Calendar.


'The UK's recovery requires a thriving business sector, so it is vital that new business taxes, higher National Insurance contributions, and any measures that may damage enterprise and job creation are avoided.'

David Frost, Director General of the British Chambers of Commerce, commenting on the results of the latest BCC Economic Forecast.



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Key tax and financial information

For useful information and tips designed to help you make the most of your finances, visit the Your Money section of our website.

Essential business planning advice

For tips and advice on all aspects of business planning, visit the Your Business section.

Business issues warning following sick leave ruling
The CBI has warned that a recent landmark ruling on sick leave could leave employers open to abuse by unscrupulous staff.
Click here for the full story

Darling to 'broaden sources of finance' for businesses
More medium-sized firms could soon gain access to capital markets as part of new plans being developed by the Treasury.
Click here for the full story

Government approves new payment technology
New technology that allows consumers to use their mobile phone like a debit card has been given the go-ahead by the Government.
Click here for the full story

Business remains cautious on economic recovery prospects
While the UK economy may be showing signs of recovery, it still faces some significant risks, the British Chambers of Commerce (BCC) has warned.
Click here for the full story

Revenue and Companies House to offer common online filing facility
HMRC and Companies House will adopt a common approach to filing company accounts online, it has been announced.
Click here for the full story