Welcome to the December 2007 Newsletter from Connolly Accountants & Business Advisors

This month saw the publication of the Employment Bill, which outlines new measures aimed at reducing red tape for employers. Provisions set out in the Bill include a strengthening of the rules governing recruitment agencies and a ‘clampdown’ on rogue employers that fail to comply with National Minimum Wage legislation.

Meanwhile, Chancellor Alistair Darling has postponed making an announcement on the controversial changes to capital gains tax until the New Year. Business groups have criticised the delay and called for clarification on the new rules before they are implemented in April 2008.

And not forgetting … we would like to wish all of our clients Season’s Greetings and we look forward to working with you in the New Year.

New Employment Bill to ‘cut red tape’ for businesses

Government plans to reform key aspects of employment law have been welcomed by leading business groups.

The Employment Bill, which received its first reading on 6 December, aims to clarify and strengthen important areas of legislation in order to benefit employers and employees, as well as trade unions and the public sector.

Provisions set out in the Bill include a shake-up of the way in which workplace grievances and disciplinaries are managed, following recommendations made in the Gibbons Review of dispute resolutions.

Although the Government is yet to clarify details of how the new system will operate, Employment Relations minister Pat McFadden said the changes would ‘ease burdens for businesses and employees by abolishing rigid, statutory processes for dispute resolution, while also ensuring there is no discrimination in employees’ rights.’

In addition, the Government will look to increase protection for agency workers by granting more powers to agency inspectors and strengthening the penalty regime for agencies that commit offences against employment legislation.

Businesses that fail to comply with the National Minimum Wage may also face tougher penalties under provisions outlined in the Bill, with the possibility of an uncapped fine and referral to the Crown Court. The clampdown follows the first criminal prosecution over a breach of the minimum rate earlier this year.

Commenting on the new provisions, Tom Hadley, director of external relations for the Recruitment Employment Confederation, said: ‘We welcome this Bill as it aims to crack down on those employers and agencies that are breaking the rules.'

The Trades Union Congress has also praised the Government’s publication of the Bill, declaring that the proposed changes to the disciplinary and grievance procedure would remove ‘much of the unnecessary red tape’ for businesses dealing with workplace disputes.

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Discontent grows as Darling delays capital gains announcement

Chancellor Alistair Darling has faced criticism from leading business groups, following his decision to delay an announcement on the new legislation for capital gains tax (CGT).

The Chancellor had been expected to clarify reforms to CGT last week, but instead confirmed to MPs that he needed more time for consultation and planned to make a statement early in the New Year.

However, the delay has sparked fierce reactions from Mr Darling’s political rivals and has been met with dismay by the business community. ‘Everyone knows in the New Year he will be announcing a U-turn forced on him by the business community and his political opponents,’ claimed Shadow Chancellor George Osborne.

The Confederation of British Industry (CBI) has also criticised the Chancellor’s failure to clarify the new rules. ‘We are glad that the Chancellor is paying attention to the submissions he has received from the business community, but he needs to get on with this decision urgently,’ said CBI director general, Richard Lambert.

‘People need to be able to make decisions about their businesses - whether to invest, or whether to sell up. This uncertainty mustn't be allowed to continue.’

The controversial reforms to the capital gains tax system, which include the abolishment of taper relief and the introduction of a flat tax rate of 18%, were first outlined in the Chancellor’s Pre-Budget Report in October.

Following this, leading business groups launched a high-profile campaign to persuade the Chancellor to rethink his plans for CGT, claiming the new rules would ‘discourage enterprise growth’ in the UK.

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Microsoft founder Bill Gates, on the importance of computer skills in the workplace.


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