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The amount that people can add to their pension funds and on which they can receive tax relief is to be reduced.

The Treasury has confirmed plans to reduce the annual limit from £255,000 to £50,000.

The government hopes that the change will in time save as much as £4 billion.

Also to be reduced is the lifetime allowance on money that can be saved in a pension fund for which tax relief is allowed. This will come down from £1.8 million to £1.5 million.

The government has estimated that the change to the annual allowance will affect some 50,000 savers of whom 80 per cent will be earning over £100,000.

Higher earners will, however, retain the benefits of tax relief at 40 per cent and 50 per cent. The previous government had proposed tapering pensions tax relief for those earning more than £150,000 to 20 per cent, plans which have now been dropped.

The new annual allowance comes into effect as from April 2011; the new lifetime allowance from April 2012.

To protect individuals who exceed the annual allowance due to a one-off  ‘spike’ payment of more than £50,000, the government is to allow them to offset this against unused allowance from previous years.

Having announced in the June Budget that it would be reforming the tax system with respect to pensions saving, the government consulted over the summer with various pension professionals, industry bodies and employers.

The original discussion document proposed reducing the annual allowance to between £30,000 and £45,000.

However, the government said that targeting the lifetime allowance as well as the annual allowance has meant it has been able to set a £50,000 limit.

As part of its cost saving programme, HM Revenue and Customs (HMRC) has announced that it is to stop issuing plastic national insurance cards.
The cards notify taxpayers of their NIC number.
Instead, from next year, the tax authority will send out letters confirming the NIC .
Scrapping the plastic cards will save somewhere in the region of £1 million annually.
The change came from suggestions made on the Spending Challenge website and has been accepted by Treasury ministers.
Although the cards are to be axed, HMRC will continue to write to taxpayers who request confirmation of their NIC numbers.

More parents are to get the right to request flexible working patterns.
The government has said that it plans to extend the right to ask for more flexible ways of working to parents of children aged 18 and under from April 2011.
A consultation will also be launched later this year on the feasibility of allowing everyone the right to make the request.
At the moment, parents of children aged up to 17, parents of disabled children aged under 18 and carers of certain adults can ask their employers to consider alternative work patterns so that they achieve a better balance between work and home.
The extension by a year of the age of the children involved will mean that a further 300,000 working parents will come within the regulation.
Meanwhile, the consultation on broadening the right to all employees will form part of the government’s ongoing review of employment legislation.
To qualify for making a request, workers must be continuously employed by the same employer for more than 26 weeks.
Carers are eligible when they care, or expect to care, for a spouse, partner, civil partner or relative or live at the same address as the person being cared for.
Under the regulation, employees can ask for a change in their contractual working pattern. Employers have a statutory duty to consider each request seriously, but they can reject a request if there is a clear business reason for doing so.
The government also announced that the Additional Paternity Leave regulations will remain in force as an interim measure.
Under the regulations, which were introduced in April 2010 and apply to parents of children due on or after 3 April 2011, fathers have a right to up to six months extra leave which can be taken once the mother has returned to work.
Some of the leave may be paid if taken during the mother’s maternity pay period. This is paid at 90 per cent of earnings up to the same standard rate as Statutory Maternity Pay (SMP) which is currently £124.88 per week.
This new provision will be available during the second six months of the child’s life, giving parents the option of dividing a period of paid leave entitlement between them.

The method used for working out business rates needs an overhaul if firms are not to suffer additional tax burdens.
The British Retail Consortium (BRC) has written to the Secretary of State for Communities and Local Government urging him to adopt a new way of setting rates for businesses in England and Wales.
At the moment, the annual rates increase is calculated according to the Retail Prices Index rate of inflation each September. The subsequent rise is introduced the following April.
This year the RPI rate of inflation could be as high as 4 per cent come September, the BRC said.
The BRC also highlighted a second area of concern for businesses operating out of commercial properties.
The other element of the business rates calculation is determined by rateable values, based on how much it would cost to rent commercial properties. These are re-calculated every five years, and the last change was introduced in April 2010.
As a result, many firms saw a sharp increase in their rates bills. To soften the impact, a transitional scheme was introduced to phase in the additional charges.
But the BRC claimed that a combination of having to pay significant costs held over from 2010/11 and a high annual increase on the back of this September’s RPI rate could push up rates bills for some businesses by as much as 22 per cent next April.
To ease the burden, the BRC wants the government to investigate other means of working out the charges, perhaps by switching from the RPI rate of inflation to the traditionally lower Consumer Prices Index.
The BRC is also calling for the government to ensure that Business Rate Supplements are only used for projects which have the support of local businesses.
Prior to April 2008 no business rates had to be paid for the first three months during which shops and offices were empty; after this period only 50 per cent of the normal rate was due.
Since the relief was scrapped, there is still no charge for the first three months but then full business rates must be paid even if the property is unoccupied.
In the 2008 pre-Budget Report, the previous government introduced a one-year exemption for empty properties with a rateable value of less than £15,000. This qualifying limit was later increased to £18,000 and extended by another year in the 2009 pre-Budget Report.

HM Revenue and Customs (HMRC) is considering writing off £1.5 billion in unpaid tax.
According to reports from the BBC, there are currently 7.5 million backlogged cases where there has been underpayment or overpayment of taxes going back to 2007/08.
The latest cases have emerged after HMRC conceded that 6 million taxpayers have paid the wrong amount of tax over the past two years as a result of errors in the PAYE system.
Staff at HMRC informed the BBC that only those cases outside of the two-year window which suggest fraudulent activity will be pursued.
Because many of the cases are more than two years old, claims for the money owing could be open to legal challenges from taxpayers.
A staff member said: “For each underpayment there are thousands of pounds owed. Underpayments are very frustrating.
“If we had the chance to sort it out three years ago we could have recovered the money. It is now likely to be written off if it’s over two years – we’re not looking at underpayments beyond two years.
“Our directors are telling people that those who owe tax will appeal and fight it and this will generate more work.”
Since the latest cases are not logged on HMRC’s new computer system, any problems would have to be processed by hand.
Another HMRC staff member told the BBC: “These people who have underpaid earn £30k, £40k, £50k a year and got benefits such as a company car and we’re not told about them until after the tax has been paid.
“The cases cannot be dealt with by the new computer as they have to be done manually – what did we do with the cases older than two years? We wrote them off.”
The official line of HMRC is that in cases where people have paid too much tax taxpayers will receive a refund but that cases of underpayment are still being assessed.
A spokesman commented: “We have said to staff if you find an overpayment to pay it back – we are prioritising vulnerable groups, old age pensioners, low-income groups – the priority is to repay these groups.
“But while we are reviewing the cases of underpayment, no decision has been made on these cases.
“It’s a provisional period, where staff have been asked to review underpayments. If they find someone who has underpaid then that is set aside for a future decision.
“We are going to be looking at how best to deal with these. We are going to look at the specifics of each case and apply a normal criterion in due course.
“Those who have underpaid, they will be part of the overall decision-making process – no decision yet on what to do with them. But they are being identified

Business lending shrank for the fifth month running, a new report from the Bank of England has revealed.
According to the Bank’s latest Trends in Lending report, net business loan repayments in July were £2.5 billion.
The figure was an improvement on the £3.2 billion recorded in June, but the Bank said that lending by the UK’s major credit providers has stayed moderate in August.
The picture is not uniform. Credit conditions for larger companies were showing signs of easing, but smaller businesses were still struggling to secure finance.
Although many firms have been seeking to pay down debts in the aftermath of the recession, smaller enterprises have fewer funding options open to them than their larger counterparts.
The report said: “Contacts of the Bank’s network of agents noted that while credit conditions were easing for larger businesses, they remained tight for smaller firms.”
New lending facilities for SMEs have remained unchanged over recent months.
Despite the £200 billion of quantitative easing with which the Bank of England has been priming the economy, the broad money supply declined by 0.2 per cent in August compared with the previous month. The annual rate of growth in money was down by 1.8 per cent.
It had been hoped the quantitative easing programme would make more funds available for credit-starved small businesses.

Gang members Syed Ahmed and Shakeel Ahmad, both currently serving prison sentences of seven years, received the additional jail terms of ten years for failing to abide by the court order issued in July 2010. The order required them to re-pay crime profits of £92.3 million each by the beginning of this month.
They were part of a 21-strong criminal gang who bought luxury houses in London, high performance cars, and built blocks of flats in Dubai after stealing £37.5 million in a ‘missing trader’ VAT tax fraud.
Richard Meadows, Assistant Director of Criminal Investigation for HMRC, said:
“This will send the strongest message yet to criminals that they cannot hide, even in prison, from our actions to reclaim their criminal profits. We are determined that this money will be restored to the nation’s finances in what is the largest confiscation order ever secured in the UK. Their prison sentences now total 34 years and they will still have to re-pay the outstanding confiscation order.
Syed Ahmed and Shakeel Ahmad’s £184.6 million debt will be realised through the assets restrained by HMRC including:
• A luxury flat in Knightsbridge worth £4.5 million
• A house in Harrow worth £2 million
• A house in Buckinghamshire worth £1.5 million
• A riverside flat in Battersea worth £500,000
• Two apartment tower blocks in Dubai worth £80 million
• High performance motorcars including a Ferrari 360 Modena convertible and a Mercedes 500CL.
They also gave ‘tainted gifts’ to their families including top of the range designer clothing, a Range Rover and cash totalling around £1 million.
Background
Investigations began in April 2002 into the ‘missing trader’ fraud, involving the dishonest manipulation of the VAT system through the import and export of computer processing units (CPUs). The gang used highly complex chains of VAT registered companies both here and abroad to steal £37.5 million.
The final defendant of the 21 strong crime gang was sentenced in June 2010 and ended one of the most complex investigations undertaken by HMRC which included seven trials and retrials. In total the gang were jailed for 74 years.
The conspiracy involved the import of CPUs mainly from Ireland VAT free. The goods would then be sold on more cheaply, but with VAT added, through a chain of companies each involved in the plot and sham invoices would be issued. Once the goods had been sold on a number of times they would be exported back to the EU. The exporter would then claim a VAT credit from HMRC for the VAT paid on the purchase of the goods.
The gang would divide the dishonest profits of the fraud and launder them through various bank accounts both in the UK and abroad. The account holders would then withdraw the bulk of the cash and were paid a commission for their dishonest service. Some of the money is believed to have been invested in a third a tonne of gold bullion, substantial property in Dubai and a luxury flat near Harrods.
Notes

1. Photographs of the defendants and assets restrained are available on request. A copy of the news release previously issued, which includes all 21 defendants, can be viewed at: http://nds.coi.gov.uk/content/detail.aspx?NewsAreaId=2&ReleaseID=414272&SubjectId=9
2. Details of the defendants confiscation order default hearing on,16 September 2010, at Northampton District Magistrates Court, along with sentencing on 30 March 2007 and confiscation orders on 5 July 2010, at Northampton Crown Court, include:
• Syed Mubarak Ahmed (DOB 25.09.72) of HM Prison Service and formerly of Round Coppice, Iver Heath Buckinghamshire and of Beaulieu Close, Datchet, Slough, Berkshire.
Sentencing – seven years in prison. He was disqualified from being a company director for 12 years.
Confiscation Order – £92.3 million, to be paid within two months or face an additional ten years in jail.
Default Sentence – an additional ten years in prison
• Shakeel Ahmad (DOB 07.01.72) of HM Prison Service and formerly of 10 Astons Northwood, Middlesex,
Sentencing – seven years in prison. He was disqualified from being a company director for 12 years.
Confiscation Order – £92.3 million, to be paid within two months or face an additional ten years in jail.
Default Sentence – an additional ten years in prison
Issued by HM Revenue & Customs Press Office

The British Chamber of Commerce ( BCC) has said that changes to maternity leave planned by the EU as “unaffordable” and that the proposals to extend maternity leave to 20 weeks on full pay would cost UK business an additional £2.5 billion annually.
The figure emerged from an impact assessment carried out on behalf of the European Parliament on the likely consequences of the change.
Initially, the European Commission, wanted to extend fully paid maternity leave from 14 to 18 weeks, with member states able to specify a ceiling which must be equal to statutory sick pay.
However, the Women’s Rights Committee of the European Parliament subsequently agreed amendments to the Commissions proposal whereby maternity leave would be extended to 20 weeks on full pay.
Currently, new mothers in the UK are entitled to a year off work. The first six weeks can be taken on 90 per cent of pay, with a following 33 weeks on statutory maternity pay of £124.88 a week, which is 55 per cent higher than sick pay. The remainder is unpaid.
MEPs are due to vote on the plans in mid October, but the BCC has argued that they will not be able to come to a fully informed decision because the impact assessment only took into account the costs and benefits for ten out of the 27 member states.

As a reminder,any Right To Manage company incorporated in England before 9th November 2009 has until 30th September 2010 to adopt new articles in accordance with RTM Companies (Model Articles) (England) Regulations 2009 (SI 2009/2767). Please feel free to contact Brighton Comapny Formations on 01273 831891 to discuss this matter further. It is after all a simple and strightforward process to change the articles.