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Business and Tax Round-up

Are you prepared for the new data protection regulation?

The new General Data Protection Regulation (GDPR) is set to come into effect on 25 May 2018, and will require all organisations that deal with individuals living in an EU member state to protect the personal information belonging to those individuals, and have verified proof of such protection.

Under the new regulation, firms must be accountable for their data usage, and must identify a lawful basis for processing personal data. The GDPR builds on existing principles under the Data Protection Act, and also introduces some additional rights.

The new regulation applies to processing carried out by organisations operating in the EU, and also to those offering goods or services to individuals who reside in the EU. The UK’s decision to leave the EU will not affect the introduction of the GDPR, so it’s essential that your business is prepared.

Businesses are strongly advised to review their data privacy and security practices, to help ensure they are compliant. You may wish to provide GDPR training to your employees, and review your procedures relating to consent, requesting fresh consents from customers where necessary. The financial penalties for non-compliance with the GDPR are severe, with fines costing up to €20 million, or up to 4% of total annual worldwide revenue, whichever is the greater.

Further guidance can be found on the Information Commissioner’s Office website:

New National Minimum Wage and National Living Wage rates

In the 2017 Autumn Budget, Chancellor Philip Hammond announced increases in both the National Minimum Wage (NMW) and the National Living Wage (NLW). The new rates will apply from April 2018, and are as follows:

Apprentices*16 and 1718 – 2018 – 2025 and over
National Minimum Wage£3.70£4.20£5.90£7.38
National Living Wage£7.83

*Under 19, or 19 and over in the first year of their apprenticeship.

Please note, there are separate minimum wage rates for agricultural workers. Visit for more information.

Employers can also choose to pay their employees the Voluntary Living Wage (VLW), which is set by the independent Living Wage Foundation. The VLW is calculated based on workers’ actual living costs, and the wage currently stands at £8.75 per hour, with the London VLW being £10.20 an hour.

Abolition of Class 2 NICs is delayed

The government has delayed the abolition of Class 2 national insurance contributions (NICs) by a year, to 6 April 2019.

Under the reforms, which had been due to take effect in April 2018, Class 2 NICs will be abolished and Class 4 contributions will be reformed to include a new threshold, the ‘Small Profits Limit’.

The government stated that ‘the delay will allow time for [it] to engage with interested parties and parliamentarians with concerns relating to the impact of the abolition of Class 2 NICs on self-employed individuals with low profits’.

Access to contributory benefits for the self-employed is currently gained through Class 2 NICs. After the abolition, those with profits between the Small Profits Limit and Lower Profits Limit will not be liable to pay Class 4 contributions, but will be treated as if they have paid Class 4 contributions for the purposes of gaining access to contributory benefits. All those with profits at or above the Class 4 Small Profits Limit will gain access to the new State Pension, contributory Employment and Support Allowance and Bereavement Benefit.

Those with profits above the Lower Profits Limit will continue to pay Class 4 contributions.

HMRC considering plans for new points-based penalty system

HMRC has announced its intention to reform the current penalty system for late or missing tax returns, as part of its review of tax administration and compliance.

Under the proposed new system, taxpayers who miss the self assessment filing deadline could receive driving licence-style points instead of an immediate fine. Taxpayers would only be penalised once their points reach a specified level. Points would also be wiped from an individual’s records after a set period of time.

Under the current system, taxpayers who fail to submit their tax return by the 31 January deadline are liable to an instant £100 fine, with further penalties applying for prolonged delays.

The new ‘holistic’ approach is intended to focus on taxpayers who persistently break the rules, rather than those who make genuine errors of judgement.

Outlining its plans, the Treasury said: ‘The government will reform the penalty system for late or missing tax returns, adopting a new points-based approach. It will also consult on whether to simplify and harmonise penalties and interest due on late payments and repayments.

‘This will ensure that the system is fair, simple and effective across different taxes. Final decisions on both measures will be taken following this latter consultation.’