Government plans to reduce child benefit for families where an individual earns more than £50,000 have come under fire from a leading accountancy body.

Child benefit is currently paid to all families with children under 16 years of age (or in some cases up to 20 years of age), at a rate of £20.30 a week for the first child, and £13.40 a week for any subsequent children.

However, the Government has stated that those on low incomes should not be subsidising those on higher incomes, and plans to reduce the benefit for higher earners were confirmed in the 2012 Budget.

The changes mean that from January 2013 the benefit will be gradually withdrawn where one parent’s income exceeds £50,000, being eroded entirely where income reaches £60,000 or more.

At this point an individual will either need to stop claiming child benefit, or alternatively declare receipt of the benefit in a self assessment tax return, in which case HM Revenue & Customs will tax them by an equivalent amount.

The Institute of Chartered Accountants in England and Wales (ICAEW) has warned that the measures undermine the principle of individual taxation, by making it necessary to claw back from one person a benefit that is paid to another person, and by expecting couples to disclose to each other their level of income and whether they are claiming the benefit.

Critics have also highlighted the fact that the move goes against the principle of a universal child benefit, which is paid to all families regardless of circumstance.

A further loophole was highlighted in the run-up to the Budget, with experts warning that while a single parent earning £50,000 or more would lose the benefit, a family with two parents who each earn just under £50,000 would retain it.

The ICAEW has written to MPs and the Treasury, outlining the problems that it perceives to be inherent in the plans.

HM Revenue & Customs (HMRC) has released a series of tests which are designed to help determine the employment status of workers.

The IR35 legislation is intended to prevent individuals from using intermediary companies to supply services rather than being directly employed by their clients, and the new tests take the form of a series of questions and scenarios, complete with a scoring system.

The tests cover such areas as: whether your business owns or rents premises which are separate from your home and the end client’s premises; whether the business engages any workers who bring in at least 25% of your annual turnover; and whether the current client has engaged you on PAYE employment terms within the 12 months ending on the last 31 March.

Other areas covered include: business plans, advertising, efficiency, professional indemnity insurance, client risk, repair at own expense, billing and substitution.

Small business representatives have criticised the tests, arguing that they do not take into account key issues that were brought to the Treasury forum, and expressing concern that the Revenue has missed the chance to bring ‘clarity, transparency and fairness’ in dealing with IR35.

HMRC has stated that the legislation is not ‘set in stone’ and could change in response to feedback.

The full legislation can be viewed here: http://www.hmrc.gov.uk/ir35/guidance.pdf.

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Business groups have expressed concerns over the recent Queen’s Speech, with many arguing that the measures do not go far enough to boost economic growth.

Opening the new parliament, the Queen said the Government’s first priority was to ‘reduce the deficit and restore economic stability’.

She outlined a total of 19 pieces of legislation, ranging from enterprise and regulatory reform, to measures aimed at supporting children and families. She also confirmed the Government’s plans to implement banking reform, along with the Groceries Code Adjudicator Bill.

The measures have prompted criticism from some business leaders, with John Longworth, Director General of the British Chambers of Commerce (BCC), suggesting that the Speech ‘could have been bolder’.

While it welcomed some of the Government’s proposals, such as the reform of employment tribunals, the BCC raised concerns over plans to impose new legislative requirements on businesses.

‘On balance, business will welcome some of the Government’s proposed legislative measures, but express serious reservations about others. Positive steps such as reform to employment tribunals and red tape reductions could be undermined by complex new burdens around shared parental leave, for example,’ said Longworth.

‘Ministers could have been bolder by including legislation to establish a British business bank, to further simplify dismissal rules, and to progress the construction of our high-speed rail network.’

The Children and Families Bill could see new parents given the right to ‘share’ blocks of parental leave, by allowing women to transfer some of their maternity leave entitlement to the baby’s father.

But the Forum of Private Business (FPB) echoed the BCC’s concerns over the new entitlement, warning that it will add to the ‘burden’ on employers.

The FPB’s Senior Policy Advisor, Phil McCabe, said: ‘Perhaps the most concerning aspect of today’s Queen’s Speech for many small business owners is the plan to shake-up maternity leave by letting mums or dads mix and match time off with the new arrival. Nice concept in theory, but the paperwork and organisation will frankly not be welcomed by most business owners.

‘While flexible working is good for some businesses, firms should not be compelled into providing it if it doesn’t suit,’ he added.

However, the lobby group did welcome plans to introduce an independent adjudicator to ensure supermarkets deal fairly and lawfully with suppliers, stating that the move would ‘go some way to rebalancing the relationship’.

Individuals will soon be able to make charitable donations when using a cash machine, under new plans to encourage philanthropic giving.

From this summer it will be possible to donate between £1 and £250 when using a debit or credit card at a cash point.

It is hoped the facility, which is expected to be available on more than 12,000 ATMs nationwide, will make it easier for people to donate small amounts of money to charity.

‘By making it possible to add donations at cash points we can make an even greater difference to other people’s lives,’ said Nick Hurd, minister for civil society.

‘It’s important that as a government we bring public sector bodies, businesses and civil society organisations together to find new ways to support charitable and voluntary action.’

Independent operator Bank Machine said it had received registrations of interest from around 550 charities.

‘We have asked an independent panel to decide which charities will participate as we want to ensure that as many worthy causes as possible are able to take part,’ spokesperson Melanie Knight said.

The Forum of Private Business (FPB) is urging banks to help drive the SME export market, by relaxing the lending criteria for small firms considering overseas operations.

The call follows recent research from the Engineering Employers Federation (EEF), which reveals that exports in the SME sector have increased by 36% since 2009, and are set to follow a similar pattern of growth for 2012.

However, the FPB is arguing that it is essential that bank lending keeps pace with the boom, or the UK could risk lagging behind the rest of the world.

Phil McCabe of the FPB said, ‘It is now down to the banks to do their bit and make sure that firms wanting to export have access to affordable credit to finance such operations’.

‘While it’s understandable banks would want to closely examine any business plan from a firm looking to trade in foreign markets, it must not be an obligatory ‘no’ once they hear the word ‘export’ mentioned.’

The business group is also urging the Government not to make further cuts in resources to the UK Trade and Investment body, UKTI.

Mr McCabe added, ‘Today’s report suggests UK  business is finally ‘getting it’ when it comes to the importance of exporting, and the Government now must react accordingly and make sure the support is in place to allow firms to get it right. UKTI does a great job but in order to keep up the good work it needs the right tools for the job’.

A number of organisations have warned that small businesses could struggle to implement the new filing requirements under Real Time Information (RTI), due to poor internet access or a lack of technical knowledge.

Under the new system, employers will tell HMRC about tax, national insurance contributions and other deductions when or before they are made, rather than at the end of the tax year.

The system will be mandatory for all employers by October 2013.

However, the Low Incomes Tax Reform Group has argued that older employers, people with disabilities or businesses with limited access to the appropriate resources will face additional burdens.

The charity warns that the impact note produced by HM Revenue & Customs (HMRC) fails to recognise those small employers who remain ‘digitally excluded’.

The Public Accounts Committee has echoed these concerns, highlighting the fact that some small businesses without electronic payroll systems and the self-employed do not currently submit monthly data to HMRC.

HMRC launched a pilot scheme last month, to allow time for testing new systems and processes and more businesses are expected the join the scheme in the coming months.

More than four million taxpayers will pay tax at the highest rates this financial year, HM Revenue & Customs (HMRC) has predicted.

According to HMRC, 3.8 million people will pay income tax at the 40% rate during 2012/13, while over 300,000 will be subject to the 50% additional rate.

The figures represent a significant increase in the number of people paying higher rate tax, a change which has largely been put down to cuts in the threshold at which individuals begin to pay tax at the higher rates.

The news follows Chancellor George Osborne’s announcement in the March Budget that the 50% additional rate of income tax will be cut to 45% from 2013/14, with the Chancellor arguing that the measure has failed to raise sufficient additional income.

Meanwhile, the total number of people paying income tax is set to fall again this year from 30.1 million to 29.7 million, with the number of individuals paying tax at the basic rate of 20% likely to drop to 24.8 million.

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A recent ruling by the UK Supreme Court has suggested that employers can force workers who have reached the statutory retirement age to retire on a number of ‘legitimate grounds’, such as ensuring the future succession of staff.

In the landmark ruling, the court dismissed the appeal of a solicitor whose claim to continue working beyond retirement age was rejected.

While Mr Seldon argued that the firm’s decision amounted to age discrimination, the employer put forward the case that its policy on retirement had a number of aims, which included ensuring that younger workers were given the opportunity to take up a partnership role after an appropriate period.

The firm also argued that its policy aided long-term planning, and reduced the need to force partners to leave on the grounds of poor performance.

The judgement stated that all businesses must now ‘give careful consideration to what, if any, mandatory retirement rules can be justified in their particularbusiness’.

The ruling follows the recent news that almost 50% of working people over the age of 50 will need to remain in work for a further 11 years beyond state retirement age, in order to achieve a minimum standard of living in retirement.

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Around 12,000 taxpayers have been sent penalty notice letters by HM Revenue & Customs (HMRC) in error, warning them of the new £10 daily fines for failing to file their self assessment tax returns.

However, the taxpayers concerned were originally informed that they no longer needed to fill in a tax return.

A spokesperson for the HMRC said, ‘We can reassure these customers that we know who they are and that this letter is incorrect – they do not owe a penalty’.

The deadline for filing the self assessment tax return online was 2 February. Under HMRC’s new penalty system, individuals who have not filed their return by 1 May are subject to daily penalties.

Further penalties apply for taxpayers who have still not filed their returns after 6 and 12 months.

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The Office of Fair Trading (OFT) has issued guidance for businesses regarding their choice of trading name, with the aim of preventing firms from choosing names which could mislead customers about their commercial status.

The regulator has warned that the trading names chosen by some businesses give the impression that they are operating as charities or government agencies, when they are in fact commercial entities.

The use of terms such as ‘helpline’ and ‘debtline’ forms a focal point of the guidance, which advises that names used by a commercial enterprise should never mislead consumers who are looking for free, impartial advice or expertise.

In addition, the guidance highlights that a trading name should not mislead consumers regarding the services provided, the cost of the offering, the scale of the business including its geographical scope, and the relationship of the business to other organisations.

David Fisher of the OFT commented, ‘Businesses are free to choose trading names as long as they are not misleading or otherwise undesirable. For example, where they do not make clear the nature of a business or where it pretends to be something it is not’.