New Rules on Consumer Data Imminent: Are you Prepared?

The changes to data protection laws are expected to be ratified by the Council of the European Union by the end of 2014. The new rules will mean big changes for businesses that collect consumer data. They are designed to protect individuals from aggressive marketing techniques and give them more control over where and what information about them is held.

How the Changes Will Affect Small Businesses

All businesses should be reviewing the data they hold, how they currently manage it, and what they do with it, so that they can plan how to respond to the changes. Even if your small business has a small customer database, if you sell products or services to the public, you could be affected, and compliance may cost more than you expect.

People already have the right to see what information you hold about them, but the new rules will mean you can’t charge a fee for this. It has to be free, and you have to pick up the tab for the time and effort involved. Having accurate data is important for many reasons, but never more than now.

Whether or not the information is accurate, customers may then want their data deleted completely, and you have to comply. You can no longer just mark the record, ‘do not contact’; you have to delete everything about a customer who requests it. If you have records held for different purposes in different areas within your organisation, the deletion exercise must cover them all. If one is missed and a person is contacted and complains, you could face a fine based on your annual turnover. The percentage of this imposed as a fine will depend on the perception of the severity of the offence. Your outsourced bookkeepers could be one source of assistance for this.

The Questions to Ask

Every new customer must be asked if their data can be kept. No longer will it be sufficient to have a tick box for them to opt out. They must respond about whether they want to opt in. Customers must also give their permission for you to use their data for customer profiling – working out what they are likely to be interested in based on their purchasing history. Many will agree, so that they can receive relevant offers, such as money off vouchers for items they have been purchasing before. Others will not, preferring to keep their buying habits, and their lifestyles, private.

Whatever your activities, if you need to keep records of customers for marketing or other purposes, you need to work out how to respond to the new rules. There are likely to be cost implications that need to be factored into your cash flow projections. If you discuss it with your outsourced bookkeepers, you will probably find there are a number of ways in which they can help you.

Be Prepared for the New Waste Management Laws

Waste management company, BusinessWaste.co.uk, recently surveyed 1700 small businesses and discovered that around 90% of them were not aware that waste laws for businesses will change at the beginning of 2015. The Customer Services Manager at BusinessWaste.co.uk is Alex Wignall. He said, “It is shocking that 90 percent of the businesses we spoke to had no idea that these changes are set to come into law very soon. The cost of not complying with these new regulations could be catastrophic for businesses – small businesses in particular.”

What you Must Do in 2015

An amendment to the Waste (England and Wales) Regulations 2011, based on the EU Waste Framework Directive, means that you will be legally obliged to separate recyclable materials from your landfill waste. This is so that the waste collection services can collect it separately.

As long as you keep materials like paper, glass, metals and plastics separate from the non-recyclable waste, you don’t have to separate the different types of recyclable material to stay within the law. But different local authorities have different recycling arrangements and some may require this. The way they arrange their domestic collections will give you a clue about it, but if you are not sure about it, your outsourced bookkeepers may know through their contacts. Otherwise, you can check the local authority website or you can contact the waste collection service you currently use for advice.

What you Should do now

If you don’t currently separate your recycling, you need to be organising this now so that you can be ready by the New Year. There should be some advantages to the new regulations. If your business gets rid of waste to landfill sites, the fees and taxes you pay for this will be reduced along with the weight of your landfill waste. This should offset the cost of investing in any new bins or recycling bags you need.

What Could Happen Otherwise

As Alex Wignall pointed out, the penalties for non-compliance are unlimited in the Crown Courts, and they can be very severe. Even magistrates can impose fines of up to £5,000 on a business that is brought before them. So make sure your business doesn’t get a criminal record by sorting out your waste management arrangements now.

Discussing regulation that has the potential to affect your bottom line with your outsourced bookkeepers can often be helpful. All their clients have to meet these challenges, and they see what is working for others. Talking it over with them could be the next best thing to all those time consuming networking events.

Small Businesses and Real Time Information

Have you got your head around Real Time Information (RTI) yet? Many small businesses are saying that they were not able to ready themselves for the deadline for this new tax regime.

Submitting Payroll Data to the Revenue in Real Time

Under RTI, you have to make online submissions of information about employees and their pay to HMRC on or before the day they are actually paid. If you pay monthly, that means once a month, but for anyone paid weekly, the RTI return must be submitted every week. This is instead of sending in the quarterly and annual employer returns and is a major change in the work relating to payroll operation.

For many companies, the changeover date was 6 April 2013, but small businesses were given a less stringent regime with more time to prepare for it. They could submit their returns monthly even if they paid some employees weekly. Of course, they still would have to find the wherewithal to update their systems or invest in new payroll software, as well as to set up new procedures and resource them.

Employee details are critical. It is particularly important that national insurance numbers and dates of birth are accurate, and home addresses must be kept up to date. It’s a tall order for a small operation, but of course, your outsourced bookkeepers will be up to the job.

Period of Grace for Small Businesses Extended

Since many of the smallest businesses have reported their concerns that they have still not managed to prepare themselves properly, HMRC have now extended the full deadline for those with fewer than 50 employees to March 2015.  If you fall into this group, you can continue to submit your returns monthly until this date, so you still have a few months of grace.

With the help of your bookkeepers, even if you aren’t ready yet, you could most likely manage it before then. The sooner you can submit returns on or before wages and salary payment dates, the sooner you can breathe your sigh of relief knowing that you won’t be penalised from March next year.

Remember though, that if your business is doing well enough for your employee numbers to be growing and likely to hit the magic 50, you have no choice but to comply with RTI. Otherwise automatic fines that cannot be avoided will be applied.