Warning for Employers over Tough New Health & Safety Sentencing Regime

Two recent prosecutions by the Health and Safety Executive (HSE) have brought home the gravity of the reformed and far more stringent health and safety offence sentencing guidelines which were introduced in February 2016.

The new guidelines, applying to breaches of health and safety and food safety guidelines as well as corporate manslaughter, apply to incidents that occurred on or after 12 March 2015. Now, large companies in England and Wales will face fines of up to £10 million for the most serious breaches and magistrates’ courts will be able to impose unlimited fines for offences, whereas before they could only levy fines of up to £20,000.

Laura Cameron of Pinsent Masons, a well-known law firm, says that the new regime should act as a stark warning to businesses that there is no margin for error or failure when it comes to meeting their duties under the regulations.

"Businesses have been sent a clear message that the regulatory authorities expect health and safety to remain a key corporate priority... If they are not already doing so, directors should be pushing health and safety issues to the top of their agenda," she said.

Recent Examples of Hefty Fines

In November 2016, an automotive manufacturing company that produces parts for the likes of Jaguar Land Rover and Audi was fined after it was reported to the HSE that six of its employees had sustained back injuries following repeated heavy lifting. Mahle Powertrain, the company in question, was fined a staggering £183,340 plus costs of £21,277.

In December 2016, an Ipswich Burger King franchise operated by KFG Quickserve was fined after a young employee was scalded by hot oil following several breaches of health and safety legislation. The resulting fine was £166,000 plus £12,000 costs.

Why Businesses Should Take Heed

The new guidelines for sentencing following health and safety and food safety breaches and corporate manslaughter require the courts to undertake an initial assessment of the overall seriousness of the breach in question. They will pose questions such as whether there was a risk of serious harm, regardless of whether such harm actually occurred. They will also look at the liability of the offender and will take into consideration what could have happened, as well as what actually did happen.

Fines will be based on a tiered system based on how serious the offence was; the business size and the turnover of the company. If there are any mitigating factors such as evidence of a clean health and safety record and measures having been taken to ensure the incident did not reoccur, then these will be considered. However, if the offender stood to gain financially or has a track record of similar offences then these will also be considered.

The new sentencing guidelines have clearly proved expensive for the two organisations mentioned. Business owners therefore need to think, can we afford to breach the rules?

The importance of site specific risk assessments and adherence to health and safety guidelines cannot be emphasised enough for businesses of any size. The fines being levied now could be devastating, so if you don’t already have procedures in place to ensure a safe working environment for your staff, take those crucial steps today.

What the 2017 Budget Means for the Smaller Business

For many small business owners, the 2017 Budget will have cast more gloom than it did sunshine. Listening to Chancellor Philip Hammond will have left many small firms worried about the impact the budget will have on their bottom line, but it’s important to stay abreast of any changes so that you can plan accordingly.

These are the main points from this year’s Budget that will affect small businesses in the coming period.

National Insurance Contributions

This year’s Budget will likely be remembered for the Chancellor’s U-turn on his decision to increase Class 4 National Insurance contributions for the self-employed.

Class 4 National Insurance Contributions for the self-employed were due to rise by 1 per cent, to 10 per cent in April 2018, and then to 11 per cent in April 2019. However, the Chancellor reneged on this move shortly after its announcement. This is something that has been seen as a positive move by those who work for themselves and believe the fact they cannot claim the same benefits as employed workers, such as holiday pay, sick pay and maternity / paternity pay means they should not be classed in the same category.

Dividend Tax

The Chancellor announced a reduction in the tax-free dividend allowance for directors and shareholders from £5,000 to £2,000 with effect from April 2018. This will in part be offset by the reduction in Corporation Tax that came into effect this month. The reduction will see the rate drop to 19 per cent from 1 April 2017, then 18 per cent from 1 April 2020.

Business Rates

The effort to mitigate the impact of business rate increases was the only silver lining for many small businesses in this year’s Budget. There were previously fears that this tax would push many small traders out of business entirely.

The Chancellor announced that companies which are losing their business rate relief will receive an extra cap, which will stop rates from increasing by more than £50 a month. Furthermore, public houses will receive a £1,000 discount provided that they have a rateable value of less than £100,000, and there will be an additional £300 million fund for councils to allow them to provide discretionary relief to businesses which are deemed as struggling.

Delay to Tax Regime Digitalisation

The other relief for many small business owners was the news that there will be a delay of one year to the Making Tax Digital (MTD) initiative for all incorporated businesses with turnover below the VAT threshold.

MTD will digitalise tax returns and call for quarterly reporting, which has caused some alarm amongst small firms. As the biggest change to UK tax reporting in a generation, many small businesses have been asking for more details in order to comply with the legislation, yet the details have not been as forthcoming as they may have hoped. The delay will therefore be a welcome relief to many.

If you’re unsure of what you need to be doing planning wise over the coming year, or how the changes introduced by the latest Budget will affect your small business, talk to your local bookkeeper who will be able to assist you with every aspect.

Important Dates for the Small Business Pension Diary 2017

Approximately 500,000 small to medium sized businesses will set up a workplace pension this year. Indeed, it’s the biggest ever year for workplace pension enrolment. If you’re a small to medium business that will be required under the regime to provide a workplace pension, there are certain key dates that you need to have in your pension diary for this year. These are as follows.

2017 Ongoing

Payroll integration is something employers need to think about on an ongoing basis this year. You will have a payroll system in place of course, but it’s wise to link it to your workplace pension provider in order to reduce the amount of admin required each month.

If you outsource your payroll to an external company, contact them to make sure you will not be charged extra should they not have an integrated system in place.

October 2017

October 2017 is when staging dates will no longer exist. The staging date is the date when a company has to have a workplace pension in place, but by October this becomes obsolete. Any companies formed after October 2017 will have to offer a workplace pension straight away.

End of 2017

Auto-enrolment into the workplace pension is an ongoing task. However, because the workplace pension has been rolled out across larger companies first, this year the majority of companies joining will be small to medium sized businesses.

This means it’s likely that if you haven’t already had a date to join, you’ll need to join by the end of this year.

At the end of this year, the Department for Work and Pensions (DWP) will start to review how successful auto-enrolment has been, and whether it can be improved.

This may lead to further changes in the year ahead, such as to the rules of the ‘earnings trigger’ (the minimum amount a person needs to earn before the automatic pension kicks in).

The aim of the DWP review is to look at ways in which certain workers could benefit more, such as those that work multiple jobs. It will also assess how much of a burden is being placed on the employer under the current auto-enrolment system. It’s important therefore that all small to medium sized businesses keep an eye on the review and any changes that may occur. 

April 2018

As things stand, under auto-enrolment, the minimum contribution to a workplace pension is currently set at two per cent of an employee’s qualifying earnings, with one per cent being contributed by the employer.

In April 2018, this is set to rise to five per cent, with employers contributing at least two per cent of that. It’s important that small businesses plan ahead to budget for this increase.

If you’re unsure about what you need to do with regards to putting the workplace pension in place, or the likes of payroll integration, speak to your local bookkeepers as they will of course be fully clued up on all aspects of it.