Grants

Ensuring adequate finance is a fact of life if you run a business. Whether you are looking to expand, undertake a specific project or simply fund your day to day purchases, finance is essential.

Obtaining finance is not always easy, especially if yours is a small business and particularly if it is a recent start-up. Borrowing may be difficult due to lack of security.

A grant may be the answer.

What is a grant?

A grant is a sum of money awarded, by the government or other organisation, for a specific project or purpose. Normally it will cover only some of the costs (typically between 15% and 50%); the business will need to fund the balance. Their availability is limited and competition for the funds can be quite intense. One of the main features of a grant is that the money generally becomes repayable if the terms and conditions of the grant are not met.

This sounds quite simple in principle. However, in practice, it can be somewhat daunting because of the huge number of different schemes in operation and the fact that schemes are constantly changing. Government grants are distributed through a variety of ministries, departments and agencies both on a national and local basis. They are usually for proposed projects only, so ensure you have not already started the project otherwise you may not be entitled to the grant.

The following websites may help with initial research into grant availability:

https://www.gov.uk/business-finance-explained/grants

https://www.gov.uk/business-finance-support-finder

The European Union is also a provider of funds, mainly through the European Commission which administers a large number of schemes.

http://ec.europa.eu/contracts_grants/grants_en.htm

Grants can also be received through Local Enterprise Partnerships (LEPs), local authorities and charitable organisations.

Is my business eligible?

Many of the available schemes are open to all without restriction. Eligibility for others will generally depend upon a number of factors:

• geographical location of the business – for example some schemes are targeted in areas of social deprivation or high unemployment
• size of business – for example some schemes are restricted to small or medium sized businesses – such as those businesses with fewer than 250 employees
• industry or sector in which the business operates – for example some schemes aim to tackle particular problems or issues affecting an industry sector – these are generally defined by the European Commission
• purpose of the grant – grants are often awarded for specific purposes – for example purchasing a new machine or increasing employment. Grant bodies often seek specific targets which are often in line with their own objectives.

Applying for a grant

Before applying

Initial research is essential so that you know what’s on offer.

It is also necessary to ensure that you:

• have funds available to ‘match’ any grant that may be awarded (where this is a condition of the grant)
• need the money for a specific ‘project’ or purpose
• have a business plan
• do not start work on the project before the award is confirmed.

Making the application

It is a good idea, if possible, to make personal contact with an individual involved in administering your chosen scheme. This will give you a feel for whether it is worthwhile proceeding before you spend too much time on a detailed application. You may also be able to get some help and advice on making the application.

It is also a good idea where you can to apply as soon as possible after launch of the scheme. Many grant schemes run for a limited period of time; there will be more money available at an early stage and the administrators will be keen to receive applications and make awards.

The application itself should focus on the project for which you are claiming a grant. It should include an explanation of the potential benefits of the project as well as a detailed plan with costings. You should ensure that your application matches the objectives of the scheme. You will almost certainly need to submit a business plan as part of the application. It is important to show that the project is dependent on grant funds to proceed and that you have matching funds available.

Hearing back

This can take anything from a few weeks to a year or more. Your application will generally be assessed by looking at a variety of factors including your approach, your expertise, your innovation and your need for the grant.

Why you might be turned down

There are various reasons why your application may be turned down. The common ones include:

• your industry sector or field is not relevant to the body making the award
• your plan of action was not detailed enough or was unfocused and lacking in clarity
• you have not made it clear that the grant is vital to the success of the project
• matched funds are not available.

Finally, if your application is unsuccessful, ask for feedback. This will help you to be more effective when applying for funds in the future.

How we can help

We can help you to find an appropriate source of grant funds and also assist with your business plan and detailed application. Contact us to find out more.

Community Amateur Sports Clubs

Since April 2002, many local amateur sports clubs have been able to register with HMRC as Community Amateur Sports Clubs (CASCs) and benefit from a range of tax reliefs including Gift Aid. In 2014, the tax benefits were increased to encourage more clubs to register and some of the registration requirements are being amended in order to clarify the conditions that clubs have to satisfy.

What kind of club can register?

Broadly a club seeking to register must:

• be open to the whole community
• be organised on an amateur basis
• have as its main purpose providing facilities for, and promoting participation in, one or more eligible sports.

Legislation was introduced in FA 2013 to allow HMRC to amend some of the conditions. The only changes which are law at the moment relate to the income conditions, but it appears that the rest will take effect in the near future.  

Open to the whole community

A club is open to the whole community if:

• membership of the club is open without discrimination
• the club’s facilities are open to members without discrimination, and
• any fees are set at a level that does not pose a significant obstacle to membership or use of the club’s facilities.

Discrimination

Discrimination includes:

• discrimination on grounds of ethnicity, nationality, sexual orientation, religion or beliefs
• discrimination on grounds of sex, age or disability, except as a necessary consequence of the requirements of a particular sport.

Costs associated with membership and participation

It is anticipated that new regulations will specify:

• clubs where membership and participation costs total £520 or less a year will be considered to be open to the whole community
• clubs where membership costs (excluding participation costs) are above £1,612 a year will not be eligible
• clubs where membership and participation costs total more than £520 a year must make special provisions for members on a low or modest income to participate for £520 or less.

Organised on an amateur basis

A club is organised on an amateur basis if:

• it is non-profit making
• it provides for members and their guests only the ‘ordinary benefits’ of an amateur sports club
• it does not exceed the limit on paid players
• its governing document requires any net assets on the dissolution of the club to be applied for approved sporting or charitable purposes.

Non-profit making

A club is non-profit making if its governing document requires any surplus income or gains to be reinvested in the club. Surpluses or assets cannot be distributed to members or third parties. This does not prevent donations to other clubs that are registered as Community Amateur Sports Clubs.

‘Ordinary benefits’ of an amateur sports club

Some of the rules as to what constitutes an ‘ordinary benefit’ are expected to be amended in 2015.

The ordinary benefits of an amateur sports club include:

• provision of sporting facilities
• reasonable provision and maintenance of club-owned sports equipment
• provision of suitably qualified coaches
• provision, or reimbursement of the costs, of coaching courses
• reimbursement of certain travel expenses incurred by players and officials travelling to away matches
• sale or supply of food or drink as a social adjunct to the sporting purposes of the club.

Payments to members

A club is allowed to:

• enter into agreements with members for the supply to the club of goods or services or
• employ and pay remuneration to staff who are club members.

So a CASC could pay members for services such as coaching or grounds maintenance but would not, for example, normally pay members to play. However under new regulations clubs will be allowed to pay a maximum of £10,000 a year in total to players to play for the club.

Eligible sports

Eligible sports are defined in the legislation by reference to the Sports Council’s list of recognised activities. This can accessed using the following link: http://www.sportengland.org/our-work/national-work/national-governing-bodies/sports-that-we-recognise/

A new income condition

All CASCs must meet a new income condition which aims to ensure that CASCs are mainly sports clubs rather than mainly commercial clubs with sports activities. The income condition applies to the turnover received from broadly commercial transactions with non-members, where the club is offering a commercial service or supply, for example sales of food and drink. The maximum amount of turnover that a club may receive under the income condition is £100,000 a year, excluding VAT.

Clubs are able to generate unlimited income from transactions with their members. Investment income and donations received is also excluded from the income condition.

This condition is treated as having effect from 1 April 2010.

Tax reliefs for registered CASCs

CASCs can reclaim basic rate tax on Gift Aid donations made to them by individuals but CASC subscriptions are not eligible as Gift Aid payments.

CASCs are treated as companies for tax purposes. Therefore their profits may be chargeable to corporation tax.

CASCs can claim the following tax reliefs:

• exemption from Corporation Tax on profits from trading where the turnover of the trade is less than £50,000 (was £30,000)
• exemption from Corporation Tax under Schedule A on income from property where the gross income is less than £30,000 (was £20,000)
• exemption from Corporation Tax on interest received
• exemption from Corporation Tax on chargeable gains.

It should be noted that if trading turnover exceeds £50,000 (£30,000), all the trading profit is assessable to corporation tax.

The revised income figures apply in relation to accounting periods beginning on or after 1 April 2015. Where an accounting period straddles this date, the receipts are pro-rated accordingly.

Example A CASC runs a trade with turnover of £60,000 and profit of £6,000. Because the turnover exceeds the £50,000 limit the profit is taxable. The CASC also has gross rental income of £12,000. The gross rental income is below the exemption limit and is not taxable.

Claiming the tax reliefs

Where a CASC receives a tax return, relief can be claimed in the return. However most clubs do not receive a tax return each year. If the club has had tax deducted from its income or if it has received Gift Aid payments, it can claim a repayment from HMRC.

Corporate Gift Aid to the rescue?

The FA 2014 extended corporate Gift Aid to donations of money made by companies to CASCs. This allows companies to claim tax relief on qualifying donations they make on or after 1 April 2014.

It is expected that the corporate Gift Aid provisions will not only encourage companies to make donations to clubs which are registered as CASCs but will also encourage clubs with high levels of commercial trading to potentially benefit from CASC status. A club with significant trading receipts may well not qualify for CASC status because of the trading receipts. It could however set up a trading subsidiary and donate the profits to the club. The donation received by the club will not be treated as trading receipts and thus the club could apply for CASC status. The new Gift Aid relief will eliminate the corporation tax charge on the profits of the company.

There are however other issues for the club to consider in the establishment of a trading subsidiary.

Non-domestic rates relief

CASCs in England and Wales get the same relief that would be available to a charity (80% mandatory relief) where the CASC property is wholly or mainly used for the purposes of that club. For CASCs in Scotland, the Scottish Executive has agreed voluntary relief with local authorities for the same amount.

Relief for donors

• Individuals can make gifts to CASCs using the Gift Aid scheme. We have a separate factsheet giving further details of the Gift Aid scheme.
• Businesses giving goods or equipment that they make, sell or use get relief for their gifts.
• Corporate Gift Aid.
• Gifts of chargeable assets to CASCs are treated as giving rise to neither a gain nor a loss for capital gains purposes.

How we can help

Please contact us if you have any queries relating to the rules on CASCs. We would be delighted to help.

Data Security – Backup

Many companies are now completely reliant on the data stored on their network servers, PCs, laptops, mobile devices and on data stored in the cloud. Some of this data is likely to contain either personal information and/or confidential company information.

Here we look at some of the issues to consider when reviewing the security of your computer systems and data.

Data backup is an essential security procedure and needs to be undertaken on a regular basis. A business should view the undertaking regular backups as a form of insurance policy.  There are a number of points to consider.

Systems and Applications Software Installation media

Ideally, once software has been installed, the original media (unless the software was downloaded) should be stored securely off-site. Any activation keys/codes should be similarly stored securely.

Data file locations

In a network environment some data files might be stored on the server and other data files stored on local drives. In which case separate backups may be required for both the server and one or more PCs.

Ideally, a network solution should be provided which ensures that all data is re-copied back to the server from local drives.

Backup strategy and frequency

There is likely to be a need for two parallel backup procedures; one to cover a complete systems backup of the server(s) and another to incrementally (or differentially) backup data files which have been updated since the previous backup.

The most common backup cycle is the grandfather, father, son method. With this, there is a cycle of 4 daily backups, 4/5 weekly backups and 12 monthly backups.

Remember that some data has to be preserved for many years – for example accounting records for need to be kept for a minimum of 6 years.

Backup media can be re-used many times, but they do not have a finite life and will need replacing after 2-10 years depending on quality and number of times used. Some additional points are made on this issue in the section on backup media degradation.

Backup responsibilities

Someone should be given responsibility for the backup procedures. This person needs to be able to:

• regularly ensure that all data files (server and local) are incorporated in the backup cycle(s)
• adapt the backup criteria as new applications and data files are added
• modify the backup schedule as required
• interpret backup logs and react to any errors notified
• restore data if files are accidentally deleted or become corrupt
• regularly test that data can be restored from backup media
• maintain a regular log of backups and log where the backup media are stored.

Applications backup routines

Many accounting and payroll applications have their own backup routines. It is a good idea to use these on a regular basis (as well as conventional server backups) and always just before critical update routines. These backup data files should be stored on the server drive so that they are backed up.

Local PCs

Certain users will have applications data files exclusively on their local drives (such as payroll data for example) and these will require their own regular backup regime which as mentioned in the previous paragraph may consist of a combination of backing up to media and backing up to the server.

Backup media

Selecting the right media to use for backups depends on budget, how much data there is and the networking operating software. External hard disks or a NAS box with cloud backup may provide a good solution . If an external service provider is used, or perhaps a cloud option, they should have their own backup regime – but don’t totally rely on this.

Optical storage such as CD/DVD, or Blu-Ray may also be considered as a cheaper alternative, but capacity and life may be limited.

Backup location

Backups should be stored in a variety of both on-site and off-site locations. On-site backups are easily accessible when data has to be restored quickly, but are at risk from either fire or other disaster.

A large number of businesses use an on-site safe, however, this will be useless if it’s buried under tons of rubble, or the premises otherwise become inaccessible.

Off-site backups have the advantage that they can be recovered in an emergency, but

a) they still need to be stored securely; and

b) need to be reasonably accessible.

Backup retention

Finally, certain type of records, such as accounting records for example, need to be kept for a minimum period of time and this must be considered when developing the data backup strategy (also see below regarding degradation).

Backup media degradation/decomposition

Backup media degrades and the data stored on them decomposes over a period of time.

Optical media such as CD/DVD and Blu-Ray are particularly sensitive to light (photosensitive), so ensure that they are stored in a dark environment. They are also prone to physical damage when being handled. Finally, this type of media is not designed for long-term storage – lasting possibly as little as 2 years.

Backups should be checked on a regular basis for signs of digital decomposition, and tested to check that data can be successfully restored.

In-house or cloud?

Many internet service providers and third-party IT service organisations, now offer, either as standard or as a chargeable extra, off-site data repositories and also complete online application solutions. The immediate appeal is that there is no need to internally support a server and its operating and applications software. However, there are a significant number of key security issues which should be covered as part of the contract/service level agreement (SLA). These should include level of encryption , the countries in which the data is processed and stored (as this has potential issues with Data Protection laws), data deletion and retention periods, the availability of audit trails of who is accessing the data and finally, who has ownership of the data if the provider goes into administration/receivership.

We would always recommend therefore that if a third-party is used, that the business uses a combination of both traditional in-house backup solutions, and cloud backup services. Where data is stored in the cloud, try to ensure that as little personal data as possible is processed and stored in this way.

How we can help

We can provide help in the following areas:

• performing a security/information audit
• drawing up a suitable backup regime
• training staff in security principles and procedures.

Please do contact us if we can be of further help.

Venture Capital Trusts

Venture Capital Trusts (VCTs) are complementary to the Enterprise Investment Scheme (EIS), in that both are designed to encourage private individuals to invest in smaller high-risk unquoted trading companies affected by the equity gap. While the EIS requires an investment to be made directly into the shares of the company, VCTs operate by indirect investment through a mediated fund. In effect they are very like the investment trusts that are obtainable on the stock exchange, albeit in a high-risk environment.

What is a VCT?

VCTs themselves are quoted companies which are required to hold at least 70% of their investments in shares or securities that they have subscribed for in qualifying unquoted companies. VCTs have a certain time period in which to meet the percentage test. If a VCT sells a holding and breaches the test, the VCT is allowed a six month period to reinvest cash received into another qualifying investment.

Other conditions are:

• they must distribute 85% of their income
• they must have a spread of investments with no single holding accounting for more than 15% of the value of total.

From 22 April 2009 the time limits concerning the employment of money invested are relaxed.

VCTs are exempt from tax on their capital gains and there is no relief for capital losses.

Reliefs available to investors

Income tax relief of 30% is currently available on subscriptions for VCT shares up to a limit per tax year of £200,000.

To qualify for income tax relief the shares must be held for a minimum of five years.

Investors are exempt from tax on any dividends received from a VCT although the credits are not repayable.

Capital gains arising on disposal of the shares are also exempt and for this relief, there is no minimum period of ownership. There is no relief for any capital losses.

Qualifying companies

The definition of a qualifying company for VCT purposes is very similar to that applying for EIS. The company:

• must be unquoted, although shares on the Authorised Investment Market (AIM) are deemed unquoted for this purpose. They may become quoted later.
• must not deal in land, leased assets or financial, legal or accountancy services. In addition it must not be a trade that has a large capital aspect to it, such as property development, farming, hotels or nursing homes.

Certain changes to the qualifying conditions for VCTs have been made to ensure that the scheme continues to meet European State Aid requirements.

In summary the changes are:

• VCT shares must be traded on an EU regulated market rather than being restricted to an official UK list
• the rules governing the amount of a VCT investments which must be held as equity, and the types of shares qualifying will change
• companies will be excluded from qualifying for VCT purposes where it would be regarded as an ‘enterprise in difficulty’ under the European Commission’s guidelines.

It was announced in Budget 2015 that the government will make amendments to the scheme, subject to EU state aid approval:

• Require that companies must be less than 12 years old when receiving their first VCT investment, except where the investment will lead to a substantial change in the company’s activity
• Introduce a cap on total investment received under tax-advantaged venture capital schemes of £15 million, increasing to £20 million for knowledge-intensive companies
• Increase the employee limit for knowledge-intensive companies to 499 employees, from the current limit of 249 employees.

How we can help

It is not possible to cover all the detailed rules in a factsheet of this nature. If you are interested in investing in a VCT please contact us for further information.

Statutory Sick, Statutory Maternity and Statutory Paternity Pay

Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP) Statutory Paternity Pay (SPP) and Shared Parental Pay (ShPP) are important regulations to understand as they enforce minimum legal requirements on employers. Each operates in a different way.

This factsheet sets out the main principles of the regulations and what an employer needs to consider.

Statutory Sick Pay (SSP)

SSP applies to all employers regardless of size and represents the minimum payments which should be paid by law.

It is possible to opt out of the scheme but only if an employer’s occupational sick pay scheme is equal to or more than SSP. There would still be a requirement to keep appropriate records etc.

We have outlined the general principles below but first we need to explain some of the special terms used.

Glossary of terms

Period of incapacity for work (PIW)

A PIW consists of four or more calendar days of sickness in a row. These do not have to be normal working days.

Linking

Where one PIW starts within eight weeks of the end of a previous PIW the periods can be linked.

Qualifying days (QDs)

These are usually the employee’s normal working days unless other days have been agreed.

SSP is paid for each qualifying day once the waiting days have passed.

Waiting days (WDs)

The first three QDs in a PIW are called WDs. SSP is not payable for WDs.

Where PIWs are linked it is only the first three days of the first PIW which are WDs.

Who qualifies for SSP?

All employees who, at the beginning of a PIW or linked PIWs, have had average weekly earnings above the Lower Earnings Limit £112 for 2015/16 (£111 in 2014/15).

Employees must have notified you about their sickness – either within your own time limit or within seven days.

They must give evidence of their incapacity. Employees can self-certify their absence for the first consecutive seven days, thereafter form Med3 (Fit Note) is required from their general practitioner.

How much SSP is payable?

The weekly rate of SSP for the 2015/16 tax year is £88.45 (£87.55 for 2014/15) but it is computed at a daily rate.

The daily rate

The daily rate may vary for different employees. It is calculated by dividing the weekly rate by the number of qualifying days in a week. For example an employee with a five day working week would normally have a daily rate of £17. 69 for 2015/16.

Only QDs qualify for SSP and remember the first three days (WDs) do not qualify.

Maximum SSP

The maximum entitlement is 28 weeks in each period of sickness or linked PIW.

Recovery of SSP

With effect from 6 April 2014 the Percentage Threshold Scheme (PTS) which enabled employers falling within certain limits of the scheme to recover some of their SSP has been abolished.

The PTS enabled employers to recover some of the SSP paid to their employees if the total SSP paid in a tax month is greater than 13% of their gross Class 1 NICs (employers’ and employees’) liability for that month.

Employers will have until the end of 2015/16 to recover SSP paid for sickness absences occurring before the end of 2013/14.

PAYE and records

SSP is included in gross pay and PAYE operated as normal.

In line with the abolition of the Percentage Threshold Scheme and the introduction of the Statutory Sick Pay (Maintenance of Records) (Revocation) Regulations, with effect from 6 April 2014, employers are no longer required to maintain minimum statutory SSP records to demonstrate compliance with SSP obligations.  However, it is best practice to continue to monitor sickness absence and maintain detailed records as these will be required for PAYE purposes.

Statutory Maternity Pay (SMP)

SMP is paid to female employees or former employees who have had or are about to have a baby.

The payment of SMP is compulsory where the employee fulfils certain requirements.

The requirements

SMP is payable provided the employee has:

• started her maternity leave
• given 28 days notice of her maternity leave (unless with good reason)
• provided medical evidence with a form (MATB1)
• been employed continuously for 26 weeks up to and including her qualifying week
• had average weekly earnings (AWE) above the Lower Earnings Limit in the relevant period.

It is important to note that mothers have a legal entitlement to take up to 52 weeks off around the time of the birth of their baby whether or not they qualify for SMP. This means that mothers can choose to take up to one year off in total.

The amount payable

SMP is payable for a maximum of 39 weeks. The date the baby is due, as shown on the MATB1 certificate, determines the maternity pay period entitlement and not the date the baby is born. The rates of SMP are as follows:

• first six weeks at 90% AWE (see below)
• up to a further 33 weeks at the lower of:

• 90% of AWE
• £139.58 per week for 2015/16 (£138.18 for 2014/15)

SMP is treated as normal pay.

Average weekly earnings (AWE)

AWE need to be calculated for two purposes:

• to determine if the employee is entitled to SMP (earnings must be above the Lower Earnings Limit)
• to establish the rate of SMP.

The average is calculated by reference to the employee’s relevant period. This is based on an eight week period up to the end of the qualifying week, which is 15 weeks before the baby is due. In some instances subsequent pay rises have to be taken into account when calculating SMP. Earnings for this purpose are the same as for Class 1 NIC and include SSP.

Recovery of SMP

92% of SMP paid can be recovered by deduction from the monthly PAYE payments.

Employers may qualify for Small Employers’ Relief (SER). SER is 100% of SMP plus 3% compensation.

To qualify for SER, the current limits are:

• total gross Class 1 NIC for the employee’s qualifying tax year must be less than £45,000
• the employee’s qualifying tax year is the last complete tax year that ends before the start of her qualifying week.

Glossary of terms

Week baby due

The week in which the baby is expected to be born. This starts on a Sunday.

Qualifying week (QW)

The 15th week before the week baby due.

The week baby due and QW are easy to establish using software or online calculators which are available through GOV.UK Basic PAYE tools.

Maternity Pay Period (MPP)

The period of up to 39 weeks during which SMP can be paid.

MATB1

Maternity certificate provided by a midwife or doctor. This is available up to 20 weeks before the baby is due. SMP cannot be paid without this.

Ordinary Statutory Paternity Pay (OSPP)

OSPP is paid to partners who take time off to care for the baby or support the mother in the first few weeks after the birth. OSPP was previously known as Statutory Paternity Pay.

It is available to:

• a biological father
• a partner/husband or civil partner who is not the baby’s biological father
• a mother’s female partner in a same sex couple

The partner must have:

• given 28 days notice of their paternity leave (unless with good reason)
• provided a declaration of family commitment on form SC3
• been employed continuously for 26 weeks up to and including their qualifying week
• had average weekly earnings above the Lower Earnings Limit in the relevant period.

The amount payable

OSPP is payable for a maximum of 2 weeks, it must be taken as a block either 1 week or a complete fortnight but not 2 single weeks at the following rates:

• the lower of:

• 90% of AWE
• £139.58 for 2015/16 (£138.18 for 2014/15)

OSPP is treated as normal pay.

The calculation of average weekly earnings and the recovery of OSPP are subject to the same rules as for SMP.

With effect from 1st October 2014, fathers will have the right to take unpaid leave to attend up to two antenatal appointments.

Adoptive parents

To qualify for Statutory Adoption Pay (SAP) an employee must meet the same earnings and service criteria as an employee seeking to qualify for SMP. An employee must provide his or her employer with evidence of the adoption and a declaration that he or she has elected to receive SAP. HMRC form SC4 provides a declaration form that can be used. A matching certificate from the adoption agency must be produced to the employer. SAP is paid at the same rates as SMP and follows the same rules with regard to recovery.

Shared parental leave (SPL)

New rights to Shared Parental Leave are available to parents whose babies are due on or after 5 April 2015. In the case of adoptions SPL will apply in relation to children matched with a person or placed for adoption on or after 5 April 2015.

Employed mothers are  still entitled to 52 weeks of maternity leave. The mother can curtail her right to SMP and leave and opt to take ShPL and Shared Parental Pay (ShPP). SPL and ShPP will be available provided the parents satisfy the eligibility requirements. The main elements of the scheme are:

• In the 52 week period there will be two weeks’ compulsory SML (four weeks if they are manual workers) which the mother must take.
• Eligible parents will then be able to share the remaining leave and pay in the form of ShPP and ShPL between themselves as they choose.
• Fathers will still be entitled to two weeks OSPP basic paternity leave.
• Mothers with partners (who must also meet the qualifying conditions) will be able to end the mother’s  leave and pay and share the untaken balance as ShPL and ShPP.
• Employees who take ShPL are protected from less favourable treatment as they will have the right to return to the same job if the total leave taken is 26 weeks or less in aggregate, even if the leave is taken in discontinuous blocks.
• Any subsequent leave will attract the right to return to the same job, or if that is not reasonably practicable, a similar job.
• It will be up to the parents how they share ShPL – they could take it in turns or take time off together, provided they take no more than 52 weeks of this leave, combined in total.
• Additional paternity leave and pay is abolished for babies due from 5 April 2015 .
• ShPP is calculated in the same way as SMP.

How we can help

As the scheme payments are statutory it is important that rules are adhered to and we will be more than happy to provide you with assistance or any additional information required. Please do not hesitate to contact us.

Share Ownership for Employees – EMI

EMI and SIPs

Retaining and motivating staff are key issues for many employers. Research in the UK and USA has shown a clear link between employee share ownership and increases in productivity. The government has therefore introduced two ways in which an employer can provide mechanisms for employees to obtain shares in the employer company without necessarily suffering a large tax bill.

The two routes are:

• Enterprise Management Incentives (EMI) and
• Share Incentive Plans (SIPs).
• EMI allows selected employees (often key to the employer) to be given the opportunity to acquire a significant number of shares in their employer through the issue of options.

A SIP is designed to allow all employees to participate in their business and to encourage long-term shareholding by them.

This factsheet outlines the rules for EMI.

Tax problems under normal rules

If shares are simply given to an employee the market value of the shares will be taxed as earnings from the employment. This is expensive for the employee as he may not have any cash to pay the tax arising.

In order to avoid this immediate charge, options could be granted to an employee. An option gives the employee the right to obtain shares at a later date. Provided that the terms of the option are that it must be exercised within ten years, any tax liabilities will be deferred until the time the options are exercised.

This may still be expensive for the employee if he is not then in a position to sell some of the shares in order to pay the tax arising.

What does EMI offer?

EMI allows options to be granted to employees which may allow the shares to be received without any tax bill arising until the shares are sold.

How does it work?

Selected employees are granted options over shares of the company. The options should be capable of being exercised within ten years of the date of grant.

In order to qualify for the income tax and national insurance contribution (NIC) reliefs, the options awarded need to be actually exercised within ten years of the date of the grant. There is also a statutory limit of £250,000 in respect of options granted on or after 16 June 2012, which maximises the value of the options which may be granted to any one employee. No employee may hold unexercised qualifying EMI options with a market value of more than £250,000. The market value is taken at the date of grant.

What are the tax benefits to employees?

The grant of the option is tax-free.

There will be no tax or NICs for the employee to pay when the option is exercised so long as the amount payable for the shares under the option is the market value of the shares when the option is granted.

The EMI rules allow the grant of nil cost and discounted options. However, in these circumstances, there is both an income tax and an NIC charge at the time of exercise on the difference between what the employee pays on exercise and the market value of the shares at the date of grant.

Following the acquisition of the shares, when the option is exercised, an employee may immediately dispose of, or may retain the shares for a period before selling them. At such time there will be a chargeable gain on any further increase in value. The CGT liability will depend on the availability of any reliefs and annual exemption.

For chargeable gains:

• CGT at the rate of 18% applies to gains where net total taxable gains and income are below the income tax basic rate band
• CGT on any part of gains above this limit will be charged at 28%.

In certain circumstances, in respect of shares acquired through exercising EMI options, Entrepreneurs’ Relief may be available to reduce the CGT liability to 10%. The law has been amended to extend the relief to EMI shares by removing the 5% minimum shareholding requirement and allowing the 12 month minimum holding requirement to commence on the date the option is granted. This measure applies to shares acquired on or after 6 April 2012 that are disposed of on or after 6 April 2013. The other Entrepreneurs’ Relief requirements apply.

What are the benefits to employers?

• Employees have a potential stake in their company and therefore retention and motivation of these employees will be enhanced.
• Options will not directly cost the employer any money in comparison to paying extra salary.
• There will normally be no NICs charge for the employer when the options are granted or exercised or when the employee sells the shares.
• A corporation tax deduction for the employer company broadly equal to employees’ gains.

EMI: Points to consider

There are a number of issues to consider in deciding whether EMI is suitable for your company.

• Does the company qualify?
• Which employees are eligible and who should be issued options?
• What type of shares will be issued?
• When will the rights to exercise options arise?
• The costs of setting up the option plans are not tax deductible.

Does the company qualify?

EMI was introduced by the government to help small higher risk companies recruit and retain employees with the skills that will help them grow and succeed. The company must therefore:

• exist wholly for the purpose of carrying on one or more ‘qualifying trades’
• have gross assets of no more than £30 million
• not be under the control of another company (so if there is a group of companies, the employee must be given an option over shares in the holding company).

The main trades excluded from being qualifying trades are asset backed trades such as:

• property development
• operating or managing hotels
• farming or market gardening.

Which employees are eligible and who should be issued options?

An employee cannot be granted options if they control more than 30% of the ordinary share capital of the company. They must spend at least 25 hours a week working for the company or the group, or if the working hours are shorter, at least 75% of their total working time must be spent as an employee of the company or group.

Subject to the above restrictions, an employer is free to decide which employees should be offered options. The sole test is that options are offered for commercial reasons in order to recruit or retain an employee.

What type of shares will be issued?

EMI provides some flexibility for employers. For example, it is possible to limit voting rights, provide for pre-emption or set other conditions in respect of shares which will be acquired on exercise of an EMI option. The shares must, however, be fully paid ordinary shares so that employees have a right to share in the profits of the company.

When will the rights to exercise options arise?

The options must be capable of being exercised within ten years of the date of grant but there does not have to be a fixed date.

Examples of circumstances in which the options could be exercised include:

• fixed period
• profitability target or performance conditions are met
• takeover of company
• sale of company
• flotation of company on a stock market.

Options can be made to lapse if certain events arise, for example the employee leaves the employment.

How we can help

We can help you decide whether EMI is appropriate for your business and whether the business will qualify.

We are also able to help you with the necessary documentation required to establish and operate EMI and advise on the costs so please do contact us.

Business Plans

Every new business should have a business plan. It is the key to success. If you need finance, no bank manager will lend money without a considered plan.

It is one of the most important aspects of starting a new business. Your plan should provide a thorough examination of the way in which the business will commence and develop. It should describe the business, product or service, market, mode of operation, capital requirements and projected financial results.

Why does a business need a plan?

Preparing a business plan will help you to set clear objectives for your business and clarify your thinking. It will also help to set targets for future performance and monitor finances and profitability. It should help to provide early warning for when you might need to reconsider the plan.

Always bear in mind that anyone reading the plan will need to understand the essentials of your business quickly and easily.

Contents

The business plan should cover the following areas.

• Overview
  An overview of your plans for the business and how you propose to put them into action. This is the section most likely to be read by people unfamiliar with your business so try to avoid technical jargon.
• Description
  A description of the business, your objectives for it and how you plan to achieve them. Include details of the background to your business for example how long you have been developing the business idea and the work you have carried out to date.
• Personnel
  Details of the key personnel including you and any external consultants. You should highlight the skills and expertise that these people have and outline how you intend to deal with any weaknesses.
• Product
  Details of your product or service and your Unique Selling Point. This is exactly what its name suggests, something that the competition does not offer. You should also outline your pricing policy.
• Marketing
  Details of your target markets and your marketing plan. This may form the basis for a separate, more detailed, plan. You should also include an overview of your competitors and your likely market share together with details of the potential for growth. This is usually a very important part of the plan as it gives a good indication of the likely chance of success.
• Practices
  You will need to include information on your proposed operating practices and production methods as well as premises and equipment requirements.
• Financial forecasts
  The plan should cover your projected financial performance and the assumptions made in your projections. This part of the plan converts what you have already said about the business into numbers. It will include a cash flow forecast which shows how much money you expect to flow in and out of the business as well as profit and loss predictions and a balance sheet. Detailed financial forecasts will normally be included as an appendix to the plan. As financial advisers we are particularly well placed to help with this part of the plan.
• Financial requirements
  The cash flow forecast referred to above will show how much finance your business needs. The plan should state how much finance you want and in what form. You should also say what the finance will be used for and show that you will have the resources to make the necessary repayments. You may also give details of any security you can offer.

The future

Putting together a business plan is often seen as a one-off exercise undertaken when a new business is starting up.

However the plan should be updated on a regular basis. It can then be used as a tool against which performance can be monitored and measured as part of the corporate planning process. There is much merit in this as used properly it keeps the business focused on objectives and inspires a discipline to achieve them.

How we can help

We can look forward with you to help you put together your best possible plan for the future.

Inheritance Tax – a Summary

Inheritance tax (IHT) is levied on a person’s estate when they die, and certain gifts made during an individual’s lifetime.

Most gifts made more than seven years before death will escape tax. Therefore, if you plan in advance, gifts can be made tax-free: the result can be a substantial tax saving.

We give guidance below on some of the main opportunities for minimising the impact of the tax.

It is however important for you to seek specific professional advice appropriate to your personal circumstances.

Summary of IHT

Scope of the tax

When a person dies IHT becomes due on their estate. Some lifetime gifts are treated as chargeable transfers but most are ignored providing the donor survives for seven years after the gift.

The rate of tax on death is 40% and 20% on lifetime chargeable transfers. For 2015/16 the first £325,000 is chargeable at 0% and this is known as the nil rate band.

Charitable giving

A reduced rate of IHT applies where 10% or more of a deceased’s net estate (after deducting IHT exemptions, reliefs and the nil rate band) is left to charity. In those cases the 40% rate will be reduced to 36%.

IHT on lifetime gifts

Lifetime gifts fall into one of three categories:

• a transfer to a company or a trust is immediately chargeable
• exempt gifts which will be ignored both when they are made and also on the subsequent death of the donor, eg gifts to charity
• any other transfers will be potentially exempt transfers (PETs) and IHT is only due if the donor dies within seven years of making the gift. It might therefore be more advisable to regard them as potentially chargeable transfers.

IHT on death

The main IHT charge is likely to arise on death. IHT is charged on the value of the estate. This includes any interests in trust property where the deceased had a right to income from, or use of, the property. Furthermore:

• PETs made within seven years become chargeable
• there may be an additional liability because of chargeable transfers made within the previous seven years.

Estate planning

Much estate planning involves making lifetime transfers to utilise exemptions and reliefs or to benefit from a lower rate of tax on lifetime transfers.

However careful consideration needs to be given to other factors. For example a gift that saves IHT may unnecessarily create a capital gains tax (CGT) liability. Furthermore the prospect of saving IHT should not be allowed to jeopardise the financial security of those involved.

Use of PETs

Wherever possible gifts should be made as PETs rather than as chargeable transfers. This is because the gift will be exempt from IHT if the donor survives for seven years.

Nil rate band and seven year cumulation

Chargeable transfers covered by the nil rate band can be made without incurring any IHT liability. Once seven years have elapsed a gift is no longer taken into account in determining IHT on subsequent transfers. Therefore every seven years a full nil rate band will be available to pass assets out of the estate.

Transferable nil rate band

It is possible for spouses and civil partners to transfer the nil rate band unused on the first death to the surviving spouse for use on the death of the surviving spouse/partner. On that second death, their estate will be able to use their own nil rate band and in addition the same proportion of a second nil rate band that corresponds to the proportion unused on the first death. This allows the possibility of doubling the nil rate band available on the second death. This arrangement can apply where the second death happens after 9 October 2007 irrespective of the date of the first death.

Annual exemption

£3,000 per annum may be given by an individual without an IHT charge. An unused annual exemption may be carried forward to the next year but not thereafter.

Gifts between husband and wife

Gifts between husband and wife are generally exempt, if both are UK domiciled. It may be desirable to use the spouse exemption to transfer assets to ensure that both spouses can make full use of lifetime exemptions, the nil rate band and PETs.

Small gifts

Gifts to individuals not exceeding £250 in total per tax year per recipient are exempt. The exemption cannot be used to cover part of a larger gift.

Normal expenditure out of income

Gifts which are made out of income which are typical and habitual and do not result in a fall in the standard of living of the donor are exempt. Payments under deed of covenant and the payment of annual premiums on life insurance policies would usually fall within this exemption.

Family maintenance

A gift for family maintenance does not give rise to an IHT charge. This would include the transfer of property made on divorce under a court order, gifts for the education of children or maintenance of a dependent relative.

Wedding presents

Gifts in consideration of marriage are exempt up to £5,000 if made by a parent with lower limits for other donors.

Gifts to charities

Gifts to registered charities are exempt provided that the gift becomes the property of the charity or is held for charitable purposes.

Business property relief (BPR)

When ‘business property’ is transferred there is a percentage reduction in the value of the transfer. Often this provides full relief. In cases where full relief is available there is little incentive, from a tax point of view, to transfer such assets in lifetime. Additionally no CGT will be payable where the asset is included in the estate on death. However the reliefs may not be so generous in the future and therefore gifts now may be advisable.

Agricultural property relief (APR)

APR is similar to BPR and available on the transfer of agricultural property so long as various conditions are met.

Use of trusts

Trusts can provide an effective means of transferring assets out of an estate whilst still allowing flexibility in the ultimate destination and/or permitting the donor to retain some control over the assets. Provided that the donor does not obtain any benefit or enjoyment from the trust, the property is removed from the estate.

We can advise you on the type of trust which may be suitable for your circumstances.

Life assurance

Life assurance arrangements can be used as a means of removing value from an estate and also as a method of funding IHT liabilities.

A policy can also be arranged to cover IHT due on death. It is particularly useful in providing funds to meet an IHT liability where the assets are not easily realised, eg family company shares.

Wills

As the main IHT liability is likely to arise on death, an up to date Will is important.

How we can help

Whilst some generalisations can be made about IHT planning it is always necessary to tailor the strategy to fit your situation.

Any plan must take account of your circumstances and aspirations. The need to ensure your financial security (and your family’s) cannot be ignored. If you propose to make gifts the interaction of IHT with other taxes needs to be considered carefully.

However there can be scope for substantial savings which may be missed unless professional advice is sought as to the appropriate course of action. We would welcome the opportunity to assist you in formulating a strategy suitable for your own requirements. Please do not hesitate to contact us.

Employment Benefits

Today the remuneration of many directors and employees comprises a package of salary and benefits.

Essentially two tests must be applied in determining the tax implications of any benefit.

• Is the benefit taxable?
• If the benefit is taxable, what is its taxable value?

In this factsheet, we give guidance on some of the main benefit in kind rules and indicate some common types of benefits.

It is not intended to be an exhaustive guide and any decisions should be supported by professional advice appropriate to your personal circumstances.

Setting the scene

All earnings of an office or employment are taxable. Where they are not in cash it becomes necessary to put a value on them.

As a general rule unless the benefit can be converted into cash there is no taxable benefit. Where it is convertible into cash the taxable amount is the resale value.

To prevent avoidance, additional legislation charges certain other benefits to tax. The detailed rules are complex. We can advise on structuring remuneration packages, including benefits, in a tax efficient way.

Reporting

Employers are required to notify HMRC of benefits provided to directors and most employees by completing forms P11D annually.

Penalties can apply where the forms are submitted late or are incorrect.

The full amount of any benefit or reimbursed expense must be reported on this form. However, where the reimbursed amounts represent genuine business expenses a claim can be submitted by the taxpayer on his or her tax return, (or in writing to HMRC if they do not receive a tax return) thus resulting in a nil liability.

Dispensations

Many expense payments do not involve a tax liability as a corresponding claim is made by the employee for amounts expended wholly, exclusively and necessarily in the performance of their employment.

A dispensation, granted by HMRC, allows certain expenses to be ignored when completing P11Ds. Commonly, a dispensation covers travelling and subsistence expenses and routine entertaining. Correspondingly, the employee cannot make an expenses claim to HMRC.

National Insurance

In general employees’ national insurance (NIC) is not due on benefits except vouchers, stocks and shares, the discharge of an employee’s personal liability and benefits provided by way of ‘readily convertible’ assets.

Most benefits are subject to Class 1A NIC payable by the employer. As this amounts to 13.8% of the taxable value of the benefit, you always need to consider the tax efficiency of providing benefits.

Please consult us for advice.

Non-taxable benefits

Certain benefits are not taxable. The most important ones are:

• retirement benefits which are paid by an employer into a registered pension scheme
• meals provided in a staff canteen
• drinks and light refreshments at work
• parking provided at or near an employee’s place of work
• workplace nursery places provided for the children of employees
• certain other employer-supported childcare up to £55 per week. Any formal registered childcare or approved home childcare contracted for by the employer such as a local nursery, out-of-school club or childminder may be covered by this exemption
• in-house sports facilities
• payments for additional household costs incurred by an employee who works at home
• removal and relocation expenses up to a maximum of £8,000 per move
• the provision of a mobile phone or vouchers to make available a mobile phone (limited to one phone per employee only)
• annual social functions for employees provided the total cost of all events in a tax year is less than £150 per head
• a statutory exemption for trivial benefits in kind costing less than £50 (from 6 April 2015).

Taxable benefits

The following benefits are taxable on all employees:

• any living accommodation provided, unless job related
• vouchers
• credit tokens.

In addition, special rules apply to tax other benefits received by directors and all but the lowest paid employees. Common types of benefits provided are detailed below.

• Employer provided cars – this is probably the most common benefit and the taxable amount will generally be based on a range of 10% – 35% of the manufacturer’s list price (including accessories) of the car. The taxable benefit depends upon the carbon dioxide emissions of the car.

  There are reductions for unavailability of the car and where the employee makes a contribution towards the cost of the car.

  Please talk to us for further details on the application of the rules.

• Private fuel – a separate charge applies where private fuel is provided for an employer provided car, unless the employee reimburses the employer for all private mileage (including travel between home and work). The charges are determined by reference to the percentage applying to the company car. A set figure of £22,100 for 2015/16 (£21,700 for 2014/15) is multiplied by this percentage to determine the taxable benefit.
• Van – The scale benefit charge for the unrestricted use of an employer provided van is £3,150 for 2015/16 (£3,090 for 2014/15).  Where the restricted private use condition is met no benefit arises. Where an employer also provides fuel for unrestricted private use an additional fuel charge of £594 for 2015/16 applies(£581 for 2014/15. Please do get in touch if you would like to ensure that employee van use meets the restricted private use condition.
• Cheap or interest free loans – no benefit will be taxed where the loan does not exceed £10,000.

• Medical insurance – the cost of providing medical insurance is a taxable benefit.
• Use of company assets – an annual benefit is taxed where employees have the private use of company assets. The annual benefit amounts to 20% of the asset’s market value when first made available to any employee. Insignificant private use of certain assets is not taxable.
• Phones – private home phone bills, including rental charges, which are paid for by the employer will be taxed as a benefit.

How we can help

The taxation of employment benefits is a complex area. Ensuring that you comply with all the administrative obligations and plan in advance to minimise tax liabilities is essential. We can help you with the following:

• reviewing existing employees’ remuneration packages for tax and NIC efficiency
• planning flexible and tax efficient remuneration packages for key employees within your organisation
• advising on systems for reimbursing expenses and applying for dispensations
• providing advice and assistance with the completion of your PAYE returns
• negotiating with HMRC if disagreements arise and in reaching settlements.

We would welcome the opportunity to assist you with any planning and compliance matters so please do contact us.

Internet and Email Access Policy

In order to protect the firm, its employees, customers and suppliers, all members of staff should be given a copy of the firm’s policy regarding acceptable use of IT resources – particularly internet, email access, and data protection policies. It may also be necessary to have a separate Bring Your Own Device (BYOD) policy covering the use of personal devices and to what extent (if any) these are permitted to connect to corporate information systems.

Any such policies should form part of the contract of employment – to the extent that any breaches of the policy could result in disciplinary action, and in some cases even dismissal.

Having an acceptable use policy not only helps protect the organisations exposure to rogue software, legal action, and loss of corporate/personal data but can also help in disputes with employees.

Email

Employees need to be wary of the content of all emails they may send. One email sent without thought as to the potential repercussions can have unintended consequences for both the employee and organisation.

Illegal material

Due to the uncensored nature of the material on the internet, there are a large number of web sites which contain offensive, obscene and illegal (in the UK) material. Employees should not access such sites.

Viruses and phishing

Innocent looking web sites and emails have been used to tempt users to download material which has been found to contain a virus, or to disclose company, or personal confidential data they would not normally impart.

Personal phones, personal headsets and use of social networks

Firms may wish to include references to the use of personal phones, personal headsets and social networking. The use of these or restrictions on the use of these will very much depend on the working environment.

A Model Policy Statement

To minimise these kinds of potential problems, all employers should consider setting out a policy statement for all employees embracing internet and email access.

A suggested policy statement is shown below which you may find useful as a starting point.

Policy and scope

The company/firm (delete as appropriate) sees the internet and the use of email as an important business tool.

Staff are encouraged to enhance their productivity by using such tools – but only according to guidelines on their use as set out in this document.

The internet is largely unregulated and uncensored and we have a duty of care to protect the security of the company’s/firms internal information, our customers, our suppliers and our employees from malevolent, obscene and illegal material.

[Monitoring – Optional paragraphs 1

With this in mind, the company/firm reserves the right to monitor emails and internet sites visited on an employee basis. However, this will only be performed where there is a suspicion of behaviour which breaches the company’s ‘email and internet access’ policy.

Staff under surveillance will be informed, by management, that they are being monitored.

Covert monitoring will only be performed in exceptional circumstances and only when sanctioned by a senior officer(s) of the company/firm.]

[Monitoring – Optional paragraphs 2

With this in mind, the company/firm reserves the right to monitor email and internet traffic. However, individual users will not be identified in the monitoring process.]

It will be assumed that all staff understand and agree to the policies unless a director (partner) is notified otherwise. Any exceptions are to be appended to the employee’s contract of employment and signed by a director (partner) and the employee.

All the company’s/firm’s resources, including computers, access to the internet and email are provided solely for business purposes.

The purpose of this policy is to ensure that you understand to what extent you may use the computer(s) owned by the company/firm for private use and the way in which access to the internet should be used within the company/firm, to comply with legal and business requirements.

This policy applies to all employees of the company/firm and failure to comply may lead to disciplinary action in line with the Disciplinary Procedure. In addition, if your conduct is unlawful or illegal you may be personally liable.

General principles

A computer and internet access is provided to you to support the company’s/firm’s activities.

Private use of computers and the internet is permitted subject to the restrictions contained in this policy. Any private use is expected to be in the employee’s own time and does not interfere with the person’s job responsibilities. Private use must not disrupt IT systems or harm the company/firm’s reputation.

You should exercise caution in any use of the internet and should never rely on information received or downloaded without appropriate confirmation of the source.

Access to the internet and email

All/The following users have access to the internet and email from all/the following PCs…

Personal use

The internet may not be accessed for personal use during normal hours of employment. Occasional use for personal reasons is allowed outside working hours, however the restrictions set out in ‘Browsing/Downloading material’ (below) must be adhered to.

Personal emails may not be sent/received unless in an emergency or with prior authority.

[Optional paragraph on Personal use of mobile phones, personal headsets and social networking]

Emails and email attachments

Emails must conform to the same rules as issuing correspondence on the company’s/firm’s headed paper.

[Optional sentence – Emails must be authorised by either a director/partner (or manager)].

Emails must not contain controversial statements/opinions about organisations or individuals. In particular, racial or sexual references, disparaging or potentially libellous/defamatory remarks and anything that might be construed as harassment should be avoided.

Emails must not contain offensive material.

Emails containing a virus must not knowingly be sent.

Emails coming from an unknown source must not be opened but disclosed to management (see Disclosure).

Emails sent externally, must contain the company’s/firm’s disclaimer (see sample below)

Emails (sent and received) must be stored in the appropriate client files and use the same naming conventions which are used to store letters and other correspondence.

Browsing/Downloading material

Only material from bona fide business, commercial or governmental web sites should be browsed/downloaded.

No other material should be browsed/downloaded. This specifically includes games, screensavers, music/video and illegal, obscene or offensive material.

Laptops/portables and portable media devices

a) Travelling with laptops/portables

• Laptops are liable to be inspected by authorities particularly if travelling by air/sea/rail, both within and outside the UK. Where an employee has a company’s/firm’s laptop they must ensure that it does not knowingly contain illegal material.
• Laptops containing corporate data should be encrypted.

b) Using laptops/portables on remote connections

• Company’s/firm’s laptops may be used for email/internet use without being connected to the corporate server. Appropriate security software to allow such access and to control viruses, should be installed.

c) Using portable media devices

• Portable media devices include USB memory sticks, USB pens, CDs, DVDs etc
• Where these contain confidential corporate or personal data, the data contained on these devices should be encrypted.

Disclosure

Employees have a duty to report the following to management:

• suspect emails/email attachments/web sites
• obscene/illegal material found on a PC
• persistent use of the internet for personal reasons
• persistent downloading of illegal/obscene/offensive material
• loss of corporate data or loss of machines and devices containing corporate data

Disciplinary

A breach of any of the policies is a disciplinary matter.

Illegal activities will also be reported to the relevant authorities.

Inappropriate use

Computers are a valuable resource to our business but if used inappropriately may result in severe consequences to both you and the company/firm. The company/firm is particularly at risk when you have access to the internet. The nature of the internet makes it impossible to define all inappropriate use. However you are expected to ensure that your use of computers and the internet meets the general requirements of professionalism.

Specifically, during any use of the computer or internet you must not:

• copy, upload, download or otherwise transmit commercial software or any copyrighted materials belonging to the company/firm or other third parties
• use any software that has not been explicitly approved for use by the company/firm
• copy or download any software or electronic files without using virus protection measures approved by the company/firm
• visit internet sites or download any files that contain indecent, obscene, pornographic, hateful or other objectionable materials
• make or post indecent, obscene, pornographic, hateful or otherwise objectionable remarks, proposals or materials on the internet
• reveal or publicise confidential or proprietary information (including personal data) about the company/firm, our employees, clients and business contacts.

The following activities are expressly forbidden:

• the deliberate introduction of any form of computer virus
• seeking to gain access via the internet to restricted areas of the company’s/firm’s computer system or another organisation’s or person’s computer systems or data without authorisation or other hacking activities.
• Downloading corporate information onto portable media devices (such as USB pen or CD) unless management has expressly approved this activity.
• Uploading personal/private information (for example music, films or photographs) from portable media devices (such as USB pen or CD) onto a local or network drive, unless management has expressly approved this activity.

Monitoring

At any time and without notice, we maintain the right and ability to examine any systems and inspect and review any and all data recorded in those systems. Any information stored on a computer, whether the information is contained on a hard drive, computer disk or in any other manner may be subject to scrutiny by the company/firm. This examination helps ensure compliance with internal policies and the law. It supports the performance of internal investigations and assists the management of information systems.

In order to ensure compliance with this policy, the company/firm may employ monitoring software to check on the use of the internet and block access to specific websites to ensure that there are no serious breaches of the policy. We specifically reserve the right for authorised personnel to access, retrieve, read and delete any information that is created by, received or sent as a result of using the internet, to assure compliance with all our policies. Such monitoring will be used for legitimate purposes only.

Sample eMail Disclaimer

This email and all attachments it may contain are confidential and intended solely for the use of the individual to whom it is addressed. Any views or opinions presented are solely those of the author and do not necessarily represent those of [the company/firm]. If you are not the intended recipient, be advised that you have received this email in error and that any use, dissemination, printing, forwarding or copying of this email is strictly prohibited.

Please contact the sender if you have received this email in error.

Companies Act 2006 emails and web sites

Changes to Company law mean that, every company must now include their company registration number, place of registration and registered office address on corporate forms and documentation (this includes emails and websites).

In particular, all external emails must include this information – whether as part of the corporate signature or as part of the corporate header/footer.

How we can help

We will be more than happy to provide you with assistance in formulating an acceptable use policy, or if any additional information is required.