How Government Policy Changes Might Affect Your Business
As the UK’s recent IR35 tax policy adjustments have proven, businesses can become suddenly prone to penalisation should they fail to accommodate their business to new regulations. While changes are often well-broadcast and made known to each national business, it can still be easy to find yourself non-compliant, especially when regulations are vague or complicated.
Some issues can easily and quickly be remedied, while others require businesses to adjust their entire operation. The latter situation can be expensive and time-consuming, leading some companies to try and cut corners. In these instances, those caught out will be open to large fines and potentially more. Here are a few ways in which policy changes have caused businesses issues.
Despite the clarity behind minimum wage policy changes, numerous businesses around the UK are continuously caught out under-paying staff, often teenage workers who fall into different pay brackets. Adjustments to minimum wage pay levels, as well as pay brackets, are changing constantly. In April 2020, the minimum wage for those over 24 was raised to £8.72 and yet there are businesses already being caught out for not adjusting their payroll.
At the best of times, the various tax policies that affect businesses require careful consideration. It isn’t always easy to be confident that you are paying the right amount and from the right places, especially if you have been caught in the past, finding yourself with a sudden and large amount to repay.
Those who are responsible for employees and contractors must also ensure that they are adhering to a variety of tax policies. As mentioned, April’s IR35 policy changes are causing businesses to review and renegotiate their contracts with contractors. To avoid complications, outsourcing these departments has risen in popularity and businesses have begun finding safety in alternative options, such as umbrella payroll from People Group Services, ensuring their taxation is continuously compliant and up-to-date.
Perhaps the most notable change in government policy of recent years, GDPR has resulted in huge fines for many businesses around the UK. The regulations put in place are wide-ranging and, as such, require businesses to reevaluate their current paperwork, data storage, and information distribution.
Failure to comply with GDPR can lead to a fine of up to €20 million or 4% of your business’ annual turnover. The deadline to meet new regulations was in 2018 and yet businesses, both large and small, have failed to meet government expectations.
Review Your Business
If you haven’t outsourced your necessary departments to reputable professionals, then it is crucial that you review your business and the governmental policies that might affect it regularly. While it may seem tedious or unnecessary, even a small oversight can lead to huge penalties. Time spent ensuring that you are compliant is going to add to your business’ fortification, preventing surprise inspections or unforeseen events.
So, do your best to forget the adage if it ain’t broken, don’t fix it when running a company, because compliance with regulation can become broken very quickly, even without immediate realisation.