Students are being reminded that they may not have to pay any  tax on the money they make from summer jobs.

Many college and university students take on temporary work over the summer to earn extra cash but HM Revenue & Customs (HMRC) says that they may not know that – provided their total earnings for the tax year are less than the personal allowance of £7,475 – they will not have to pay any tax on the money they make.

To ensure their employers do not deduct tax they do not need to pay, students must fill in a form P38(S), which they can download from the HMRC website at www.hmrc.gov.uk/forms/p38s.pdf

Students who fail to fill in the form can reclaim any tax paid by sending HMRC a form P50, available at www.hmrc.gov.uk/pdfs/p50.pdf

Stephen Banyard, director general of personal tax at HMRC said: “We don’t want students to pay tax when they don’t owe any, so we’re encouraging them to fill in a P38(S) and return it to their employer. That way they can keep all the money they’re earning for student life’s essentials.”

LINK: Student tax advice

Conciliation service Acas helped to prevent more than 13,000 workplace disputes between individuals and their employers from reaching an employment tribunal, its latest annual report has shown.

The report for 2010-2011, issued on 28 July, revealed that Acas dealt with almost 18,000 such disputes – 80 per cent up on the previous year – through its pre-claim conciliation service, which aims to resolve workplace issues before they escalate into tribunal claims.

The proportion of cases where no claim was then made to an employment tribunal rose from 70 per cent to 74 per cent, preventing 13,158 cases going any further.

Acas said it had seen a significant increase in demand for its help in resolving large-scale disputes in the past year. It dealt with 1,054 collective disputes over the period, up 15 per cent from 2009/10.

Pay continued to be the top issue followed by redundancy. Ninety-one per cent of cases, including high profile disputes such as British Airports Authority (BAA), the BBC and London Underground, were either resolved or the parties were moved towards a resolution.

The number of claims Acas received for conciliation via employment tribunals fell to just under 75,000 cases, a drop of 15 per cent. Unfair dismissal continued to be the most common reason for individual conciliation cases.

Ed Sweeney, Acas chair, said: "There have been a number of high profile collective disputes and it’s encouraging to see employers and trade unions willing to get round the negotiating table to reach agreement.

"The success of our pre-claim conciliation service was highlighted by the government’s proposal to expand it in their Resolving workplace disputes consultation. We know that tackling issues in the workplace as early as possible can save time, money and stress for all involved.” The annual report also revealed that:

• the Acas helpline answered almost one million calls
• the Acas website attracted more than four million visits, 400,000 more than in 2009/10. Guidance on the Equality Act guidance was the most popular with visitors, attracting 270,000 page views
• Acas trained more than 35,000 employers and employees in good employment practices, a rise of 16 per cent on the previous year.

LINK: Acas annual report

Businesses should be more willing to undergo data protection audits, says the Information Commissioner.

The warning came as figures published in the Information Commissioner’s Office (ICO) showed that private companies reported the most data security breaches of any sector in 2010/11.

A data security breach is an incident that results in the loss, release or corruption of personal data. There is no legal obligation on data controllers to report such breaches, but the ICO operates a voluntary scheme under which serious breaches are brought to its attention.

Figures from the annual report show that of the 603 data security breaches reported to the ICO in 2010/11, 186 – almost a third – occurred in the private sector.

But only 19 per cent of businesses contacted by the ICO accepted its offer of a free data protection audit. In contrast, 71 per cent of public sector organisations who were contacted voluntarily agreed to be audited.

Information Commissioner Christopher Graham said: “Lenders, general businesses and direct marketing companies account for almost a third of total complaints to the ICO, and businesses were the top sector for reporting data security breaches to us last year.

“Despite this, many of them are still resisting our offer to undergo audits. We’ve written to organisations we consider to be high risk but the response has been disappointing.

“These audits are not about naming and shaming those who are getting it wrong. The fact that a company has undergone a consensual audit should count as a badge of honour, showing that the business takes data security seriously. After all, sound data protection practices are irrevocably linked to providing good customer service.”

The ICO’s good practice audits are designed to help organisations and businesses to meet their data protection obligations through sharing good practice and making helpful recommendations. During 2010-11, the ICO wrote to more than100 public and private sector organisations to offer its services and a total of 30 per cent agreed to undergo an audit.

LINK: ICO’s annual report

A new service has been launched to help UK companies learn about the security and business risks in 90 markets when working abroad.

The Overseas Business Risk service is particularly aimed at giving SMEs the information they need to help them do business abroad safely and successfully.

Overseas Business Risk, launched on 12 July, is run jointly by UK Trade & Investment (UKTI) and the Foreign & Commonwealth Office and is accessible through the UKTI website.

Profiles available for 90 markets all over the world will cover aspects like the risk of cyber crime, corruption, bribery and theft of intellectual property. It will also provide, in one place, links to authoritative information from across government.

Foreign Secretary William Hague said: “The success of British firms in markets overseas is essential to our nation’s economic recovery and we want to encourage more businesses to export.

“Many opportunities exist in markets overseas, but we know that risks can accompany opportunity. Companies need support to address such risks, including those relating to corruption, security and rapidly growing threats such as cyber crime.

“Our new Overseas Business Risk service aims to help business manage these risks by providing information on over 90 markets.”

The service forms part of the FCO Charter for Business, which helps business to identify and pursue new opportunities while managing potential pitfalls.

LINK: Overseas Business Risk service

A new report has shown that the UK is the top destination for foreign direct investment in Europe and the third worldwide.

The World Investment Report, published on 26 July by the United Nations Conference on Trade and Development (UNCTAD), said the stock of foreign direct investment (FDI) in the UK was $US 1,086 billion in 2010, up from $US1,056 the previous year. The stock of inward investment measures the actual book value of assets held by foreign investors in the UK.

Lord Green, Minister of State for Trade and Investment, said: “This report reinforces the UK’s position as one of the most attractive places to do business in the world.”

The World Investment Report also showed that the UK outperformed the European market. The UK’s share of FDI stock increased while the overall stock of FDI in Europe declined to $7,614 billion (from $7,951 billion in 2009) and that in the EU fell to $6,890 (from $7,296 in 2009).

Earlier in July, Business Secretary Vince Cable published figures showing that inward investment created or safeguarded 94,598 jobs created in 2010/11.

Over two-thirds of the new jobs came from existing investors, indicating that businesses already operating in the UK are growing and stimulating growth.

LINK: UKTI press release

Retailers’ lives are set to be made easier after the government said more than 160 regulations would be simplified or scrapped in the first changes to be introduced through its Red Tape Challenge.

The first wave of reforms, announced by Business Secretary Vince Cable on 28 July, is set to benefit shops and consumers. Comments from the public and businesses have led to proposals including:

• streamlining more than a dozen pieces of consumer rights law with a single new piece of legislation
• simplifying the  poisons licensing system for low risk products such as fly spray and toilet cleaner and removing the requirement on retailers to notify TV Licensing about TV sales
• removing the need for a shop selling liqueur chocolates to have an alcohol licence and lowering the age for buying Christmas crackers
• scrapping redundant legislation, such as the wartime Trading with the Enemy Act and rules around the safety of pencils, prams and hood cords, where consumers are already protected by other legislation.

Dr Cable said: “We have to roll back the number of rules and regulations that our businesses have to deal with if we are to create the right conditions for sustainable economic growth.

“We are making real progress but this is just the start. We still need the help of business and the public to make the rest of the Red Tape Challenge a success and free businesses to compete, create jobs and unleash a private sector-led recovery.”

Minister for Business and Enterprise Mark Prisk said: “As a result of the thousands of comments we received, and a robust challenge process inside Whitehall, we are now proposing to simplify, improve or abolish two-thirds of the retail regulations that we asked the public to comment on, cutting back the bureaucracy that our retailers face.

“These moves will help reduce costs, especially for small retailers, by cutting down the number of forms they have to fill in and overlapping and confusing laws they have to get to grips with.“

The Red Tape Challenge was launched on 7 April as part of the government’s drive to do away with badly designed or badly thought-out regulations that create an unnecessary burden on the commercial sector.

LINK: Red Tape Challenge

Tax experts say there could be “grave consequences” unless problems with the PAYE system are resolved before the introduction of a new system.

The Low Incomes Tax Reform Group (LITRG), an initiative of the Chartered Institute of Taxation, spoke out in July following publication of the National Audit Office (NAO) report on the 2010-11 accounts of HM Revenue & Customs (HMRC). The report noted that “stabilisation” of PAYE would not be fully complete until 2013.

LITRG chairman John Andrews said: “HMRC’s failure to clear past years’ debts and repayments promptly through the PAYE system has led to hardship for significant numbers of people and has badly dented public confidence in the department.

“HMRC are now working hard to do two things; to stabilise the existing PAYE system and to introduce (in 2013) a new way of employers providing data to HMRC on a monthly basis, the so-called ‘real-time information’ project.

“The new system will be relied upon to determine not only an employee’s tax liability but also their universal credit entitlement.

“It will be essential for all old disputes and PAYE data problems to be out of the way by the time real-time information comes on stream. Any unresolved problems could have grave consequences for the unrepresented on low incomes and make the universal credit delivery fraught with difficulty.”

Mr Andrews highlighted that the NAO had warned that increasing the volume of in-year taxpayer records while reducing the number of HMRC staff could affect the accuracy of PAYE codes and added: “More frequent PAYE data collections could place yet greater burdens on employers – especially small and micro-businesses unused to dealing with HMRC online.

”The anticipated ‘win-win’ situation coming from these two major initiatives could easily turn into a ‘lose-lose’ unless the existing PAYE system is working very smoothly before the radical change of real time information is introduced.”

LINK: National Audit Office report

The government is asking businesses for their views on integrating the income tax and national insurance contributions (NIC) systems.

Its call to evidence, a preliminary consultation launched in July and continuing until 19 September, aims to build a clear picture of how employers are affected by having to operate two different systems. Responses received will help to shape the government’s proposals for reform, on which it will consult in the autumn.

The government believes that bringing together the two systems – currently operated entirely separately – can reduce the burden on business and improve fairness for individual earners.

David Gauke, Exchequer Secretary to the Treasury, said: “Greater integration of income tax and NICs will be a radical reform, but we believe that it has potential to bring real improvements. We would like to hear from businesses and other stakeholders before we move on to further consultation later in the year.”

Topics the government is seeking views on include how much staff time and other resources are required to manage the existing income tax and national insurance systems, which aspects of the process currently work well and how often problems are encountered when calculating payments.

LINK: Consultation on integrating income tax and national insurance

Around 500,000 people who complete self assessment tax returns will have to wait longer than normal to find out how much tax they have to pay, HM Revenue & Customs (HMRC) has announced.

Some of the self assessment statements due to be issued in July will now be issued later, HMRC announced on 25 July, although it said most would be sent on time. People with a unique taxpayer reference number ending with digits from 70 to 99 may be affected.

HMRC usually tells people in the self-assessment system – mainly sole traders, the self-employed, and partners in businesses or limited liability partnerships – who have to pay tax "on account" that they should make two estimated tax payments, one by 31 January and the other by 31 July.

They make the payments based on tax paid in the 2009-10 tax year. A balancing payment, or refund, will then be made in January 2012 to resolve any differences between the estimate and the actual amount.

HMRC said around 500,000 customers would receive their July statements later than normal, adding: “If HMRC has asked you to make a second payment on account in July, you normally have to pay this by 31 July. If you receive your statement in August, you should still pay the tax due as soon as you can.

“You’ll only be asked to pay interest on the tax due on the second payment on account if you still haven’t paid it more than 30 days after you receive your statement. Online customers will still be able to check their statement online and pay online too.”

In January 2008, a similar number of taxpayers received their statements late. HMRC said it had since changed its forecasting arrangements and these had worked well but added: “The volumes on this occasion have risen out of all proportion to previous patterns. HMRC will now ensure that they understand the reasons for this and will be fully prepared for any future rises.”

The BBC and other media have reported that HMRC failed to order enough special paper on which to print the statements.

LINK: Self assessment statements