For small- or medium-sized enterprises, this year sees several legal changes come into force that could affect the way you operate or plan ahead. The changes are designed to help businesses, particularly around data, payments and talent – so they'll require careful consideration.
Practical changes: Late payments and data security
To combat late payment culture, new UK laws mean that companies with an April year-end are required to report on their payment policies, practices and performance by November of the tax year.
In May, the General Data Protection Regulation (GDPR) comes into force. The regulation is applicable to businesses of all sizes and serves as a necessary refresh of the Data Protection Act 1998. In response to the surge in social media and high-profile data breaches across the board, the GDPR will ‘properly deal with hackers’ and will reflect current methods of handling and storing data.
If data security is breached, organisations can face a fine of 4% of their global turnover or a one-off payment of €20 million (whichever is greater). The Information Commissioner’s Office features a step-by-step guide to preparing for the new rules.
Structural changes: Hiring and strategising
Following confirmation from the UK government that there will be ‘no change to the immigration status of EU workers in the UK after Brexit’, there will need to be small changes implemented in order to help companies retain EU workers.
EU nationals who have been living and working in the UK for more than five years can apply for permanent residency. It's therefore important for businesses to encourage such employees to go down this route if they want to secure talent. Employers should be prepared to help colleagues fill out forms and provide copies of documents such as payslips and/or P60s.
One of the most significant changes stands to affect the way in which businesses structure their organisations. Due to take effect ‘later in 2018’, the legislation means that businesses will no longer be able to benefit from the use of ‘corporate directors’ or artificial entities as directors of their companies. The government announced two years ago that company directors will have to be ‘natural persons’. The key difference here is that businesses may not benefit from being able to sidestep personal liabilities.
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