So many employment changes are being enforced this April from the Apprenticeship Levy, gender pay and minimum wage to other challenges to ensure your organisation is complaint with new regimes.
Our last blog provided you with more information on the Apprenticeship Levy
Many Salary Sacrifice tax advantages will come to an end!
Employees that currently use salary sacrifice arrangements to pay for items such as company cars, parking, private health schemes, gym memberships, mobile phone contracts and school fees will be taxed on these benefits from 6 April. Transitional arrangements will exist for plans already in place before April 2017 and will be protected until April 2018 or April 2021 in some cases. NB. Pension contributions and advice, childcare, cycle-to-work schemes and ultra-low emission vehicles will remain exempt from tax.
The Minimum Wage increases
The national living wage for employees aged 25 and above is due to increase from £7.20 per hour to £7.50 per hour from 6 April. The national minimum wage for 21 to 24 year olds increases from £6.95 to £7.05 per hour, 18-20 year olds increases from £5.55 to £5.60 per hour and 16-17 year olds increases to £4.05. The Apprentice rate increases from £3.40 to £3.50 per hour.
This month could be the first step in eradicating the gender pay reporting
If your organisation has 250 or more employees then you will be required to publish the difference between mean and median hourly pay of full time male and female employees and show the proportions of men and women awarded bonuses.
All private and voluntary sector companies are required to base their reporting data on staff employed at the “snapshot date” of 5 April and public sector organisations are required to use 31 March. Employers then have 12 months to publish the information on their website and on the government website. The information provided must be accessible to staff and the general public. It is currently unclear if and how pay gaps will be publicised and gender reporting sceptics believe that general figures will not address issues such as like-for-like inequalities between similar jobs. It has been suggested that this new reporting will help to tackle the gender pay gap and increase the number of females at higher levels within organisations.
New limits on statutory redundancy pay come into force on 6 April
Employers making redundancies must pay those with two years’ service an amount based on their weekly pay, length of service and age. The qualifying weekly pay is rising by £10.00 to £489.00
The weekly rate of statutory sick pay will also increase from £88.45 to £89.35 from 6 April. To be entitled to these payments, employees’ average earnings must be equal to or greater than the lower earnings limit, which is rising to £113.
Statutory maternity, paternity, adoption and shared parental pay is increasing to £140.98 for weeks commencing on or after 2 April. These rates will reduce to 90 per cent of an employee’s earnings if this is lower than the statutory rate.
In early March, Chancellor Philip Hammond confirmed that a new tax-free childcare scheme would be rolled out to eligible parents by the end of this year. This will provide those with children under 12 with an equivalent tax credit of up to £2,000 a year per child.
Changes to the IR35 tax system
If you are a public sector employer you will have to deduct tax and NICs from contractors’ pay at source, rather than allowing them to defer and claim expenses. It is thought that from 6 April, many who work regularly in the public sector could lose 30% of their take-home pay.
If you need more help or advice on any of the above then please call Absolute Works today on 01926 748040.