20th September 2016
October is always a good time to look at what’s coming up in the world of employment law. Comparatively, things are quite quiet on the new legislation front which may be a reflection of Brexit. The main items on the agenda in 2017 for SMEs are Childcare Scheme changes and the Apprenticeship levy. For many of my clients the change in in the taxation of termination payments in 2018 may make a difference in negotiating those Settlement Agreements.
Do give me a call if you’d like to talk through how any of these changes might affect you and your business, or drop me a line. Tel: 07949 552403 or email louise@indigohr.com
Early 2017 Childcare Scheme
The Government is introducing a new tax free childcare scheme to replace the current employer supported childcare voucher scheme. The new scheme will allow working families to claim 20% of 2 childcare costs for children under five (later to be extended to children under 12) up to a maximum of £2,000 per child each year.
Unlike the current childcare voucher scheme, the new scheme will not depend on participation by employers, as it will be open to all eligible working couples, where both parents are employed or self-employed and neither parent is an additional rate taxpayer.
Existing childcare voucher schemes will be closed to new joiners once the new scheme is in place. Any employee who is already a member of a childcare voucher scheme will be able to choose whether to stay within that scheme or join the new tax-free childcare scheme instead
April 2017 Equal Pay
Employers with 250 or more employees will be required to publish information on the gender pay gap in their organisation. The draft regulations will require employers to publish, on their website annually, the mean (average) and median (mid-point in the data) difference between male and female pay, as well as the mean difference between bonuses received by male and female employees.
Employers will be required to start reporting from April 2018 at the latest, in respect of pay data covering the period from April 2016 to April 2017.
The Government intends to “name and shame” employers who fail to comply. There is no proposal at this stage for any civil or criminal penalty.
April 2017 Apprenticeships
Employers will be required to pay an apprenticeship levy of 0.5% of the amount by which their pay bill exceeds £3million. All employers will be able to access funding for apprenticeships, including those not required to pay the levy.
April 2018 Tax on Termination Payments
Currently, notice payments are paid free of tax (up to £30,000) and National Insurance contributions where there is no payment in lieu of notice (PILON) clause in the contract.
From April 2018, all notice payments will be subject to income tax and NICs regardless of whether the contract contains a PILON clause. The £30,000 tax exemption will remain available for any termination payment over and above notice pay.
25 May 2018 Data Protection
A new EU regulation will make major changes to data protection law. The key changes will include: – an increase in the maximum fine for breach of data protection law from the current £500,000 to up to £20million – consent to the processing of personal data will be more difficult to obtain and must be more clearly demonstrated – breaches of data protection law will have to be notified to the Information Commissioner within 24 hours – large employers may be required to have a permanent data protection officer.
When the UK leaves the EU the regulation will not apply, but the UK may be required to put equivalent rules in place to trade with the single market.
2018 Grandparental Leave
The Government has announced proposals to extend shared parental leave and pay to working grandparents by 2018. The Government intends to consult on the details of this proposed leave before it is introduced.
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