The rates which employers can use to reimburse employees who pay to put petrol in their company cars when they are using them for business have been updated. These rates apply to all journeys undertaken on or after 1 December 2016
until further notice. For one month from the date of change, employers may use either the previous or new current rates, as they choose.
HMRC have now issued guidance as to when the new 16.5% rate will be appropriate. To view the guidance click here
For all VAT registered traders currently using the Flat rate Scheme (FRS), you will need to consider when the new provisions apply, how they will affect you and if appropriate, action to be taken before 1 April 2017 when the new rules apply.
Statutory rates normally increase every year in line with the consumer price index but have been frozen since 5th April 2015.
The Government has announced the following proposed
(to be confirmed) rates will take effect from April 2017:
The Lower Earnings Limit (LEL)
Statutory Maternity Pay (SMP) and Statutory Adoption Pay (SAP)
Statutory Paternity Pay (SPP) and Statutory Shared Parental Pay (ShPP)
Statutory Sick Pay (SSP)
From 2018 HMRC are introducing "Making Tax Digital" - MTD. This is the start of the end of the annual tax return. Amongst some tax professionals, the MTD is known as "MAKING TAX DIFFICULT".
The HMRC consulation period is now ended and at the end of January 2017 we can expect further guidance from HMRC. This will be the biggest change to personal and business taxation since the introduction of self assessment.
With effect from 1 July 2016 Companies House is replacing the Annual return form AR01 with a new annual consent form CS01
. The annual filing fee is likely to remain unchanged at £13, but this is still to be confirmed. For more information click here
. Further information can be found by clicking here
.The bad news is that a company now has only 14 days from the date of the return to file the CS01
(the AR01 had to be filed within 28 days of its due date).
Two common scams where criminals target businesses to trick them into sending money to them:
1 Cheque overpayment scams
A cheque overpayment scam is when a new customer pays a business for goods or services with a fraudulent cheque, which is made for a higher amount than the actual value requested.
Usually, the new customer will contact the business to advise them of the error and request an urgent refund. The business process the refund quickly as they're keen to build a strong relationship with them. Afterwards, the cheque is returned unpaid because it is fraudulent and the business is left with a loss.
- Never feel pressured into making a refund.
- · Never accept a cheque for a higher value than expected.
- Treat cheques with caution and don't provide goods or services, or refund a payment, until you're certain the funds have cleared.
2 CEO payment fraud
CEO payment fraud happens when a fraudster takes on the identity of a senior member of a business by hacking or spoofing their emails.
Usually, the fraudster will email the accounts department and request to set up a new payment, i.e. to pay a new contract, or amend bank details on an existing or future payment. These requests are often sent with a sense of urgency to encourage the individual to act quickly.
- Always confirm new payment instructions by phone or in person with the colleague making the change - be careful not to respond to the email containing the instructions
- Consider setting up single points of contact with businesses to which you make regular payments
- Review your account processes regularly. It is recommended having a minimum of two approvers for all payments, as this offers an extra layer of security
It's important to stay vigilant and protect yourself against scams and fraud.
NATIONAL LIVING WAGE AND EMPLOYEE GRIEVANCES
All workers who are aged 25 or over must now receive at least £7.20 per hour due to the introduction of the National Living Wage on 1st April 2016.
This may result in more senior workers aged under 25 being paid less than more junior colleagues aged over 25.
COMMISSION AND HOLIDAY PAY
The Employment Appeal Tribunal has decided that a worker should have had his holiday pay increased to reflect the amount of commission he would ordinarily earn when he was working.
This judgment represents a double blow for employers who have already had to consider changing their holiday pay practices in relation to certain types of overtime because of a separate judgment a couple of years ago.
However, this is a developing area of law and the judgment is likely to be appealed meaning it may or not be overturned.
SHARED PARENTAL LEAVE AND GRANDPARENTS
As part of the Government Budget in March, Chancellor George Osborne set out the timeline for the extension of shared parental leave to grandparents.
The Government announced last year that the right to take shared parental leave would be extended to working grandparents to provide even more flexibility to the systems which allows parents more choice over who provides the care for their new born baby or adopted child, and how time off work will be shared.
Shared parental leave was introduced for babies born on or after 5th April 2015, giving mothers the right to choose one person to share a year’s leave with, and being able to take leave flexibly throughout that year. Currently, the one person that leave can be shared with is one of the following: the baby’s father; the mother’s husband/civil partner or partner.
The ball will begin rolling on the extension in May 2016 when the Government will set out their initial proposals and invite views from the public. It is still expected that grandparents will be able to take shared parental leave from April 2018.
This is likely to mean that many older employees will remain in work for longer. Older employees should not be treated differently in terms of targets or other required productivity levels placed on them - employers can still expect the same from them.
Don’t forget – in employment law, unless you can objectively justify it, there is no retirement age.
The Chancellor of the Exchequer, George Osborne, presented his Summer Budget to Parliament on 16th March 2016. Amongst other topics, the Budget included plans which may have an impact on employment law. The main ones include changes to termination payments, apprenticeships, shared parental leave, salary sacrifice schemes and trivial benefits in kind.
The term ‘termination payments’ mainly refers to redundancy pay and settlement agreements. The current rules are that payments above £30,000 are subject to tax only, but the government plans to tighten the laws on taxation for these larger payments. From April 2018 termination sums over £30,000 will not only be subject to tax, but also subject to employer’s National Insurance Contributions (NICs). The law on payments below this threshold will not change – there is no need to pay tax or NICs. All sums will remain free from employee’s NI contributions.
Salary sacrifice schemes are another area which will be affected, as the government is considering implementing a limit on the types of benefits which can be offered through salary sacrifice. This was proposed due to a 30% increase of such arrangements since 2010. Despite this proposed limit, the government has expressed its intention to keep salary sacrifice schemes relating to pensions, childcare and health-related schemes, such as Cycle to Work, exempt from tax and NICs.
Apprentice Levy top up
The Budget also revealed more about the proposed apprenticeship levy which was announced in last year’s Autumn Statement. The levy will apply to employers in the UK from April 2017 but only to those with annual wage bills larger than £3 million. The employers which fall within that description will have to pay 0.5% of that wage bill into a separate account solely to fund apprenticeships within their organisation. For employers in England the government will offer a 10% “top-up” of their total monthly contributions which will be added to the same digital account.
Shared Parental Leave
The Chancellor announced the government’s plan to launch a consultation on Shared Parental Leave in May 2016. The consultation will aim to establish how Shared Parental Leave should be extended to grandparents from 2018 to allow parents to return to work sooner after having a child. The consultation will also look at simplifying the process around the entitlement, mainly focusing on the eligibility and notification requirements.
Trivial Benefits in Kind
Finally from 6th April 2016, trivial benefits in kind, up to a maximum of £50 value, will no longer be subject to income tax and Class 1A NICs (paid by employers). This will extend to Class 1 NICs (paid by employees) later this year.
- National Living Wage introduced from 1 April 2016 – not a choice! National Minimum Wage or National Living Wage have different names but they mean the same thing – a legally required minimum level of pay related to a workers age. The penalty for failure to pay either of these will also increase from 100% of the underpayment to 200% of the underpayment on 1 April 2016.
- National Minimum Wage increases have been announced for October 2016.
Age 25 and over: £7.20 – (This is the National Living Wage effective from April 2016 and so will not increase in October 2016)
Age 21 – 24: from £6.70 to £6.95
Age 18 – 20: from £5.30 to £5.55
Age 16 – 17: from £3.87 to £4.00
Apprentice rate: from £3.30 to £3.40
Please note – from 2017 the date for all minimum wage increase will be changed from October to April each year. This is to bring National Minimum Wage increases in line with National Living Wage increases.
- New ACAS Guidance on Workplace Investigations
ACAS has published new detailed guidance on conducting workplace investigations covering all aspects of the process, including how to choose the investigator and handling reluctant witnesses.
Unfair dismissal cases are often lost because the employer did not carry out an investigation that was good enough in the circumstances. All employers must have written rules and procedures for investigations, disciplinary, grievances and appeals.
This all forms part of the legal floor that employers rely on whenever there is an issue with an employee and is essential to obtaining a fair dismissal.
- Increases To Unfair Dismissal Compensation from 6 April 2016
The maximum compensatory award for an unfair dismissal claim will increase from £92,585 to £93,332. This is because the maximum basic award is increasing to £14,370; and the maximum compensatory award is increasing to £78,962.
- Sunday working update
The Government plans to give power to local councils to extend trading hours in large shops on Sundays has met with strong opposition from both Conservative ministers and other parties and was subsequently vetoed.
The Government has recently taken additional steps in order to reduce the risk of illegal working taking place in businesses across the UK. One of the measures it has implemented is an increase to the financial penalty applied for employing an illegal worker which is now £20,000 for each illegal worker and also if you knowingly employ an illegal worker, you could also face up to 2 years imprisonment.
All employers should be checking every single employee, that means even someone you think is British and believe was born in the UK. If you are just checking employees that have a different colour skin, accent or foreign sounding name, then that itself can be classed as discrimination.
The Government has published a list of documents which are considered suitable to prove that an individual is eligible to work in the UK. Don’t worry, you won’t be asked to go on a course at the local passport office to qualify to do the checks! Just common sense is needed and really, this should form part of your recruitment process and become a habit. This is also the paper trail that you will rely on as defence if accused of employing an illegal worker – so get it right.
As an employer make the correct document checks before employment commences. You should be looking at original documents, not photocopies, check that they are valid and belong to the individual who is applying for work. If the names differ, request additional documents certifying the change of name, for example a marriage certificate. You will need to make copies and keep a record of the date you undertook the “right to work” check.
The process you adapt within your business should be water tight and will help defend you if you find that you have employed an illegal worker. You must also remember to re-check any employee who only has a limited right to work in the UK when the permission that they currently have expires.
To check if a worker is eligible to work in the UK a useful tool can be found at: