For the SME community, the relevant scheduled changes from April 2018 are the rates paid for statutory purposes, a change to the tax treatment of payments made in lieu of notice, and the impact of new regulations from May regarding data protection of staff records.
Changes in statutory payments
From 1st April:
Rates for statutory maternity pay, statutory paternity pay or shared parental pay rise to £145.18/week
The national minimum wage for those aged 25+ rises to £7.83/hour
From 6th April:
Statutory sick pay rises to £92.05/week
Employer contributions into a pension auto-enrolment scheme increases to a minimum of 2%
Change to tax treatment of payments made in lieu of notice introduced
Human resource management, HR, recruitment, leadership and teambuilding. Business and technology concept
From 6th April, the rules are being clarified, after years of ‘depending on what my accountant says’ when it comes to the tax treatment of pay in lieu of notice on the termination of an employee’s contract. All payments in lieu of notice (including accrued but untaken holiday pay and benefits) will be subject to tax.
This is more of a tax point than any change to employment law as some organisations routinely pay in lieu of notice (PILON) the net pay an employee is entitled to during the notice period so depriving HMRC of the tax and NI receipts.
However, you may want to review this point in your existing staff contracts by including a pay in lieu of notice clause which will allow the employer to dismiss the employee (and pay him/her in lieu of the notice period) without this amounting to a breach of contract. Furthermore, if there is no PILON clause and the employer breaches the employee’s contract by dismissing him/her without notice, the employer may not be bound by post-employment restrictive covenants, such as a non-solicitation clause.
General Data Protection Regulation
From 25th May these regulations come into force. This has been well signposted over the last 12 months. If you are stuck and want some guidance or you would like to discuss an audit of your HR personal data, particularly where you have a ‘people heavy’ business, be it contractors or full time staff, give Stephen Cowburn a call on 07974 425361 or email him at stephen.cowburn@lgbusinessadvisors.co.uk