April is usually the month where we see changes in employment or taxation. April 2020 is no different and every employer or HR team should be preparing for the following:
- From 6th April 2020 any part of a termination payment above
£30,000 will be subject to employer NICs.
To do: make sure to factor the employer’s NICs into the costs for items such as pay in lieu of notice.
- IR35 rules are extended to the private sector for businesses with an annual turnover of over £10.2 million or 50 or more employee, to reduce tax avoidance for off-payroll contractors working through personal service companies (PSC). Employers will be responsible for deciding whether IR35 applies, and for deducting tax and NICs from contractors’ fees paid through PSCs when it does not, from 6th April 2020.
To do:
- Look at the contractors your company uses and decide the employment status of each one – agency staff or direct workers
Share your decision and reasoning with the worker and the person or organisation you contract with before work starts – you will have liability for tax and National Insurance contributions until you tell the worker, and the person you contract with, of your decision and the reasons for it.- keep detailed records of your employment status decisions and reasoning
- have processes in place to deal with any disputes that arise from your decision
Share your decision and reasoning with the worker and the person or organisation you contract with before work starts – you will have liability for tax and National Insurance contributions until you tell the worker, and the person you contract with, of your decision and the reasons for it.
3. Also in 2020, employees who lose a child under the age of 18, or suffer a stillbirth from the 24th week of pregnancy, become entitled to two weeks’ unpaid leave, as a right from day one of their employment. Payment will be at the statutory rate if the employee has 26 weeks’ service. This builds on the existing right to take a reasonable amount of unpaid time off to deal with an emergency involving a dependant, from day one of employment.
To do:
- Update any relevant policies (maternity, time off for dependents) or your employee handbook
- Make sure the information is shared with eligible employees and applied in a timely manner.
If you need any help or advice on implementing these changes, simply get in touch with Redway HR.