New financial year, new payroll regulations

Mar31

Posted in News

iStock_000016583408SmallIt’s almost April, and that means UK payroll regulations are about to change. Here’s our guide to what’s new…

1. The dates

The 2013/14 financial year ends on 5 April. Unless otherwise stated, the following changes take effect from the first day of the new tax year, 6 April.

2. Statutory pay rates

Statutory maternity, paternity and adoption rates will increase by £1.40 pw to £138.18 pw.

Statutory sick pay increases from £86.70 to £87.55 per week.

The minimum wage will increase by 19p per hour to £6.50 (the first time in 6 years that the rise will be higher than inflation), effective from October.

3. Flexible working

Under current UK legislation, businesses are already bound to consider requests from employees who are parents and carers with over 26 weeks’ continuous service. New regulations extend this right to everyone on the payroll, although businesses retain the right to refuse the request where they have adequate reasons to do so (for example, the burden of incurring additional costs).

4. Tax relief on employer-funded occupational health interventions

As discussed on these pages in late 2013, employers will receive tax relief on the first £500 of health treatment services recommended by a new health, work assessment and advisory service. Following an extension to the scope of the tax relief, it will also apply to interventions arranged by the employer’s own occupational health services.

The changes will start affecting UK payrolls once regulations are put in place by the Finance Bill 2014, which is also expected to set a go-live date.

According to the government consultation paper, interventions beyond £500 will be “classed as payment of earnings or a benefit-in-kind, depending on the type of expenditure, and will be subject to the appropriate deduction of income tax or reporting on form P11D, and either Class 1 or Class 1A NICs.”

5. Changes to TUPE

From the start of the new financial year, changes to transfer of undertakings (protection of employment) regulations mean that employee liability information must be provided 28 days before the transfer date; and post-transfer duties must be “fundamentally or essentially the same” as those before the transfer.

Make managing the changes to UK payroll regulations easy. Talk to your payroll provider.