A number of changes in employment law and payroll procedure become effective from either 1 or 6 April and although many of the topics have formed the basis of stand alone articles in The People Bulletin it is still useful to have a reminder of the state of play.
Stuart Chamberlain has already helpfully provided a ‘legislation timetable’ in his article ‘The wheels of regulation’ in The People Bulletin, 26 January 2011. The following items are additional ones that employers need to be aware of and this list should be checked in conjunction with Stuart’s list.
Tax changes
HMRC is amending the Income Tax (Pay as You Earn) Regulations 2003 (the ‘PAYE Regulations’). At the moment, employers are only required to deduct income tax at the basic rate of 20 per cent when making post-termination payments to employees. From 6 April 2011, employers will now be required to deduct income tax at rates of up to 50 per cent. This means that the BR code can no longer be operated when making post-termination payments. The BR code means employees are only taxed a basic rate deduction on payments at the time they are made and only account for any additional rate tax (of up to 50 per cent) through self assessment at a later date.
Employers will now need to use the 0T code when deducting PAYE from payments made to employees after they leave their employment and they will have to operate the 0T code for all employees who start a new job but who do not provide a P45.
A number of allowances and rates all change from 6 April and a list of these can be found on the HMRC website.
Immigration
The government’s radical changes to the work visa route becomes effective from 6 April 2011. At the end of last year the Home Office announced that the number of people allowed to enter the UK from outside the EU is limited to 20,700 per annum under the skilled worker route (except for those earning a salary of more than £150,000 or in-country applications from those in the UK), and 1,000 per annum under the new exceptional talent route.
Under the new system, employers will have to apply for a certificate of sponsorship from the UK Border Agency for a specific post if they wish to bring someone to the UK – this is a change from the current system which gives businesses an annual allocation.
The annual limit of 20,700 certificates of sponsorship will be divided into 12 monthly allocations and, because of the likely demand in April, 4,200 certificates will be made available that month with places set at 1,500 per month from May onwards. Any places that are unused each month will be rolled over to the next month.
Equality law
Many of the provisions of the Equality Act 2010 came into force on 1 October 2010. See also Michelle Gray’s article ‘Some more equal than others’ in The People Bulletin, 29 June 2010 for a summary of the key changes and the useful ACAS guide, along with its handy summary table here.
The public sector Equality Duty and the positive action in recruitment and promotion provision in the Equality Act 2010 will come into force on 6 April 2011. The government is still considering whether to implement the mutliple (dual) discrimination provision in the Act. Therefore it will not be implemented in April 2011, as was originally timetabled.
Statutory Maternity Pay recovery
The Statutory Maternity Pay (Compensation of Employers) Amendment Regulations 2011 come into force on 6 April, reducing the amount of SMP an employer can reclaim from HMRC from 4.5% to 3%. The reduction applies to SMP payments on or after that date.