With the new tax year fast approaching employers need to make sure they maintain compliance with obligations relating to statutory employment rights and paying staff correctly.
Each year the government reviews the statutory payment rates bringing with it an inflationary increase.
For the April 2018 tax year, the following rates will apply:
Usually the rate increase for the family friendly payments would be from the first Sunday in April, which this year falls on 1st April..
..but in a statement to Parliament announcing the new figures, there is a suggestion that the date this year may be postponed, coming into effect from Monday 9 April 2018.
The following rate will apply to Statutory Sick Pay from 6th April 2018 or after:
It is also worth noting that when considering these Statutory Payments, the lower earnings limit will rise from its current £113 to £116 per week.
The following rates that will change apply to dismissals and are relevant to those with a date of termination of 6th April 2018 or after:
Current rates for National Minimum Wage (NMW) and National Living Wage (NLW) from 1st April 2018 will be:
- £7.83 is the National Living Wage (NLW) for workers aged 25 years and over
- £7.38 for workers 21 and over, up to 25 years of age when NLW becomes applicable
- £5.90 for workers aged 18-20 years
- £4.20 for workers aged 16-17 years, so minimum school leaving age but under 18 years
- £3.70 for apprentices aged under 19 years or those who are 19 and over but are in the first year of an apprenticeship
Those covered by National Minimum Wage (NMW) and National Living Wage (NLW) are:
- Workers and agency workers
- Casual labourers
- Apprentices aged 25 and over
Pay in Lieu of Notice (PILON)
There are also planned changes to taxation of contractual and non- contractual PILON payments.
The proposed plans from the Government mean that employers will no longer have the option of paying tax free damages in lieu of notice where there is no contractual right to pay in lieu.
So from 6th April 2018 with the new tax year all payments in lieu of notice will be subject to normal deductions for tax and National Insurance. However, the first £30,000 of a termination payment will remain as exempt from income tax.
For employers, this will create an impact on the cost of providing termination packages including PILONs and termination packages that are in excess of £30,000.
This is because both PILONs and payments of more than £30,000 will be subject to employer National Insurance contributions (NIC).
Employers may need to consider if they will compensate for the increased cost to employees, who will suffer tax and employee NIC on the PILON element of their termination packages in the future.
Employment Tribunal Fees – could you claim a refund?
Following the abolition of tribunal fees on 26th July 2017, where the Supreme Court ruled that the regulations introducing tribunal fees in July 2013 were unlawful, meaning as a result that employment tribunals stopped accepting fees with immediate effect.
The Government has since opened a fee refund scheme where claims for refunds can be submitted by any employee and employer that paid the Employment Tribunal or Employment Appeals Tribunal fees between July 2013 and July 2017.