For 2017 many employers are still tackling issues arising from case law developments that hit the headlines last year and an imminent Government crackdown is set to stamp out exploitation in the workplace. This
Employers will now have to prepare for the increasing complex challenges of the 2017 legislative developments, which include:
The final regulations of the Equality Act 2010 have now been published (subject to parliamentary approval) and are expected to come into force on 6 April 2017. This means an employer with 250 or more employees will be required to publish information relating to the gender pay gap within their organisation, for both basic pay and any bonus payments. It is likely employers will need to review some of their contractors, consultants and freelance arrangements to identify who may fall within the reporting requirements.
As of 6 April 2017 employers with an annual pay bill of more than £3m will need to pay 0.5% of their total pay bill for the tax year on the apprenticeship levy. Employers will need to consider their strategy for employing apprentices and how best to utilise the revised funding scheme through the new digital apprenticeship service account.
Salary sacrifice schemes
It was announced in the Autumn Statement that the Finance Bill 2017 will set out changes to the tax status of salary sacrifice benefits with effect from April 2017. From this point the only benefits that will remain exempt from tax will be pension schemes, childcare benefits, cycles and cyclists safety equipment under the cycle to work scheme and ultra-low emission cars. Arrangements in place before that date will be protected until April 2018 or for cars, accommodation and school fees, until April 2021
As previously mentioned, existing employer-supported childcare voucher schemes will retain taxation benefits. These can remain open to new entrants until April 2018 with childcare vouchers and all associated tax savings available for the life of the scheme. However, the Government is expected to launch a new, alternative tax-free childcare scheme, which will allow working families satisfying a minimum/maximum income requirement to claim 20% of childcare costs for children under 12, or under 17 where children have a disability, capped at £2,000 per year.
The Court of Appeal has confirmed that commission-based earnings should be included in holiday pay calculations in the case of British Gas v Lock. British Gas has appealed the ruling which is expected to be heard in March 2017. Until then the ruling stands and employers will need to look at irregular payments made to employees and establish which are to be included within ‘normal’ pay and subsequently to be included in any calculation for holiday pay.