This month the Chancellor of the Exchequer, George Osborne, issued his Summer Budget. The most relevant issues for HR/employment law are:
- Apprenticeships: A new Apprenticeships Levy will be applied to large employers to fund 3 million new apprenticeships during the current Parliament. The levy will support all post-16 apprenticeships in England, and will provide funding that each employer can use to meet their individual needs.
- Termination payments: The Government will consult on simplifying the tax and NICs treatment of termination payments. Previous recommendations have included that the current £30,000 exemption should be replaced with a new income tax relief that is available in the case of statutory redundancy payments.
- IR35: HMRC is to consult further on possible reforms to the IR35 legislation as personal service companies are still seen as vehicles for avoiding tax through disguised employment. The consultation document will be released shortly.
- Salary sacrifice arrangements: The Government will “actively monitor” the growth of salary sacrifice schemes. The Government notes that salary sacrifice arrangements have become more popular and therefore their cost to the taxpayer is increasing.
- National Living Wage: A new mandatory National Living Wage of £7.30 per hour will be introduced from April 2016 for workers aged 25 or over. The National Minimum Wage (currently £6.50 per hour rising to £6.70 in October, with lower rates for those under 21 and apprentices) will continue to apply to other workers. This is lower than the current living wage calculated by the Living Wage Foundation according to the basic cost of living in the UK, which is presently £7.85 per hour across the UK and £9.15 per hour in London.
- Sunday trading: Currently shops are allowed to open all day on a Sunday, except for those over 280 square metres which are limited to six hours. Shop and betting workers currently have the right to opt out of Sunday working by giving three months’ notice to their employer, unless they were hired to work only on Sundays. The Government will consult on devolving powers on Sunday trading to city mayors and local authorities to ensure that local areas have a greater say over their own economies. The consultation will look at allowing mayors or councils to extend Sunday trading for additional hours within parameters that they would determine. Unions have already raised concerns about the effect on workers who may be required to work longer hours.
- Childcare for pre-school children: All working parents of children aged between 3-4 years are to receive free childcare for up to 30 hours per week.