5 important changes to the law happening today
April 2017 sees a raft of changes to legislation, particularly in the area of employment law. We take a look at five of the key changes that come into effect today (6 April).
1. Large employers will need to report on gender pay gaps
One of the most noteworthy developments is the introduction of annual gender pay gap reporting. From today, employers with 250 or more staff will need to disclose data on the differences in pay between male and female employees.
Employers will not be required to actually level the rates of pay between men and women, but they will have to reveal information on the average overall gender pay gap, bonuses awarded and the proportion of men and women represented in each pay quartile.
The information will need to be published by 4 April 2018 on both the individual organisation’s own website and that of the government, and updated on a yearly basis thereafter. Data will be based on a ‘snapshot’ as of 5 April each year (or 31 March for public sector organisations), with bonuses based on the preceding 12 months.
If this law applies to you, you will need to ensure you have the scope for such yearly reporting.
2. Employing non-EEA workers will become more expensive
Employers looking to employ non-EEA workers will be hit with the new immigration skills charge, which came into effect today. This affects most employers wishing to employ a non-EEA worker. It will cost £1000 per year per worker (with reductions applying to smaller businesses and charities).
There will also be an increase to the minimum salary threshold applicable to those workers sponsored under Tier 2 (general). The new threshold will be £30,000, and similarly the new minimum for most workers coming to the UK on an intra-company transfer will increase to £41,500 per annum.
These changes will significantly increase the cost of sponsoring employees from outside the European Economic Area.
3. The national minimum wage is going up
The government has pledged to increase the national living wage (payable to all employees aged 25 and over) to £9 per hour for workers over 25 by 2020.
Accordingly, minimum wage workers have seen a substantial uplift to their pay this April. The standard adult national minimum wage increases to £7.05 per hour, while the national living wage (payable to all employees 25 and over) increases to £7.50 per hour.
4. Other statutory minimums are also increasing
It is not just the national minimum wage that is changing this month. Other statutory minimums are changing too.
From today a week’s pay (used for the purposes of calculating statutory redundancy pay) will increase to £489, statutory maternity pay to £140.98 and statutory sick pay to £89.35.
5. New nil rate band lifts inheritance tax threshold
Good news for those leaving their estate to family members; an additional nil rate band, known as the residence nil rate band (RNRB), applies from today so that less inheritance tax (IHT) may be paid when the family home is left to children, grandchildren and certain other qualifying beneficiaries.
Prior to today (ignoring any reliefs for agricultural and business property), no IHT was charged on the first £325,000 (the nil rate band) but was charged at 40% on everything in excess of this amount.
From now on, the RNRB applies in addition to the nominal nil rate band allowance. The value of this is initially £100,000 rising by £25,000 in each of the following three years to reach £175,000. It is transferable too, so after April 2021 married couples and civil partners may be able to benefit from a combined nil rate band and RNRB of £1 million.
In order to maximise the tax-saving effect of the RNRB, we strongly recommend that your review your will, or make a will if you do not already have one. The conditions for claiming the RNRB are complicated and you should get expert advice to ensure that your family can benefit from the enhanced nil rate band inheritance allowance in the future. Download a fact sheet with more information here.
If you envisage that any of these changes will affect you and you require expert advice and guidance,please contact our highly regarded multi-disciplinary teamWe're here to help