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Key employment statistics National Minimum Wage As from 1 October 2009 the rates are as follows:
Note that as from 1 October 2009, tips, service charges, gratuities and cover charges, whether discretionary or mandatory, no longer count towards the NMW. The government has also announced that, as from October 2010, 21 year olds will get the standard adult rate. Statutory Sick Pay (SSP) Statutory Sick Pay is payable for up to 28 weeks. The employee must earn a minimum of the Lower Earnings Limit. The rate of SSP as from 6 April 2009 is £79.15. This is not due to increase in April 2010. The daily rate of SSP is calculated by dividing the weekly amount by the number of qualifying days in the week. To calculate the rate for a number of days, the unrounded rate is multiplied by the number of days and rounded up to a whole penny. Statutory Maternity Pay (SMP) For employees who earn more than the Lower Earnings Limit:
Statutory Maternity Pay is reimbursed to the employer. The rate depends on how much the employer has paid in National Insurance Contributions in the previous tax year:
Statutory Paternity Pay (SPP) Subject to meeting the eligibility criteria, working fathers have the right to two
weeks' paid paternity leave Statutory Paternity Pay is reimbursed to the employer. The rate depends on how much the employer has paid in National Insurance Contributions in the previous tax year:
Statutory Adoption Pay (SAP) Subject to meeting the eligibility criteria, one of the adoptive parents may take paid adoption leave, for the same period as maternity leave, when a child is first placed with a family. Payment for adoption leave is at the same rate as lower rate SMP throughout. Employer supported childcare Employers can contribute up to £55 per week (£243 per month) towards childcare costs, free of tax and National Insurance contributions, provided this benefit is offered to all employees. The payment may be made by voucher or otherwise and the care must be provided by an approved childcarer, whether registered childcare or approved home-childcare. Note however that the Government has announced changes to the tax relief on childcare vouchers. The tax relief will be applied to all vouchers at the standard income tax rate of 20% - thus penalising higher rate taxpayers who have claimed the relief, but leaving the relief for basic rate tax payers. Parents who currently have childcare vouchers will not be affected as the change only applies to new entrants to the scheme from 2011. The government still has to confirm how the relief on National Insurance contributions will be affected, and also what happens to voucher users who switch jobs. Week's pay The maximum weekly wage used for calculating statutory redundancy payments, basic awards, and other statutory compensation is £380. This was increased for all dismissals taking effect on or after 1 October 2009. The limit on a week's pay will remain at this level until February 2011. Statutory Redundancy Pay (SRP) The amount of Statutory Redundancy Pay is the 'number of weeks' multiplied by the lower of either the actual average weekly wage or a maximum weekly wage of £380 (as from 1 October 2009). The 'number of weeks' relates to the employee's age and completed years of
continuous service as at the date the notice period would expire. See our
Redundancy Pay ready reckoner Tribunal awards Compensation for unfair dismissal is made up of two elements: a basic award (similar to a redundancy payment - therefore a maximum payment of £11,400 as from 1 October 2009) and a compensatory award.
Interest is incurred if the awards are not paid within 42 days (or within 14 days in discrimination cases). Tax and NI are not normally deducted if the payment is made to an ex-employee, unless over £30K or reinstatement has been ordered. Guarantee payments ("lay-off pay") The guaranteed daily rate for employees who are laid off work under the Employment Rights Act 1996 is £21.20 as from 1 February 2010 (previously £21.50). Employees are entitled to guarantee payments for up to five workless days in any three month period. Where the normal working week is less than five days, the number of days' entitlement to guarantee pay is reduced accordingly. Income tax 2009-10 tax year
2010-11 tax year
Employees National Insurance Contributions (NICs) Tax year 2009-10:
Tax year 2010-11:
The 2009 pre-budget report suggested a 1% increase in the NIC rates payable by employers, employees and the self-employed from April 2011. Taxation of company cars The benefit charge for a company car is calculated initially as a percentage of the car's list price. The percentage charge depends on the car's rated CO2 emisson level, ranging from 15% for the most efficient vehicles to a maximum of 35% for heavy polluters. The CO2 emissions qualifying for the minimum petrol percentage (15%) charge are 130 grams per kilometre of CO2 for the tax year 2010/2011; and 125g for 2011/12. From 6 April 2012 the CO2 emissions bands will be reduced by 5gm CO2 per km. In addition, the current graduated table of company car tax bands will be extended down to a 10% band which will apply to company cars with CO2 emissions up to 99gm CO2 per km. "Qualifying low emissions cars" will therefore no longer exist as a separate category For details of individual cars, click here. Car fuel benefit Fuel benefit charge is linked directly to carbon dioxide emissions. The charge applies where an employee who has a company car is provided with free fuel for private use. The same percentage figures are used as for the company car benefit charge. Like car benefit, the fuel benefit charge is based on the level of CO2 emissions of the car, with the same 3 per cent supplement for diesels which do not meet Euro IV standards and reductions for alternatively fuelled cars. Also like car benefit, the percentages for petrol and diesel range from a minimum of 15 to a maximum of 35 per cent and the percentage for alternative fuels and hybrid cars can be below 15 per cent with reductions. To calculate the benefit charge on free fuel the percentage figure will be multiplied against a set figure of £16,900 (£18,000 from April 2010). Employer provided vans Employees who are obliged to take their vans home, but are prevented from making any other private use of the vehicle, are exempted from any tax charge. The scale charge for unrestricted private use is £3,000, whatever the age of the van. An additional fuel scale charge of £500 (£550 from April 2010) applies where fuel is provided for private mileage. Authorised mileage rates - own vehicle For employees who use their own vehicles for business travel (irrespective of engine size). These payments are free from tax and NICs. Motorcars and vans:
Motorcycles:
Bicycles:
Authorised mileage rates - company-provided vehicles The HMRC advisory rates used to negotiate dispensations for mileage payments for business travel in company cars are below. These increased with effect from 1 December 2009. They only apply where employers reimburse employees for business travel in their company cars, or require employees to repay the cost of fuel used for private travel. Engine size:
Future changes are scheduled to take effect twice a year, on 1 June and 1 December. Hospitality to employees Employers are allowed to provide hospitality tax-free to employees (eg summer events, Christmas party) up to a total maximum of £150 per employee per year, provided that this is available to all employees. This limit applies to everything - hire of facilities, food, drink, entertainment, incidental costs, transport, overnight accommodation and VAT. Termination payments The following termination payments are tax-free:
Relocation An employer may provide up to £8,000 tax free to an employee to help him/her to relocate (any additional sums are taxable). State retirement pension The full basic state retirement pension for a single person for the 2009-2010 tax year is £95.25; for a married couple it is £152.30. This will increase to £97.65 for a single person, and £156.15 for a married couple for the 2010-11 tax year. Occupational pension schemes There are two limits on an individual's tax-relieved pensions savings, in the form of an annual and lifetime allowance. For 2009/10 the allowances are:
For 2010/11 the allowances are:
From 2011-12 to 2015/16 the allowances will be frozen at:
Starting in 2011-12, tax relief on pension contributions will be restricted to basic rate for individuals with an annual gross income (including employer pension contributions) of £150,000 or higher and who, in addition, have gross income (excluding employer pension contributions) of not less than £130,000. Stakeholder pensions All employers (other than those who are exempt) are required to consult with their employees and choose, and put into place, a stakeholder scheme. Exempt employers include: those who have less than five employees; those who have an Occupational Pension scheme already in place which all employees can join within a year of starting employment; and those who offer a group personal pension to all staff, contribute at least 3% of basic salary, offer payroll deductions if asked and have no exit/transfer charges. Employee Share Schemes The following schemes are approved by the HMRC and offer tax advantages:
Criminal Records Disclosures The initial cost to an organisation registering with the CRB is currently £300 and each additional countersignatory costs £5.00. The costs of disclosures are as follows:
Under the Safeguarding of Vulnerable Groups Act 2006, individuals wishing to work with vulnerable groups will need to be registered with the ISA scheme and there will be a charge for this of £64.00 (volunteer workers will not be charged). The fee will consist of two components: an ISA registration fee of £28.00 and a CRB enhanced disclosure, currently £36.00. Registration is portable so those transferring from one employer to another will not be required to re-register. Employers will not be charged for checking individuals' registration. Juror's financial loss allowances Employees on jury service are allowed to claim the following allowances from the courts (the following rates apply as from 1.6.09):
Magistrate's allowances The allowances for magistrates (reviewed with effect from 1 May 2009) are as follows:
Data protection As from 1 October 2009, the fees payable by data controllers to register or renew with the Information Commissioner to process personal data are as follows:
The maximum amount that an individual can be required to pay to view his/her personal data is £10.00. |
