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Key employment statistics National Minimum Wage As from 1st October 2008 the rates are:
As from 1 October 2009 the rates are increased as follows:
In addition, as from 1 October 2009, all tips, service charges, gratuities and cover charges, whether discretionary or mandatory, will 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 (previously £75.40). 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)
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. Week's pay The maximum weekly wage used for calculating statutory redundancy payments, basic awards, and other statutory compensation is £350. This will be increased to £380 for redundancies taking effect on or after 1 October 2009. The increase will apply to all compensation payments that are based on the amount of a statutory week's pay. The limit on a week's pay will then 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 £350 (£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 Unfair dismissal
Guarantee payments ("lay-off pay") The guaranteed daily rate for employees who are laid off work under the Employment Rights Act 1996 is £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:
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. 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. 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. From April 2007, the scale charge for unrestricted private use is £3,000, whatever the age of the van. An additional fuel scale charge of £500 will apply 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 July 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 January and 1 July. 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. 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 income of £150,000 or higher. 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. A standard disclosure costs £31, an enhanced check £36 and a POVA/first check £6. Checks are free for volunteers. These rates were reviewed but not increased in 2008. 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 (volunteer workers will not be charged). The fee will consist of two components: an ISA registration fee of £28 and a CRB enhanced disclosure, currently £36. 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:
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