New toolkit for employers on handling domestic abuse

July 16, 2018

Public Health England (PHE) and Business in the Community have published a new toolkit to help employers support workers who are affected by domestic abuse.

One in four women and one in six men suffer from domestic abuse in their lifetime and domestic abuse apparently costs businesses £1.9 billion every year due to decreased productivity, time off work, lost wages and sick pay. The new domestic abuse toolkit is aimed at raising awareness of the issue with employers and providing guidance on how they can support those affected by it. The toolkit, developed in consultation with employers, will help them spot the signs and symptoms of domestic abuse, which include frequent absence, lateness or needing to leave work early, reduced quality and quantity of work or missing deadlines, changes in the way an employee communicates (e.g. a large number of personal calls or texts or a strong reaction to personal calls) and physical signs and symptoms, such as unexplained or frequent bruises or other injuries.

The toolkit provides three key actions for employers:

• Acknowledge – employers should use the toolkit to help understand the issues and acknowledge their responsibility to address domestic abuse, by enabling staff to openly discuss the topic
• Respond – employers should review their policies and processes to ensure they’re providing a supportive workplace and can respond to disclosure
• Refer – access should be provided to organisations who can help employees affected by the issue.

The toolkit is part of a suite of toolkits for employers developed by PHE in association with Business in the Community. The other employer toolkits available cover: mental health for employers; drugs, tobacco and alcohol; musculoskeletal health in the workplace; reducing the risk of suicide; crisis management in the event of a suicide; physical activity, healthy eating and healthier weight; and sleeping and recovery.

Rent-a-room relief to be modified

July 11, 2018

The publication of the draft Finance Bill 2018-19 includes legislation to change the way the rent-a-room relief scheme works. Following last year’s Budget, a consultation was launched by HM Treasury to examine the design of the rent-a-room scheme.

When the relief was first launched it was intended to be used where one bedroom in a house was rented out to a lodger for medium to long-term lets, however this has changed as more and more people rent out rooms online for short term lets using property portals and apps (such as AirBnB).

The new legislation will introduce a new test that must be satisfied in order to be eligible for the relief. The test requires that the individual or individuals in receipt of rental income, need to share occupancy of the residence for all, or part of the period, of occupation which gives rise to the receipts. This change will mean that the relief will not be available if the owner is absent for the whole period that they sub-let rooms.

If an individual lets their house and is away for only part of the rental period, then the rental would be eligible for rent-a-room relief. The initial consultation also suggested the removal of relief for rentals of less than 30 days. However, this measure has not been included in the new legislation. The changes are expected to come into force from April 2019.

Beneficiaries of tax exempt pension benefits to be extended

The draft Finance Bill includes a new measure that will help modernise the tax treatment of employer paid premiums for the provision of death in service life assurance products for their employees. 

Currently, these premiums are only tax-exempt if the named beneficiary is a member of the employee’s family, or a member of their household. This includes the employees spouse or civil partner, parents, children and members of the employee’s household (such as domestic staff). As the law stands, if the beneficiary is not a member of the employee’s family or household, the premiums paid by the employer are treated as a taxable benefit in kind.

This new measure will see the tax exemption modernised and extended to include any individual or registered charity as a beneficiary. The inclusion of registered charities is in line with the government’s policy of providing tax relief on charitable donations and has been welcomed by the charity sector.

The changes will also apply to employer contributions to qualifying recognised overseas pension schemes (QROPS). The government has said that these changes are being made to ensure the tax system remains relevant and fair and to reflect societal changes. The new measures are expected to take effect from 6 April 2019.

Rules for use of taxable cars and vans to be updated

The Finance Bill 2018-19 draft clauses include new measures that will address two anomalies in the Optional Remuneration Arrangements (OpRA) rules.

These measures will:

  • ensure that when a taxable car or van is provided through OpRA, the amount foregone, which is taken into account in working out the amount reportable for tax and National Insurance contributions purposes, includes costs connected with the car or van (such as insurance) which are regarded as part of the benefit in kind under normal rules
  • adjust the value of any capital contribution towards a taxable car when the car is made available for only part of the tax year.

The proposed legislation will ensure that the OpRA rules work as intended.

The Finance Bill 2018-19 will also introduce another car related measure that will see the introduction of legislation to remove any tax liability for charging electric cars or plug-in hybrids at or near a workplace. This measure will have retroactive effect from 6 April 2018.

Draft clauses for forthcoming Autumn Budget are published

The Finance Bill 2018-19 draft legislation was published on 6 July 2018. The Bill which runs to 226 pages (with a further 143 pages of explanatory notes) contains the legislation for many of the tax measures that had previously been announced by the government as well as new initiatives.

The publication of the draft Finance Bill is in line with the approach to tax policy where the government committed to publishing most tax legislation in draft for technical consultation before the legislation is laid before Parliament.

The Bill is open for comment until 31 August 2018 and the draft legislation is subject to change. The final Finance Bill will be published shortly after Budget 2018 which is expected to take place in November this year. The Bill, colloquially known as Finance Bill 2018-19, will become Finance Act 2019 after Royal Assent is received.

Supporting documentation for 33 separate measures have been published. This includes changes to rent-a-room relief, simplification of donor rules for Gift Aid, Corporation Tax reform of loss relief rules, changes to the VAT grouping eligibility requirements and a new points-based penalty regime for certain regular tax filings.

Commenting on the publication of the draft Finance Bill, Mel Stride, Financial Secretary to the Treasury, said:

‘Britain is one of the best places in the world to do business, and we’re determined to see that continue. This legislation illustrates our commitment to creating an environment in which innovation and enterprise can thrive, while ensuring that everyone plays by the same rules.’

Change to evidence required for employee expenses

A new measure to remove the requirement for employers to check receipts for expense claims made by employees using the HMRC benchmark scale rates or overseas scale rates is to be introduced.

The benchmark scale rates can be used by employers to reimburse staff for subsistence expenses when they are travelling on business away from their normal workplace. HMRC lists maximum rates but employers can choose to pay less if they so wish.

The change will be legislated for in Finance Bill 2018-19 and will remove the onerous requirement for employers to check evidence, such as receipts, of the amounts spent when using benchmark scale rates to pay or reimburse qualifying subsistence expenses when employees travel for work.

The new legislation will also place the concessionary accommodation and subsistence overseas scale rates on a statutory basis and the same rules will apply. The overseas scale rates are similar but take into account the cost of subsistence overseas, including hotel accommodation etc, and are calculated on a country-by-country basis.

From April 2019, employers will only be asked to ensure that employees are undertaking qualifying business travel when claiming the benchmark scale rates and / or overseas scale rates. This measure was first announced at Autumn Budget 2017 and should create ongoing administrative savings for many businesses.

Non-UK resident property companies to be charged Corporation Tax

The government is to move forward with plans to charge Corporation Tax to non-UK resident companies with property income. Currently, these companies are chargeable to Income Tax and not UK Corporation Tax.

This change is part of the government’s aim to ensure that all companies are subject to the same tax treatment and to limit some of the reliefs claimed by foreign companies on UK rental income. Whilst the Corporation Tax rate continues to fall, the benefit of the falling tax rate may not offset the tighter restrictions faced by non-resident companies claiming tax relief on rental income.

The change is expected to take effect from 6 April 2020, when any non-UK resident companies that carries on a UK property business or has any other UK property income will become liable to Corporation Tax rather than Income Tax as at present.

This measure is expected to affect approximately 22,000 non-resident company landlords. The restriction on interest relief could have a significant impact on non-UK companies that receive UK rental income as well as some entities that seek to reduce their tax bill on UK property through offshore ownership.

Technical change to Entrepreneurs’ Relief

Entrepreneurs’ Relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where Entrepreneurs’ Relief is available CGT of 10% is payable in place of the standard rate. There are a number of qualifying conditions that must be met in order to qualify for the relief. One of these conditions is that an individual’s shareholding must make up at least 5% of the shares.

This means that entitlement to Entrepreneurs’ Relief is lost where there is a dilution below the 5% qualifying level as a result of a new share issue. In some cases, this rule can act as a disincentive for entrepreneurs to accept external investment.

The government has therefore decided to make changes to the legislation as part of the Finance Bill 2018-19 to protect entrepreneurs whose shareholding is ‘diluted’ below the 5% threshold. This measure, which was first announced at Budget 2017 will have effect for shares held at the time of fundraising events to raise additional equity funds which take place on or after 6 April 2019.

There is a lifetime Entrepreneurs’ Relief limit of £10 million.

Acas publishes guidance for employers on suspension from work

July 9, 2018

Acas has published new guidance on the circumstances in which employers should consider suspending an employee. Suspension is where an employee continues to be employed but does not have to attend work or do any work. The guidance makes clear that employers should usually only consider suspension from work if there is either a serious allegation of misconduct, medical grounds to suspend or a workplace risk to an employee who is a new or expectant mother. It also emphasises that suspension should not be used as a disciplinary sanction.

 

The guidance covers:

 

·       Suspension as part of a disciplinary procedure, and the alternatives to a suspension

·       Suspension on medical grounds

·       Suspension due to a risk to a new or expectant mother

·       How an employee should be suspended

·       Pay during suspension

·       How long a suspension should last

·       Communication during a suspension

·       Ending a suspension

·       Options if an employee believes their suspension has not been handled fairly.

239 employers identified on latest list of national minimum wage offenders

The government has named and shamed another 239 employers for underpaying their workers the National Minimum Wage (NMW) or National Living Wage (NLW). The government’s latest “naming and shaming” list covers 22,400 workers who will now receive £1.44 million in back pay. The back pay identified by HMRC was for more workers than in any previous single naming and shaming list. The government has also fined the errant employers an additional record £1.97 million. Employers who pay less than the NMW/NLW must pay back arrears of wages to the worker at current NMW/NLW rates and face financial penalties of up to 200% of the arrears, capped at £20,000 per worker.

The top 5 reasons for NMW/NLW underpayments in this naming and shaming round were:

  • Taking deductions from wages for costs such as uniform
  • Underpaying apprentices
  • Failing to pay travel time
  • Misusing the accommodation offset
  • Using the wrong time periods for calculating pay.

The largest employer named on the list was the Card Factory, which failed to pay £430,097 to 10,256 workers.

The naming and shaming scheme is now in its fifth year and has so far identified £10.8 million in back pay for around 90,000 workers, with more than 1,900 employers fined a total of £8.4 million. Funding for NMW/NLW enforcement has more than doubled since 2015, with the government set to spend £26.3m in 2018/19.

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