Wednesday, 29 July 2015

At last Government to simplify tax on settlements

It looks as if The Government is at last to simplify a delineated system of ascribing tax to settlements. We all know that tax and employment tribunal decisions have been at odds in the past and in order to advise clients you have to tip toe around case law and guidance of Byzantine complexity. Well fortunately, The Government have decided to launch a consultation.

The best bit is that the proposal as it stands (para 10) will remove the distinction between the tax and NICs treatment of contractual and non-contractual termination payments. This will hopefully remove the majority of the complexity and misunderstanding within the existing system.

This blanket exemption it is proposed will be set at a lower threshold than £30,000. It is reported at 4.16 that:

'One approach the government is considering is to create a new exemption which increases proportionately with the number of years of service the employee has completed. This would create a new fairer exemption which will proportionately reward long serving, lower paid employees.'

We shall wait and see whether there is devil in the detail.

Responses to the consultation can be emailed to:

Tuesday, 14 July 2015

Companies to publish gender pay gap information

The Government has confirmed that it will legislate under S.78 of the Equality Act 2010 to require companies with 250 or more employees to publish gender pay gap information. It has published a consultation paper on the detail of the regulations to be made under S.78, seeking views on the level of gender pay information to be required and the frequency of publication.

It asks whether the information should be the overall difference between the average earnings of men and women as a percentage of men's earnings, or whether it should be broken down by full-time and part-time employees, or by grade or job type. It also asks whether employers should be required to provide additional, contextual information, explaining any pay gaps and setting out what remedial action they intend to take; and how often employers should be required to publish such information. Under S.78 EqA, the information can be required to be published annually at most.  

The consultation closes on 6 September 2015. The regulations are expected to be made in the first half of 2016, although implementation may be delayed to give businesses time to prepare.

Link to consultation document: