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National Living (Minimum) Wage from April 2020
The new age related minimum wage bands will come into force from April 2020:
– the adult rate 25+ will increase by 51p to £8.72 per hour
– the rate for 21 to 24 year olds will increase by 50p to £8.20 per hour
– the rate for 18 to 20 year olds will increase by 30p to £6.45 per hour
– under 18s increases to £4.55 per hour
– the apprentice rate will increase 25p to £4.15 per hour
PERSONAL LIABILITY of DIRECTORS
The High Court found that claimants could recover their losses directly from company directors because their actions caused the company to breach its statutory (and contractual) duties as an employer. In Antuzis (& others) v DJ Houghton Catching Services Ltd it was shown the claimants worked in the toughest conditions as chicken catchers:
- they were paid below the National Minimum Wage;
- suffered many unlawful deductions from their pay and
- received no overtime or holiday pay.
The court’s decision is a landmark case and has wider implications for directors personal assets where they cause a business to breach its legal responsibilities, consequently fatally harming a company’s viability. The full case can be viewed here
Domestic Reverse Charge for VAT delayed
HMRC announced it will be delaying implementation of DRC for VAT until October 2020. Further information about DRC for Construction (and the delay) can be viewed here.
There will be a FREE seminar on this nearer the time, you can register your interest through our contact page.
HMRC say due diligence is required when using “Labour Providers”.
HMRC are urging companies to be diligent AND warn that in some circumstances where an umbrella company (or labour contractor) fails they will “ask you to account for unpaid VAT and NICs”!! (see link for more).
National Living (Minimum) Wage from April 2019
The new age related minimum wage bands will come into force from April 2019:
– the adult rate 25+ will increase by 38p to £8.21 per hour
– the rate for 21 to 24 year olds will increase by 32p to £7.70 per hour
– the rate for 18 to 20 year olds will increase by 15p to £6.15 per hour
– under 18s increases to £4.35 per hour
– the apprentice rate will increase 20p to £3.90 per hour
PENSION AUTO-ENROLMENT: Auto-Enrolment Pension Scheme contribution rates are set to increase for PAYE workers: The new rates for employers and employees will be 3% and 5% respectively and will take effect from 6th April
Gender Pay Gap Reporting: Reach Network Limited had no appreciable mean, or median, gender pay gap as at the snapshot date of 5.4.2017 to 4.4.2018 and 5.4.2018 to 4.4.2019. Our disclosable pay gap is therefore 0%.
HMRC tax take hits £517bn, as evasion clampdown nets £26.6bn
HMRC has reported collecting a record £517.7bn in tax in 2014-15, up by £12bn on the previous year, a 2.4% increase which the department says is down to economic growth and the continued crackdown on tax evasion and avoidance. HMRC Executive Summary can be seen here.
HMRC win £9m MSC CASE: Managed Service Company Regulations came into play in 2007, nine years later, with time on its side, we are starting to see HMRC bring cases to conclusion. The “Costelloe” case will generate huge debts for the ‘workers’ involved and potentially ruinous debt transfer consequences for the scheme providers. This case is a reminder not to encourage/promote the use dubious structures. Full case details here.
National Living (Minimum) Wage from April 2018
The new age related minimum wage bands will come into force from April 2018:
– the adult rate 25+ will increase by 33p to £7.83 per hour
– the rate for 21 to 24 year olds will increase by 33p to £7.38 per hour
– the rate for 18 to 20 year olds will increase by 30p to £5.90 per hour
– under 18s increases to £4.20 per hour
– the apprentice rate will increase 20p to £3.70 per hour
END of UMBRELLA PAYE … as we know it: from 6 April 2016 new legislation will restrict tax relief on travel and subsistence for umbrella workers subject to Supervision, Direction or Control, see full proposals here;
DEBT TRANSFER RULES: Where HMRC discovers deliberate non-compliance with the above changes it has been empowered to transfer debts to companies and individuals in the contract chain.
CIS ONLINE: Contractors registered for CIS should note that filing CIS300 online will be a mandatory from April 2016. [And from April 2017 it will not be possible to verify a subcontractor by telephone. For further information about forthcoming changes, see CIS Reforms.
ILLEGAL WORKING: The Home Office ‘blitz’ on illegal working has resulted in 257 arrests in just 4 months; with fines of up to £20,000 per illegal worker “Operation Magnify” could raise as much as £1.4 million from construction sites across London and the South East.
DIVIDEND TAX: From April 2016 the 10% tax credit on dividends will be replaced by a £5,000 tax free dividend allowance, see link.
NATIONAL LIVING WAGE: In April the new NLW will become law: Employees aged 25 or over will be legally entitled to be paid £7.20 per hour.
Enforcing NMW and “Tackling Exploitation”
HMRC have already introduced specialist teams to carry out “intensive bursts” of National Minimum Wage compliance activity in high risk trades and locations across the UK. And together with BIS they catch, fine and ‘name and shame’ non-compliant employers on their website (see list 1 , list 2 or list 3 for example).
These legal sanctions, not to mention bad PR, do not seem to be sufficient to deter many rogue businesses and the Government are intending to up the ante with its next consultation, Tackling exploitation in the Labour Market (link), which proposes to:
- Create a Director of Labour Market Enforcement;
- Introduce a new offence of aggravated breach of labour market legislation (a custodial sentence);
- Increased data sharing across government departments;
- Widen the remit &/or increase GLA powers; and
- Extend the concept of “exploitation” to include deliberate/systematic withholding of wages and spurious deductions
The consultation finishes on 7 December 2015, which in theory gives the government enough time to table legislation for April 2016.
May output fell but CPA confirms remarkable confidence for future
UK construction output in May fell short of expectations, declining at the fastest pace in more than a year, in a sign that the sector will remain a drag on the British economy in the second quarter. Output dipped by 1.5pc compared with April, the sharpest decline since February 2014, according to the Office for National Statistics (ONS). Economists had expected a slight rise and believe May’s construction data probably reflected a slowdown in activity in the run-up to the general election (more). BUT latest forecasts from the Construction Products Association confirm remarkable confidence in the industry with forecast total construction output of almost 5% 2015 (more)
Home Office Targeting Illegal Working in Construction
A Home Office enforcement campaign has been launched to root out illegal working in the construction industry. ‘Operation Magnify’ is looking to target those businesses in the sector which are employing and exploiting illegal migrant workers. With fines of up to £20,000 per illegal worker Contractors should take this very seriously.
National Minimum Wage 2015
The new age related national minimum wage rate will come into force on October 1st 2015. The following new age bands will apply:
• the adult rate will increase by 20 pence to £6.70 per hour
• the rate for 18 to 20 year olds will increase by 17 pence to £5.30 per hour
• the rate for 16 to 17 year olds will increase by 8 pence to £3.87 per hour
• the apprentice rate will increase by 57 pence to £3.30 per hour
This summer Reach Group engaged the services of one of the UK’s leading professional tax and employment advisors to conduct an audit/review of our contracts, systems and compliance standards. The audit was a surprisingly interesting exercise and we are delighted to inform our clients that at the end of it we received a “clean bill of health”.
Compliance is the single most important activity we undertake to support our clients, it is at the heart of what we do and we will continue to “raise the bar” in this area.
Autoclenz Ltd v Belcher and Others
The Supreme Court judgement in Autoclenz Ltd v Belcher and Others found that workers engaged as car valeters (by Autoclenz) were in fact employees and not self-employed as Autoclenz contended.
This is a genuine ‘landmark’ judgement which raises several interesting issues for contractors, who engage subcontractors under contracts for services, to consider, not least the veracity of the substitution (personal service) clause. The case once again raises the importance of contract clauses being a true reflection of working arrangements between subcontractor and contractor.
Reach Group’s employment lawyers recommend that contractors review their contracts with subcontractors: If you do not have a specialist advisor in this field please feel free to contact us.
Visa Restrictions lifted for A2 work-seekers from 1st January 2014
Employers in the UK no longer have to apply for work permits for Romanian and Bulgarian workers and the workers themselves no longer require an ‘accession worker card’. Low-skilled workers from these countries are also no longer restricted to existing quota schemes in the agricultural and food processing sectors. Like other EU citizens, Romanians and Bulgarians now have an unrestricted right to live and work in the UK.