First of all, as this is our first post of 2018, a Happy New Year to all our followers and readers! Whatever you did over the break, we hope you managed to relax, have fun and recharge the batteries.
Get ready for another 12 months of turbulence and change!
So, after the roller-coaster ride of 2017, what can we expect from 2018? In these crazy times, it’s impossible to make any firm predictions about anything – even on who will be running the country by the end of the year or where we’ll be with Brexit …
For those of us operating in the employment sector, there are plenty of bubbling issues to keep an eye on, and here at ePayMe we’ll be providing you with news, commentary and advice as events unfold. Follow us on Twitter, Facebook or LinkedIn to make sure you’re kept in the loop.
Here are just a few of the topics we’ll be covering:
Pay and deductions
The final deadline for filing 2016-7 self-assessment online tax returns is midnight on January 31st. This is also the deadline to pay any tax due for both paper and online filers.
The National Minimum Wage goes up on April 1st as follows:
| Age | From | To | Increase |
|---|---|---|---|
| 25 and over (National Living Wage) | £7.50 | £7.83 | 4.4% |
| 21-24 | £7.05 | £7.38 | 4.7% |
| 18-20 | £5.60 | £5.90 | 5.4% |
The employment landscape
The coming year will teach us more about changing patterns of employment in the light of Brexit. While many employers are reportedly upbeat about business prospects over the next few years, there are also widespread anxieties about skills shortages and the impact that may have on worker availability – especially if we continue to see large numbers of foreign workers moving out of the UK and reduced numbers coming in.
Watch out for more legal and political developments concerning the gig economy, with more debate over the rights and status of those working for Uber, Deliveroo and numerous other modern-style businesses. The European Court of Justice recently ruled that Uber is a transport company and not a digital platform, as it claimed.
The full ramifications of the decision are yet to be seen. Previously, Uber had also lost an appeal against a landmark ruling in the UK ordering it to treat its drivers as workers, paying them minimum wage and affording them rights including sickness and holiday pay.
Meanwhile, we await the Government’s overdue response to the Taylor Commission Report into modern working practices, published last July. In the wake of the report, the Work and Pensions and Business, Energy and Industrial Strategy Committees have published a joint report entitled A framework for modern employment They also published a draft bill, calling on draft legislation intended to close the loopholes that allow “irresponsible companies to underpay workers”.
The draft bill aims to clarify the definitions of employment status and enshrine the presumption that those working for companies over a certain size are all classed as workers, with rights to the minimum wage and holiday pay. There is very little chance of the bill ever becoming law, but it has kept the debate alive at a time when the Government itself has gone quiet on the issue.
So long, Swedish derogation?
One area the Taylor Report focussed on was agency workers and concerns they were being exploited in terms of rights and pay. The Commission has proposed the abolition of the so-called Swedish derogation rule within the Agency Workers Regulations (AWR). This rule creates an exemption to the general rule that agency workers should be granted the same basic pay as comparable employees after a 12-week qualifying period.
While the AWR expressly prohibits employers from structuring work specifically to avoid equal pay, the Taylor review researchers came across examples where this had clearly been happening. “The reason we decided in the end … to get rid of the Swedish derogation, is that it’s clear it is being abused and we think the flexibility that employers and agencies want can be found without using that derogation,” Taylor said shortly after the report’s publication.
However, not everyone agrees. As Philip Harman, from law firm DAC Beachcroft, explained: “This opt out is used extensively in the sector and there is the counter argument that, rather than operating as a disadvantage to workers, it provides a degree of pay security for agency workers in between assignments in return for waiving the right to parity of pay with comparable employees. A repeal would result in significant upheaval to those areas of the sector relying upon the opt out.”
Hostility to the Swedish derogation is not new: several trades unions have long been calling for it to be scrapped, and a pledge to abolish it was included in the Labour Party’s 2017 election manifesto. At present there has been no indication from the Government that this will happen any time soon.
The IR35 saga continues
This year will also no doubt see further developments in the fraught saga of HMRC’s efforts to combat ‘disguised remuneration’ and tax avoidance using the so-called IR35 rules (“Off-payroll working through an intermediary”). The chaos and unhappiness caused by the imposition of IR35 in the public sector was one of the biggest stories of last year (see Public sector IR35 reforms survey: projects crippled by contractor exodus for example).
The fear of many is that the Government is itching to extend IR35 to the private sector without further ado. Speculation was rife that the Chancellor would announce just that in his recent Autumn Statement, but in the end he made no direct reference to IR35 at all. However, the Red Book small print included the following potentially ominous single sentence:
“The government will carefully consult on how to tackle non-compliance in the private sector, drawing on the experience of the public sector reforms, including through external research already commissioned by the government and due to be published in 2018.”
No further official information was forthcoming, fuelling speculation that extension of IR35 into the private sector might happen as early as this April. However, on December 8th Julia Kermode, CEO of the FCSA, reported that HMRC had confirmed in a meeting that early implementation is not on the cards.
The GDPR is coming!
Over the past 20 years, the way your personal data has been captured, processed and stored has changed beyond all recognition. It’s perhaps surprising then that the prevailing primary UK legislation is the 1998 Data Protection Act. Needless to say the Act, even in its amended form, is no longer fit for purpose.
Well all that’s about to change, because on May 28th the all-new EU General Data Protection Regulation (GDPR) comes into effect. Notwithstanding our impending exit from the European Union, most aspects of the Regulation will come directly into force in the UK and will be applicable immediately. There is also a new Data Protection Bill currently going through Parliament: this will address certain country-specific provisions in the GDPR as well as implementing a range of other data protection provisions.
The GDPR creates new rights for people to access the information companies hold about them, obligations for better data management for businesses, and a new regime of fines. It has several important implications for the way recruitment agencies and intermediaries such as payroll providers and umbrellas treat their data.
If your organisation is not yet busy getting its GDPR plans in place, then you need to get going quickly! Visit the Information Commissioner’s Office website for further information as well as a GDPR checklist and a PDF on ‘12 steps to take now’.
Source: ePayMe | 8th January 2018