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Legislation changes you can't afford to miss

Your Legal Diary - Part 2

Are you ready to mark your calendars? Keep up to date with the latest changes for 2010 and beyond here! Our Diary includes employment law changes, as well as highlights from the latest Pre-Budget Report.

So... start the year as you mean to go on and avoid those pesky penalties and charges.

OCTOBER

The Equality Bill consolidates the Existing Equality Law into a single piece of legislation.

NOVEMBER

As of November 2010, new workers and those moving jobs who wish to work with Children and vulnerable adults must register with the Independent Safeguarding Authority.

PAYROLL RELATED CHANGES FOR THE TAX YEAR 2010/11 AND ONWARDS

Tax Rates and Thresholds

For the tax year 2010/11 all tax allowances and existing thresholds will be the same as for the current year. The new 50% tax band applies to taxable earnings that exceed £150,000.

Other changes impact high earnings individuals but are not part of the payroll application. Payroll will only calculate on earnings processed through the payroll using the tax code applied by HMRC rules. Further guidance will be circulated within Ceridian a little later, but high earning employees of clients may need to be warned that not all their actual 50% tax liability will be collected through payroll. Their Self Assessment return may result in a tax bill at some future point for any personal underpayments which are outside the scope of the payroll operation. This also applies to reduced entitlements of Personal Allowances already announced which is not a payroll derived calculation. Some individuals may have this already calculated as part of their tax coding for the 2010/2011 tax year, others may be in for a nasty surprise at some future point when their tax affairs are understood by HMRC and the 50% tax liability is realised.

For the tax year 2012/13, the higher rate threshold (the point at which someone starts to pay higher rate tax) will be frozen at the 2011-12 amount. The personal allowance will be increased and the basic rate limit will be reduced by the same amount

NICs Rates and Thresholds

For the tax year 2010/11, the Lower Earnings Limit will increase to £97 (from £95), all other NICs rates and thresholds are unchanged from the current year 2009/10.

For the tax year 2011/12, in addition to the 0.5% increases to rates already announced at PBR 2008, the Chancellor has announced that there will be a further 0.5% increase to those rates, making a 1% increase in total from 6 April 2011. The primary threshold limit will be increased by £570 to compensate the lowest earners. Employers, however, will not benefit from this increase in threshold.

Salary Sacrifice Workplace Canteens

From 6 April 2011 the exemption for the benefit of free or subsidised meals will be restricted where an employee has an entitlement to employer-provided free or subsidised meals in conjunction with salary sacrifice or flexible benefits arrangements.

Salary Sacrifice Child Care & Childcare Vouchers

The government have withdrawn its plan to remove the tax and NIC advantages of the non-cash benefit provision of Childcare Vouchers which were pre-announced at the last Labour Part Conference.

Child Care schemes operated through Salary Sacrifice are no longer under threat of withdrawal from 2015 and new entrants from 2011. There is some discussion on restricting the tax reliefs (to the basic tax rate) on such schemes for higher tax payers, detail is yet to be announced.

Company Car Tax

From 6 April 2012 the current graduated table of company car tax bands will be extended down to a new 10 per cent band, and all CO2 emissions thresholds moved down by 5g/km. This will mean that the 10 per cent band will apply to company cars with CO2 emissions up to 99g/km. Qualifying Low Emissions Cars (QUALECs) will therefore no longer exist as a separate category.

Pensions

The restriction of higher rate tax relief being introduced from 6 April 2011 which the Government is consulting on, will affect individuals with a ‘gross income’ of £150,000 or over who save in a registered pension scheme. ‘Gross income’ includes both the value of the individual’s pension contributions and any pension benefit funded by the employer on their behalf.

It is also calculated before any deductions for charitable donations are made. However, there will also be a ‘floor’, so it will only apply where the individual’s income (excluding employer pension contributions) is £130,000 or over. So people who have an income of less than £130,000 are not affected.

To keep up to date with continuing legislation changes and network with fellow HR and payroll executives, come along to one of Ceridian’s Legislation Updates.  To find out more about your nearest event visit www.ceridian.co.uk/events