While still navigating the impact of coronavirus, there is still the annual changes to employment legislation which usually hits our table in April. This year is no exception and from next month these changes include, an extention to the IR35 tax regulations which will effect the private sector, minor changes to the national minimum wage age bands, and increases to statutory rates. You can download the changes below but in summary: 
National Living Wage (NLW) will be extended to 23 and 24 year olds from 1st April which means than anyone 23 years old or over will now qualify for the NLW. Currently, the NLW is only applies to those aged 25 and over. The impact of this will see a nearly 9% increase for 23 and 24 year olds.  
Age 2020 2021 
23 and over £8.72 £8.91 
21 - 22 £8.20 £8.36 
18 - 20 £6.45 £6.56 
16 - 17 £4.55 £4.62 
Apprentices £4.15 £4.30 
Other Statutory payments have also increased: 
Statutory sick pay from £95.85 to £96.35 
Statutory family leave payments for maternity, paternity, adoption, shared parental and parental bereavement leave increases from £151.20 a week to £151.97 a week. 
Statutory redundancy payments increase from £538 to £544 for each qualifying week 
Compensation awards limits have also seen an increase. The maximum compensation award for unfair dismissal, from 6th April 2021, is £89,493 (or 52 weeks pay if this is lower). The minimum award for unfair dismissal relating to Health and Safety, employee representation, Trade Union, or occupational pension trustee is £6,634. 
One of the biggest changes to the private sector for medium and large organisations are the reforms of the IR35 tax regulations, already applicable in the public sector, relating to off-payroll working. Due to come into force last April but delayed due to the pandemic, these regulations aim to reduce tax avoidance by contractors employed by personal services companies or those who are fulfilling roles which should done by employees (also known as 'hidden employees'). Under these regulations, the business engaging the contractor becomes responsible for determining their tax status and assessing if IR35 applies or not. It's important that employers review their contracts and provide a status determination statement to the contractor and the contracting companies. Using the CEST tool on the government website can help with this. If IR35 does apply, the organisation will be considered to be their employer for tax and national insurance purposes. 
IR35 regulations apply to all businesses that have 
more than 50 employers 
an annual turnover of £10.2 million 
a balance sheet worth over £5.1 million. 
For support with any of the changes, or any HR or employment challenges, get in touch at hello@dynamic-ps.co.uk 
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