Business HR Under The Spotlight – Your 3 Minute September Roundup

“Welcome to Spotlight HR’s monthly ‘bite-size’ look at the latest HR news and important legal changes affecting small to medium-sized businesses across the UK today.”

SEPTEMBER 2022. By Kimberly Bradshaw (CEO, Spotlight HR.)

It’s a budget, but not as we know it – the mini-budget dissected for small businesses

This mini-budget has proved to be a bone of contention and is already in flux, with the largely unpopular top earners’ tax cuts being hastily retracted just days after the announcements. So here is just a quick whiz through some key changes that haven’t been backtracked upon… yet…

  • National Insurance changes: On the 6th of November 2023, NI will be reversed to previous levels. This is for both employee and employer contributions.  Your payroll system should handle this seamlessly, just make sure you run the essential updates!
  • Employment Allowance: This change could be worth £5k per year if your NI contributions were below £100k in the last tax year – so worth checking.
  • Banker Bonuses: Well, I don’t think this will affect any of us! Basically, they can earn eye-boggling amounts again.

Through the HR lens – get ready for MASSIVE employment law changes in 2023

To mark the progress of Brexit and our split from the EU, we have a litany of employment law changes powering our way. Thanks to the Retained EU Law (Revocation and Reform) Bill, introduced on 22 September 2022, there are major changes afoot – and yes, likely to impact many small businesses.

From 31 December 2023, any retained EU law will automatically expire unless the UK reforms are implemented. The laws potentially changing at the moment relate to the regulations surrounding:

  • Agency workers
  • Fixed-term employees
  • Part-time workers
  • Parental leave

Across the UK, these regulations will also reform the way employment tribunals are considered, with cases being appealed in the lower courts if EU case law is still being used. We will be keeping a close eye on these developments to report back.

IR35 reform, the bits you need to know

Kwasi Kwarteng’s controversial ‘mini-budget’ announced in September did have some favourable news for businesses. His repeal of the 2017 and 2021 public and private sector reforms to the IR35 rules as of 6th April 2023. But what exactly does this mean?

Under the current rules, contractors can be ‘deemed employed’ by the businesses using them in certain circumstances. This is a costly and complex business expense, with payroll and employee tax implications. Worse still, the responsibility for determining whether a working arrangement falls inside or outside the IR35 set-up has fallen at the feet of company owners, meaning they have had to pay any tax or NI shortfalls to the government.

This change on the 6th of April shifts back to the pre-2017 status – putting the onus of IR35 responsibility back with the contractor, with them having to pay any taxation shortcoming.

My big concern in all of this – is how short-lived will any or all of this be? How long will the government survive? And will we have to reverse all of our ‘reversals’ in the coming months? It’s complex stuff, but anything that saves tax and bureaucracy for small businesses is welcome. Feel free to get in touch for a more in-depth explanation.

Employment Tribunal in focus – Secretary with asthma-related absences wins tribunal

During the COVID pandemic, a company secretary at a large bank raised concerns about the working conditions with her line manager when she developed a bad cough which she connected to the air conditioning: Miss G Raja vs Starling Bank. Her absences, working from home requests, and not working beyond her contracted hours like other staff members led to her dismissal for underperformance. During the subsequent tribunal, the Judge ruled in favour of the claimant, identifying her treatment as unfavourable and her asthma as a disability.

This serves as yet another reminder of the dangers of disability and, or, sex discrimination in the workplace and the need for employers to consider remote working fairly.

At Spotlight HR, we are experts in educating and informing company culture to avoid costly tribunals. Get in touch if you need advice.

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