With a general election looming, there’s no doubt there’ll be changes to payroll that’ll affect employees and employers.
Over the last five years, we’ve mainly seen changes to national insurance — with employee rates reduced from 12% to 8%, and an increase in the primary threshold to line up with the tax-free allowance of £12,570.
Some important changes this year were those made to parental leave rights and holiday pay for employees. Alongside these, we saw the usual changes that roll out in April each year — those made to tax bandings, statutory payments, student loan thresholds, and minimum wage rates.
During the last three years, there’s been no change to the tax-free allowance of £12,570.
So, how could a general election change all this? Well, we don’t really know yet. But let’s have a look at some of the main points proposed so far, without the finer detail — given this can change, as parties rewrite their manifestos ahead of the election:
Labour
- Raise tax-free allowance
- Simplify workers’ categories to one status of worker — to provide statutory rights benefits of sick pay and family leave to workers.
- End long term plans to stop national insurance contributions.
- Increase minimum wage rates to better reflect cost-of-living rises.
- End zero-hour contracts, instead having an opt in clause for employees.
- Provide statutory pay rights to employees from the first day of employment.
- Provide unfair dismissal rights from first day of employment.
Liberal Democrats
- Raise tax-free allowance.
- Provide flexible working rights.
- Improve parental leave.
- Close the gender pay gap.
- Provide protection against unfair dismissal and workplace discrimination.
The Conservatives
- Reduce national insurance rates further.
- Maintain long term goal to end national insurance contributions.
- Maintain current three categories of employment status — means no statutory rights benefits of sick pay and family leave for workers.
- Raise tax-free allowance.
- End the non-domicile tax status.
The Green Party
- Echoes Labour party pledge of statutory rights for employees from the first day of employment.
- Increase minimum wage rates.
- Reduce working days from a 5 day week to a 4 day week, but keep full time hours (no loss of pay for staff).
- End the non-domicile tax status.
As mentioned, these are all subject to change, as political parties keep their upcoming proposals close to their chests.
Under the current government, changes are planned for both employees and employers in the coming year:
- Give tips and gratuities to employees without any deductions.
- Provide workers’ rights to request a more predictable working pattern
- Provide new rights for parents to take up to 12 weeks of paid leave if their baby requires specialist care after birth.
- Lower pensions auto-enrolment age from 22 to 18.
Our payroll team will communicate updates in the lead up to the general election. We’ll also take you through the implications for payroll following the election.
To contact our payroll team, please call 0131 558 5800 or e-mail Claire Proctor (Senior Payroll Manager) on claire.proctor@ct.me
