Each April the government generally makes changes which come into effect with the changing of the tax year, including changes to statutory rates for various employment related payments and the national minimum wage. In this blog we note some of this year’s changes.
Increase in National Minimum Wage
From 1st April 2021, the highest rate, the National Living Wage, is extended to workers aged 23 and over, where it previously applied to those aged 25 and over. From the same date, the rates for all ages will increase as follows:
- Living Wage (23+) - £8.91 per hour
- Age 21 – 22 - £8.36 per hour
- Age 18 – 20 - £6.56 per hour
- Age 16 – 17 - £4.62 per hour
- Apprentice rate - £4.30 per hour.
Changes to Statutory Rates
From 4th April 2021, the rate of statutory pay for family related leave is increased to £151.97 per week. This applies to statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay.
Also from 4th April 2021, the rate of statutory sick pay is increased to £96.35 per week.
From 6th April 2021, there is also an increase in the limit on a weeks’ pay for the purposes of calculating a statutory redundancy payment, which is now £544 per week. This means than any employee who is made redundant after 6th April 2021 should have their statutory entitlement calculated on the basis of a maximum weekly payment of £544.
IR35 changes come into force
It was intended for changes to IR35 rules to come into force in April 2020. These relate to the tax treatment of the income of individual contractors or consultants supplying their services through an intermediary, often a personal service limited company. The changes mean that medium and large private sector businesses who engage workers through intermediaries will be responsible for deciding whether the workers have deemed employment status. If they do, the end-user client, or the person who pays the fees for the work done, will be responsible for accounting for tax and NI.
These planned changes were postponed due to the Covid-19 pandemic, but have now come into force as of 6th April 2021. For further details see our previous blog which discusses the changes.
Extension of weeks’ pay regulations for furlough purposes
The government has extended regulations which govern the calculation of a weeks’ pay for furloughed workers from the 30 April 2021, to cover the period until the intended end of the furlough scheme in September 2021. This is to ensure that employees who are on furlough remain entitled to certain statutory payments such as notice pay and statutory redundancy pay on the basis of their full salary (pre-furlough).
For advice on these issues and how they might affect you or your employees, contact our employment team at Miller Samuel Hill Brown. Contact us online or call 0141 221 1919.
