Business
Business advice from Tina Sargent, of Griffins, on payroll and tax queries
QUESTION one: I own a catering business employing 100 staff. I have heard that there will be some changes to statutory maternity, paternity, adoption and sick pay. I need to be aware of these things as I do my own payroll. Can you tell me what the increases will be?
Answer: The flat rates of statutory maternity pay, statutory paternity pay and statutory adoption pay will increase to £117.18 per week.
The flat rate of statutory sick pay will also increase to £75.40 per week.
The increases come into effect on April 6 and are subject to parliamentary approval.
If you are struggling to keep abreast of statutory increases and finding it difficult to do your own payroll, owing to a lack of time and technical expertise, have you considered outsourcing it?
There are specialist payroll bureaus and a lot of accountancy firms, such as Griffins, that have experts who can help.
Question two: I am a small business owner and I remember that in the Queen’s speech last year she mentioned that a Bill was to be introduced to reduce regulatory burdens on business. What are the details of this?
Answer: I put this question to Anna Beasant, the HR manager and consultant at Griffins. She informs me that the Employment Bill received its first reading on December 6 in the House of Lords. It aims to simplify, clarify and develop a stronger enforcement regime for certain aspects of employment law. The provisions include:
n Changes to the law relating to dispute resolution in the workplace. This will include repealing the current statutory dispute resolution procedures and revision of the ACAS code on discipline and grievance. Tribunals will be able to adjust awards by 25 per cent, where parties have unreasonably failed to follow the code.
n The delivery of a more straightforward and transparent enforcement and penalties regime for the national minimum wage and employment agency standards.
n Compliance with the European Court of Human Rights decision in ASLEF versus UK, which concerned the rights of trade unions to determine their members.
No implementation date has been given, but the Bill is likely to become law in April next year.
Question three: I am a small business owner and although I understand the value of training my staff, I have financial constraints. Are there any tax benefits available if I spend money on training?
Answer: Many employees want to develop new skills by means of some additional training.
The tax treatment of these costs depends on how the courses are paid for and how relevant they are to the employee’s job.
If you pay for the training courses for your employees, then these are tax deductible for your business. Also, your employees are not taxed on the value of the training, so long as the course relates to their current role or to some activity that they may have to perform as part of their job.
If the employees pay for the training themselves, then this does not apply.
Unfortunately, an employee cannot claim tax relief for training costs unless the training was actually carried out as part of their job, as opposed to preparing them to do the job.
So it is unlikely that an employee who pays training costs personally will obtain any tax relief for the costs.
In the courts recently it was held that the costs and expenses of an employee to better qualify themselves in carrying out their duties were not deductible expenses.
An alternative would be for your employee to take a salary sacrifice to the value of the cost of the training and for you, the employer, to pay for it.
An example of a salary sacrifice follows:Salary: £20,000 £18,500
Training costs paid: £1,500 £1,500
Employer’s NI at 12.8 per cent: £1,891 £1,699
Employee’s NI at 11 per cent: £1,625 £1,460
Employer’s NI saved: £192
Employee’s NI saved: £165
Employee’s tax saved: £330
Total employer cost: £21,891 £21,672
This example shows that both the employer and employee are better off after the salary sacrifice, owing to the tax and NI savings.
This may suit an employee if they want to further their career by developing new skills not directly related to their current position.
Please continue to send in your questions by e-mail to richard.maynard@newburynews.co.uk, flagged ‘Ask Tina’, so that the experts at Griffins can help and advise you on business matters.
More From: Business News Next Story: Help solve UK's skills shortage Previous Story: Award for Newbury IT company