New Tax Year - What Employers Need To Know

Holiday Entitlement and Holiday Pay Calculations

The government has introduced changes with the aim to simplify holiday entitlement and holiday pay calculations.

The Equality Act 2010 (Amendment) Regulations 2023 came into force on the 1st January 2024 and amend the Working Time Regulations 1998. The Regulations aim to clarify the law on holiday pay and entitlement and codify decisions of the European Court of Justice and the United Kingdom Courts to address the perceived unfairness created by the Supreme Court decision in the Brazel case.

The changes to holiday entitlement and pay for a worker who has irregular hours applies to the leave year starting on or after 1st April 2024.

• defining irregular hours workers and part-year workers in relation to the introduction of the holiday entitlement accrual method and rolled-up holiday pay
• introducing a method to calculate statutory holiday entitlement for irregular hours and part-year workers
• introducing a method to work out how much leave an irregular hour or part-year worker has accrued when they take maternity or family related leave or are off sick
• removing the Working Time (Coronavirus) (Amendment) Regulations 2020 which affect the accrual of COVID-19 carryover of leave
• maintaining the current rates of holiday pay where 4 weeks is paid at normal rate of pay and 1.6 weeks paid at basic rate of pay, whilst retaining the 2 distinct pots of leave
• defining what is considered ‘normal remuneration’ in relation to the 4 weeks of statutory annual leave
• introducing rolled-up holiday pay as an alternative method to calculate holiday pay for irregular hours workers and part-year workers

For further information please see the government's website.

New Tax Year Brings Changes to Finances

As always, April brings increases to the rates of minimum wage - but this year there are a couple of changes that employers should pay close attention to - including the biggest ever increase in the National Living Wage.

April 1st 2024 - Minimum Wage Rise

The National Living Wage for workers over the age of 23 is going up by 9.8 per cent and the National Minimum Wage for workers aged between 21 and 22 will increase by 12.4 per cent.

The exact amount of the increases will be:

• National Living Wage for over-23s - going up from £10.42 to £11.44 an hour - this represents an increase of 9.8% for over 23s
• National Minimum Wage for those aged 21-22 - going up from £10.18 to £11.44 an hour - this represents an increase of 12.4% for over 21s - the first time 21 and 22 year olds have been brought into the top bracket.
• National Minimum Wage for 18 to 20-year-olds - going up from £7.49 to £8.60 an hour
• National Minimum Wage for under-18s - going up from £5.28 to £6.40 an hour
• The Apprentice rate - going up from £5.28 to £6.40 an hour
• Accommodation offset going up from £9.10 to £9.99

Statutory Rate Changes - Benefits and Pensions

This year will again see a rise to all payments including benefits and the State Pension.

For example, the full weekly rate of the new State Pension is going up from £203.85 to £221.20

The rate for 2023/24 for statutory maternity (SMP), paternity (SPP), adoption (SAP), parental bereavement (SPBP) and shared parental pay (ShPP) will increase from £172.48 to £184.03 per week. Additionally, the rate of statutory sick pay (SSP) is also set to increase from £109.40 to £116.75 per week.

The minimum weekly amount an individual must earn to be entitled to these payments will remain at £123.

Carer's Leave

New regulations will give greater rights to employees who have a dependent with long-term care needs. The employees will be able to apply for one week of unpaid carer’s leave in any 12-month period.

Read More... Get Ready For New Carer's Leave Regulations

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