Category: Legal News for Business

UK-Switzerland Services Mobility Agreement Extended to 2025

UK-Switzerland Services Mobility Agreement Extended to 2025

Switzerland and the UK have extended the Services Mobility Agreement for a further 3 years, until 31 December 2025. The UK-Switzerland Services Mobility Agreement is a post-Brexit arrangement between the UK and Switzerland that has been in place since 2021. It allows UK service industry professionals to travel and operate freely in Switzerland for up […]

Carers Given One Week Unpaid Leave Under New Law

Carers given one week unpaid leave under new law

Unpaid caregivers are to be entitled to one week of unpaid leave per year under new legislation. The Carer’s Leave Bill, which was approved in its second reading on 21 October, is set to give employees with care responsibilities the right to take one week of unpaid time off work each year to provide for, […]

ICO Publishes Revised Draft Journalism Code

ICO Publishes Revised Journalism Code

A revised draft of the UK’s Journalism Code has been published by the Information Commissioner (ICO) and is now open for public consultation. The UK’s data protection regulator is revising guidelines to make clear journalists’ obligations under UK data protection law. The draft code sets out recommendations and expectations of those engaged in ‘journalism’ using […]

TikTok Facing £27m Fine From UK Data Commissioner

TikTok Facing £27m Fine From UK Data Commissioner

TikTok is facing a £27 million fine after the UK’s Information Commissioner’s Office (ICO) provisionally determined that it violated child data protection regulations over a two-year period. The ICO said that social media giant “may have” processed data of children under the age of 13 without parental consent between May 2018 and July 2020. Additionally, […]

New Legislation Put Forward to Amend, Repeal & Replace EU Law More Easily

New legislation to repeal, replace & amend EU law more easily

The UK Government has put forward the Retained EU Law (Revocation and Reform) Bill to remove the ‘special features’ of EU law that remain in the UK legal system. The Bill amends the 2018 European Union (Withdrawal) Act to make it easier for UK legislators to amend, repeal or replace retained EU law (REUL). Since […]

Legal challenge launched against government’s new ‘strike-breaking’ laws

Title: HMRC starter checklist; employers' guide Key phrase: HMRC starter checklist Synonym: P46 Audience: Employers Word count: 2200 minimum The following guide for employers looks at what you should do in the context of registering a new-starter for PAYE and setting them up with the correct tax code, including using the HMRC starter checklist where the employee does not have a recent P45. We explain the different steps that you must follow, as the employer, when taking on a new recruit in the context of your obligations to HM Revenue and Customs (HMRC), including: checking that you need to pay your new-starter through PAYE getting information to work out your new-starter’s tax code finding out if your new-starter needs to repay a student loan, and registering your new-starter with HMRC. If you are employing staff for the very first time, you will need to register as an employer with HMRC before anything else. You can do this 4 weeks before you pay your new staff.   Do you need to pay your new-starter through PAYE? You will need to pay a new-starter though Pay As You Earn (PAYE) if they will be earning £123 or more a week, £533 a month or £6,396 a year. However, you do not need to pay self-employed workers through PAYE, including freelancers or independent contractors. As a general rule, someone will be classed as ‘self-employed’ if they run their own business and are responsible for both its success or failure, and as ‘employed' if they work for you and do not take on any of the risks associated with running a business. When taking on someone new, you must always first ascertain their employment status to make sure that they are not self-employed. If you get this wrong, there may be pay extra Income Tax and National Insurance to pay, as well as interest and a possible penalty. When it comes to agency workers, you do not need to operate PAYE if a worker is paid by the agency, unless that agency is based abroad and does not have a trading address or representative in the UK. For any temporary workers that you pay directly, you will still need to operate PAYE, provided they are classed as an employee. Even if you will only be paying an employee once, you will still need to put this through PAYE, although the way in which you do this is different to when you will be paying an employee on a regular basis. What information do you need to work out their tax code? You will need to obtain certain information from your employee so that you can set them up with the correct tax code or starter declaration on your payroll software, including: their full name and address their gender and date of birth their National Insurance number their employment start date the leaving date from their last job their total pay and tax paid to date for the current tax year their student loan deduction status, and their existing tax code. You will usually get most of this information from any recent P45 that the employee is able to give to you from their last employer. A P45 provides a record of the amount an employee has earned in their previous employment and what taxes they have paid on their salary so far in the tax year. In this way, this allows the right information to be passed on to a new employer, to be inputted into their payroll software, to ensure that tax continues to be deducted from an employee at the correct rate. If your new-starter has more than one P45, you should use the one with the latest date and give the other back to them. If these have the same leaving date, you should use the P45 with the highest tax-free allowance. If the new-starter does not have their P45, they will need to complete the ‘HMRC starter checklist’ for PAYE. Equally, if they left their last job before 6 April 2021, and so have not been in work for more than a year, their P45 will no longer be valid. This is because a P45 is only valid for the tax year in which it was issued. If you receive a P45 for a prior tax year then you should not use this, but should instead ask the employee to complete the starter checklist, in this way providing you with information about the current tax year. The HMRC starter checklist can be found online at GOV.UK and can either be completed online and printed off to give to you, or downloaded and completed manually. The statement will ask the new-starter for their personal details and student loan deduction status. It will also ask them to select one of the following three statements: Statement A: “This is my first job since 6 April and since then I’ve not received payments from Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit.” This statement is typically for those who have not had any form of work before, even part-time, and are now starting their first paid job, for example, school leavers. Statement B: “Since 6 April I’ve had another job but I do not have a P45 and/or since the 6 April I’ve received payments from any Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit." This statement is typically for those who have lost their P45 or did not receive a P45 from their last employer. Statement C: "I have another job and/or am in receipt of a State, Works or Private Pension.” If the employee receives payments from any pensions, they must not choose either statements A or B above, but rather statement C. Once the HMRC starter checklist has been completed by the employee, this form must be forwarded to your payroll department, so that this information can be recorded in your payroll software. Having obtained your employee’s information, you can use the online tool at GOV.UK to work out their tax code and starter declaration to use in your payroll software, and to establish what else to do before you pay your employee for the first time. The information obtained from a new-starter and provided to payroll must be retained as part of your records for the current year and the following three tax years. HMRC may check your records to see that you are paying the right amount of tax for your employees, where your payroll records must show that you have reported accurately. If you fail to keep accurate records, HMRC may estimate what you have to pay and charge you a penalty. Does your new-starter need to repay a student loan? If your new-starter has an outstanding student loan, you may be responsible for making deductions for repayments for this. You should make student loan deductions if either: your new-starter’s P45 shows that deductions should continue your new-starter tells you that they are repaying a student or postgraduate loan, for example, on their HMRC starter checklist, or HMRC sends you either form SL1 or form PGL1, and your employee earns over the income threshold for their loan. You will need to check these thresholds. Even if your new-starter has a P45 from their last job, you should ask them if they have a student or postgraduate loan, where they may have both. You must record their answer in your payroll software. If they finished their studies after 6 April in the current tax year, they will not begin to repay their loan until the following tax year. You do not need to calculate their loan recovery repayments as your payroll software will do this for you. If your new-starter has a student loan, you should ask them to sign in to their repayment account to check which plan to use for deductions or to contact the student loans company. If they are still not sure, use should use Plan 1 in your payroll software until you get an SL1. Where the new-starter is on more than one plan, start the student loan deductions for the plan with the lowest recovery threshold until you receive an SL1. The possible student loan plans are as follows: The employee will have a Plan 1 if either they lived in Northern Ireland when they began their course of studies, or in England or Wales and began before 1 September 2012 The employee will have a Plan 2 if they lived in England or Wales and began their course of studies on or after 1 September 2012 The employee will have a Plan 4 if they lived in Scotland and applied through the Students Award Agency Scotland (SAAS) when they began their course The employee will have a Postgraduate Loan if either they lived in England and began their Master’s course on or after 1 August 2016, lived in Wales and began their Master’s course on or after 1 August 2017, or lived in England or Wales and began their Postgraduate Doctoral course on or after 1 August 2018. How do you register your new-starter with HMRC? To register your new-starter with HMRC, you will not be required to send the completed HMRC starter checklist, but you will instead need to include their details on what is known as a Full Payment Submission (FPS) the first time that you pay them. You can use the information from the employee’s P45 or completed checklist to help fill this in. You can then use your payroll software to send an FPS on or before their first payday. On this first FPS, you will need to include the following: the information that you have collected from the employee the tax code and employee starter declaration that you have worked out the payments and deductions made since they started working for you, for example, Income Tax, National Insurance contributions and student loan deductions, but not including figures from their previous employment. For any employee that you will only be paying once, you will need to operate PAYE differently. In these circumstances, you must set up a payroll record with the employee’s full name and address, and if you give them a payroll ID, you must ensure that this is unique. When you send your FPS, you will need to use tax code ‘0T’ on a ‘Week 1’ or ‘Month 1’ basis, putting ‘IO’ in the ‘Pay frequency’ field, and do not put a start or leaving date. You must then give the employee a statement showing their pay, before and after deductions, and the payment date, for example, a payslip or letter. You do not need to give them a P45. What was the P46 and what has replaced this? The P46 was a tax form completed by new-starters who did not have a P45. This has been replaced with the HMRC starter checklist. In the same way as the P46, the starter checklist allows employers to add an employee to PAYE and calculate a temporary tax code for them. It is important, however, that when asked to complete the HMRC starter checklist, the individual selects the correct employee starter declaration, or they may end up paying either too much or too little tax under an emergency code. The starter checklist will help the employer to deduct the most accurate tax and National Insurance if they do not have the correct tax code from HMRC, although it may not necessarily be exact and require amendments in later payslips when the correct code is sent. If HMRC has sent you a tax code, you must use that code if your employee gives you a P45 or starter checklist after you have first paid them, deducting any student loan repayments from the date that they started working for you. You may need to update your payroll records if your employee later produces a P45 after you have registered them with HMRC. If the employee gives you a P45 from the outset, they will not also need to complete the HMRC starter checklist. This is because the P45 contains all of the information an employer will need to set up a new-starter on payroll with the right tax code. Any changes required to this code will be issued by HMRC directly to you as the employer. FAQ’s What is a HMRC starter checklist? A HMRC starter checklist is a form that new employees will need to complete if they don’t have their P45 or left their last job before 6 April 2021. Once completed, this must be sent to the employer’s payroll department. How do you fill in a starter checklist? The HMRC starter checklist can either be completed online and printed off, or downloaded and completed manually. This asks the employee for their personal details and to tick an employee starter declaration as to their last job and benefits received. What does starter checklist mean? The starter checklist is a form completed by a new-starter who does not have a P45 or was last employed prior to 6 April 2021. This will enable the employer to work out their tax code and complete payroll. What do I need if I don't have a P45? If you don’t have a P45, you can complete the HMRC starter checklist, providing your employer with your personal details, a declaration as to when you last worked, any benefits or pension received and your student loan deduction status.

Trade unions have started legal action against the UK Government to challenge new rules allowing agency workers to replace striking staff. Trade unions, led by the led by the Trades Union Congress (TUC), have begun judicial review proceedings, claiming that the new legislation permitting businesses to use agency workers to break strikes constitutes a “broad […]

Changes to Digital Right to Work Checks from 1 October

Changes to Digital Right to Work Checks from 1 October

From 1 October 2022, UK employers will be required to use government-certified identity service providers (IDSPs) when conducting digitial right to work checks. This is a change to the current guidance, which allows virtual checks to be conducted through video calls, apps or emails. Prior to the pandemic, right to work document checks had to […]

Law Reforms Proposed For Digital Assets

law commission propsals for new digital asset laws

Reform of the law on cryptocurrencies and non-fungible tokens (NFTs) has been proposed by the Law Commission of England and Wales. In its 549-page proposal document, the Commission has put forward recommendations for new laws relating specifically to digital assets — or “data objects” — given their differences to ‘traditional’ assets. The new laws would […]

New Law To Plug Staffing Gaps Caused By Strike Action

Laws banning agency workers from filling in for strikers to be repealed

A new law has been passed allowing companies to bring in agency workers on a temporary basis to address staffing shortages caused by industrial action. Under the new rules, employers are able to fill vital roles with temporary, skilled workers to help ensure crucial public services and people’s daily lives remain uninterrupted by workforce strikes. […]

New Bill to Safeguard Fair Pay for Seafarers

New Bill to Safeguard Fair Pay for Seafarers

A new bill has been introduced in the UK to guarantee that sailors receive pay at least equal to the National Minimum Wage. From 6 July, 2022, the Seafarers’ Wages Bill brings in new pay protection intended to prevent businesses from relying on lawful excuses to pay low wages and from underpaying seafarers who routinely visit […]

World’s Biggest Four-Day Working Week Trial Starts in UK Today

World's Biggest Four-Day Week Trial Starts in UK Today

More than 3,300 staff at 70 UK companies will begin trialling a four-day week from today with no pay cut. In what is understood to be the world’s largest experiment of the new working pattern, participating employers will continue to pay their employees 100% of their wages on the understanding that they maintain maximum productivity. The trial […]

New UK Work Visa Routes Announced For 2022

UK Visa

The UK Home Office has announced a number of changes to the UK Immigration Rules impacting work visa options and routes for employers to recruit and employ overseas workers. As a headline for businesses, the UK ICT visa and Sole Representative visa are closing and are being replaced by a number of new work visas. […]

Increases to Statutory Employment Payments from April 2022

employment limits increasing

National minimum wage and other statutory rates of pay are set to change for the year April 2022-2023. Employers must ensure they adjust employee pay levels to comply with the new statutory rates. National minimum wage 2022-2023 From 1 April 2022, the following increases will apply: For workers aged 23 and over, the national living […]

Journalist Wins in ‘Kleptocrat’ Book Libel Case

The High Court has dimissed a libel case brought by a post-Soviet mining company against a UK journalist. Kazakhstan-based Eurasian Natural Resources Corporation (ENRC), a mining company with interests around the world, brought the lawsuit against journalist Tom Burgis for his book ‘Kleptopia’. The book is about how dirty money and corruption are now “flooding […]

HMRC seizes NFTs for first time in fraud probe

HMRC, the UK tax authority, has reported its first ever seizure of non-fungible tokens (NFTs), following a probe into an alleged £1.4 million VAT fraud. The HMRC investigation involved over 250 sham companies, resulting in three NFTs being confiscated, along with £5,000 in other cryptoassets. Three people were also detained following allegations they used a […]

Temporary Visa Scheme for HGV Drivers & Poultry Workers

The UK is to make thousands of emergency temporary work visas available to address critical labour shortages in the haulage and food processing industries. Under the temporary visa scheme announced by the Government, a total of 10,500 three-month work permits will be issued by the Home Office, in an attempt to ‘save Christmas’ for Britains. […]

Workers May Be Given Right to Request Flexible Working From ‘Day 1’

UK workers could be given the right to request flexible working from their first day of employment, under new government proposals. The BBC has reported that the government is launching a consultation into the proposals over the coming days.  Under the proposals, workers could become able to make a statutory request for flexible working from […]

‘Unlawful’ Mandatory COVID Vaccine Law Challenged By Care Home Workers

Care home workers are taking legal action against the UK government to overturn the mandatory COVID vaccine law. Two care home staff are pursuing a Judicial Review challenging the amendment to ‘The Health and Social Care Act 2008’ which will prevent individuals from entering a care home after 11 November 2021, unless they have been […]

New Children’s Privacy Design Code In Force

A new data protection code has taken effect in the UK designed to restrict and monitor online services accessed and used by children. The Age Appropriate Design Code, also referred to as the Children’s code, has been introduced by the UK ICO to make the internet a “better and safer place for children”. The code […]

One Month Countdown to End of Furlough Scheme

Employers currently claiming furlough support have only one month left until the Coronavirus Job Retention Scheme closes. Government financial contributions towards furloughed workers’ wages are due to end on 30 September 2021, when employers will be required to resume full responsibility for workers’ wages. During September, the government will contribute 60% of wages up to […]