The majority of employees should receive the NI cut directly via their November payroll!
What is the National Insurance increase reversal?
On 6 April 2022, National Insurance Contributions (NICs) increased by 1.25%. The NICs increase was due to be replaced by the Health and Social Care Levy in April 2023.
The Chancellor of the Exchequer confirmed in September 2022 that the increase will be reversed from 6 November 2022. Additionally, the new Health and Social Care Levy will no longer be introduced in April 2023.
From 6 November 2022 the main and additional rates of Class 1 employee NICs will be reduced by 1.25 percentage points to 12% and 2%. Class 1 employer NICs will also be reduced by 1.25 percentage points to 13.8%.
How will your employees receive the cut?
Depending on your payroll processes, the majority of employees should receive the NI cut directly via their November payroll. Some employees may not benefit immediately from the in-year reduction in NICs rates if you’re unable to update payroll software before 6 November 2022. These employees should receive the benefit retrospectively once updates to the payroll have been applied.
The Government’s policy paper makes clear that the reversal to the National Insurance increase will only apply prospectively from 6 November 2022. However, in case the new reduced rates are not applied to employees’ pay from 6 November 2022 for any reason, UK Government guidance states that, “although individuals should contact their employer for refunds as a first port of call in all circumstances, there may be circumstances where individuals may need to apply to HMRC for a refund. For example, if their employer is no longer trading, or if an individual has moved roles and their previous employer has confirmed they are unable to issue a refund retrospectively themselves”.
Does this change the Employment Allowance?
No. The Employment Allowance, an FSB-designed measure to remove the first £5,000 off every small employer’s NICs bill, will be retained at the same level. This means that small businesses can employ four staff on the living wage without paying any employer NICs.
Will there be a bank holiday for the King’s coronation?
It has been confirmed by Buckingham Palace that the coronation of King Charles III will be on Saturday 6 May 2023. The coronation ceremony will take place at Westminster Abbey in London, where the King will be crowned alongside the Queen Consort.
So the date has been set, but will there be a bank holiday to mark the occasion? As the coronation is taking place on a Saturday, a bank holiday won’t be called for that day (when a moveable bank holiday falls on a weekend, a substitute day is observed). There have been calls from some MPs for the early May bank holiday (currently to take place on Monday 1 May 2023) to be moved to Monday 8 May 2023 to create a long weekend or for an extra bank holiday to be announced, but there is no confirmation of an extra or moved bank holiday right now.
There are usually eight bank holidays in England and Wales each year (nine in Scotland). There is no statutory right for employees to take time off on bank holidays, this will depend on the terms of their contracts. Bank holidays can be included in the statutory minimum 5.6 weeks’ annual leave entitlement under the Working Time Regulations (pro rata for part-time workers). The Supreme Court confirmed in Harpur Trust v Brazel that the 5.6 weeks’ statutory minimum annual leave entitlement also applies to part-year workers including term-time only, zero-hours and casual workers, and should not be pro-rated for these workers.
If an additional bank holiday is granted, usually there will be no statutory right to time off so employers will need to review their contracts of employment to determine whether their staff are entitled to time off. For example, contracts that say employees have a right to 20 days’ annual leave plus time off on eight public/bank holidays where the bank holidays are listed and there is no extra flexibility in the wording, will not have an automatic right to time off. If there is no contractual right to time off, employers can choose to give their employees an additional day of paid leave or staff can make an annual leave request in the usual way.
The coronation will be a once in a lifetime event for many, being the first coronation to take place in 70 years, so employers should be prepared for an increase in requests for annual leave in the lead-up to the day itself. Although it takes place on a Saturday, employees who work weekdays only may still want to take annual leave to travel to London in advance of the ceremony.
While the traditional Monday to Friday jobs will not be affected by the coronation being on a Saturday, businesses that run on a Saturday should consider if they need staff to work and make preparations. Some may decide to close to give staff the opportunity to watch the ceremony/travel to London or because they don’t think they will be busy. Choosing to close means that staff who would have worked on that day will be entitled to full pay for the day off, unless the employer can agree that staff take annual leave (employees might stand their ground and not agree to put a request in). Alternatively, employers can enforce annual leave provided they give the right notice (twice the amount of notice as the annual leave they want the employee to take, ie two days’ notice would be required to enforce one day of annual leave).
Other employers may be extra busy and designate the coronation day as a day when no one can take annual leave. Employers could consider arranging for staff who are required to work to watch the ceremony or part of it while at work by giving longer breaks and the additional time being made up later or allowing breaks to be moved. Some businesses may be happy to work on a skeleton staff and increase annual leave caps for the day to give more staff the opportunity to take annual leave.
While the bank holiday position for the coronation has yet to be confirmed, employers should start to consider how the coronation may affect their businesses now that the date has been set and communicate their plans with their staff. It may seem a long time until the coronation but some employees will already have started thinking about when they want to take annual leave next year, so employers need to be prepared to respond to any annual leave requests, taking into account any expected peaks in demand and staffing levels.
UNIVERSAL CREDIT AND PENSIONS KEY CHANGES
UNIVERSAL CREDIT AND PENSIONS KEY CHANGES after 17th of November 2022.
People claiming Universal Credit could see their payments rise by as much as £52 a month if expected plans are put in place next week.
Benefits, including Universal Credit, and pensions are expected to rise 10 per cent in line with inflation if Rishi Sunak bows to increasing pressure ahead of next week’s Autumn Statement. The previous prime minister, Liz Truss, said pensions would increase in line with inflation, but Rishi Sunak has not confirmed this. The Prime Minister has made it clear that the Government faces “difficult decisions” to fix the economic turmoil triggered by Liz Truss’s doomed spell in No10.