Sex discrimination review heralds change to maternity benefits

Amongst the well-publicised changes to annual leave and the National Minimum Wage another imminent amendment to the law has all but slipped in under the radar.

Back in February the government, in the form of the Department for Business, Enterprise and Regulatory Reform (BERR), were taken to court by the Equal Opportunities Commission in respect of deficiencies in the Sex  Discrimination Act.

A number of issues were raised in court, in particular the inconsistency between the entitlement to contractual non-pay benefits during ordinary and additional maternity leave. At present employers are not obliged to continue to provide such contractual benefits as company cars, childcare vouchers and company holiday after the 26 week ordinary maternity leave period.

The only exception to this is the necessity to continue to make employer pension contributions throughout maternity leave – a maximum of 52 weeks.

After losing the case, the government undertook a judicial review and has  resolved to amend the relevant maternity and parental leave legislation. They had hoped to be able to do this by 1 October 2007, but given the lack of publicity of the change it is a welcome relief that this deadline has not been met.

The next implementation of such changes should not be until 1 April 2008, but BERR may feel that it has to react before this, given that UK law is currently at odds with the originating EU directive.

Meanwhile employers need to consider the additional costs and the necessary process changes that will arise from continuing to provide benefits throughout 52 weeks of leave.

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HMRC lose minimum wage case

The beleaguered E24 Guide to tips and troncs is set for another re-write after HM Revenue & Customs (HMRC) lost another case that reached the tribunal system as a result of operation gourmet - its crackdown on the payment of National Minimum Wage (NMW) in the hospitality sector.

HMRC argued that only payment of tips passed by the troncmaster to the
employer to put through the payroll, and therefore displayed on payslips,
could count towards NMW. In the cases that went to Employment Tribunal (ET)
the employees were indeed on very low hourly rates – well below the NMW –
but when the tips from the tronc were added some employees were actually 40%
taxpayers.

The ET said it was therefore nonsense to say that in such cases the NMW had
not been paid. So, yet again, we need new guidance making clear that
employers can add together tips paid directly through a tronc to wages paid
through the payroll when assessing if they have met their NMW obligations.

The new NMW rates from 1 October 2007 are:

Age 16-17 £3.40
Age 18 -21 £4.60
Age 22 or over £5.52
Accommodation offset £4.15 per day

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HMRC announces changes to payroll stationery

The September edition of the Notes for Payroll Software Developers(http://www.hmrc.gov.uk/comp/notes-11-1.pdf) contains a number of important announcements in respect of payroll stationery. 

Most of these have come about as a result of the move to mandatory online filing of in-year forms,which comes into affect for all but the smallest PAYE schemes in April 2009.

The online P45 will be amended from April 2008 to include new fields that will align it more closely with the paper version, although the majority of fields will be conditional, ie, they only need to be completed in certain situations.

From October 2008 the P45 will be resized to A4 and employers submitting online at this stage can choose to print P45s on plain paper to hand to leavers. Employers do not need to move to the new stationery and can continue to use pre-printed stationery if they so choose. Plain paper P45s cannot be emailed to recipients.

The old A5 version of the P45 will be withdrawn from April 2009 and at that time Date of Birth (DOB) and gender will be mandatory on both the P45 and P46. Also, the P46(Pen) will be introduced for pension payrolls.

The 2007/08 P11D will contain mandatory fields for gender and DOB (these were optional this year). The P46(Car) is being amended to include new fuel type G for E85 bio fuels.

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End of year returns sent in parts

HM Revenue & Customs have asked payroll software developers for their views on plans to change the error messages returned to employers when they submit their end of year returns in parts. In other words when the P14s and P35s are sent separately and/ or in batches.

Under the current system batches of P14s and a P35 sent separately are checked independently to ensure that the totals add up and that the contents of all the fields meet the validation rules for P14s and P35s. Returns can therefore be rejected immediately for either type of error. Where no errors are identified an acceptance message is sent to the employer.

However, it is only when the final batch of P14s or the P35 is received for the scheme that a final check that the totals on the batches of P14s match back to the P35 can be made. At this stage HMRC cannot reject a P35 that they have already accepted at an earlier stage.

From next year HMRC would like to hold on to P35 only parts and send an acceptance message only when all the P14 parts have been received and matched to the P35. There will still be the facility to replace P35s whilst the return is pending.

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