What legislation changes can you expect in 2019?

The start of the year has undoubtedly been somewhat overshadowed by Brexit – whether it will be enforced, how it will be enforced, and even WHEN it will be enforced are the hot political topics that have dominated endless UK business headlines.

However, in amongst the noise, the government have quietly published their proposed legislative changes for the beginning of the new financial year in April. The start of 2019/2020 brings significant alterations to tax thresholds, pensions, savings, payslips, and even business VAT rules.

With many businesses still understandably preoccupied with the financial, political and even geographical consequences of the possible outcomes of Brexit, we’ve decided to round up the key legislative changes to be aware of as we move into the new financial year:

• 1st Jan 2019: Executive pay gap reporting comes into force

From the beginning of the year, government regulations have required all UK listed companies with more than 250 employees to publish an annual report on the pay differences between their CEO, other board members, and the average pay of their workers at lower level.

• 29th March 2019: Brexit

The never-ending negotiations for Brexit continue, but, without any significant changes to the current withdrawal agreement, as it stands the UK is poised to officially leave the EU on the 29th March 2019. Whether a longer withdrawal period will be negotiated still remains to be seen, but the main issue currently hindering negotiations is the need to avoid a hard border between Northern Ireland and the Republic of Ireland post-Brexit.

• 30th March 2019: Gender pay gap reports (Public Sector)

Some public authorities, including government departments, the armed forces, the NHS and state schools, will be required to publish their gender pay gap reports in the public domain by this date. The requirements for the report content are essentially the same as those applied to the private and voluntary sectors.

• 1st April 2019: Changes to National Minimum Wage, National Living Wage, tax thresholds, and workplace pensions come into force

Both the National Minimum Wage and the National Living Wage will increase from April. The ‘living wage,’ which effectively acts as the minimum wage for people aged 25 or over, will rise to £8.21. For those aged 21 to 24, the minimum wage will rise to £7.70.

The income tax threshold will also raise from April, with basic rate tax payers remaining exempt from paying tax for their first £12,500 of earnings. The threshold for higher rate tax payers will also increase to £50,000 per year.

Minimum workplace contributions for auto-enrolment pension schemes will increase for both employers and employees from April 2019. Currently, contribution rules allow for employers to contribute a minimum of 2%, and employees to contribute a minimum of 3%. The new legislation means that employers and employees will be required to contribute a minimum of 3% and 5% respectively.

• 6th April 2019: New payslip legislation and the ‘Good Work Plan’

From the 6th April, the legal right to be issued with a payslip will be extended to include all workers who are not officially classed as an ’employee,’ such as contractors, freelancers, and those employed on a casual basis.

Employers will also be required to include the total number of hours that an employee, working on hourly basis, has worked over the course of a weekly or monthly payment period.

Also launching on the 6th April, the government’s ‘Good Work Plan’ will enable legislative forces to crack down on employers who repeatedly breach obligations relating to employment law. Employment tribunals, which currently have the power to impose a £5,000 ‘aggravated breach,’ against employers, will also see the limit for this rise to £20,000 from April.

• April 2019 – tax on termination payments

April will also mark the point at which the government’s new law on termination payments will come into force. This means that any part of a termination payment made to an employee over the sum of £30,000 will now be subject to employer NICs.

What else should you be aware of? 

• Business VAT rules

From April 2019, all VAT-registered businesses with a taxable turnover above the UK VAT registration threshold will be required to keep VAT records in digital form, as well as filing their VAT returns using digital software.

• National minimum wages for sleep ins

The court of the appeal has recently ruled that people working ‘sleep-in shifts,’ such as nurses or care workers, are not entitled to the National Minimum Wage for time spent asleep where they are ‘available for work,’ but not actually working.

A request has been lodged to appeal the decision with the Supreme Court By Unison, and a final decision is expected to be reached in early 2019.

• Non-disclosure agreements

A full review into the use of non-disclosure agreements in the UK is expected this year. The agreements, which are often controversially known as ‘gagging clauses,’ were originally used to protect businesses intellectual property, but in recent years, they have been heavily criticised as they can also be used to silence employee claims of racism, sexism, harassment and bullying.