On 24 July 2015, the Government launched a consultation on simplifying the tax and NICs treatment of termination payments. The proposals include:
At first glance, the proposals may well impact on your exit negotiations with employees, particularly those with shorter service, as a larger part of their termination payment will become taxable. It is likely that employees will be looking to gross up any exit payments, in order to take account of this.
We will update you as the consultation progresses.
In a previous edition of the Employment Update, we advised of the Government’s intention to introduce regulations requiring mandatory gender pay gap reporting.
On 14 July 2015, a consultation was launched in respect of such regulations, which are likely to be introduced in 2016. The regulations will require companies with 250 or more employees to carry out an equal pay review and publish their gender pay gap. The consultation is due to conclude on 6 September 2015.
Ahead of the mandatory requirements coming into force, it may well be worth considering a legally privileged equal pay review, which would help your business identify any risks and close the gap on any inconsistencies uncovered.
Please contact us if you have any queries or wish to discuss this further.