1) P45 changes

At present, post-P45 payments are subject to PAYE at basic rate (tax code “BR”) and any additional income due is accounted for through self-assessment. According to HMRC, this can result in employees paying less tax than is due, so from 6 April 2011, employers will need to use a new tax code for post-P45 payments. The new tax code, “0T”, means that employers must withhold income tax at the appropriate rate as if the departing employee is entitled to no allowances. Guidance on how employers are required to operate the new code is not yet available, although it is expected to be published shortly.

2) NICs increases

From 6 April, the rate of employees’ national insurance contributions (NICs) will be increased from 11% to 12% on earnings between the lower earnings limit (currently £110 a week but increasing to £139 a week) and the upper earnings limit (currently £844 a week but decreasing to £817 a week). NICs on earnings above the upper earnings limit will increase from 1% to 2%.

3) The Equality Act 2010 – positive action

Section 159 of the Equality Act 2010, which provides for positive action in recruitment and promotion, will be brought into force in April. Under this section, employers may treat a person (A) with a protected characteristic more favourably in connection with recruitment or promotion than another person (B) who does not share that protected characteristic. This will only be permitted where:

  1. A is as qualified as B to be recruited or promoted;
  2. the employer does not have a general policy of treating the person sharing the protected characteristic more favourably than those without it; and
  3. the treatment is a proportionate means of achieving a legitimate aim.

The provision is supposed to apply where an employer reasonably thinks persons sharing that protected characteristic suffer a disadvantage connected to that characteristic and participation in the activity by a person with that characteristic is disproportionately low. For example, a business which has no female employees could choose to appoint a female candidate who is of equal merit to a male candidate. It is important to note that the above does not represent an obligation for employers, they may still choose whether to take positive action or not.

4) The Bribery Act 2010 - delayed

The implementation of the Bribery Act, which was due to take place on 1 April 2011, has been delayed. No firm date has been given for implementation of the Act, nor for publication of guidance on “adequate procedures”. However, the Ministry of Justice has indicated that the guidance is being worked on with a view to being finalised shortly. The Ministry of Justice has also confirmed that there will be a three month period between the publication of the guidance and the Act being implemented. It is likely that implementation will take place during 2011.