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Legislation Changes Your Business Needs to Know About in 2018

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Legislation Changes Your Business Needs to Know About in 2018


Implementation Date

Occupational pensions revaluation rate amended

The Occupational Pensions (Revaluation) Order 2017 comes into force on 1 January 2018 and specifies the revaluation percentages for the purpose of the revaluation of benefits under occupational pension schemes on and after this date.

1 January 2018

The Second Payment Services Directive (PSD2) comes into force

This updated directive must be complied with my any business wishing to supply payment services within the EU, as well as in an out of it. It establishes a common standard for payments and requires robust customer authentication. It additionally is widening regulation to allow businesses to store all account information in one place for their customers to access.

13 January 2018

New Check-Off Arrangement come into force

The draft Trade Union (Deduction of Union Subscriptions from Wages in the Public Sector) Regulations 2017 implement new arrangements for check-off for public-sector employers.

Check off is when workers who are union members pay their union subscriptions by deduction from their pay at source. The money is then passed direct to the union by their employer.

Where a contract of employment or collective agreement contains arrangements for check-off, the arrangement can continue only where the trade union meets the administrative cost in respect of making the deductions and workers have the option to pay their trade union subscriptions by other means.

10 March 2018

Cross Border Portability of Online Content

Regulation (EU) 2017/1128 on the cross-border portability of online content services in the internal market will allow consumers who have paid for an online content service (eg films, sports broadcasts, music, e-books and games) in their home country, to access and use that service (and the content on it) when they are travelling outside their home country within the EU.

1 April 2018

Increase in parental pay

The rate of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay increases from £140.98 to £145.18 per week.

1 April 2018

National Minimum Wage and National Living Wage Increase

The hourly rate of the national living wage (the rate for workers who are aged 25 and over) increases from £7.50 to £7.83.

The national minimum wage for workers aged at least 21 but under 25 rises from £7.05 to £7.38 per hour.

The rate for workers who are aged at least 18 but under 21 increases from £5.60 to £5.90 per hour.

The rate for workers aged 16 or 17 rises from £4.05 to £4.20 per hour.

The apprentice rate rises from £3.50 to £3.70 per hour.

The accommodation offset increases from £6.40 to £7.00 per day.

The increases were announced in the Autumn Budget 2017.

1 April 2018

Tax rate changes

The personal income tax allowance increases to £11,850 and the higher rate tax threshold to £46,350, as was announced in the Autumn Budget 2017.

6 April 2018

Lower earnings limit for national insurance contributions increases

The lower earnings limit for primary Class 1 national insurance contributions increases to £116 per week, as announced in the proposed benefit and pension rates 2018 to 2019.

6 April 2018

Employer contribution into a pensions auto-enrolment scheme increases

Employers (and workers) must pay a minimum level of contributions in a defined contribution scheme.

Under the Employers’ Duties (Implementations) Regulations 2010 as amended by the Employers’ Duties (Implementation) (Amendment) Regulations 2016, the minimum employer contribution rates, which are expressed as a percentage of a jobholder’s qualifying earnings, are to be increased from 1% to 2%.

Pensions: qualifying earnings figures

On this date:

(1) the earnings trigger will remain at £10,000 (the income tax personal allowance threshold);

(2) the lower limit of the 'qualifying earnings' band will increase from £5,876 to £6,032; and

(3) the upper limit of the qualifying earnings band will increase from £45,000 to £46,350.

6 April 2018

Changes to Scottish income tax bands and rates introduced

In the draft Scottish Budget 2018/19, a new "starter rate" tax band of 19% is introduced for those earning between £11,851 and £13,850 and a new "intermediate rate" tax band of 21% for those earning between £24,001 and £44,273.

The basic rate of tax is 20% for those earning between £13,851 and £24,000, the higher rate is 41% for those earning between £44,274 and £150,000 and the top rate is 46% for those earning over £150,000.

6 April 2018

Statutory sick pay rises

The rate of statutory sick pay increases from £89.35 to £92.05 per week.

6 April 2018

State pension rates increase

The single-tier state pension increases from £159.55 to £164.35 per week and the basic state pension increases from £122.30 to £125.95 per week, as announced in the Proposed benefit and pension rates 2018 to 2019.

April 2018

Van Benefit and Car and Van Fuel Benefit

The van benefit charge and the car and van fuel benefit charges will increase from the 6 April 2018 by amendments made to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) by the Van Benefit and Car and Van Fuel Benefit Order 2017, SI 2017/1176, which comes into force on 31 December 2017.

The flat-rate van benefit charge will increase to £3,350; the multiplier for the car fuel benefit charge will increase to £23,400; and the flat-rate van fuel benefit charge will increase to £633.

6 April 2018

Tax: employment related measures

The government published a second Finance Bill of 2017, containing a number of employment-related provisions that were dropped from the previous Finance Bill ahead of the general election. The Bill introduces tax measures in respect of:

(1) a time limit for making good benefits in kind

(2) ultra low emission company cars

(3) an exemption in respect of pensions advice given to an employee which is paid for by an employer

(4) an extension of existing reliefs for employees who may require legal advice or indemnity insurance which is funded by their employer

(5) termination payments

(6) disguised remuneration.

There is a new charge on the write-off of disguised remuneration loans. There is another new charge (the ‘loan charge’) on disguised remuneration loans outstanding on 5 April 2019.

Restrictions are placed on employer deductions and, following further consultation, secondary legislation will be introduced to broaden the powers of HMRC to transfer tax and National Insurance contributions (NICs) liabilities from the employer to the employee.

The Bill was given Royal Assent on 16 November 2017 and became the Finance (No 2) Act 2017.

April 2018

Taxation of termination payments

Until they were withdrawn in the run up to the General Election the Finance Bill contained provisions which would amend the way in which termination payments would be taxed.

A consultation on that draft legislation ran until 5 October 2016. Revised draft legislation was subsequently published. The withdrawn provisions were introduced in a second Finance Bill after the election.

The Bill was given Royal Assent on 16 November 2017 and became the Finance (No 2) Act 2017.

April 2018

The General Data Protection Regulation (GDPR) comes into force

The Regulation harmonises data protection law across the EU and extends it to include all foreign companies processing the data of EU residents.

The Regulation:

  • provides for the imposition of a fine of €20 million or 4% of global turnover, whichever is greater;
  • requires the express consent of individuals to have their data processed beyond where the business has a legitimate business interest to process that data;
  • requires the notification of data breaches to the data protection authority (in the UK, the ICO); and
  • extends the special categories of information, such as trade union membership and religious belief or political opinion, to include information relating to health.

The Data Protection Bill, which will replace the Data Protection Act 1998, has had its second reading through the House of Lords. The Bill will bring data protection rules in the UK into line with the requirements of the GDPR. In particular, the Bill provides for enhanced rights of individuals over their data, for example in relation to consent and erasure of personal data. It creates the requirement for mandatory data protection officers, whose role is to monitor compliance, and applies greater sanctions for data breach. The Bill also sets out derogations from the GDPR including the derogations that permit the Government to legislate on the processing of criminal conviction data.

25 May 2018

Trade Secrets Directive implemented

The Trade Secrets Directive (2016/943/EU)introduces an EU-wide definition of "trade secret" as information that is secret, has commercial value because it is secret, and has been subject to reasonable steps by the holder of the information to keep it secret.

The Directive provides protection against the unlawful acquisition, use or disclosure of a trade secret or other conduct contrary to "honest commercial practices".

Whistleblowers are excluded from liability where disclosure of a trade secret serves the public interest.

9 June 2018

e-Privacy Regulation Update: Privacy and Electronic Communications Regulations (PECR)

Alongside the GDPR, the European Commission have set out to update the Privacy and Electronic Communications Regulations, to ensure a cohesive ePrivacy legislation framework.

Consent to use of cookies on websites is being tightened and the e-Privacy Reform also seeks to address ad-blocking and WiFi location tracking. Marketing rules are to be tightened and opt in shall be default. The fines for breaching the legislation shall mirror those of the GDPR, being €20 million or 4% of the business’ turnover.

The new regulation is still in draft form.

Sometime in 2018

Public sector exit payments

The Enterprise Act 2016 (EA 2016) allows regulations to be made introducing a cap of £95,000 on exit payments made to public sector workers.

The provisions of section 153A of the Small Business, Enterprise and Employment Act 2015(SBEEA 2015), suggest that the public sector workers to be covered will include civil servants, local government workers, teachers, health service workers, fire and rescue workers and members of police forces.

A draft of the Public Sector Exit Payment Regulations 2016 which impose the cap was published and a further consultation on the proposals was held until 3 May 2016.

This draft also sets out that some public sector employees may be prevented from keeping their exit payments when they return quickly to the same area.

The Regulations may come into force in 2018.

Sometime in 2018

Sunday trading: protection for shop workers

The government are to devolve powers to extend Sunday trading hours to local authorities.

The relevant measures had been set out in the Enterprise Bill but were dropped during the passage of the Bill through Parliament.

Nonetheless, the rights of shop workers to ‘opt out’ of working Sundays, if they so choose, such as for religious or family grounds, are to be extended in relation to 'additional hours', such as contractual hours they can be asked to work in excess of their normal hours.

The duty on employers to notify employees of their rights about working on Sundays is also to be extended.

When the Enterprise Act 2016 is brought into force thewill necessary legislative changes will be brought into effect.

Sometimes in 2018

Trade unions: financial penalties

When section 19of the Trade Union Act 2016 is brought into force it will amend TULR(C)A 1992 to allow regulations to be made empowering the Certification Officer to impose financial penalties of up to £20,000 on trade unions if they fail to comply with certain statutory requirements.

The regulations are currently in draft form.

Sometime in 2018

Apprenticeships: Technical and Further Education Act 2017

When the Technical and Further Education Act 2017 (TAFEA 2017) takes effect, it will extend the Institute for Apprenticeships’ remit to cover classroom-based technical education in addition to apprenticeships.

New measures support the Institute’s establishment and remit regarding apprenticeships.

Regulations to bring the relevant provisions of the act into force are expected in 2018.

Sometime in 2018

Shared parental leave for working grandparents

The right to shared parental leave and pay is to be extended to working grandparents. A consultation was expected to be launched in 2016 with the new rights expected to come into force in 2018.

Sometime in 2018

Caste discrimination

Under section 9 of the Equality Act 2010 (as amended by the Enterprise and Regulatory Reform Act 2013) an order must be made providing for caste to be included as an aspect of race.

In September 2016 it was announced that there would be a public consultation on the issue. The consultation and a feasibility study on measuring caste discrimination were published on 28 March 2017. The consultation ended on 18 July 2017.

Sometime in 2018

Unpaid Work Experience (Prohibition) Bill

This Bill has not yet had its second reading by the House of Lords, but would provide that individuals undertaking work experience for a period exceeding four weeks must be paid the national minimum wage for their age.

Sometime in 2018