From IR35 repeal to income tax cuts, People Management asks the experts how fresh updates to employment legislation will impact businesses
Following a flurry of regulatory reform announcements by newly appointed chancellor Kwasi Kwarteng in last week’s ‘mini’ budget, there is plenty for organisations to get on top of. From tax legislation and post-Brexit regulatory changes to IR35 and benefits, People Management asks the experts what the new rules mean for HR teams and organisations.
Reflecting on the regulations with the biggest impact on employment, Ben Chaplin, managing director at Croner-i, deems the reversal of the 1.25 per cent increase in national insurance (NI) that came into effect in April as “perhaps the main announcement affecting employers”.
As the planned increase will now be abolished from 6 November, this will affect employers and employees alike.
“Work will need to be done in payroll teams to ensure the separate listing on payslips is taken off from this date, and employers should let their employees know that their payslips will look different, as well as the impact this will have on their final take-home pay,” Chaplin says.
Also, delivering an important update for business owners, who will be paying 40 per cent on top of earnings, instead of the 45 per cent rate of tax as of April 2023 – “ this will also have a knock-on effect on the dividend tax rate”, Chaplin explains.
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