DISTRIBUTING TIPS

From 1 October 2024 employers must ensure all ‘qualifying’ tips are fairly allocated to staff.  Qualifying tips include employer received tips (e.g. service charge added onto a bill) and worker received tips (e.g. cash on the table) if they are collected up by the employer then distributed. 

Whilst the Code of Practice does not specify how tips are to be allocated, the distribution must be fair and transparent.  Businesses must then maintain a written policy as to how tips are dealt with, ensure it is made available to all workers and maintain a tipping record log to show how each tip received has been dealt with. Further information on all the factors to be considered can be found at: Code of practice on fair and transparent distribution of tips (HTML version) - GOV.UK (www.gov.uk)

STATUTORY NEONATAL CARE PAY AND LEAVE

With effect from April 2025 a new statutory allowance will be introduced to give parents who have a child that requires neonatal care in the first 28 days following birth, the option to take up to 12 weeks of paid leave to reduce the burden and afford more time while their baby is receiving hospital care.  Administratively SNCP is expected to follow the same process as other existing statutory payments.

FAIR PAYMENT CODE

New proposals are being tabled to introduce legislation preventing big businesses from taking advantage of small businesses by delaying payments to them.  This will require large businesses to annually report their payment practices with a view to encouraging faster payments to small businesses who frequently have to cover cash flow gaps caused by these larger firms ignoring or failing to meet payment terms on time.

GROWTH & SKILLS LEVY

Aimed at boosting access for young people to apprenticeships, a new levy is being designed to give businesses more flexibility to take on and train new apprentices and address critical skill shortages.   It will allow apprentices to be taken on for shorter periods of time (currently a minimum of 12 months) tailored to the business’s needs and introduce a foundation level enabling young people to earn a wage whilst forging a route into a critical sector career.

THE BUDGET – 30 OCTOBER 2024

With less than a month now until the new Chancellor, Rachel Reeves, presents the first Budget of the new parliament, speculation is rising as to what can be expected.  There have already been announcements on abolishing the non-dom and furnished holiday lettings tax regimes, charging VAT on school fees and a proposed new roadmap for Making Tax Digital.  And whilst we await the finer details, we’ll also be keeping an eye on other rumoured changes for Capital Gains, Inheritance, Stamp Duty and Motoring taxes.   Our next newsletter will be a Budget Special with details of the announced changes.

CHILD TRUST FUNDS

Over half a million people born between 1 September 2002 and 2 January 2011 have yet to claim their Child Trust Fund.   Each account set up was boosted by a government £250 deposit which may have been topped up over the years by friends and family.   If you do not know which bank, building society or saving provider your account is being held at, you can check easily using Gov.UK free online tool  Child Trust Fund: Find a Child Trust Fund - GOV.UK (www.gov.uk).  

TRIVIAL BENEFITS

With the festive season looming ever closer (sorry), this is just a reminder that you don’t have to pay tax on a ‘trivial benefit’ for an employee.  The same applies to Directors although a maximum limit of £300 in a tax year applies if you are a ‘close’ company with 5 or fewer shareholders.  To qualify as a ‘trivial benefit’ all of the following must apply:

• Cost £50 including VAT or less to provide (even 1p more will make the full value taxable)
• Is not cash or a cash voucher (gift vouchers are fine if it cannot be exchanged for cash)
• Is not a reward for work or performance
• Is not in the terms of their contract

Examples include store or services gift cards, flowers for a birthday or anniversary, hampers, a night out at a restaurant* or a turkey for Christmas!  

* this is in addition to the annual staff entertaining exemption as long as the cost per head remains below £50. 

We are here to work alongside you and help you prosper so please do get in touch at any time.

Dawn, James, Rebecca, Elaine, Leanne, Penn, Nat, Lucy, Becky, Steph, Janet & Josh
Clarksons 01969 624999