Creative HEAD UK April 2018

#BusinessEdit
Employee wage
deductions catching
out employers
UNIFORMS AND DEDUCTIONS are catching
out big employers such as Wagamama and TGI
Fridays, named on the latest government ‘name
and shame’ list featuring businesses failing to pay
the correct National Minimum Wage or National
Living Wage.
Several of the high-profile cases were
due to the rules being incorrectly applied on
uniforms and deductions and, Hilary Hall, chief
executive of the NHF, warned salons to take
care. “Deductions from pay, for any reason, is
a tricky area and you should take legal advice
before doing so, even if your employees agree
to deductions being made,” she warned. “If
such deductions take a team member below
the minimum wage, then you’re breaking the
law. HMRC will still consider the cost of items
which employees have to supply as a deduction
from wages for the purposes of calculating the
National Minimum Wage.”
FIT FOR WORK SCHEME
SET TO CLOSE
THE GOVERNMENT’s Fit for Work health,
work and employee absence service has
closed for referrals in England, and will
cease in Scotland at the end of May.
The service was designed to help
small businesses in particular to get
employees back on their feet and into
work after sickness or injury. GPs were
able to refer employees into it for specialist
rehabilitation help and support. However,
since its launch in 2015, the service had
struggled to be accepted by businesses or
GPs, and the government said it was closing
because of “low referral rates”.
The service’s website fitforwork.org will
continue to offer free return-to-work advice.
NO ANSWER ON SELF-
EMPLOYMENT QUESTION
THE NHF HAS expressed disappointment that the government failed to
provide much-needed clarity on the future status and tax treatment of selfemployed
workers in its long-awaited response to the Taylor Review of Modern
Working Practices.
The review had been tasked with looking at whether changing employment
models, including the ‘gig’ economy and rising rates of self-employment, were
benefiting or exploiting workers. It had recommended a number of potentially
significant changes, including the creation of a new category of worker, a
‘dependent contractor’, as a halfway house between being directly employed
and self-employed.
Were this to happen, it could have important implications for hair and
beauty. Chair renters, for example, could gain rights to benefits such as
sickness and holiday pay. In its response, the government announced plans
to crack down on employers who fail to pay fines imposed by employment
tribunals, including ‘naming and shaming’ and much larger penalties.
But on the all-important issue of self-employment status it decided to
put the question out to further consultation. The government also rejected
Taylor’s proposals to reduce the difference between the National Insurance
Contributions (NICs) of employees and the self-employed.
“Although it’s great news for people who are self-employed, we are obviously
disappointed that changes to NICs have been ruled out,” said NHF chief
executive Hilary Hall. “But the burning questions on employment status
have not yet been answered, yet there could be far-reaching consequences
for the hairdressing, barbering and beauty industries. We will be building
on the campaigning work we have already done and actively participating in
the consultations.”
PAY AND TAX CHANGES ARRIVE
APRIL HERALDS THE start of the new financial year and will bring an
array of pay and tax changes. Hourly rates for the National Living Wage and
National Minimum Wage will all be going up, as will the Apprentice wage, see
table below.
With tax, owners who pay themselves an income from dividends rather than
a salary will see their tax-free dividend allowance fall from £5,000 to £2,000.
Income from dividends above this will be taxed at 7.5 per cent for basic-rate
taxpayers, 32.5 per cent for higher-rate payers and 38.1 per cent for top-rate
payers. In Scotland, the basic rate of income tax will be frozen at 20p, while a
new intermediate rate of 21p will kick in on earnings above £24,000. The rate
for higher-rate taxpayers will also increase, by 1p to 41p. A new ‘starter’ rate,
set at 19p, will also be introduced, and will apply to the first £2,000 of taxable
income between £11,850 and £13,850.
RATE FROM APRIL 2018
National Living Wage (over 25s)
£7.83 (up 4.4 per cent)
Age 21 to 24
£7.38 (up 4.7 per cent)
Age 18 to 20
£5.90 (up 5.4 per cent)
Age 16 to 17
£4.20 (up 3.7 per cent)
Apprentice*
£3.70 (up 5.7 per cent)
*The apprentice rate applies to those aged 16 to 18 training on an apprenticeship and to
those aged 19 or over who are in the first year of an apprenticeship
To find out more information and how to join the NHF, call 01234 831965 or visit nhf.info
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CREATIVE HEAD