The 2009 Budget.
The latest details of employment law implications of the Budget Report.
Alistair Darling delivered his Budget Report to Parliament on 22 April 2009. The details of the Budget have been much discussed in various news media over the last few days. In this update we intend to highlight the employment law implications of the 2009 budget.
The Chancellor announced a one-off increase in a week’s pay for the purposes of calculating the amount of statutory redundancy from £350 to £380. Accordingly, the maximum statutory redundancy payment will rise from £10,500 to £11,400. It is not clear from the Budget announcement when this one-off increase will take effect. It is also not clear whether or not the increase in a week’s pay will extend to other statutory payments that are calculated by reference to a week’s pay, for example, the basic award for unfair dismissal.
The Chancellor also announced changes to personal taxes and the tax treatment of pension contributions for high earners:
- From 6 April 2010 the top rate of income tax for individuals (for those with a taxable income over £150,000) will increase to 50%
- From 2010 the basic personal allowance for income tax with net income over £100,000 will be adjusted.
- From April 2011 the availability of higher rate relief on contributions to registered pension schemes will be restricted.
- Finally, from 2011 significant changes to company car tax will come into effect.
Before any of the news becomes set in stone for employers, legislation will have to be updated. You can rely on HCS to keep you in touch with any changes as they occur.
In the meantime, HCS recommendations are to:
Consider the additional cost of redundancy if you are calculating potential redundancy costs in the next few months
Consider the personal effect of taxation on high earners if you are considering salary reviews. It may not be the best option to increase an already high earner’s salary to beyond the point of taxable allowance increases.
For further advice or to receive more details please contact: enquiries@humancapitalservices.co.uk or call us today on 0141 776 6456.
© Human Capital Services Ltd 2009
26 June 2009, Administrator
news feed