Whenever a new government comes into power, there is usually a raft of new legislation as MPs hit the ground running to get started on their manifesto. This new government is no exception. Many of the changes will be significant to business owners, who will need to ensure that they, or whoever is in charge of their bookkeeping and payroll, are fully up to speed.
In this blog, we’re going to cover three of these changes which will impact on bookkeeping.
The new tips act
One of the changes which will make a big difference to hospitality businesses is the new Employment (Allocation of Tips) Act and the statutory Code of Practice on fair and transparent distribution of tips which came into force on 1 October.
This will require all service charges, tips and gratuities to be passed onto workers without employers making any deductions for whatever reason. The Department for Business and Trade estimated that this is expected to put £200 million earned by workers back into their pockets instead of those of their employers.
Any employer who keeps all or part of any of the tips due to their workers is now breaking the law, and workers will be able to bring a claim against them at an employment tribunal.
Statutory Sick Pay updates
Prior to this change, for any employee to be eligible for SSP, they had to earn at least the lower earnings limit, which is currently £123 per week. This disproportionately affected those working in low paid, part time or zero hours contract work. The Employment Rights Bill repealed that exclusion which means that all employees who fulfil the other eligibility criteria will be entitled to receive SSP when they’re ill. In addition, the qualifying period for SSP has been removed, meaning that instead of having to have three days of illness before you are entitled to it, an employee can claim from the first day of illness.
Changes to National Living and National Minimum wage
- The National Living Wage will increase to £12.21 from 1 April 2025 for employees aged 25 or above
- The National Minimum Wage for employees aged 18-20 will increase to £10.00
- The National Minimum Wage for employees aged 16-17 will increase to £7.55
- The National Minimum Wage rate for apprentices will increase to £7.55
These changes, along with others which came into force under the Employment Rights Bill, will undoubtedly have an impact on many small businesses. It’s important to keep abreast of them in order to incorporate increased pay into budget forecasting, and to remain legally compliant.
At AMR Bookkeeping Solutions, we keep well ahead of any new legislation which is likely to affect our clients’ cash flow, ensuring they’re prepared for the allocation of more money to employees. If you need advice with any aspect of bookkeeping or payroll, why not get in touch with our friendly and expert team? Complete our contact us form or call 01892 559480.
