HR REWARD AND BENEFITS Annual leave
A recent case that may be of interest is Asociación Nacional de Grandes Empresas de Distribución (ANGED) v Federación de Asociaciones Sindicales (FASGA) et al. The European Court of Justice was required to decide whether to issue the declaration sought by Spanish workers confirming that they were entitled to postpone pre-arranged, paid annual leave which coincided with sick leave, despite contrary provisions in collective agreements. It was held that if a worker has to take sick leave which coincides with their paid annual leave, they are entitled to take the annual leave at a later time, irrespective of the point at which they became unable to work, even if this will be in a new leave year. This new period of annual leave may be taken outside of the normal period in which annual leave must be taken. HR departments should be aware of this recent development and ensure this declaration is complied with, in order to avoid claims being brought against their organisation by workers who have been denied this right.
Tax credits
Following the changes introduced in April 2012 to the Working Tax Credit (WTC), which required couples to work at least 24 hours per week in order to continue to be eligible for WTC, further changes are due to come into force next year. April 2013 will see a change in the threshold of rises in income considered for the purpose of a Tax Credit award: it will be decreased to £5,000 or more in April 2013. This lowering of the threshold may mean many taxpayers are left having made overpayments. To reduce the risk of this, changes in employees’ rates of pay should be communicated to HMRC as they happen.
Childcare vouchers Company cars
On 6 April 2012, the sliding scale used to calculate tax due on company cars changed. This included abolition of the company car tax category, Qualifying Low Emission Car (QUALEC), and the lower threshold for carbon dioxide emissions was reduced. As a result, employees who have been provided with company cars that exceed this level of carbon dioxide emissions can expect to be faced with higher tax increases – and employers have been required to pay increased National Insurance contributions. Something employers – and in particular, the HR function – may want to consider when it becomes time to renew or purchase a new lease for company cars is whether it would be practical, taking into account the environmental and monetary benefits, to select new company cars with lower emissions.
The 2012 Budget brought changes for many higher rate taxpayers to child benefit, due to come into effect in 2013. Employees earning over £60,000 will no longer be eligible to receive this benefit and those earning over £50,000 will lose 1% of benefit for every £100 they earn over the £50,000 limit. As a result, employers may begin to get requests from higher
rate taxpayers who wish to purchase childcare vouchers using their pre-tax wage. Employees who earn just over the £50,000 limit may be looking for ways to effectively reduce their basic salary and may invest more heavily in the pension scheme. HRDs should be aware of this and ensure it is able to deal with such requests. More employees may apply to work flexibly: working reduced hours, to bring their salary below the limit or working remotely from home, to reduce their childcare costs.
Harmajinder Hayre (pictured) is partner in the employment unit at law firm Ward Haddaway and head of employment within HR magazine’s HR Legal Service
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30 HR Supplement September 2012
hrmagazine.co.uk
1111078-HR-SA5
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