For many, the transition into 2021 feels much the same as 2020. With little changing regarding how we can shop, what we can do and who we can see, it seemed as much a change in year as it did a day of the week
However, as we have entered 2021 there are some things businesses and HR professionals need to be aware of which will present new challenges and impact the legal landscape.
Some important changes that will come into place this year, affecting businesses and employees include:
IR35 (or the Intermediaries Legislation), refers to tax legislation introduced in April 2000. IR35 was introduced to crack down on a particular form of perceived tax avoidance, where individuals would seek to avoid paying employee income tax and NIC’s by supplying services through an intermediary (usually a Personal Service Company, PSC).
Originally intended for introduction in April 2020 but postponed amid the COVID-19 pandemic, IR35’s new off-payroll working rules are now set for April 2021.
From 6 April 2021, all public sector clients and medium or large-sized private sector clients will be responsible for deciding their worker’s employment status. This includes some charities and third sector organisations. If the off-payroll working rules apply, your worker’s fees will be subject to tax and National Insurance contributions.
For those businesses who fall into a certain criteria, they will need to notify contractors of their IR35 status via a Status Determination Statement (SDS). From this, the organisation will need to take steps to ensure compliance.
Changes because of Brexit
As of 1st January, EU citizens moving to the UK for work will require a visa. Therefore, if your business wants to recruit from the EU, you need to apply to become an approved sponsor which takes around two months.
If you have existing employees working in the UK from the EU, EEA or Switzerland, they will need to apply to the EU settlement scheme by 30th June 2021.
From the beginning of January 2021, EU citizens who enter the UK will only be able to live and work in the country if they have pre-settled or settled status under the EU settlement scheme, or, they have indefinite leave to remain. If this is not the case, they will be required to apply for the right to live and work in the UK under the government’s new post-Brexit ‘points-based immigration system’.
The government consulted in 2019 regarding the extension of redundancy protection. This is for employees taking maternity leave and for other new parents. During this, it committed to extending the period of protection to cover the period of pregnancy and a period after, an extension period of six months. There would also be extensions to the protection periods for employees taking adoption leave and shared parental leave.
Measures to extend redundancy protection to prevent pregnancy and maternity discrimination have also been discussed. Although there isn’t a set date for these changes, it is important to be aware and stay up to date with the latest employment laws.
Coronavirus job retention scheme
The Coronavirus Job Retention Scheme (CJRS) was meant to end on 31 October 2020, but has since been extended until the end of April.
The scheme will continue to allow employers will be able to place their staff on furlough and claim 80% of their salary, with a cap of £2,500 per month. Flexible furlough is also being extended so employees can work some hours and have their unworked hours covered by the grant.
Employers should therefore plan steps they are going to take to retain employees without support from the government. This means preparing for potential redundancies and putting processes into place to ensure this is done fairly and legally.
It’s important to be able to adapt to change
2020 has seen mass change for businesses and HR teams. So, it’s important to be able to be adaptable where necessary and remain up to date with the latest changes to regulations.
If you would like further information about navigating your workforce through the changes, or to find out more about recruiting staff in another country, speak to a member of our global expansion team today.