By Paula Fisher
October 5th 2022
By Paula Fisher
October 5th 2022
On 22nd September, Secretary of State for business, energy and industrial strategy introduced a bill to the House of Commons which will put an end to EU-based legislation the UK has kept since Brexit. In addition, there was more to last week’s statement from our new Chancellor of the Exchequer than tax cuts. It was also announced that there would be change in employment law regarding off-payroll working.
Many of our employment rights came from Europe, and in other respects the jurisprudence of the European Courts has been taken into account in the UK, more often than not, to extend rights for UK workers. Holiday pay is a particularly good example. Thanks to the EU Courts, we now have principles about the proper calculation of holiday pay (in particular, e.g., inclusion of voluntary overtime, bonuses and commission) and rules about not being obliged to take holidays during periods of sickness etc.
‘Retained EU Law’ was a concept created as a result of the legislation that enabled the UK’s departure from the EU, i.e., Brexit.
The new bill ‘the Retained EU Law (Revocation and Reform) Bill 2022’, if passed in its current form, will make it easier for the Government to amend legislation such as the Working Time Regulations, the right to holiday pay, aspects of discrimination law and the Transfer of Undertakings (Protection of Employment) Regulations which derive from EU law. It is said that this will be completed by 31st December 2023.
The Government has announced that it will reverse changes to the off-payroll working rules (also known as IR35) that were implemented in 2017 (in the public sector), and in 2021 (when similar changes were applied in the private sector).
IR35 legislation is about whether a contractor is a disguised employee or genuinely self-employed. If they are a disguised employee then PAYE and NI contributions are deducted at source from their income (meaning they pay more tax), and liability for any non-payment of tax or NI sits with the client (hirer).
Therefore, from April 2023, this tax regime will revert to the pre-2017 rules, when the responsibility for applying these rules and paying the correct tax and national insurance rested with the Limited Company Contractor, not the client.
It is a little difficult to predict at this point in time, exactly what rights will be thrown out under the Retained EU Law (Revocation and Reform) Bill 2022, although one might reasonably assume that politically it would be a brave Government indeed to abolish the right to paid holidays. So watch this space!
Fiona Haworth
You can contact Fiona on [email protected].
If you feel that you need guidance or advice on this matter, please call Practical HR on 01702 216573 or email Fiona on the above.