Latest changes to Employment Law, dodging tax avoidance, and VAT road fuel scale updates
If you’re an employer, it’s vital that you are aware of the latest changes in Employment Law to ensure you are treating all of your employees fairly. Plus, how to avoid getting caught out by a tax avoidance scheme, and the latest VAT road fuel scale charges set to take effect on 1st May 2024.
Employment Law changes in April
New employment laws came into force on 6 April 2024 that apply to all businesses. Here is a brief summary of the changes.
Flexible working:
- An employee now has a right to request flexible working from their first day of employment.
- Previously, an employee could only make one request in a 12-month period, however this is now increased to two.
- Employers must respond to a request within 2 months and provide an explanation and consultation if the request is refused.
Carer’s leave:
- Previously, there were no leave rights for employees who are carers. Now, an unpaid leave entitlement exists from day one of employment.
Pregnancy and family leave:
- Enhanced protection in a redundancy process is available to employees on maternity leave, shared parental leave or adoption leave. Under these laws, an employer must offer suitable alternative vacancy where one is available. This is sometimes called MAPLE protection.
- From 6 April, this protection has been extended to cover an employee from the point they tell their employer they are pregnant.
- MAPLE protection generally extends to 18 months after the birth of the child, but conditions apply to those who have taken shared parental leave without taking maternity or adoption leave.
Paternity leave:
- There is now greater flexibility in how and when paternity leave is taken.
- It can be taken at any time in the first year of the child’s life, and the weeks can now be split and taken at different times.
See: https://helptogrow.campaign.gov.uk/new-changes-to-employment-law/
Don’t get caught out by tax avoidance
HM Revenue and Customs (HMRC) are running a campaign to help people avoid being caught out by tax avoidance schemes. This is particularly relevant to those who are contractors, agency workers, or are working through an umbrella company.
Tax avoidance schemes are schemes designed to bend the rules of the tax system in a way that was not intended. They usually involve contrived transactions whose only real purpose is to artificially reduce the amount of tax someone pays. It is different from effective tax planning.
Being caught out by a tax avoidance scheme can be expensive. People who use them often end up paying interest and penalties in addition to the tax they should have paid. This is on top of the fees that may already have been paid to the person who sold the scheme.
Therefore, it makes sense to check your working arrangements and contract to make sure that you do not get caught up in a scheme that might land you a big tax bill somewhere down the line. This applies whether you are being considered as self-employed or employed.
Red flags include receiving more money in your bank account that what is shown on your payslip, or receiving untaxed payments that are described as loans or capital advances.
You should be especially careful if a scheme is described as ‘HMRC approved’, since HMRC does not approve schemes.
HMRC provide a risk checker tool that you can use to find out if your employment arrangements might involve tax avoidance. This can be accessed here: https://www.gov.uk/guidance/check-if-you-are-at-risk-of-tax-avoidance
We are expert tax advisers and can help you with effective tax planning, however please be assured that we do not offer tax avoidance schemes. If you think that you may have been caught out by a tax avoidance scheme and would like some advice, please call us and we will be happy to help you.
See: https://dontgetcaughtout.campaign.gov.uk/tax-avoidance/
Updated VAT road fuel scale charges from 1 May 2024
From 1 May 2024, the VAT road fuel scale charges will be updated. The new rates will need to be used from the start of the next VAT accounting period that begins on or after 1 May. So, if your next VAT quarter starts on 1 June, you will begin using the new rates for the quarter that begins on 1 June.
VAT road fuel scale charges provide a simplified method for calculating and accounting for VAT for VAT registered businesses that pay for road fuel that is used both for business and private purposes.
Instead of tracking each fuel purchase individually, businesses apply fixed charges based on the type of vehicle and its CO2 emissions. The fixed charges are effectively an estimate of the VAT on private use.
If your business only pays for fuel that is used for business purposes, or simply reimburses business mileage to employees, there is no need to use the VAT road fuel scale charges.
The vehicle logbook or UK approval certificate should show the vehicle’s CO2 emissions figure. However, the online tool here – https://www.gov.uk/get-vehicle-information-from-dvla – can also be used to check this figure.
If the car is too old to have a CO2 emissions figure, then the CO2 band needs to be identified based on the engine size.
The new scale charges together with details on how to calculate the charge for a vehicle can be found on HMRC’s website at the link below. If you need any help with calculating the rate or you are not sure whether you need to use these charges on your VAT return, please feel free to call us and we will be happy to help you.
See: https://www.gov.uk/guidance/vat-road-fuel-scale-charges-from-1-may-2024-to-30-april-2025