George Osborne delivered the 2013 Budget on 20 March and highlighted below are its main implications for HR and employment law:
1. Employee shareholder status – The new legislation on employee shareholder contracts will take effect on 1 September 2013, allowing employees to opt out of certain employment rights in return for shares in their employer’s
company. (STOP PRESS: the House of Lords has now rejected this proposed legislation and it remains to be seen whether the Government will press ahead with it, change it or drop it altogether.)
2. Encouraging employee ownership – The Government will provide £40 – 50 million annually from tax year 2014-15 to encourage the uptake of employee ownership structures for businesses.
3. Employment Allowance – From April 2014, all businesses will be given an allowance of £2,000 off national insurance each year. The Government has confirmed that employers will need to confirm their eligibility through their
regular payroll processes, following which the allowance will be deducted from their employer NIC’s over the course of the year.
4. Personal allowance – The personal allowance for those born after 5 April 1948 will increase (by £560) to £10,000 in 2014-15.
5. Tax free loans – The Chancellor has doubled the value of employment-related beneficial and notional loans which will be increased from £5,000 to £10,000 from 6 April 2014. This will give employers more flexibility to offer
employees loans to enable them to buy transport season tickets and this will doubtless be welcomed by employees given the increasing costs of commuting.
6. Tax-free childcare scheme – The Government will introduce a new tax-free childcare scheme. Under the scheme, working families will be able to claim 20% of childcare costs for children under 12, up to £1,200 per child each
7. Disguised employment through LLPs – The government announced that it will consult in spring 2013 on measures to remove the presumption of self-employment for partners in limited liability partnerships (LLP0s) so as to
combat the disguising of employment relationships through LLPs.
8. Single-tier state pension – This will be introduced in April 2016, a year earlier than originally planned. The new arrangements will involve the end of the state second pension and the abolition of defined benefit contracting-out.
9. Sickness absence – The Government announced that it will abolish the Percentage Threshold Scheme, which currently provides compensation for those facing high levels of sickness absence, and will introduce a new health
and work assessment advisory service. This service will offer free occupational health expertise to employers, employees and GPs, including an independent assessment of employees who have been off sick for four weeks.
For more information about any of the above or for practical advice on any aspect of employment law, please contact Nigel Crebbin of the Berg Employment Team on 0161 833 9211 or email him at
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The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Berg or any of its partners or employees. Professional legal advice should
be obtained before taking, or refraining from taking, any action as a result of this article.