Equality – Gender pay gap reporting
The government has introduced new requirements for all private and voluntary sector employers of over 250 people relating to equal pay reporting from April 2017.
The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (SI 2017/172) mean that large employers must calculate and publish the difference in mean and median pay and bonuses between the men and women they employ. In addition, information must be given about the proportion of men and women receiving a bonus payment and the proportions of men and women in each quartile of their pay distribution.
Key stages for this are:
- 5 April every year, starting in 2017- take a snapshot of the data
- bonus data is based on the previous 12 months leading up to 5 April 2017
- by 4 April 2018 – the results must be published on the organisation’s website with a signed statement confirming their accuracy
- both the results and statement must remain on the website for 3 years
Organisations might choose to add some narrative with the results, but this is not part of the requirement.
Read more: GOV.UK gender pay gap
Class 4 National insurance u-turn
One of the significant announcements Chancellor Philip Hammond made on Budget Day was the proposed increases to the main rate of Class 4 National Insurance Contributions (NICs) paid by self-employed individuals from 9% to 10% from April 2018 with a further increase planned from 10% to 11% from April 2019.
The Chancellor subsequently announced that the government will not now proceed with the proposed increase in Class 4 NICs rates . Self-employed individuals currently pay Class 2 and Class 4 NICs. Class 2 NICs are to be abolished from April 2018.
Read more: BBC news
Reduction in the Dividend Allowance
It was announced in the Budget that the Dividend Allowance will be reduced from £5,000 to £2,000 from April 2018.
Dividends received by an individual are subject to special tax rates. The first £5,000 of dividends are charged to tax at 0% (the Dividend Allowance). Dividends received above the allowance are taxed at the following rates:
- 7.5% for basic rate taxpayers
- 32.5% for higher rate taxpayers
- 38.1% for additional rate taxpayers
Dividends within the allowance still count towards an individual’s basic or higher rate band and so may affect the rate of tax paid on dividends above the £5,000 allowance.
To determine which tax band dividends fall into, dividends are treated as the last type of income to be taxed.
The government expect that even with the reduction in the Dividend Allowance to £2,000, 80% of ‘general investors’ will pay no tax on their dividend income. However, the reduction in the allowance will affect family company shareholders who take dividends in excess of the £2,000 limit. The cost of the restriction in the allowance for basic rate taxpayers will be £225 increasing to £975 for higher rate taxpayers and £1,143 for additional rate taxpayers.
Read more: GOV.UK dividend allowance