Employment Law changes in 2020 – part 2

Now we’re into 2020, there are upcoming employment law changes that you need to be aware of. Here is the second of our blogs explaining what to expect in 2020.

IR35 legislation

The off-payroll working rules may be extended to medium and large companies in the private sector from 6 April 2020.

Medium and large companies are defined as any company which has two out of three factors; an annual turnover of £10.2 million, a balance sheet of more than £5.1 million and more than 50 employees. These rules are intended to prevent the avoidance of tax and national insurance contributions by individuals operating through personal service companies when they should be an employee by removing the tax advantages.

As a result of this, payments made to self-employed contractors may be treated as employment income for tax purposes. HMRC will assess this using the same tests used in employment law to establish employment status.

Whilst HMRC will enforce the IR35 rules, the onus will be put on large and medium-sized companies to decide whether or not the relationship is one of deemed employment. If they do deem the relationship to be an employment relationship, they must deduct tax and national insurance contributions from any payments before they are made to the personal service company.

Information and Consultation of Employees (ICE) Regulations

The Information and Consultation of Employees (ICE) Regulations apply to businesses with more than 50 employees. The regulations give employees the right to request that their employer sets up or changes arrangements to inform and consult them about issues in their organisation.

From April 2020, the threshold to request an information and consultation agreement under the ICE Regulations will be decreased from 10% to 20% of employees. However, there must be a minimum of 15 employees making this request.

For further advice on this topic you can contact us by emailing [email protected] or calling 0114 218 4000. Please note this article should only be considered as guidance and should not be taken as specific legal advice.