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Payroll Update – July 2023

By July 20, 2023Payroll

Ethnicity pay reporting

It has been announced this month, that following a Government consultation on ethnicity pay reporting, the Goverment will not be mandating it for organisations.

The consultation was introduced initially because it ws felt that greater transparency was needed in this area and felt it needed to be aligned with mandatory gender pay reporting.  However, in its findings, the Government concluded that there are more valuable tools and methods to assist organisation’s, and to mandate ethnicity reporting may not suit all.

You can read the Government’s full response here.

Finance Bill: draft legislation and tax documents

In readiness of the next stage of the Finance Bill, the Government has published draft legislation that allows for technical consultation and provides taxpayers with predictability over future tax policy changes.  It includes for instance (this is not an exhaustive list):
  • Pension schemes relief at source – this will ensure that the legislative framework supports modernisation of the Relief At Source (RAS).
  • Additional tax relielf for R&D intensive SMEs – this would introduce a new permanent rate of relief for the most R&D intensive loss making SMEs.  The additional support will be worth over £1.8 billion over the next 5 years.
  • Lifetime allowance – draft legislation will be published that will abolish the pensions lifetime allowance following the removal of the lifetime allowance charge from 6 April 2023.

The Pensions (Extension of Automatic Enrolment) (No 2) Bill

The Pensions (Extension of Automatic Enrolment) (No 2) Bill is a Bill that if passed, will introduce two extensions to automatic enrolment; firstly, to abolish the lower earnings limit for contributions and secondly, to reduce the age for being automatically enrolled to 18 years of age.

This month, the Bill passed its second reading in the House of Lords and is now at the Committee Stage, the date of which is planned for 12 September 2023.

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