Key employment statistics

National Minimum Wage

As from 1st October 2007 the rates are:

• adult rate for those aged 22 or over: £5.52 per hour
• youth rate (18-21): £4.60 per hour - note that this rate no longer applies to those aged 22 or over who are on an accredited training scheme and during the first six months only of a new job with a new employer.
• rate for those aged 16-17 (provided they are above compulsory school age and excluding 16 and 17 year old apprentices who are exempt): £3.40 per hour
• the maximum amount that can be offset where accommodation is provided is £30.10 per week (£4.30 per day) (previously £4.15 per day, £29.05 per week).

As from 1st October 2008 the rates will be:

• adult rate for those aged 22 or over: £5.73 per hour
• youth rate (18-21): £4.77 per hour
• rate for those aged 16-17 (provided they are above compulsory school age and excluding 16 and 17 year old apprentices who are exempt): £3.53 per hour
• the maximum amount that can be offset where accommodation is provided will be £31.22 per week (£4.46 per day).

Statutory Sick Pay (SSP)

Statutory Sick Pay is payable for up to 28 weeks. The employee must earn a minimum of the Lower Earnings Limit. The rate of SSP as from 6 April 2008 is £75.40 (previously £72.55).

The daily rate of SSP is calculated by dividing the weekly amount by the number of qualifying days in the week. To calculate the rate for a number of days, the unrounded rate is multiplied by the number of days and rounded up to a whole penny.

Statutory Maternity Pay (SMP)

For employees who earn more than the Lower Earnings Limit:
 

 

Length of service	Maternity leave	SMP
Less than 26 weeks' service at the beginning of the 14th week before the Expected Week of Confinement (EWC)	Up to 52 weeks	No entitlement
26 weeks' service or more at the beginning of the 14th week before the EWC	Up to 52 weeks	Six weeks at 90% of earnings (even if this is less than the SMP weekly rate) and up to 33 weeks at £117.18 wef 6.4. 08 (previously £112.75 ) or 90% of earnings (whichever is less) The remaining 13 weeks are currently unpaid

Statutory Paternity Pay (SPP)

• Subject to meeting the eligibility criteria, working fathers have the right to two weeks' paid paternity leave .
• This will be paid at the same rate as the lower rate of SMP.

Statutory Adoption Pay (SAP)

• Subject to meeting the eligibility criteria, one of the adoptive parents may take paid adoption leave, for the same period as maternity leave, when a child is first placed with a family. Payment for adoption leave is at the same rate as lower rate SMP throughout.

Employer supported childcare

Employers can contribute up to £55 per week (£243 per month) towards childcare costs, free of tax and National Insurance contributions, provided this benefit is offered to all employees. The payment may be made by voucher or otherwise, and the care must be provided by an approved childcarer, whether registered childcare or approved home-childcare.

Week's pay

The maximum weekly wage used for calculating statutory redundancy payments, basic awards, and other statutory compensation is £330 as from 1st February 2008 (previously £310).

Statutory Redundancy Pay (SRP)

• The amount of Statutory Redundancy Pay is the 'number of weeks' multiplied by the lower of either the actual average weekly wage or a maximum weekly wage of £330 for dismissals taking place on or after 1st February 2008 (£310 prior to 1 February 2008).
• The 'number of weeks' relates to the employee's age and completed years of continuous service as at the date the notice period would expire. See our Redundancy Pay ready reckoner . The maximum number of weeks is 30 - therefore the maximum statutory redundancy payment is £9,900 as from 1st February 2008.

Unfair dismissal

• Compensation is made up of two elements: a basic award (similar to a redundancy payment - therefore a maximum payment of £9,900 as from 1 February 2008 and a compensatory award.
• A minimum basic award of four week's pay is made where a dismissal is regarded as automatically unfair under ERA 1996, s98A(i) if the basic award is less than this amount. However such an award need not be made where it would result in injustice to the employer.
• The minimum basic award for unfair dismissal for a reason related to the complainant's appointment as a Health and Safety representative, exercise of rights under the Working Time Regulations, activities as a pension scheme trustee, activities as an employee representative in connection with redundancies or a transfer of undertakings is £4,400 as from 1st February 2008 (previously £4,200).
• The minimum basic award for dismissal or selection for redundancy on grounds related to union membership or activities is £4,400 as from 1st February 2008 (previously £4,200).
• The minimum compensation awarded for exclusion or expulsion from a trade union is £6,900 (previously £6,600).
• The maximum compensatory award a tribunal can award to an employee who brings a successful claim is £63,000 as from 1st February 2008 (previously £60,600 ). This brings the total potential liability for a normal unfair dismissal claim to £72,900 as from 1st February 2008 (previously £69,900).
• There is no limit on the amount of compensation for cases of whistleblowing, certain health or safety matters, or discrimination on grounds of race, sex, sexual orientation, religion or belief, disability or age.

Guarantee payments ("lay-off pay")

• The guaranteed daily rate for employees who are laid off work under the Employment Rights Act 1996 is £20.40 as from 1st February 2008 (previously £19.60).
• Employees are entitled to guarantee payments for up to five workless days in any three month period.
• Where the normal working week is less than five days, the number of days entitlement to guarantee pay is reduced accordingly.

Income tax

2008-9 tax year:

• The personal allowance for the PAYE tax threshold is £5,435 for those aged under 65; £9,030 for those aged 65-74 and £9,180 for those aged 75 and over.

• After this, tax becomes payable at the following rates:
  • for income of £0 to £36,000 - income tax rate = 20%
  • for income of above £36,000 - income tax rate = 40%.

Employees National Insurance Contributions (NICs)

Tax year 2008-9:

• The Lower Earnings Limit is £90.00 (£390 per month)
• The threshold after which NICs become payable is £105 (£453 per month).
• No National Insurance contributions are payable on earnings below the rates listed above.
• There are no changes to class 1 NICs rates for 2008-9.
• An employee whose earnings exceed the Upper Earnings Limit will pay 1% of ALL earnings above the Earnings Threshold.
• The Upper Earnings Limit is £770 per week, £40,040 per year.

Taxation of company cars

The benefit charge for a company car is calculated initially as a percentage of the car's list price. The percentage charge depends on the car's rated CO2 emisson level, ranging from 15% for the most efficient vehicles to a maximum of 35% for heavy polluters.

The CO2 emissions qualifying for the minimum petrol percentage (15%) charge are 140 grams per kilometre of CO2.

For details of individual cars, click here.

Car fuel benefit

Fuel benefit charge is linked directly to carbon dioxide emissions. The charge applies where an employee who has a company car is provided with free fuel for private use. The same percentage figures are used as for the company car benefit charge.

Like car benefit, the fuel benefit charge is based on the level of CO2 emissions of the car, with the same 3 per cent supplement for diesels which do not meet Euro IV standards and reductions for alternatively fuelled cars. Also like car benefit, the percentages for petrol and diesel range from a minimum of 15 to a maximum of 35 per cent and the percentage for alternative fuels and hybrid cars can be below 15 per cent with reductions.

To calculate the benefit charge on free fuel the percentage figure will be multiplied against a set figure of £16,900 (from 6.4.08, previously £14,400).

Employer provided vans

Employees who are obliged to take their vans home, but are prevented from making any other private use of the vehicle, are exempted from any tax charge.

From April 2007, the scale charge for unrestricted private use is £3,000, whatever the age of the van. An additional fuel scale charge of £500 will apply where fuel is provided for private mileage.

Authorised mileage rates - own vehicle

For employees who use their own vehicles for business travel (irrespective of engine size). These payments are free from tax and NICs.

Motorcars and vans:

• up to 10,000 miles: 40p per per mile
• over 10,000 miles: 25p per mile

Motorcycles:

• 24p per mile (irrespective of how many miles)

Bicycles:

• 20p per mile (irrespective of how many miles)

Authorised mileage rates - company-provided vehicles<

The HMRC advisory rates used to negotiate dispensations for mileage payments for business travel in company cars are below. These were increased with effect from 1 January 2008. They only apply where employers reimburse employees for business travel in their company cars, or require employees to repay the cost of fuel used for private travel.

Engine size:

• up to 1400 cc:
  • petrol: 11p (previously 10p)
  • diesel: 11p (previously 10p)
  • LPG: 7p (previously 6p)

• 1401 - 2000 cc:
  • petrol: 13p (previously 13p)
  • diesel: 11p (previously 10p)
  • LPG: 8p (previously 8p)

• over 2000 cc:
  • petrol: 19p (previously 18p)
  • diesel: 14p (previously 13p)
  • LPG: 11p (previously 10p)

The rates are calculated using average miles per gallon for the different engine sizes, reduced by 10% to give more realistic fuel consumption figures. The fuel prices used for this last increase were:

• petrol - 102.1p per litre (464.3p per gallon)
• diesel - 106.3p per litre (483.0p per gallon)
• LPG - 50.2 p per litre (228.2p per gallon).

Future changes will be scheduled to take effect twice a year - on 1 January and 1 July.

Termination payments

The following termination payments are tax-free:

• statutory redundancy pay
• non-statutory redundancy pay up to £30,000
• ex-gratia payments on the death or disability of an employee
• compensation for wrongful dismissal
• certain other termination payments for which the employee has no contractual entitlement up to £30,000.

Relocation

An employer may provide up to £8,000 tax free to an employee to help him/her to relocate (any additional sums are taxable).

State retirement pension

The full basic state retirement pension for a single person for the 2008-9 tax year is £90.70; for a married couple it is £145.05.

Occupational pension schemes

There are two limits on an individual's tax-relieved pensions savings, in the form of an Annual and Lifetime allowance.

For 2008/9 the allowances are:

• annual allowance: £235,000
• lifetime allowance: £1,650,000

Stakeholder pensions

All employers (other than those who are exempt) are required to consult with their employees and choose, and put into place, a stakeholder scheme.

Exempt employers include: those who have less than five employees; those who have an Occupational Pension scheme already in place which all employees can join within a year of starting employment; and those who offer a group personal pension to all staff, contribute at least 3% of basic salary, offer payroll deductions if asked and have no exit/transfer charges.

Employee Share Schemes

The following schemes are approved by the HMRC and offer tax advantages:

• Savings Related Share Option Schemes (SAYE): where the employee can contribute a maximum of £250 per month to acquire shares at the end of a three, five or seven year period.
• Share Incentive Plans (SIPs): each year, companies can give up to £3,000 worth of shares to each employee. Employees can also buy up to £1,500 worth of shares, which can be matched by the company with up to two matching shares for each share an employee buys. These schemes also offer NIC advantages. (Also known as All Employee Share Ownership Plans; Employee Share Plans)
• Company Share Option Plans (CSOP): up to £30,000 worth of options can be granted to any number of employees. Also offer NIC advantages.
• Enterprise Management Incentives (EMI): companies with gross assets up to £30M can grant share options worth up to £100,000 per employee, subject to total share value of £3M. Also offer NIC advantages.

Criminal Records Disclosures

The initial cost to an organisation registering with the CRB is currently £300 and each additional countersignatory costs £5.00.

A standard disclosure costs £31, an enhanced check £36 and a POVA/first check £6. Checks are free for volunteers.

These rates were reviewed but not increased in 2008.

Visas and work permits

From 1 April 2007 an application for a work permit costs £190, and the fees for visas are as follows:

• settlement visas from £260 to £500
• work permit visas from £85 to £200
• long-term visas from £85 to £200
• visitors from £50 to £63
• students from £85 to £99
• highly-skilled migrant programme applicants from £315 to £400.

Full details are on the BIA website.

Juror's financial loss allowances

Employees on jury service are allowed to claim the following allowances from the courts (the following rates apply as from 2.7.07):

• During the first 10 days:
  • 4 hours or less on any day: £29.98
  • more than 4 hours on any day: £59.96
• From 11th day up to 200th day:
  • 4 hours or less on any day: £59.96
  • more than 4 hours on any day: £119.93
• From the 201st day:
  • 4 hours or less on any day: £105.27
  • more than 4 hours on any day: £210.54

Magistrate's allowances

The allowances for magistrates (reviewed with effect from May 2008) are as follows:

• for self-employed magistrates: £56.63 for a half-day sitting or up to £113.26 for a full day sitting (over four hours)
• for employed magistrates: £45.30 for a half-day and £90.61 for a full-day.