Legal changes affecting businesses in 2018 – what you need to know

Merseyside law firm Kirwans has issued a warning prior to a raft of new legislation taking effect, reminding business owners of the dangers of ignoring the legal updates

Lindsey Knowles, employment solicitor at Kirwans


Businesses across the Liverpool city region need to be aware of a number of legal changes in 2018, according to Merseyside law firm Kirwans.

The specialist employment law and corporate and commercial practice has issued a warning prior to a raft of new legislation taking effect, reminding business owners of the dangers of ignoring the legal updates.

Lindsey Knowles, employment solicitor at Kirwans said: “We know that 2018 is going to be a key year for businesses, and it’s vital that owner/managers are prepared.

Here, Lindsey, and her colleague, corporate and commercial solicitor James Pressley, run through the key changes expected in 2018:

Publication of gender pay reports

Under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, all private and voluntary sector employers in England, Wales and Scotland with at least 250 employees will be required to publish information about the differences in pay between men and women in their workforce by April 4, 2018. The information shared will be based on a pay bill ‘snapshot’ date of April 5, 2017.

Companies employing more than 250 people will be obligated to publish gender pay data


Changes in the Tax Treatment of Termination Payments

Under existing rules, the first £30,000 of a genuine termination payment for loss of employment can be paid free of income tax, with the balance being subject to income tax but free of employer and employee NICs.

From April 2018, a termination payment that falls within the income tax exemption will, after it hits the £30,000 limit, be liable for both income tax and employer NICs. There will, however, continue to be an unlimited employee NICs exemption for payments relating directly to the termination of employment.

Restriction of employment allowance for illegal workers

Since April 2014, businesses have been able to claim a reduction of up to £3,000 a year on their employers’ NICs. From April 2018, however, employers will be excluded from claiming the allowance for one year if they have:

  • Employed a worker who was subject to immigration control
  • Been penalised by the Home Office
  • Have exhausted all appeal rights against the penalty.

Tax- Free Childcare

Tax-Free Childcare was introduced on April 21 2017, and has been gradually rolled out this, with parents of children aged under four (as of August 31, 2017), and parents of disabled children aged under 17 able to enter the scheme first. The scheme is also available to eligible parents of all children under the age of 12.

Tax-Free Childcare doesn’t rely on employers offering the scheme, unlike the current scheme Employer-Supported Childcare, and any working family can use Tax-Free Childcare, provided they meet the eligibility requirements.

However, employees are not required to switch to Tax-Free Childcare if they don’t wish to. 

Changes to the National Living Wage

The recommendations of the Low Pay Commission have been accepted by the Government, which means that from April 2018 the National Living Wage will increase from £7.50 to £7.83 per hour. The National Minimum Wage, which applies at varying rates to employees aged under 25, will also rise as follows:

  • Age 21 to 24 – from £7.05 to £7.38 per hour
  • Age 18 to 20 – from £5.60 to £5.90 per hour
  •  Age 16 to 17 – from £4.05 to £4.20 per hour
  • Apprentice rate – from £3.50 to £3.70 per hour
Changes are being made in 2018 to the National Living Wage


General Data Protection Regulation (GDPR)

The GDPR is an EU law which applies to the UK from May 25, 2018, and even though the UK is leaving the EU, the regulation will still be implemented.

The GDPR will supersede current legislation to protect people’s personal information, introducing tougher fines for non-compliance, and giving people more control over how companies use their data. 

GDPR will provide individuals with easier access to their own data, as well as a right to know when high risk personal information has been hacked, such as information about health, religious belief or genetic data. It will also mean that people have a right to be forgotten.

The new rules will mean that, rather than simply ticking a box to opt out of receiving marketing information, individuals will have to give explicit consent for their data to be processed.

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