6 April is not only the start of the tax year but the commencement date for a number of new obligations on employers.

Apprenticeship Levy

Any employer with an annual wage bill of more than £3m must contribute 0.5% of their wage bill to a central training fund. The aim of the fund is to enable employers to access training for apprentices from registered providers. Although employers with a wage bill of less than £3m per annum are exempt from contributing to the fund, in due course they will be able to access apprenticeship training schemes. The levy has come out of the government’s belief that the UK lags behind other European countries in productivity and this may be due to a lack of skills in the workforce.
It is said that the contribution has been set at rates which ensure that large employers who provide considerable training can receive more benefit from the scheme than they contribute to it. This gives them an incentive to offer training. Small employers who do not have to contribute can find that almost all of their qualifying training will be paid for by this fund. Again this is an incentive for them to take on and train apprentices.
Although the levy is UK-wide there are separate arrangements for Scotland, Wales and Northern Ireland.
The levy will be managed via the PAYE system whilst the training credits are accessed through the government’s gov.uk website. Funds will have a finite life and this is an incentive for employers to provide continuous training.
This is not the first time that the PAYE system has been used for non-payroll matters. With the introduction of Real Time Information it is easier for HMRC to separate out the component parts of money transfers. The Construction Industry Scheme and reporting for auto-enrolment are other examples of the payroll process being used for non-payroll matters and I expect that it will be put to other uses in the future.

Gender Pay Gap Reporting

The apprenticeship levy is not the only change for larger employers this month. Any organisation that has 250 or more employees must publish and report specific figures about their gender pay gap. The report must be published on their website and the figures need to be provided to the government.
The gender pay gap is the difference between the average earnings of men and women expressed relative to the males’ earnings. The gov.uk website gives the example “men earn 15% more than women per hour”. Organisations that have fewer than 250 employees are not obliged to report this information. There is a hope that they will do so voluntarily.
The pay gap figures must be calculated using a specific reference date (called the snap shot date) which, depending on the reporting entity, will be either 31 March or 5 April. There are detailed regulations to determine how one calculates the numbers of employees and there are further regulations determine how one defines an employee.

Young apprentices

From next month there is a further change for employers as companies with fewer than 50 employees and which take on the youngest apprentices (or older apprentices with disabilities) can access specific government financing. This is a further incentive to recruit and train these employees.

Salary Sacrifice now OpRAs (Optional Remuneration Arrangements)

Employees also experience change from 6 April. The salary sacrifice legislation has been varied and this will reduce the extent that employees can exchange taxable salary for other benefits. There is a follow-on proposal that the P11d form will be redesigned to report any salary sacrifice undertaken by the employee.

Conclusion

Employer obligations have always been complex, whether they are regulatory, legislative or industry requirements. Those obligations have recently become more burdensome.

We support employers in a number of ways.  Our HR support service has assisted a number of organisations in managing their systems and processes to ensure that these requirements are met.  We can also help employers with payroll and tax.