Have you accrued for Holiday Pay correctly? Section 28 FRS102 Reply

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Most larger businesses, especially if they are audited probably already accrue for Holiday Pay but not every business has been accruing the cost. FRS102 Section 28.1 will require that holiday pay is accrued. Here is an example from the FRC.
Holiday Pay

Holiday pay isn’t always easy to calculate for example if you have part time employees or casual workers, Gov.uk have a calculator to help work out the entitlement – GOV.UK Holiday Calculator

The next issue is the rate of pay, for some employees with regular hours its easy but for those with fluctuating rates, bonuses etc a 12 week average is used as explained by ACAS

On 4 November, the Employment Appeal Tribunal (EAT) ruled that holiday pay should reflect non-guaranteed overtime. Non-guaranteed overtime is where there is no obligation by the employer to offer overtime but if they do then the worker is obliged by their contract to work that overtime.

The Government set up a taskforce to consider the possible impact of the EAT’s ruling on holiday pay. Regulations were laid out on 18th December 2014 to limit claims for unlawful deductions from wages to two years. The rules apply to Employment Tribunal claims made on or after 1 July 2015.

Further details at ACAS Calculating Holiday Pay

steve@bicknells.net

 

National Insurance – As one NI holiday ends we look forward £2,000 in April 2014 Reply

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Under the Regional Employers NICs Holiday scheme, new businesses could have qualified for a deduction of up to £5,000 from the employer NICs that would normally be due – for each of the first ten employees they take on.

The National Insurance contributions (NICs) holiday was available to new businesses that started up during the period from 22 June 2010 to 5 September 2013. So it has now ended.

But from April 2014 the good news is that every employer will save up to £2,000.

To take advance of the allowance, firms will simply have to inform HM Revenue & Customs, and the Treasury says it will be “delivered through standard payroll software”.

Up to 450,000 small businesses will no longer pay national insurance contributions from April 2014.

The allowance will cost almost £6bn over five years.

When George Osbourne announced it in the budget he said:

“For the person who’s set up their own business, and is thinking about taking on their first employee – a huge barrier will be removed. They can hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax,”

So we look forward to claiming our £2,000 next year.

 

steve@bicknells.net