Employee Incentives Update: September 2021

Written on 15 Sep 2021

In this edition, we look at developments relevant to incentives and employee tax, including the new health and social care levy to be introduced in the UK. We also cover the extension of HMRC's Trust Registration Service to non-taxable trusts and other updates from HMRC.

New health and social care levy announced | Rise in national insurance from April 2022

The government announced on 7 September 2021 that a new health and social care levy is to be introduced in the UK, to pay for reforms to the care sector and NHS funding.

The new levy will be based on National Insurance contributions (NICs). From April 2022, there will be a 1.25% increase in NICs for working age employees, the self-employed and employers. From April 2023, the levy will be formally separated out to become a separate tax on earned income (and NICs rates will return to their current levels).

It is important for businesses to note that the 1.25% rise in NICs for the 2022/23 tax year applies to NICs paid by both employers and employees.

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Employment related securities | Update from HMRC

HMRC published its latest Employment Related Securities (ERS) Bulletin on 17 August 2021. It covers some practical updates on HMRC's ERS online service (including how to cease a scheme no longer operating or registered in error).

A response to the government's consultation on whether the enterprise management incentive scheme should be extended to include more companies is awaited. The government may provide an update on this around the time of the Budget on 27 October 2021.

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Trust Registration Service | Extension to non-tax paying trusts

After a number of delays, HMRC’s Trust Registration Service is now open for non-taxable trust registrations.

HMRC has published information about the trusts that need to be registered, the trusts that are excluded and the relevant deadlines. Trustees must register non-taxable trusts in existence on or after 6 October 2020 by 1 September 2022.

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Germany | Challenges of the new wage tax deferral for German start-ups in an international setting

The new German wage tax deferral (of up to 12 years) applicable to start-up equity awards simplifies - in many cases - the tax structuring of the underlying equity plan. But in an international setting, ambiguous wording makes the tax deferral position unclear.

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Why hybrid working requires up-front thinking | @EGPropertyNews article

Much has been written about hybrid working over the past 18 months, but the tax considerations should not be ignored. Tax issues need to be high on the "to be considered list" for businesses thinking about a move to hybrid working. In this article (first published by EG – @EGPropertyNews – on 21 July 2021 and reproduced with their permission), we have chosen our top four issues for businesses to be aware of and to factor into their future workforce and workplace planning.

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Future of work podcast | The hybrid working series: tax and incentives

Continuing the theme of hybrid working, many businesses are considering allowing employees to work on a permanent or temporary basis from overseas "place in the sun" locations. Our podcast addresses questions this poses in relation to tax.

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Insights and podcasts | recent publications and episodes

The Tax Break Podcast | Tax mediation

The Tax Break Podcast | Global tax reform for large multinationals

Employment Law Coffee Break

HR pensions spotlight | Death-in-service benefits

Regulatory Outlook