Skip to main content Skip to search

Archives for Latest News

Considering The Rise In Popularity Of Flexible Working

A study recently suggested that being given the option to work flexibly is amongst the most popular work benefits desired by UK employees. Meanwhile, separate research also revealed that 56% of professionals believe that working the traditional nine to five is ‘outdated’, whilst a further 39% have urged employers to abandon ‘dated’ working traditions. Here, we take a look at how employees can request to work flexibly, and how employers should respond.

Making a statutory application

All employees have the right to request flexible working, whether that be choosing to work from home or having flexible start and finish times. However, in order to be eligible, employees must have worked continuously for the same employer for at least 26 weeks.

Employees seeking to work flexibly must make a statutory application. Employees are required to write to their employer, outlining their request. Take note: only one application can be made per year.

The employer is obliged to consider the request, and reach a decision within three months (however, this may be longer, if agreed with the employee).

Approving the application

In the event that the employer agrees to the request, the terms and conditions of the employee’s contract must be changed. The employer should write to the employee, giving them a statement of the agreed changes, and a start date for flexible working. This should be done no later than 28 days after the request was approved.

Rejecting the application

If the employer disagrees with the request, they are required to write to the employee, outlining the business reasons for the refusal. Many reasons exist for an employer to reject an application:

  • extra costs associated with flexible working will damage the business
  • work cannot be reorganised amongst other members of staff
  • individuals cannot be recruited to do the work
  • the quality of work and performance will be affected by flexible working
  • the business will struggle to meet customer demand
  • a lack of work exists during the proposed working times
  • the business plans to make changes to its workforce.

Making an appeal

Employees do not have the statutory right to appeal a decision. However, an employer may choose to provide an appeals system, in order to help demonstrate that they are dealing with requests reasonably.

Employees may take the matter to an employment tribunal in cases where the employer:

  • failed to handle the employee’s request in a ‘reasonable manner’
  • incorrectly treated the employee’s application as withdrawn
  • dismissed the employee or treated them unfairly as a result of their request to work flexibly
  • rejected the application based on false information.

Employees are not permitted to appeal simply because their flexible working request was rejected. Those employees that do appeal must do so within three months of:

  • hearing their employer’s decision
  • hearing their request was treated as withdrawn
  • the date the employer was required to respond to the request, but failed to do so.

Individuals unsure of their rights are advised to obtain legal advice.

Read more

Reviewing The Changes To Capital Allowances

In the 2018 Autumn Budget, Chancellor Philip Hammond announced a handful of changes to capital allowances, including the introduction of a new allowance, termed the Structures and Buildings Allowance (SBA). Here, we take a look at these changes in more detail.

Alterations to the Annual Investment Allowance

The majority of firms are able to claim a 100% Annual Investment Allowance (AIA) on the first portion of expenditure on most types of plant and machinery (excluding cars). The AIA applies to businesses of any size, and most business structures. However, provisions are in place to prevent multiple claims.

In the Budget, the Chancellor announced a temporary increase in the AIA, from £200,000 to £1 million. This applies to expenditure incurred from 1 January 2019 to 31 December 2020. Complex calculations may apply for businesses whose accounting periods straddle this period. Therefore, in order to make full use of the increase, firms should ensure they time the purchase of plant and machinery carefully.

The new Structures and Buildings Allowance

The SBA provides relief for expenditure on certain new, non-residential structures and buildings. Eligible construction costs incurred on or after 29 October 2018 will qualify for relief: this will be at an annual rate of 2%, on a straight-line basis. However, if a contract was entered into before this time, relief is not available.

New structures and buildings intended for commercial use are eligible for the SBA, alongside the costs associated with making improvements to existing premises.

Businesses chargeable to income tax and companies chargeable to corporation tax are able to claim the relief. The relief will be available from the date the structure or building is brought into use for the first time for a qualifying activity. Where the business is within the charge to UK tax, overseas structures and buildings are eligible for the SBA.

Qualifying activities and exclusions

It is important to note that only certain expenditure is eligible for the SBA. Structures and buildings must be brought into use for qualifying commercial activities. Types of structures and buildings covered include factories and warehouses; offices; hotels and care homes; walls; and retail and wholesale premises. However, the final list is yet to be clarified.

Under the initiative, certain exclusions apply: expenditure on land, residential property or other buildings functioning as dwellings is not eligible for the relief. Home offices are also not eligible. Where a structure or building has mixed use, such as between residential and commercial units, relief is apportioned.

Considering other changes

In the 2018 Autumn Budget, the Chancellor also announced a reduction in the rate of writing down allowance (WDA) on the special rate pool of plant and machinery. This is set to reduce from 8% to 6% from April 2019.

Read more

Minimising Your Tax Liability Ahead Of The Year End

With the end of the 2018/19 tax year rapidly approaching, now is the ideal time to ensure you are making the most of the available allowances and exemptions. Here we highlight some key areas to consider by 5 April 2019.

Making the most of capital allowances

When capital equipment, such as plant or machinery, is purchased by a business, the cost of the equipment can be offset against profits by claiming capital allowances.

Most businesses are able to claim a 100% Annual Investment Allowance (AIA) on the first portion of expenditure. Please note that special rules apply for cars and certain ‘environmentally friendly’ equipment. The AIA applies to businesses of any size and most business structures: however, provisions are in place to prevent multiple claims.

During the 2018 Autumn Budget, Chancellor Philip Hammond announced an increase in the AIA from its current level of £200,000 to £1 million. The increase will apply to expenditure incurred from 1 January 2019 to 31 December 2020. Accounting periods which straddle these dates will be subject to complex calculations: therefore, it is vital that purchases are timed carefully.

Making use of your ISA allowance

A range of ISAs are available to savers, including the Lifetime ISA for those under the age of 40; the Help to Buy ISA for first-time homebuyers; and the Junior ISA for individuals aged under 18.

Savers are able to invest in any combination of cash or stocks and shares, up to the overall annual subscription limit of £20,000. An individual may only pay into a maximum of one Cash ISA, one Stocks and Shares ISA, one Help to Buy ISA, one Lifetime ISA and one Innovative Finance ISA. Savers have until 5 April 2019 to make their 2018/19 investment.

Retaining more of your profit

The Dividend Allowance reduced to £2,000 in April 2018, and the question of whether it is better to take a salary/bonus or a dividend requires careful consideration. Dividends are taken after corporation tax has been paid, while a salary or bonus is generally tax deductible for the business. However, a salary or bonus can carry up to 25.8% in combined employer and employee national insurance contributions.

Other tax-efficient ways of extracting profit might include considering incorporation, or making pension contributions.

Maximising personal allowances

Individuals are entitled to their own personal allowance (PA), which is set at £11,850 for 2018/19 (rising to £12,500 for 2019/20). If your spouse or partner has little or no income, you may want to consider transferring income or income-producing assets to them. However, care is required: the legislation governing ‘income shifting’ states that any transfer made must be an outright gift, given with ‘no strings attached’, so speak to us before taking any action.

Certain married couples may also be able to make use of the Marriage Allowance, which allows those eligible to transfer up to 10% of their PA to their spouse. The Marriage Allowance is available to married couples and civil partners where one spouse has income below the PA and neither spouse pays tax at the higher or additional rate. Up to £1,190 can be transferred in 2018/19, which could help to reduce a couple’s tax liability by up to £238.

Read more