What small businesses should know about legal changes coming in 2020: part one

Many legislative matters being considered by the Government last year (and earlier) were put on hold during the uncertainty of Brexit and, latterly, a General Election.

Now that there seems to be a clear direction of travel, the Federation of Small Businesses has warned small business owners about changes which may impact the way they do business over the next 12 months. 

Many of these changes will come into force in April this year, hence this early warning to take professional advice if this could affect your business. 

The National Minimum Wage will rise on April 1:

• £8.21 per hour for those who are 25 and over.
• £7.71 per hour for those who are aged between 21 and 24.
• £6.16 per hour for those aged between 18 and 20.
• £4.55 per hour for those aged 16 and 17.
• £3.90 per hour for apprentices aged 19 and under or any apprentice in their first year. 

New rules will also come into force around main terms and conditions of employment. Previously an employer as a two-month grace period to supply these to an employee. That is being abolished and an employer must supply them no later than the first day of employment – and that includes ‘zero’ hour workers. The latter were previously not considered for this however they must now be provided with that information from day one of their work. 

The same applies to holiday pay which now has to be calculated based upon a 52 week period – rather than the existing 12 week period. This aim is to smooth out highs and lows during a year and this also applies to zero-hour workers. 

One big change which is coming applies to so-called ‘disguised employees’ under the controversial IR35 reform which is coming into force. This relates to changes to the tax rules which means the employer is responsible for ensuring that tax obligations are met. It does appear at the moment that small businesses are exempt. 

However if your business meets two or more of the following criteria, you will need to take advice about whether or not IR35 will affect your business (many businesses are already well aware):

• Annual turnover of more than £10.2million.
• Balance sheet total of more than £5.1million.
• More than 50 employees. 

Look out for part two soon….