Do you employ part-time workers? Here’s how their holiday entitlement calculation system will change 

From April, all workers on zero hours contracts (part-time or irregular hours staff), will encounter changes to how their holiday entitlement is calculated. 

This means you, as their employer, will need to know the ins and outs of the changes before they come into effect. 

The Working Time Regulations 1998 has been modified which means how your employees’ holiday entitlement is calculated has also changed. 

So, what should you know to ensure you are compliant with the new legislation? 

If I employ part-time workers, what do I need to do? 

If you employ staff who work part-time and/or irregular hours, you must now work out what holiday they are entitled to using the new system. 

Here’s what you need to do: 

Confirm your zero hours employees fall within the set definition of irregular hours/part-time workers 

Irregular hours workers have paid hours, that are set out in their contract, and these vary in each pay period. 

Part-time workers are only contractually required to work for part of the year – for the remainder of the year, they do not receive work or pay. 

Confirming where your employees’ hours fall will help you to adapt to the changes efficiently. 

Confirm when your employees’ holiday year runs from and to 

The changes will come into effect from 1 April, and these will apply to all holiday years starting on or after this date. 

You need to understand that if you have a holiday year that runs April to March then these changes will immediately apply. 

However, if you have a different holiday year (such as a calendar year which is January to December) then the changes will not apply until January 2025. 

What happens once I have confirmed who will be affected and when? 

Once you have confirmed the above, you will need to change your employment contracts. 

It is important to know that although the law has changed, consultation is still needed for contractual changes whilst the agreement of the affected employees needs to be sought and gained. 

Here are the changes you need to make: 

  • Make sure your workers accrue holiday based on 12.07 per cent of the hours worked in the pay period – this applies to holiday years starting on or after 1 April 
  • Choose between one of two methods that will pay holiday pay to irregular hours and-time workers 
  • Holiday is booked as normal and paid when it’s taken 
  • Holiday is ‘rolled’ up and paid in each pay packet so no pay is received during leave. 

If you use the second method, that pay must increase by at least 12.07 per cent per pay period and your employees must take leave. 

To remain compliant with new legislation set out by the Government, you will need review your holiday provisions – you can do this by using our expert advice. 

For more information about the changes to the calculation of holiday entitlement for part-time employees, contact us today. 

Blog right caret

Adapting your business plan for the summer

Blog

Tax implications to consider for business owners when paying themselves 

Blog

Research and Development tax relief changes 

Blog

Business right caret

Small business confidence dips ahead of new customs controls coming into force

Four in 10 exporters have reported a fall in international sales since the end of the Brexit transition period, a major study has revealed. According to the tracker, four in 10 – around 41 per cent of traders – have reported a “drop off” in international sales in the three months to September 2021.

Business

Large number of businesses looking to recruit more staff

It is perhaps a sign of confidence returning to the UK economy that a significant number of British businesses believe they will be recruiting staff over the coming year.

Business

Spring Statement 2022 summary

Mr Sunak found himself addressing MPs against a background of crisis, with the residual impact of COVID, the invasion of Ukraine and the cost-of-living crisis all affecting the economy in different ways.

Business

Cloud right caret

Cloud-powered accounting: Advancing beyond traditional cloud accounting systems

Cloud

Cloud accounting isn’t right for my business! We disagree.

Cloud

Making MTD for ITSA easier for landlords

Cloud

Compliance right caret

HMRC asks sole traders to correctly report SEISS grants or “repay in full”

Sole traders who have not correctly reported their Self Employment Income Support Scheme (SEISS) grants may be forced to repay them in full, it has been warned.

Compliance

Making Tax Digital – what you need to know ahead of 2022-23

From April 2022 all VAT-registered businesses need to comply with MTD for VAT. MTD applies to taxpayers who file Income Tax Self Assessments for business or property income of more than £10,000

Compliance

Real-time online sanctions tracker to assist importers and exporters

Any business involved in international trade, whether importing, exporting or part of the supply chain supply to those firms, is faced with a rapidly changing regulatory environment.

Compliance

Economy right caret

Small businesses call for Government support to tackle climate change

According to new research, many are addressing energy usage, increasing recycling and investing in microgeneration, but only a third of those have a formal plan to tackle climate change within their business.

Economy

Hospitality bosses develop new strategies to cope with staff shortages

Hospitality business owners have responded positively to the staff shortages caused by the pandemic, by increasing wages and implementing improved staff retention strategies.

Economy

Everything you need to know about the new WTO Services Domestic Regulation

New World Trade Organisation (WTO) rules are set to cut the cost of global trade by billions of pounds every year, it has been announced.

Economy

Funding right caret

Funding for growing businesses – Obtaining and managing private investment

Funding

Investment right caret

Funding for growing businesses – Obtaining and managing private investment

Investment

MTD right caret

Making MTD for ITSA easier for landlords

MTD

SME right caret

Adapting your business plan for the summer

SME

Research and Development tax relief changes 

SME

Late payments – why they are so damaging to small businesses and how to deal with them

SME

Tax right caret

Understanding tax obligations for charities

Tax

Navigating estate planning and Inheritance Tax: what you need to know

Tax

Tax considerations for small business owners: Sole traders vs limited companies 

Tax

Tax Planning right caret

Almost 800,000 tax scams reported to HMRC in past 12 months, figures reveal

Nearly 800,000 tax-related scams were reported to HM Revenue & Customs (HMRC) in the past 12 months, a major study has revealed. According to the report, HMRC responded to 797,010 referrals of suspicious contact from the public in the last year. Around 358,000 of these involved scams where taxpayers were offered bogus tax rebates.

Tax Planning

Be aware of tax liabilities if you are using cryptocurrencies

For those who have dabbled in the market, its important for them to understand that there may be tax liabilities with Captial Gains Tax and Income Tax, with any transactions whether with currency or other crypto assets.

Tax Planning

Did you use a Bounce Back Loan to cover personal expenses during the pandemic? Act now to avoid tax consequences

If you received a Bounce Back Loan (BBL) during the coronavirus pandemic and took the cash as drawings, there may be additional tax consequences.

Tax Planning

VAT right caret

Paper VAT registration to be abolished in latest digital move

In the latest move in their Making Tax Digital (MTD) campaign, HM Revenue & Customs (HMRC) is removing paper VAT registration from 13 November 2023.

VAT

I’m not VAT registered; can I claim VAT back? 

VAT