Tax & Payroll: Changes to Personal Allowance and Basic Rate Limit in September
Changes to the basic personal allowance and basic rate limit will result in new tax codes for many employees in September 2008.
The basic personal allowance for tax year 2008-09 is increasing by £600, from £5,435 to £6,035. The basic rate limit is reducing from £36,000 to £34,800.
As a result, employers may need to make changes to their payroll, on the first payday on or after 7 September 2008.
Tax codes with an L suffix can be changed without notice from HMRC. For example, a 543L tax code becomes 603L. For other tax codes (without an L suffix), you should wait to receive a P6 notice from HMRC. Other codes should remain unchanged unless you receive a P6. Check the HMRC website for a detailed outline of old and new tax codes.
For more information and guidance, please visit the HMRC website
Handling performance discussions
Over the previous two issues of business i we’ve discussed the importance of performance appraisals and outlined the competency framework - a valuable approach for measuring performance and underpinning performance discussions. This month we offer three tips to help handle the performance appraisal conversation with your employees.
Daryll Scott, from personal development company My Noggin, comments that some organisations “gather valuable feedback, and prepare well-structured performance discussions, only to have it made ineffective by the human factor. Many people are caught up in the process and content of ‘what’ they are delivering and oblivious to how much their behaviour is influencing the other person.”.
This lack of focus on establishing a positive human dynamic during the performance appraisal conversation could undermine the hard work done leading up to that point.
Daryll offers his top three tips for effectively handling performance discussions:
1. Set it up… Take time to set up the discussion in a way that is agreeable and cooperative. Make it conversational, and take time to have a conversation about the conversation you are about to have. Check what the perceptions and assumptions are, and clear them up so that you start positively. By investing time at the start you will provide less opportunity for misunderstanding.
2. Is the boot on the right foot? The most destructive communication takes place when the individual refutes their feedback and then takes an argumentative stance. In many cases the line manager somehow makes it their problem to prove it, providing evidence to convince them of the validity of the feedback. Elicit their self-awareness rather than battering them with documented evidence. Consider the difference between: a) “Your numbers are down this quarter.” and b) “Have you had a chance to look at your numbers for this quarter?” The former is accusatory, the latter is conversational. For a performance discussion to really work, the recipient needs to be taking responsibility for the effectiveness of the conversation, not the line manager.
3. Shooting the messenger… The most effective way of getting out of the firing line so that the meeting can remain productive is to separate your intention for the meeting from the content of the meeting. Most people assume that others are aware of their positive intentions and this assumption is typically wrong. For example: If I say, “My intention is that you fully understand this feedback so that I can provide any support you need to make any changes you want.” Now if the feedback is grizzly, I’m not necessarily grizzly for delivering it. I’m on your side! If you want the individual to make a change, you are far more influential if you are coaching them, rather than pointing your finger at them.
Employee redundancies
A redundancy arises when there has or is going to be: a) a cessation of business, b) a cessation of business at an employee’s place of work (which could be due to relocation of business activities), or c) a cessation or reduction of work.
Redundancy is a traumatic experience for both employer and redundant employee. It can also adversely impact the morale and productivity of remaining workers, not just those directly affected. For these reasons, it’s vital to effectively manage redundancies with due diligence and sensitivity.
There are two key obligations when handling redundancies. First, you must undertake a fair redundancy dismissal procedure. Second, you must keep affected employees (and potentially their representatives) adequately informed during the process.
Fore more information, see our guide: Making an employee redundant
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