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There are two types of tax an employee could be subject to whilst in employment:
Income Tax - deducted at source on his salary (wages) and benefits (BUPA, Car)
Capital Gains Tax (CGT) - If the employee has a share in the business, he can be subject to CGT if the disposal proceeds of the share exceed the original cost by more than the annual CGT allowance.
On termination of employment an employee is entitled to a tax free allowance of up to £30,000.00 on any severance or termination payment.
Any payment referable to the contract is taxable.
A payment in lieu of notice is usually treated as falling within the tax free allowance, provided there is not a clause in the contract reserving the right for the employer to make a payment in lieu of notice (a pilon).
If there is such a reserved right, then such a pilon will be treated as taxable by HMRC.
Tier 1 of the Points Based System is for highly skilled workers wishing to come to the UK to work, set up a business or be self-employed. No sponsor is required. There are 4 separate categories within tier 1 - general, entrepreneur, investor and post-study. Tier 1 is now live. General applicants need to score a minimum of 95 points. 10 are awarded for English language skills and 10 for having funds for maintenance. The remainder are awarded for age, qualifications and earnings.
Tier 2 is for skilled workers with a job offer. It has 3 categories - general, ministers of religion and sportspeople. Employers must register as sponsors and obtain a licence. Employees score points for their qualifications and prospective earnings as well as their command of English and for having funds to maintain themselves. Tier 2 is due to go live at the end of November 2008 and will bring about the end of the work permit scheme.
Tier 3 covers low skilled workers filling specific labour shortages. It is currently suspended with no indication as to when it might go live.
Tier 4 is for students. Educational institutions must apply to be licenced as sponsors. News is due in October 2008 about the likely timescales for tier 4 to become operational.
Tier 5 covers youth mobility and temporary workers. Employers must register as sponsors and obtain a licence. Tier 5 is due to go live at the end of November 2008.
All claims to the Employment Tribunal must be presented within a certain time limit. This varies depending on the type of claim you wish to make. There is scope in some limited circumstances to obtain an extension to the ordinary time limit for presenting a claim. The rules are complex.
Tribunal claims presented after the time limit has expired cannot normally be considered unless the Tribunal can be persuaded to extend time under its limited discretionary powers. The Tribunal will not have jurisdiction to hear claims unless they are presented within the time limit or an extension has been granted.
Tomlin Orders were originally used in civil courts, however, the same principle can now also apply in a Tribunal.
Essentially this order is an agreement between the disputing parties specifying the terms of settlement that the parties have agreed.
This order is unusual as it enables Court or Tribunal proceedings to be stayed for a fixed period of time (usually fixed by the Court/Tribunal), and enables the parties to bring the matter back to Court or Tribunal if either party defaults on the agreed terms within the specified period of time.
The benefit of this order is that an amicable settlement can be reached without the need for the matter to be withdrawn from the Court or Tribunal, and in the event that a party defaults, the other party has the protection of returning to Court or Tribunal.
Trade union is defined by section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992 and means an organisation (temporary or permanent) which consists wholly or mainly of workers and whose principal purposes include regulating relations between workers and employers or employers associations.
