JQ writes: One of my employees has been summoned for jury service. Do I need to pay the employee while they are doing this?
The right to a trial by peers is an important, longstanding tradition in our legal system, writes Peter Done, managing director of Peninsula. But while the accused has their day in court, the system can leave employers missing key members of staff, because anyone on the electoral register can be called up at any time.
The average amount of time required for jury service is 10 working days, although it can be longer, and most employers approach this issue with trepidation.
There is no legal entitlement to full pay during the time spent on jury service. Therefore, employers do not have any obligation in this respect unless the employee has a contractual entitlement to full pay or a daily entitlement to some pay.
Before any decision is made not to pay the worker at all, their contract should be reviewed to ensure they are not being denied any contractual entitlements.
If the employee is not entitled to contractual pay, they can make a claim for a loss-of- earnings allowance from the court. Employers will have to help with this as they need to complete a Certificate of Loss of Earnings or Benefit for the employee, including whether they can work half days if they are not required to attend court at that time.
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The amount of the allowance changes each year and the maximum per day that employees will receive depends on how long they spend on jury service and how long they spend on the jury panel each day. Employers can choose to top up this allowance to the staff member’s normal pay, but doing so will make this an implied practice for future jurors.
Although employee absence is never ideal, those who are called up for jury service have a legal right to time off.
Employers that refuse to allow their members of staff time off may be in contempt of court, although they can apply for a deferment or postponement if the absence will have a serious impact or cause hardship to the operations of the business.
Simply having work to complete is unlikely to be a valid reason for this, but it may be sufficient to say the absence will have a disproportionate effect on the workload of others in the business.
Deferment is up to the Jury Central Summoning Bureau and can happen only once in a 12-month period for a maximum of 12 months.
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Will the taxman unwrap my gifts?
DT writes: I run a recruitment business and want to buy a Christmas gift for my key clients and each of my employees, in recognition of their loyalty this year. Is there an additional tax cost I should consider?
The tax treatment will depend on the type of gift and its value, writes Jon Dawson, partner at Kingston Smith LLP. Gifts to employees will always be a tax-deductible expense for the company.
If your employees will each receive a cash bonus, this should be paid through payroll, with income tax and national insurance deducted. It will also give rise to an additional NI cost for your company.
Non-cash vouchers are treated differently, with no income tax charge for your employees — but NI contributions will be due from both the company and the employees if the voucher exceeds £50 per person.
An alternative for your employees is to provide a seasonal gift, such as a a bottle of wine or a box of chocolates, each costing under £50 including VAT. All these gifts would fall under the “trivial benefits” rules and not be taxable. If, however, you decided to provide a larger gift exceeding £50 — such as a hamper or a case of wine — this would be taxed as a benefit in kind and should be included on the employee’s P11D form to HM Revenue & Customs.
If you buy a gift for a customer, it can be tax deductible only where it is not tobacco, food or alcohol but does include an advertisement for your company. A gift of wine, for example, would be treated in the same way as entertaining expenditure.
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VAT rules are slightly different. If the total value of gifts to an individual in a 12-month period is less than £50, you simply reclaim the input VAT on the purchase. If the value exceeds £50, you must also account for output VAT.
In addition, any gifts to a customer should be considered in the context of the Bribery Act 2010.
Kingston Smith LLP, the chartered accountant, and Peninsula, the employment law firm, can advise owner-managers on their problems. Send your questions to Business Doctor, The Sunday Times, 1 London Bridge Street, London SE1 9GF. Advice is given without legal responsibility.