Annual increases to statutory compensation limits
The Employment Rights (Increase of Limits) Order 2021 has been laid before Parliament and will revise the compensation limits for certain tribunal awards and other statutory payments from 6 April 2021. What are the relevant increases?
The The Employment Rights (Increase of Limits) Order 2021 will increase the maximum amount of a “week’s pay” from £538 to £544 from 6 April 2021. A “week’s pay” is used to calculate statutory redundancy payments, payments to employees in the event of insolvency and various awards including the unfair dismissal basic and additional awards. Other key increases are:
- the maximum compensatory award for unfair dismissal will rise from £88,519 to £89,493 (there is an additional cap of one year’s salary on the unfair dismissal compensatory award)
- the minimum basic award for certain unfair dismissals, such as dismissals for reasons of trade union membership or activities, health and safety duties or acting as an employee representative or workforce representative, will go up from £6,562 to £6,634.
However, the limit on the daily amount of statutory guarantee pay will remain at £30.
The increases apply where the event giving rise to the entitlement to compensation or other payment occurs on or after 6 April 2021. In unfair dismissal claims, that date is the effective date of termination of employment. The limits previously in force will still apply where the effective date of termination falls before 6 April 2021.
Related Topics
-
When should you submit a protective claim to HMRC?
Your business has charged VAT on some sales but a recent tribunal decision has indicated that the goods are zero-rated according to the law. Should you submit a claim to HMRC for a rebate on your past sales?
-
Does personal use of business AI tools put tax relief at risk?
You’re self-employed and recently found a subscription service for an AI tool that can do the majority of your admin tasks. It’s so efficient that you’ve started to use it increasingly for non-business tasks too. Can you still claim tax relief?
-
Shifting private residence relief to maximise tax saving
Last year you bought a second home which has increased in value. Meanwhile your main home has devalued. How can you use a tax election to obtain loss relief for one property while exempting the gain on the other?