A part-time private hire driver challenged a flat weekly fee his company charged for access to its booking and dispatch system. Because the fee did not vary with hours worked, part-timers paid far more per hour than full-timers for the same service. He claimed less favourable treatment because of his part-time status. The Employment Tribunal rejected the claim, finding the fee was a revenue measure and that part-time status had to be the sole reason for the treatment, with the resulting appeal leading all the way to the Supreme Court

The Supreme Court unanimously held that a part-time worker (PTW) bringing a less favourable treatment claim under the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations (PTWRs) 2000 does not need to prove that part-time status was the sole reason for the treatment. It is sufficient that it was an effective cause or significantly influenced the outcome. Employers can no longer defend a policy simply by pointing to a second commercial motive, such as administrative convenience or revenue generation. Neutral-looking practices like flat fees, fixed charges and benefit rules that fall harder on part-timers are now much easier to challenge, in your own organisation and among your clients.

The successful claim rested on Regulations 5(1) and 5(2) of the PTWRs. These were made under Section 19 of the Employment Relations Act 1999 to implement Directive 97/81/EC. Under the law, PTWs must not be treated less favourably than comparable full-timers unless the treatment is objectively justified. The Court stressed that the Regulations deliberately omit the words "solely because", so the ordinary "effective cause" approach from discrimination law applies.

To reduce your risk, review pay structures, fees and benefits for anything that costs part-timers proportionately more or gives them less, and pro-rate salary, bonuses, pensions, leave and expenses wherever possible. Where a policy does have a disproportionate effect, record the legitimate aim behind it and why it is necessary and proportionate, bearing in mind that revenue or convenience alone is unlikely to be enough. Remember that the Regulations cover workers as well as employees, so include contractors in your review. Finally, make sure HR, payroll and finance teams understand the new test, and treat any part-time grievance about pay or benefits as a potential claim by taking specialist advice early.

A business may have the finance, premises and customers for an expansion project, yet still face another obstacle: obtaining enough electricity.

The Government has announced Great British Grid, a new publicly owned organisation intended to help accelerate investment in Britain’s electricity network.

The issue is becoming increasingly important as businesses electrify heating, transport and manufacturing processes, while renewable generation, battery storage and data-intensive activities also require additional grid capacity.

One proposed change could directly affect businesses planning substantial projects.

The Government intends to expand the use of self-build electricity connections. This could allow developers and businesses, where appropriate, to arrange construction of their own connection rather than waiting for the network company to complete the work.

That does not mean every business will suddenly be able to obtain an immediate connection. Britain’s electricity network requires substantial expansion and many projects are competing for capacity. However, the announcement highlights something businesses should consider surprisingly early in an investment project.

If an expansion requires substantially more electricity, installing rapid vehicle charging, electrifying production or opening energy-intensive premises, available grid capacity should form part of the initial feasibility work.

There is little benefit in committing to premises, machinery and finance before discovering that the required electricity connection could delay the project significantly. For larger investments, energy capacity is therefore becoming another issue to examine alongside finance, planning permission, staffing and expected demand.

The earlier it is investigated, the greater the opportunity to adjust the project, consider alternative locations or explore other connection options before significant commitments are made.

A new system for recording waste movements came into operation on 1 October 2026.

The first phase of mandatory digital waste tracking applies to permitted or licensed sites receiving controlled waste in England and Wales.

Affected organisations must record details of every load they receive through the Government’s new digital service. In most cases, the information must be submitted within two working days, beginning on the day after the waste is received. More than 12,000 permitted waste sites in England are expected to be covered by the new arrangements.

Businesses can either enter information directly through the Government service or use compatible commercial software that connects to it. The immediate obligation falls mainly on businesses operating waste-receiving sites, but this is only the first stage of a much wider change.

The Government intends eventually to create a digital record covering waste from the point at which it is produced through collection, transport and final treatment or disposal. Waste collectors are expected to become subject to mandatory digital tracking from October 2027.

The aim is to improve transparency and make it more difficult for illegal operators to disguise where waste has come from or where it has gone.

Businesses directly affected should check that staff understand the new reporting deadlines and that their software or administrative procedures can capture the required information accurately.

Other businesses should also watch developments. Digital waste tracking is gradually replacing paper-based records with a more traceable digital audit trail.

For businesses that produce, move or receive significant quantities of waste, now is a good time to review existing record keeping and establish whether future changes are likely to affect them.

The government is considering changes to the voluntary National Insurance contributions (NICs) system following a call for evidence published earlier this year.

Voluntary NICs allow individuals to fill gaps in their National Insurance record where they have not built up a qualifying year through compulsory contributions or National Insurance credits. They can help individuals build entitlement to the State Pension and, depending on the class paid, certain contributory benefits.

The call for evidence considered whether the current system delivers fair outcomes, how voluntary NICs interact with National Insurance credits and whether changes are needed to eligibility, pricing and access. The government also sought views on partial-year gaps, information and guidance, and contributions for periods spent abroad. The call for evidence closed on 15 September 2026. The feedback to the document will help inform the government’s consideration of possible future reforms.

Changes have already been put in place restricting access to making Voluntary NIC for people living or working outside the UK. Since 6 April 2026, voluntary Class 2 NICs can no longer generally be paid for periods abroad. New applications for voluntary Class 3 NICs for periods abroad now require either 10 continuous years of UK residence or 10 qualifying years of National Insurance contributions, subject to specific exceptions and transitional arrangements.

The changes do not prevent qualifying individuals from paying voluntary NICs for tax years before 2026-27. Existing overseas Class 3 payers can also continue to make contributions under transitional rules.

HMRC has updated its guidance on how individuals and organisations can apply for a certificate of residence or letter of confirmation to prove UK tax residence.

A certificate of residence can be used to claim tax relief in another country where UK residents pay tax on foreign income. It confirms to the overseas tax authority that the applicant is UK resident. A certificate can be issued where there is a double taxation agreement with the country concerned and the applicant is entitled to treaty benefits.

A letter of confirmation may instead be appropriate where there is no double taxation agreement or proof of UK residence is required for another purpose. The overseas tax authority decides whether relief from foreign tax can be granted.

The online service is available to individuals and sole traders, companies, partnerships, trusts, charities, public bodies, pension schemes and collective investment schemes. Agents can also apply directly on behalf of taxpayers.

Applicants need to provide details including the country the certificate is required for, the relevant double taxation agreement, type of income and period covered. A future date cannot be requested.

Further information is required where a tax return has not yet been filed, including days spent in the UK days during the tax year or years where a certificate is required. 

Employers operating employee share schemes may now be receiving penalties from HMRC for failing to submit their employment related securities (ERS) end of year returns on time.

ERS schemes are used to provide employees with shares, options and other securities as rewards or incentives. Employers must submit an annual ERS return for every scheme registered with HMRC, including a nil return where there have been no reportable events. The deadline for 2025-26 returns was 6 July 2026.

A £100 late filing penalty is automatically issued where a return was not submitted by the deadline. If the return remains outstanding three months after the deadline, a further £300 penalty applies. Another £300 penalty applies if it is still outstanding six months after the deadline. HMRC may also charge daily penalties from nine months after the original deadline.

Employers who have received a penalty must still submit the outstanding annual return or nil return. This also applies where a penalty is being appealed. If a scheme has ceased, the employer must enter the final event date and submit the return for the tax year in which the scheme ended.

HMRC has been consulting on proposals to modernise the tax rules governing distributions and repayments of capital from companies. The consultation was published on 23 June 2026 and closed on 14 September 2026.

The proposals look at the treatment of ‘new consideration’ and ‘repayments of capital’, distributions from non-UK companies and the interaction between the distributions and loans to participators regimes. They also include reforms to demergers, Purchase of Own Shares (POS) relief and the Transactions in Securities (TIS) rules. The consultation focuses on situations where the shareholder is within the charge to Income Tax. The proposals are not intended to directly affect corporate shareholders.

Currently, where a company carries out a reduction or return of share capital, the amount received by a shareholder is generally treated as a distribution to the extent it exceeds the capital originally contributed. However, existing rules allow for various arrangements usually involving holding companies and share reorganisations to extract value while paying CGT rather than Income Tax.

HMRC proposes to address this by ‘freezing’ the amount of capital attributed to shares in future holding companies at the amount originally subscribed for the investment. This could mean that more of a payment from a share buyback or other return of capital is treated as a taxable distribution rather than a capital receipt. The government recognises that the proposal might potentially lead to unfair outcomes in certain circumstances.

Concerns have been raised by parties including the ICAEW about the potential impact on companies of the proposed changes, including those relating to reductions of share capital. HMRC will analyse the consultation responses before deciding whether to proceed and may consult further on specific reforms.

When an employee develops a health problem, the consequences can extend far beyond a few days of absence. The Government published an update to its Keep Britain Working programme on 23 September, setting out plans for what it describes as Britain’s first Workplace Health System.

The scale of the problem is substantial. Around 300,000 people with health conditions leave employment each year, while approximately 2.8 million working-age people are economically inactive because of ill health or disability.

The Government argues that earlier intervention could help more people remain at work rather than waiting until health problems have developed into long-term absence.

There is a useful lesson here for individual employers.

A business may understandably concentrate on managing sickness absence once an employee has already been away for a significant period. Earlier conversations can sometimes be more productive. Managers should know how to respond when someone begins struggling with their workload or health. Relatively simple adjustments to hours, duties or working arrangements may sometimes help an employee remain productive.

Return-to-work arrangements also deserve attention. Government figures suggest that someone absent for four to six weeks has a 96% chance of returning to work, whereas fewer than half of those absent for a year return. 

For smaller businesses, losing an experienced employee can be particularly disruptive. Recruitment costs are only part of the problem. Knowledge, customer relationships and productivity can disappear with them.

Workplace health should therefore not be viewed solely as an HR matter. Supporting employees effectively can also be part of protecting the skills, experience and resilience of the business.

Several employment law changes are approaching that businesses need to understand. The first arrives on 1 October 2026, when the normal period in which an employee can bring a claim to an Employment Tribunal increases from three months to six months.

The change has a practical consequence for employers. Employment records relating to disputes, disciplinary action and other workplace issues may remain important for longer, making accurate record keeping increasingly valuable.

Further changes follow on 30 October when employers will be required to take “all reasonable steps” to prevent sexual harassment of employees. They will also have an obligation not to permit employees to be harassed by third parties.

The changes form part of the continuing implementation of the Employment Rights Act 2025, with further measures following during 2027.

For businesses, preparation should involve more than updating the staff handbook.

Consider whether managers understand how to recognise and respond to inappropriate behaviour. Review how employees can raise concerns and whether complaints are recorded and investigated properly. Businesses dealing directly with customers, contractors and other third parties should also consider situations in which their employees could experience inappropriate behaviour from people outside the organisation. Training may be appropriate, particularly for managers and supervisors.

Employment law is continuing to change, and businesses do not need to become experts in every new provision. They do, however, need procedures that reflect their responsibilities. A useful starting point is therefore to review employment policies, management training and record-keeping arrangements before the October changes take effect.

HMRC is contacting some trustees after identifying possible errors in recent Trust and Estate tax returns relating to the type of trust being reported.

The latest HMRC compliance campaign focuses on trusts where box 8.15 of the Trust and Estate Tax Return was ticked to indicate that the trust is not an accumulation or discretionary trust. HMRC says its records suggest that some of these trusts may in fact fall within this category and could therefore have been taxed at the wrong rates.

Accumulation and discretionary trusts generally pay Income Tax at special rates of 39.35% on dividend-type income and 45% on other income, compared with lower rates for many other trusts. Some discretionary trusts are exempt from the special trust rates.

Trustees receiving a letter should review each relevant tax return and respond to HMRC by 2 November 2026. If the returns are correct, HMRC should be told. If additional tax is due for 2024-25, the return should be amended and the tax paid. Earlier years may require a voluntary disclosure to be made. There may be interest to pay and, depending on the circumstances, a penalty may also be due.

Trustees should also check that the trust's details on the Trust Registration Service remain accurate. HMRC requires trustees to keep relevant information up to date, including changes to beneficiaries.

If you receive one of these letters we can help you review your position and advise on the appropriate action.