In this round up of recent news, we report on two Government proposals: a consultation on regulations to introduce additional paternity leave and a commitment to scrap tax relief on salary sacrifice childcare vouchers. We also review the FSA's code on reumuneration practices in financial services.

Additional paternity leave gains momentum
Following an announcement last month of its plans to introduce "additional paternity leave" for fathers of children due on or after 3 April 2011, the Government has now launched consultation on the draft regulations.

The proposal gives fathers a right to up to six months extra leave which must be taken: (i) after the mother has returned to work; (ii) no earlier than 20 weeks after the birth of the child; and (ii) no later than the child's first birthday. Fathers will be paid for this extra leave at the same rate as statutory maternity pay if it is taken during the mother's maternity pay period.

The consultation, which closes on 20 November 2009, seeks views on whether the proposed administration of the scheme (which relies largely on self-certification of eligibility by the parents) is sufficiently straightforward for employers and employees, whilst ensuring that it is not open to abuse.

Proposal to scrap tax relief on childcare vouchers
Many employees enjoy tax savings when they use pre-tax earnings to purchase childcare vouchers from their employer. However, Gordon Brown announced last week that, from April 2011, employees who want to join an employer-supported voucher scheme will not get the current tax exemptions and, from April 2015, voucher exemptions will be withdrawn completely.

It is proposed that the savings made from scrapping tax relief on childcare vouchers will be used to provide free childcare for children from low or modest income families.

FSA publishes code on remuneration practices in financial services
In August 2009, the FSA published its new Remuneration Code of Practice. The Remuneration Code is intended to deal with some of the criticism of the incentive practices of large banks and other financial institutions that has been aired in the media in recent months. For more information on the code and its likely impact, see our Corporate Finance E-Bulletin

12 October 2009

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