Pay and benefits: key differences in Scotland and Northern Ireland
Updating authors: Ian Holloway and Nicky Stibbs, consultant editor (Scotland): Gillian MacLellan, consultant editor (Northern Ireland): Gareth Walls
Brightmine editor: Zuraida Curtis
Future developments
Scotland
Income tax personal allowances: Personal allowances are frozen until tax year 2027/28. See Pay As You Earn for more details.
Income tax rates and thresholds: On 4 December 2024, in its draft budget for tax year 2025/26, the Scottish Government increased the starter rate threshold to £2,827 (£2,306 in 2024/25) and the basic rate threshold to £14,921 (£13,991 in 2024/25). This impacts the threshold of earnings subject to tax at the intermediate rate (£14,921 - £31,092 in 2025/26 compared with £13,992 - £31,092 in 2024/25). All the other thresholds remain frozen. The Scottish Government froze the income tax rates at 2024/25 levels and pledged not to introduce any new bands or increase the rates of Scottish income tax to the end of the Parliamentary session. It also pledged to raise the starter and basic rate bands annually by at least the value of inflation.
Bankruptcy and diligence: The Bankruptcy and Diligence (Scotland) Bill was introduced to the Scottish Parliament on 27 April 2023. The Bill proposes various changes to the diligence process including proposed changes relating to earnings arrestments where an employer is served with an arrestment order, including provisions that will allow earnings arrestment and current maintenance arrestment schedules to be issued electronically in addition to the current methods (personal delivery and post). If enacted, the Bill will also put in place enabling provisions for regulations to allow for a "mental health moratorium" on diligence. This will allow for future regulations to allow the temporary suspension of debt recovery where individuals have a mental illness.
On 25 May 2023, the Economy and Fair Work Committee, responsible for scrutinising the Bill, launched a consultation on the Bill. The consultation closed on 21 July 2023 and the responses have been published.
Concerns were expressed that the "mental health moratorium" was too narrow in scope and would not help enough people who are experiencing a mental health crisis. Parliament's Economy and Fair Work Committee asked the Scottish Government to amend the Bill and extend the criteria to include more people experiencing mental health crises. Section 1B was added to the Bill and requires a review of the mental health moratorium five years after the section comes into force by regulations.
On 15 July 2024, the Bill received Royal Assent and can now be referred to as The Bankruptcy and Diligence (Scotland) Act 2024.
Arrestment order threshold changes: The Diligence against Earnings (Variation) (Scotland) Regulations 2024 changes the thresholds beneath which deductions cannot be taken from earnings by arrestment (the current maintenance arrestment, conjoined arrestment or the earnings arrestment). The Regulations come into force on 6 April 2025.
Northern Ireland
Allocation of tips: In the rest of the UK, the Employment (Allocation of Tips) Act 2023, came into force on 1 October 2024 and provides for how employers must deal with tips, gratuities and service charges. No corresponding legislation has been introduced in Northern Ireland. However, on 1 July 2024, the Department for the Economy launched a public consultation on The Good Jobs Employment Rights Bill in Northern Ireland. The Bill proposes that similar legislation is introduced in Northern Ireland. The consultation closed on 30 September 2024.
On 10 October 2024, the Employment Rights Bill was published in Great Britain. The Bill, if enacted, provides that the employer's written policy on the way qualifying tips, service charges and gratuities are allocated must be produced after consultation, and reviewed every three years. This is not mirrored in the Department for the Economy consultation above (see Basic pay and benefits).
Fit note reform and voluntary occupational health frameworks: On 22 November 2023, the UK Government in its Autumn Statement announced a review of the fit note process and development of occupational health frameworks. On 19 April 2024, UK Government published a call for evidence on fit note reform. Neither of the above will apply in Northern Ireland.
SSP reform: On 10 October 2024, the UK Government published the Employment Rights Bill outlining SSP reforms (see Sick pay for further details). The proposed SSP reforms will not apply in Northern Ireland.
Itemised pay statements: On 1 July 2024, the Northern Ireland Government launched a consultation on The 'Good Jobs' Employment Rights Bill. The consultation contains proposals aimed at "strengthening employment legislation" which may progress under an Employment Bill and supporting secondary legislation. It is proposed that employers will be legally obliged to provide itemised pay statements to workers that includes information about the number of hours worked. This is similar to the legislation already introduced in the rest of the UK. The consultation closed on 30 September 2024.
