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An announcement by Ed Miliband has stated that the amount of paid paternity leave will be doubled under a future Labour government. Miliband also declared that statutory paternity pay would be increased to more than double its current rate, at £260 per week. However, the proposals have been labelled as a ‘business tax’ by some business leaders.

The Labour party leader believes that the current entitlement for fathers is out of date, and his proposals would help 400,000 families to provide their children with the “best start in life they can”. The current rate for statutory paternity pay is £138.18 a week, or 90 per cent of average weekly wages, whichever amount is the lowest. The amount proposed by Miliband of £260 per week is the same as a 40 hour week at minimum wage. The Labour leader went on to say that fathers currently enjoy two weeks paid leave, introduced by the previous Labour government, but many return to work due to a lack of money.

The British Chambers of Commerce, however, has stated that the new measures would be a “tax on business”. John Longworth, the director general, says that the proposals would create real costs for companies, which may result in lower productivity, fewer jobs and reduced growth. He also stated that businesses had already absorbed a number of changes to parental leave, with one change soon to be implemented. John Allan, national chairman of the Federation of Small Businesses, said that the extension of paternity leave to four weeks may mean that businesses have to hire temporary staff during that time.

Shared parental leave

Mothers of babies that are due on 5th April 2015 or later will be able to take up to 50 weeks maternity leave. However, they can choose to return to work earlier and their partner will be able to take the remaining weeks as paternity leave. How the weeks are shared between them is up to the parents.

How will this affect employers?

The shared parental leave may be taken as three separate blocks, but employees must give notice of eight weeks for each block of leave. Employers will have to prepare to cover the absence of staff taking paternity leave, while also being careful not to discriminate against those who want to apply for shared parental leave.

For planning advice, please contact us here at The Accountancy Partnership.

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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