The fact is accepted worldwide that men are always paid more than women in almost all industries. This gender gap is now considered a global issue in the world. This has become the reason for several forefront of government initiatives. The purpose behind this is to make the industry an equal and fair experience for everyone regardless of gender. In the UK, it has been observed that you will have to submit the data by the companies that they have to report the gender pay gap reporting and the differences in pay annually.
However, before we delve further into the discussion, let’s have a basic understanding of what is gender pay gap reporting, whether it is there in the UK, when did gender pay gap reporting become mandatory in the UK, and how will it be helpful to be more tax efficient.
What is the Gender Pay Gap Reporting?
In simple words, we can say that the gender pay gap refers to the general difference in salaries between men and women. As per the explanation of the House of Common Library 2021 in the UK, the median salary for women was observed to be 14.5% lesser than that of men in the UK. Also according to the financial times’ reports in the UK explains that three out of four companies are practising more payment to their male employees and lesser to their women counterparts.
Moreover, what is a surprising fact related to this discussion is that there are 17 sectors of the economy and nine of them are in the practice paying men more than women by a ratio of 10%.
Is there a Gender Pay Gap in the UK?
Just like it was discussed earlier that the issue is global and being noticed around the world, the case is just the same in the UK as well. However, there are serious considerations in this regard and the government is struggling to sort out this issue from the industry. A big change is also noticed after the gender pay gap reporting has become mandatory to focus on annually.
When Did Reporting on the Gender Pay Gap become Mandatory?
Many of you must be wondering about what is the reason behind making gender pay gap reporting mandatory in the UK. This legislation was passed in the year 2017 that made it mandatory for all organisations to report about the gender pay gap on an annual basis. The government has been providing the gender pay gap service to send the relevant information to the government. This can not be easier than this. The organisations that have an employee count over 250 will have to send this gender pay gap information to the government.
Some of the bigger organisations have initiated to share of detailed data in this regard. Equity partners are also a part of this information sent by the bigger companies. This will be helpful further to have an evaluation of the higher scale pay and jobs. According to a recent discussion, only one out of the five magic circle law firms is following the rules. This is because most of the highly-paid partners are males.
How will it Help to Become More Tax Efficient?
As we focus on tax-related affairs, you must be thinking by now how will it be helpful to be more tax efficient. It is related to the fact that how gender difference matters for the tax implications. Especially when the gender pay gap is there. Due to the fact that women are getting fewer series around the world, this means that they should pay less tax. However, the case is totally different in reality. The women are getting lesser pay because of the tax amount and the relevant deductions.
Moreover, if you consider the gender pay gap, there can be a discussion about gender-based taxation as well. In the current scenario, all the genders are taxed equally, all they have to do is to figure out the tax band they fall in. The first need is to be aware of all the allowances that you are getting to be more precise and clear about being more tax efficient. The allowances might include the following:
- Trading allowance
- Property income allowance
- Marriage allowance
- Personal allowance
- Capital gains tax allowance
Moreover, there are a few more on the list but the mentioned allowances are tax-free and you will be on top of your tax game and your tax bills will be reduced if you are entitled to any of these allowances. This will further help you to understand your tax scenario more clearly once you have understood your allowances.
The Bottom Line
Now that you have gathered a fair amount of information about gender pay gap reporting, we can bring the discussion towards wrapping up. There is no doubt that the gender pay gap is there in the UK and the government is trying to balance this gap in all sectors. Reporting on an annual basis about the gender pay gap has become mandatory for the purpose that this issue can come to a possible and fair solution. So that the industry becomes a platform of equal opportunities for both men and women. We hope these few minutes of reading will help you to develop a better understanding of the gender pay gap and its reporting.
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Disclaimer: All the information provided in this article on gender pay gap reporting, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.