Blogs/Vlogs

Term time calculations: year end financial statements

There was developing case law (Harpur Trust v Brazel) and challenges brought against other employers with the fundamental issue being how holidays are accounted for within pay for term time workers, when compared to their full year counterparts.

After reviewing the guidance, community and voluntary controlled schools made backdated offers (of payment/or holidays) to affected staff via Trade Unions on 18 February 2019 and provided guidance to other schools and academies to enable them to do the same (should they have wished to).

The backdated offer to 18 February 2019 was unfortunately rejected by Trade Unions who are seeking five years and three months back pay. The estimated cost of five years and three months back pay is significant and would lead to a number of schools going into a deficit budget position.

This resolution to this issue now seems to be pending the outcome of the Harpur Trust v Brazel case which is to be heard in the Supreme Court. Following this, we anticipate that all further employment tribunal claims will also be stayed until December 2021 pending the Supreme Court’s decision in Harpur Trust v Brazel which is due to be heard in November. Given that the decision of the Supreme Court will set a precedent for all cases of this type it is likely that the decision will not be published until early 2022. 

This has obviously delayed the settlement of this issue with many of our academy clients still carrying estimated provisions within their financial statements. 

The next steps

If anyone is requiring assistance in what (if any) provision is required in their accounts then please contact Stephen Grayson or your usual UHY adviser.

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