On the 23rd of November the Chancellor of the Exchequer, Philip Hammond, gave his Autumn Statement, covering several pay and benefit topics. Here’s a rundown of the essential points you need to know as an employer.
The following items from the Autumn Statement are of most importance in terms of employment law…
Confirmation of National Minimum Wage and National Living Wage increases
- National Living Wage (payable to workers aged 25+) will increase from £7.20 to £7.50 per hour
- The National Minimum Wage will increase as follows:
- For workers aged 21 – 24 year olds, the rate will increase from £6.95 to £7.05 per hour
- For workers aged 18 – 20 year olds, the rate will increase from £5.55 to £5.60 per hour
- For workers over compulsory school age but not yet 18, the rate will increase from £4.00 to £4.05 per hour
- The apprentice rate (for apprentices under the age of 19 or 19 and over but in the first year of apprenticeship), the rate will increase from £3.40 to £3.50 per hour
- The Government will invest an additional £4.3 million a year to strengthen NMW enforcement
All increases will take effect in April 2017.
Tax and Payroll Issues
- From April 2017, the employer and employee National Insurance thresholds will be aligned – both employees and employers will start paying NI on weekly earnings above £157.
- From April 2017, the tax and employer National Insurance advantages of salary sacrifice schemes will be removed. Employees will pay the same tax for benefits gained by sacrificing salary. However, tax benefits in relation to salary sacrifice will continue only in relation to:
- Childcare vouchers
- Cycle to Work schemes
- Ultra-low emission cars
The changes will be phased in, and arrangements already in place before April 2017 will be protected until April 2018. Arrangements already in place for cars, accommodation and schools fees will be protected until April 2021.