The Chancellor of the Exchequer, George Osborne, presented his Summer Budget to Parliament on 16th March 2016. Amongst other topics, the Budget included plans which may have an impact on employment law. The main ones include changes to termination payments, apprenticeships, shared parental leave, salary sacrifice schemes and trivial benefits in kind. Termination Payments The term ‘termination payments’ mainly refers to redundancy pay and settlement agreements. The current rules are that payments above £30,000 are subject to tax only, but the government plans to tighten the laws on taxation for these larger payments. From April 2018 termination sums over £30,000 will not only be subject to tax, but also subject to employer’s National Insurance Contributions (NICs). The law on payments below this threshold will not change – there is no need to pay tax or NICs. All sums will remain free from employee’s NI contributions. Salary sacrifice Salary sacrifice schemes are another area which will be affected, as the government is considering implementing a limit on the types of benefits which can be offered through salary sacrifice. This was proposed due to a 30% increase of such arrangements since 2010. Despite this proposed limit, the government has expressed its intention to keep salary sacrifice schemes relating to pensions, childcare and health-related schemes, such as Cycle to Work, exempt from tax and NICs. Apprentice Levy top up The Budget also revealed more about the proposed apprenticeship levy which was announced in last year’s Autumn Statement. The levy will apply to employers in the UK from April 2017 but only to those with annual wage bills larger than £3 million. The employers which fall within that description will have to pay 0.5% of that wage bill into a separate account solely to fund apprenticeships within their organisation. For employers in England the government will offer a 10% “top-up” of their total monthly contributions which will be added to the same digital account. Shared Parental Leave The Chancellor announced the government’s plan to launch a consultation on Shared Parental Leave in May 2016. The consultation will aim to establish how Shared Parental Leave should be extended to grandparents from 2018 to allow parents to return to work sooner after having a child. The consultation will also look at simplifying the process around the entitlement, mainly focusing on the eligibility and notification requirements. Trivial Benefits in Kind Finally from 6th April 2016, trivial benefits in kind, up to a maximum of £50 value, will no longer be subject to income tax and Class 1A NICs (paid by employers). This will extend to Class 1 NICs (paid by employees) later this year.