Autumn Budget 2017: Key points for employers

Although the Autumn Budget was delivered last year, there are a number a key points that will be coming into effect this April. Employers – keep an eye out!

The Autumn Budget 2017 has a number of measures that employers will be interested in, particularly relating to employment status consultation. There’s going to be a consultation to consider if and how the employment status tests for employment rights and tax can be made clearer. This follows The Taylor Review, published in July, which made a number of suggestions for reforming employment status and workers’ rights.

A joint report of the of the Work and Pensions and Business, Energy and Industrial Strategy (BEIS) Committees recommends legislation which would provide clarity on employment status, and put in place “the best” of the Taylor Review’s recommendations. This is likely to be part of the consultation when it’s launched.

Other key points of the budget include:

  • An increase of the national living wage (which applies to workers over 25) of 4.4% from £7.50 to £7.83 in April 2018. At the same time, there will also be an increase in the national minimum wage, from:
  • £7.05 to £7.38 per hour for 21 to 24 year olds
  • £5.60 to £5.90 per hour for 18 to 20 year olds
  • £4.05 to £4.20 per hour for 16 to 17 year olds
  • £3.50 to £3.70 per hour for apprentices.
  • A rise of the Personal allowance to £11,850 in April 2018, in accordance with the Conservative manifesto pledge to increase the personal allowance to £12,500 by 2020/21. The higher rate threshold will increase to £46,350, with the Government having pledged to increase this to £50,000 by 2020/21.
  • National Insurance Contributions (NICs) changes will be delayed by one year, in accordance with the Government’s previous announcement. Class 2 NICs and charging employers NICs on terminations payments over £30,000 will be abolished, coming into effect in April 2019.
  • Off-payroll working in the private sector consultation – following the Government’s decision in April 2017 to reform the off-payroll working rules (the IR35) for engagements in the public sector, the extension of reforms to the private sector has been considered as a next step. This would ensure that those who effectively work as employees are taxed as employees, even if they structure their work through a company. The Government has announced that there will be a consultation on this, drawing on experience of the public sector reforms and external research already commissioned by the Government. This research is due to be published in 2018.
  • From 6th April 2018, changes to the Save As You Earn scheme means that employees on maternity and parental leave will be able to take up to a 12 month pause (previously 6 months) from saving into their Save As You Earn employee share scheme.
  • From April 2018, there will be no benefit in kind charge on electricity that employers provide to charge employee’s electric vehicles.

For more information you can talk to Alison by clicking here.

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