By Jayne Morris on 29 Nov 2016
In the Chancellor's final Autumn Statement, there were a few announcements that are likely to affect employers.
National Living Wage
The National Living Wage will increase from April 2017:
- For workers aged 25 and over, the National Living Wage will increase to £7.50 per hour from £7.20
- For 21 to 24 year olds, it will go from £6.95 to £7.05 per hour
- 18 to 20 year olds will see their wage rise to £5.60 per hour from £5.55
- 16 to 17 year olds will see wages rise from £4.00 to £4.05 per hour
- The apprentice rate will change from £3.40 to £3.50 per hour
- Flat rate VAT schemes will increase to 16.5% from April 2017
- NICs for employers and employees will be aligned and paid on earnings above £157 per week. While this may simplify matters, it will lead to additional cost for employers
- Insurance Premium tax will increase to 12% from June 2017
- Government recommitted to raising the personal income tax thresholds to £12,500 and £50,000 respectively by the end of this Parliament
- Draft regulations for the IR35 tax changes, which will result in Personal Service Company (PSC) contractors in the public sector losing their right to determine their tax status, will be published on 5th December.
Example letter advising a worker of a pay increase because of a rise in the rate of the national minimum wage from XpertHR (requires registration)
The Charity Finance Group has published an excellent briefing on the likely impact of the Autumn Statment on the charity sector.