Autumn Statement for employers
Whilst the 2016 Autumn Statement may have been short on major announcements, it did confirm some key employment tax issues, most of which take effect from April 2017.
From April 2017 the tax and NIC advantages of allowing employees to give up part of their salary in exchange for benefits, such as a mobile phone, will be scrapped. This means that those employees who swap part of their salary for benefits will in future have to pay the same tax as employees who buy benefits out of their post-tax income.
Arrangements in place before April 2017 will be protected up to April 2018; and arrangements for cars, accommodation and school fees will be protected up to April 2021. Benefits not affected by the change, and which can still be salary sacrificed, are pensions (including advice), childcare, cycle to work and ultralow emission cars.
National living wage and national minimum wage
From 1 April 2017 the national living wage, payable to employees aged 25 and over, will rise from £7.20 to £7.50. Also from that date the National Minimum Wage will rise to £7.05 per hour (21 to 24 year olds), £5.60 per hour (18 to 20), £4.05 per hour (16 to 17) and £3.50 per hour (apprentices).
Employers also need to be aware of the start of the Apprenticeship Levy from April 2017. Any employer with a wage bill of more than £3m per year (excluding benefits in kind) will be liable for the 0.5% apprenticeship levy, to be collected through the PAYE system. From mid-2017, any employer – whether or not they pay into the levy - can obtain financial support for taking on apprentices, funded by the pool of money generated by the levy.
Fleur Lewis is a partner at Bishop Fleming accountants
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