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Key employment announcements arising from Autumn Statement

27th November, 2015

This week saw George Osbourne deliver his Autumn Statement to Parliament and the publication of the Government’s 2015 Spending Review, which contained a number of surprises, not only in respect of the U-turn on scrapping tax credits.

Some of the key employment announcements include:

Apprenticeship levy

Large employers will be required to spend 0.5% of their wage bill on funding apprenticeships. The so-called “apprenticeship levy” will come into force in April 2017.  Every employer will receive a £15,000 allowance to offset against the levy, in effect making the levy payable only to the extent that an employer’s wage bill exceeds £3 million per year. Effectively, this means that fewer than 2% of employers will pay any levy at all. The aim is to encourage employers to increase their apprenticeship programmes. However, some employers are concerned that the combination of the new living wage and increased compulsory investment in training could have a significant impact on the business’ budgets.

Simon Walker, the director general of the Institute or Directors said, “the major business tax announcement of this autumn statement was the apprenticeship levy, which can only be described as a new payroll tax.”

Auto-enrolment pension delays

There is some good news for small employers in particular in relation to pension auto-enrolment.   The planned rises in minimum contributions for auto-enrolment will be aligned to the start of the tax year and subsequently shall be delayed by six months, with the aim of making it easier for employers to administer. The date for minimum employer contributions to rise to 2 percent has been delayed until April 2018 and the further increase to 3 percent (planned for October 2018) will now take effect in April 2019. However, despite the changing deadlines, auto-enrolment remains an obligation for employers which requires preparation substantially in advance of your business’ staging date.  If you are unsure of your business’ staging date click here and insert your PAYE reference number to find out.

Travel and subsistence

Legislation will be introduced, with effect from 6 April 2016 to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal services company

Childcare

The Chancellor’s statement also confirmed that parents who work more than 16 hours per week (per parent) and fall within the upper income limit of £100,000 (per parent) will be entitled to up to 30 hours of free childcare from 2017.

Helping sick and disabled people back to work

The Government intends to expand the newly introduced Fit for Work Service.  It shall also be setting out reforms in 2016 aimed at improving support for employees with health conditions and disabilities and exploring how employers can assist to increase the employment of disabled people.

If you would like to discuss the potential impact of any of these announcements on your business, please contact Ben Mason on 01743 294129 or send an email to [email protected]

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