1. National Minimum Wage and National Living Wage Increases
The government will be focusing on making sure employers are correctly paying the National Minimum Wage and National Living Wage. Employers can be ‘named and shamed’ and a record number were found to be underpaying their workers last year.
From 1 April 2017 the rates will be:
- £7.50 per hour - 25 yrs old and over (National Living Wage)
- £7.05 per hour - 21-24 yrs old
- £5.60 per hour - 18-20 yrs old
- £4.05 per hour - 16-17 yrs old
- £3.50 for apprentices under 19, or 19 or over who are in the first year of apprenticeship.
2. Salary Sacrifice Schemes
Employers will need to review the benefits they offer to their employees as tax savings through many salary-sacrifice schemes will be abolished from 6 April 2017.
Pensions (including advice), childcare, cycle-to-work and ultra-low emission cars will not be affected.
Schemes that are in place prior to April 2017 will be protected until April 2018, arrangements related to cars, accommodation and school fees will be protected until April 2021.
3. Apprenticeship Levy
From 6 April 2017 employers with an annual payroll of more than £3million will be required to pay a levy of 0.5% of their total bill.
The government will give employers a £15,000 yearly allowance to offset against this amount which will be applied monthly, as well as contribution of 10% towards funding an accredited apprenticeship.
Smaller organisations are not required to pay the levy but can receive funding for accredited apprenticeships from the fund. The organisation would pay 10% towards to the cost of an apprenticeship and the government would pay the remaining cost.