On 29 October 2018, the Chancellor, Philip Hammond, delivered the Autumn 2018 Budget. The Budget included the following measures of interest to employment practitioners:
- Following the recommendations of the Low Pay Commission, the government will increase the national minimum wage from April 2019 to the following rates:
- Apprentices: £3.90 an hour;
- 16-17 year olds: £4.35 an hour;
- 18-20 year olds: £6.15 an hour;
- 21-24 year olds: £7.70 an hour;
- National living wage (workers aged 25 and over): £8.21 an hour.
- The government will meet its commitment to increase the income tax personal allowance to £12,500 and the higher rate threshold (the sum of the personal allowance and the basic rate limit) to £50,000 from April 2019, one year earlier than planned. These thresholds will remain at the same level in 2020-21 and thereafter will rise in line with the consumer prices index. Information about any changes to the income tax personal allowance in Scotland will be announced by the Scottish Finance Secretary Derek Mackay on the 12 December.
- From April 2019, businesses liable to pay the apprenticeship levy will be able to invest up to 25% of the levy to support the training of apprentices in their supply chain. For smaller employers who are not liable to pay the apprenticeship levy, the “co-investment rate” for apprenticeship training will be reduced from 10% to 5%. This means that smaller employers will contribute 5% towards the cost of apprenticeship training, and the government will pay the balance.
- The introduction of employer Class 1A National Insurance contributions on termination payments over £30,000 has been delayed until April 2020.
- The public sector off-payroll working rules will be extended to the private sector from 6 April 2020. The rules will only apply to large and medium-sized businesses, with the existing IR35 rules continuing to apply to small businesses. The government intends to use similar criteria to define small businesses as those found in the Companies Act 2006.
If you have any employment queries please don’t hesitate to contact our employment team.