Budget 2016
Chancellor George Osborne delivered his 2016 budget speech in Westminster on 16th March. Below is a quick look at the key areas of interest for most employers:
- Termination payments
From April 2018, employment termination payments over £30,000 liable to income tax will also be subject to employers’ NICs.
Certain forms of redundancy payments are currently exempt from employee and employer national insurance contributions and the first £30,000 is income tax free, which the government says incentivises employers to manipulate the rules.
- National minimum wage
National minimum wage (NMW) rates will be amended in April each year to coincide with the uprating of the national living wage, starting from April 2017. The NMR rates for workers aged up to 24 and for apprentices will increase from October 2016 in line with the recommendations of the Low Pay Commission.
- Tax-free childcare
Tax-free childcare will be rolled out for children under age 12 from early 2017. The existing employer-supported childcare scheme will remain open to new entrants until April 2018.
- Employment allowance – employing illegal workers
One year’s employment allowance (worth up to £3,000 of NICs in 2016/17) will be removed from employers who are charged civil penalties by the Home Office for employing illegal workers from April 2018.
Add a Comment