The upheaval surrounding the Autumn Statement suggested that its spring counterpart might be equally dramatic. However, it seems that businesses can breathe a sigh of relief, as the changes that will impact employers and the workforce in general are minimal.
For those of you who gave up 20 minutes into a desk-side viewing, we have summarised the changes relevant to businesses into a digestible few points- enough to keep you well informed but not enough to send you to sleep.
The Chancellor began his speech on a positive note, discussing the UK workforce. “Employment is at a record high. Unemployment is at an 11 year low, with over 2.7 million more people enjoying the security and dignity of work than in 2010. A far cry from the 3 million unemployed predicted.
“And I am pleased to report, on International Women’s Day, that there is now a higher proportion of women in work than ever before.”
Sounds pretty good to us!
Changes to National Living Wage
As previously announced, the Chancellor highlighted that national living wage will rise again to £7.50 in April, equating to over £500 more for a full-time worker than this year, and £1,400 more than when the National Living Wage was introduced.
- The personal allowance will rise for the seventh year in a row to £11,500 (helping a whopping 29 million people)
The scheme will be rolled out to all eligible parents by the end of the year and will be worth approximately £5,000 a year to a young family with a three year old and both parents working.
- Eligible working parents will be able to receive up to £2000 a year towards the cost of childcare for each child under 12
- Come September, the free childcare entitlement will be doubled to 30 hours a week
“These childcare measures represent a further huge step forward in support for ordinary working families, and for women in the workplace.” – Hammond
The government will increase the ISA limit from £15,240 to £20,000 in April 2017.
- From 6 April, savers will be able to put up to £4,000 a year into a Lifetime Individual Savings Account (LISA), which will be topped up with a 25% government ‘bonus’, making a maximum of £5,000 saved each year.
- The LISA will be available for those under the age of 40 and can be used for buying a first home or put towards their retirement.
There are now nearly 5 million self employed people in the UK, meaning that the Government earns less than they should be earning in taxes.
- In April 2018, Class 2 NIC will be abolished
- The main rate of Class 4 NICs for the self-employed will increase by 1% to 10% and then again to 11% in April 2019
It is essential that the corporate tax regime does not encourage people across the economy to form companies simply to reduce tax liabilities.
- The tax-free dividend allowance will increase from £5,000 to £2,000 with effect from April 2018
* Photo credit: ITV
- By Hannah Sims, editor at Perkbox
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