Autumn Budget 2017: What’s In It For Employers?

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23 Nov 2017

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The Chancellor of the Exchequer Philip Hammond has delivered this year’s Autumn Budget with the main headline grabbing announcement being the changes to Stamp Duty.

But there have also been a number of changes that will affect businesses, which Croner’s Head of Legal Andy Willis discusses.

Expert Summary

“As expected the Chancellor has announced increases to National Living Wage and National Minimum Wage rates, with the National Living Wage rate increasing from £7.50 to £7.83 for over-25s, in April", says Andy. “The Chancellor also announced that the government will publish a discussion paper in response to Matthew Taylor's review into modern working practices and will look to make it easier to define who is an employee, who is a worker and who is genuinely self-employed. “On apprenticeships, the government is continuing in its aim to deliver 3 million apprenticeship starts by 2020, through the operation of the apprenticeship levy, and has pledged to review the flexibility of the system – which may lead to an extension of the time employers have to spend the money in their levy account, or improve the way group structures can share their money. “More broadly, the Chancellor has allocated £3 billion to Brexit preparations, yet another indication of the mammoth task negotiating Brexit will be. Brexit will undoubtedly have an impact on future employment regulation, but it’s impossible to know what this will look like at this stage, given that our future trading relationship with the EU – and the consequences for the labour market – are yet to be determined.”

Small businesses

  • The VAT registration threshold: Despite speculation it may be lowered, the Chancellor has stuck with £85,000, which keeps most small businesses out of VAT
  • Business rates: The Chancellor has brought forward the uplifting of this by the CPI inflation index and not the RPI. The switch will begin in April 2018, two years earlier than planned. That will save businesses £2.3bn
  • Staircase Tax: Measures were announced to solve the Staircase Tax – extending the £1,000 discount for pubs with a ratable value of less than £100,000 for another year to March 2019

Brexit

  • European Investment Fund money: Will be replaced if necessary
  • Preparing to leave: £3 billion put aside

Tax

  • Basic rate income tax: threshold to rise to £11,850 in April next year.
  • Higher rate threshold: to rise to £46,350.

Changes to Minimum Wage Rates

From April 2018, hourly minimum wages will increase as follows:
  • National Living Wage (NLW) (age 25+): from £7.50 to £7.83 (this will give a full-time worker an annual £600 pay increase);
  • NMW for 21-24 year olds: from £7.05 to £7.38;
  • NMW for 18-20 years olds: from £5.60 to £5.90;
  • NMW for those over school age but not yet 18: from £4.05 to £4.20;
  • NMW for apprentices: from £3.50 to £3.70.

The Apprenticeship Levy

  • Apprenticeship Levy: The Government is continuing its aim to deliver 3 million apprenticeship starts by 2020
  • Flexibility for Levy payers: The government has pledged to review the flexibility levy payers have to spend their money. Although no details have been announced, this could look to extend the time employers have to spend the money in their levy account or improve the way group structures can share their money.

Taylor Review on employment status

  • Discussion paper: The Chancellor announced the Government will publish a discussion paper in response to Matthew Taylor's review in to modern working practices which looked at ways to better protect people who work in the gig economy, such as Uber taxi drivers. It will also look to make it easier to define who is an employee, a worker or self-employed.

Hi-Tech business

  • Investment: £500m in a range of initiatives from artificial intelligence, to 5G and full fibre broadband
  • Funding: More than £1bn of lending will be available to councils to fund high-investment projects.

House building

  • Vacant property premiums: Plans announced to legislate for councils to be allowed to impose a 100% premium on properties left vacant.
  • Huge investment: of £44 billion over the next five years to help the housing market to increase house building by the mid-2020s to 300,000 homes per year.

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