Employers

 

National Living Wage

The budget saw another rise in the standard rates for the National Living Wage (NLW) which has become an annual occurrence since its introduction in April 2016 when it replaced, what used to be known as, the National Minimum Wage (NMW).  The rates for the current tax year, 2017/18, and the rates announced for the next tax year, 2018/19, are shown below:

  25 & Over 21-24 18-20 Under 18 Apprentice
2017/18 £7.50 £7.05 £5.60 £4.05 £3.50
2018/19 £7.83 £7.38 £5.90 £4.30 £3.70

 

Income Taxes and National Insurance

 

The Chancellor announced that, in line with their commitment to increase the Personal Allowance to £12,500 and the higher rate threshold to £50,000, they will raise the income tax bands to the following:

  • The Personal Allowance will increase to £11,850 from April 2018

  • The higher rate threshold will increase to £46,350 from April 2018.

The increase in the Personal Allowance is an increase of 3%, which, while welcome, is a fairly standard increase based on CPI. This will result in an income tax reduction of up to £70 per annum for basic rate taxpayers and up to £340 per annum for higher rate taxpayers earning under £100,000 (not taking into account any other impacts).
 

The 0% starting rate band for savings will remain at its current value of £5,000 for 2018/19.
 

The National Insurance rate bands have also increased slightly – for example, the lower profits limit for Class 4 contributions for the self employed will rise from £8,164 to £8,424 from April 2018. Class 2 NICs will not be abolished until April 2019.

Company Car Tax

As expected, the Chancellor wants to promote greener alternatives for employers who provide their employees with a company vehicle.  The emissions scandals, over recent years, involving the testing of diesel vehicles has inadvertently placed them as a primary target on the Chancellor’s agenda.

The standard supplement in relation to Benefit in Kind rates for diesel vehicles will increase by 1% from 3% to 4%, with effect from April 2018.  The main rates, already announced, based upon CO2 emissions remain the same although, consistent with previous years, the percentages increase for lower emission cars.

From April 2018, there will be no Benefit in Kind charge on electricity provided by employers to charge employees’ electric vehicles, regardless of if they are company cars or personally owned by the employees.

The provision of company vehicles has become an increasingly expensive option in recent years and the costs will undoubtedly continue to escalate as the government moves towards a greener future for our country.

 

NIC and Employment Allowance

To combat some employers abusing the Employment Allowance, in order to avoid paying the correct amount of NICs often by using offshore arrangements, HMRC are to require upfront security from

employers with a history of avoiding paying NICs in this way.

  

Our handy Tax Facts Pocket Guide provides you with the rates and figures you need to manage your personal and business finances.

Autumn Budget News

Budget Highlights for UK Manufacturing

Whilst the recent budget didn’t throw up any significant headline announcements for our Manufacturing Sector, there were various items outlined which should have a positive impact on the sector, including: Research & Development

Budget Review for Retail Sector

There are number of areas in the Autumn Budget that will impact on the retail sector.

Impact of the Budget for Family Businesses

It will come with little surprise that the second budget of 2017 failed to offer significant headline announcements, despite the rumour mill going in to overdrive during the past few days.

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