Increase of the National Minimum Wage (NMW)
The government is aiming to increase the NMW by up to 60% by 2020.
The government and the Low Pay Commission (LPC) have been working closely and the recommendations of the LPC have been implemented relating to income.
The following rates will apply from April 2019:
- 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.
Income Tax Personal Allowance Increase
From April 2019, the income tax personal allowance will be increased to £12,500 and the higher rate threshold to £50,000 (the sum of the personal allowance and the basic rate limit).
Employment Allowance Reform
The Employment Allowance is claimed by over 1.1 million employers to reduce their employer NICs bill by up to £3,000.
Small and big businesses can currently get the same benefit. From 2020-21, the Employment Allowance will be limited to businesses and charities with an employer National Insurance contribution bill below £100,000.
HMRC are to provide further guidance to businesses in due course.
Changes were announced in relation to the apprenticeship levy. Up to 25% of the apprenticeship levy will be able to be invested from April 2019 to support the training of apprentices. The “co-investment rate” will be reduced for smaller employers to 5%.
Class 1A National Insurance contributions
Class 1A National Insurance contributions on termination payments over £30,000 has been delayed until April 2020. Originally this was expected to come into force in April 2019.
Changes to IR35
The Chancellor announced that the IR35 “off payroll rules” will be extended to the private sector from April 2020 – See page 42 of the print version of the Red Book in the link below. This will bring the private sector in line with the public sector following a consultation earlier this year. This was expected as it had been indicated in the government’s Autumn budget in 2017.
More details and guidance are expected to follow. The rules will only apply to large and medium-sized businesses, with the existing IR35 rules still continuing to apply to small businesses. See https://www.gov.uk/government/publications/budget-2018-documents
Get in touch
If you need any further advice, please do get in contact. Call Philomena Price, Director and Employment Law Solicitor at Spratt Endicott Solicitors on 01295 204147, or email email@example.com.
*Disclaimer: While everything has been done to ensure the accuracy of the contents of this article, it is a general guide only. It is not comprehensive and does not constitute legal advice. Specific legal advice should be sought in relation to the particular facts of a given situation.