Employment: Autumn Budget 2017 - what does this mean for employers
For employers the headline points were:
- A pledge to keep under review the flexibility that Levy-paying employers have in spending the Apprenticeship Levy. The Chancellor praised the progress made in creating 3 million apprenticeships by 2020 thanks to the Apprenticeship Levy and also announced the investment of a further £20 million to support Further Education Colleges prepare for T-Levels.
- An increase in the National Living Wage by 4.4% in April 2018 from £7.50 per hour to £7.83 per hour. He said this will amount to a £600 increase for a full time worker on the National Living Wage (NLW) and amounts to a £2,000-a-year increase for such workers since it was introduced. Including the income tax changes in recent years, this is said to benefit full time workers on the National Living Wage by an extra £3,800 per year.
- An acceptance of the Low Pay Commission's recommended increases to the National Minimum Wage (NMW) (for workers under 25). These will increase:
- from £7.05 to £7.38 for 21-24 year olds
- from £5.60 to £5.90 for 18-20 year olds
- from £4.05 to £4.20 for 16-17 year olds
- from £3.50 to £3.70 for apprentices aged under 19 or in the first year of their apprenticeship. The Chancellor said this would represent the largest increase in youth rates in 10 years.
- Of course, these increases to the NLW and the NMW (which are now aligned to increase at the same time each April) will also cost employers more since the minimum employer contribution for auto-enrolment is also set to increase from the current 1% to 2% from 6 April 2018, and then to 3% from 6 April 2019.
- An increase in the Personal Allowance to £11,850 in April 2018 (up from £11,500), and the higher rate income tax threshold will increase to £46,350 (up from 45,000).
- A National Retraining Partnership, in conjunction with the CBI and the TUC, which would help retraining during working lives especially to boost digital skills and to help expand skills in the construction sector.
Our article on what the budget means for employers can be viewed here.