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What Your Business Needs to Know About the Autumn Statement

Friday, November 25, 2016
Chancellor Philip Hammond recently delivered his Autumn Statement – find out what’s changing, and how it could impact your business.

There has been mixed responses so far regarding Chancellor Philip Hammond’s Autumn Statement of 2016, so we thought we’d summarise what we believe to be some of the most important changes for employers so you can decide for yourselves whether this is beneficial or not. If you’d like to view the full Statement then you can find it here, at the GOV.UK website.

1. A Rise in the National Living Wage
If you read our last article on the Minimum Wage then you’ll already know that the National Living Wage is set to change every April. In the coming year we see the National Living Wage for people over the age of 25 go from £7.20 to £7.50.
This obviously leads to increased cost for employers, and the Government is investing £4.3m per year to ensure that the National Minimum (for over 25’s the National Living) Wage is being paid to employees. Hammond also announced that they will be providing additional support for small organisations due to various cost increases highlighted in the Autumn Statement.

2. The National Productivity Investment Fund
A £23 billion investment from 2017/18 to 2021/22 is being made to spend on areas that are critical for a higher productivity. These include accelerating the housing supply, tackling congestion and investment in Research & Design and digital communications.

3. Limiting options for salary sacrifice
Hammond described the difference in tax paid on a cash salary compared to tax paid with benefits-in-kind as “unfair”. Therefore to broaden the tax base and promote fairness the options for salary sacrifice have been restricted to childcare vouchers, ultra low emission vehicles and cycle to work schemes.

4. Thresholds for employees and employers National Insurance has been aligned
The current threshold (as of November 2016) for National Insurance is £155 for employees and £156 for employers. This will change to £157 for both groups in April 2017.
This simplifies National Insurance payments for employers but does also lead to a slight increase in costs, although the Treasury claims that the increased cost will be no more than £7.18 per employee per year.

5. Doubling UK Export Finance (UKEF) capacity
The Government will be making a few changes to ensure that no viable UK export fails due to lack of finance or insurance from UKEF. A couple ways that they intend to do this is by increasing the capacity for support in individual markets by up to 100%, and increasing the number of pre-approved currencies that UKEF can offer from 10 to 40, enabling more overseas buyers to pay in their own currency.

If you’d like a more in depth analysis of what the Autumn Statement means for businesses check out People Management’s article on what employers need to know.

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