Spring Budget 2017 - 8 measures you should be aware of
Senior Associate, Veale Wasbrough Vizards
Following the government's announcement of the Budget on 8 March 2017, what are the key points of interest for employment practitioners, employers and employees alike?
- The Personal Allowance has increased to £11,500 (a rise of £500 from last year) and the higher rate tax threshold has risen to £45,000.
- It was proposed in the Budget that those who are self-employed would be required to pay a higher rate of National Insurance contributions in order to address the “dramatic increase” in the number of people registering as self-employed but not currently paying enough tax. This proposal has however been scrapped by the Chancellor in a Commons statement this week.
- The Tax-Free Childcare policy, which will provide up to £2,000 towards childcare for each child under 12, will be rolled out to all eligible parents by the end of 2017. From September, working parents with three and four year-olds will have their free childcare entitlement increased to 30 hours per week.
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- The government has pledged £5 million to promote 'returnships' to the public and private sector, which aim to help people return to employment after a career break. Further details will be revealed in due course.
Salary & Salary Sacrifice
- The National Living Wage will increase to £7.50 per hour on 1 April 2017, which is a rise of 30p from this time last year.
- The announcement was confirmed that the Finance Bill 2017 will introduce legislation to remove tax and National Insurance Contribution advantages when certain benefits are provided as part of salary sacrifice arrangements. As the measure is not listed in the table of unchanged measures, it is assumed that at least some changes to the draft Finance Bill 2017 legislation have been made, although no changes are specifically mentioned. The Bill is set to be published on 20 March 2017 and further details will follow.