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Autumn Statement Impact on Small Business Employers

Autumn statement Impact on Small Business Employers

The 2016  Autumn Statement is the first major economic statement from the government since the Brexit vote. To save you time, here is a summary of the main news and information likely to affect small business employers:

Living Wage

The Living Wage will rise from £7.20 to £7.50 from April 2017.

Tax-Free Personal Allowance

The tax-free personal allowance will increase from £11,000 to £12,500 and the higher rate threshold to £50,000, by 2020.

Salary Sacrifice Schemes

Salary sacrifice schemes will be subject to the same tax as cash income from April 2017 (but pensions, childcare, ultra-low emission cars and cycle-to-work schemes will be exempted). Mobile phones, health checks, gym memberships, school fees, accommodation and white goods will no longer be eligible.

Please note: arrangements made before April 2017 will be protected until April 2018, while arrangements for cars, accommodation and school fees will be protected until April 2021. Also, other untaxed benefits, such as where salary is exchanged for extra annual leave or flexible working hours, will not be affected.

Employee Shareholder Status

The tax advantages linked to Employee Shareholder Status will be removed, in response to evidence that they are primarily being used for tax-planning purposes by high-earners.

Free Childcare

The current 15 hours a week of free childcare for all 3 and 4 year olds will be increased to 30 hours for working families from September 2017.

Please note: this extra entitlement only covers 38 weeks of the year and for parents who work more than 16 hours a week.

Rural Rate Relief

The Rural Rate Relief will be increased to 100%, giving small businesses in rural areas a tax break worth up to £2,900 per year.

 

If you would like to be kept informed of future employment law changes and their likely impact on small businesses, please subscribe to my quarterly e-newsletter, which is specifically written for busy owner managers who want a clear and succinct one page summary!

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