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Autumn Statement 2016 and payroll

Here’s Biznus Payroll’s round-up of the key Autumn Statement announcements that affect payroll.

Personal Allowance

The Personal Allowance – the amount that can be earned before tax has to be paid – will increase to £11,500 in April 2017. The higher rate threshold will rise to £45,000.

Wages

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

And the National Minimum Wage will also increase

National Minimum Wage increases
21 to 24-year oldsfrom £6.95 per hour to £7.05
18 to 20-year oldsfrom £5.55 per hour to £5.60
16 to 17-year oldsfrom £4.00 per hour to £4.05
Apprenticesfrom £3.40 per hour to £3.50

The Government will invest an additional £4.3 million a year to crack down on employers breaking the law by paying less than the minimum wage.

National Insurance

Employee and employer National Insurance thresholds are to be equalised at £157 per week from April 2017.

The Lower Earnings Limit increases from £112 to £113 and the Upper Earnings Limits increases from £827 to £866 per week.

Salary sacrifice

Tax savings on salary sacrifice and benefits in kind are to be stopped from April 2017, with the exception of ultra-low emission cars, pensions, childcare and Cycle to Work schemes.

Arrangements put in place before April 2017 will be protected until April 2018 and arrangements for cars, accommodation and school fees will be protected until April 2021.

Tax-free childcare

The government confirmed that Tax-Free Childcare will be introduced gradually from early 2017.

Autumn Statement 2016 summary