The Minimum Wage will increase on 1 April 2017 as follows:
- the rate for workers over 25 years old rises to £7.50 per hour;
- the rate for workers aged 21 to 24 rises to £7.05 per hour;
- the rate for workers aged 18 to 20 rises to £5.60 per hour;
- the young workers rate (non-apprentices aged under 18 but above compulsory school age) rises to £4.05 per hour; and
- the apprenticeship rate rises to £3.50 per hour.
Salary-sacrifice schemes significantly restricted
From 6 April 2017, many tax savings benefits through salary-sacrifice schemes will be abolished. However, this is delayed for schemes in place prior to April 2017 until April 2018, while arrangements related to cars, accommodation and school fees will be protected until April 2021. This does not affect schemes related to pension savings (including pensions advice), childcare, cycle-to-work and ultra-low emission cars which remain intact.
Statutory allowances increase from April 2017
The increases to statutory allowances from April are as follows:
- the weekly rate of statutory sick pay (SSP) will be increased to £89.35;
- the weekly rate of statutory maternity pay (SMP) and (maternity allowance) will be increased to £140.98;
- the weekly rate of statutory paternity pay (SPP) will be increased to £140.98;
- the weekly rate of statutory shared parental pay (ShPP) will be increased £140.98; and
- the weekly rate of statutory adoption pay (SAP) will be increased to £140.98.
Expected to come into effect from 6 April 2017, and subject to certain thresholds and exemptions, companies with an annual payroll of more than £3 million will have to pay an apprenticeship levy of 0.5 per cent of their NIC pay bill for a tax year less an annual allowance of £15,000.
Gender pay gap reporting
The Equality Act 2010 (Gender Pay Gap Reporting) Regulations 2017 come into force on 31 March 2017. It will require employers with 250 or more employees to publish gender pay gap information on their websites as well as uploading the information to a government website. The first reports are due on 30 March 2018 and every four years thereafter.
Rights of Sunday shop workers
Rights will be enhanced to include a new right for shop workers to object to working more than their normal hours on a Sunday, and a reduction in the notice period for shop workers in large shops to opt out of Sunday working. A start date has yet to be published.
Tax-free childcare scheme comes into force
Provided both parents work and each parent earns less than £100,000 per year, with a minimum weekly income equivalent to 16 hours at the rate of the national minimum wage at least, the government will pay 20 per cent of their yearly childcare costs (capped at £2,000 for each child).
The scheme will apply to parents with children aged under 12. The government has said that the scheme will be introduced in early 2017.
Employment tribunal awards increase
The new tribunal compensation limits which will take effect on 6 April 2017.
The year ahead
It is likely that childcare for three and four year olds will be double from 15 to 30 hours per week from September 2017.
From April 2018, all pay in lieu of notice payments (PILON) will be subject to normal PAYE deductions even if it amounts to a breach of contract. Currently PILON’s can be paid tax free if paid in breach of contract.