On November 23, Chancellor Philip Hammond delivered the 2016 Autumn Statement which included a number of announcements of relevance to Watford employers, and local employees as follows: From April 2017:

  • Income tax threshold will be raised to £11,500; n National living wage will rise to £7.50 an hour;
  • Tax advantages on salary sacrifice and benefit schemes will be removed (with the exception of in respect of pensions, childcare, Cycle to Work and ultra-low emission cars). Arrangements in place before April 2017 will be protected until April 2018 or April 2021 depending on the nature of the scheme;
  • National Insurance contribution (NIC) thresholds will align so both employers and employees will pay NIC on weekly earnings over £157;
  • The responsibility for paying the correct tax on payments by public sector engagers to workers supplied by personal service companies will be moved to the engaging body; and
  • All employees called on to give evidence in court will no longer be liable to tax on legal support from their employer.

There will also be big changes to how termination payments are taxed. From April 2018, employees’ basic pay in respect of their notice period will be liable to income tax and NI deductions. This will apply whether people work out their notice or are paid in lieu and is regardless of the terms of their contract.

The Government has also announced plans to beef-up enforcement of the minimum wage.

This is for guidance only. We recommend that you take legal advice for your circumstances.