The UK’s main inflation measure in May 2019 was...
November 2017 Budget - an HR synopsis
Summarised below are aspects of the Chancellor’s autumn 2017 budget of interest/relevance to HR.
Productivity, earnings and inflation
- In what the CIPD calls ‘grim reading’, productivity is forecast to remain fat in 2017, before increasing 0.9% in 2018 and 1.0% in 2019.
- Average earnings are expected to grow at 2.3% in 2017, 2018 and 2019.
- CPI inflation is predicted to peak at the end of 2017, averaging 3.0% in the fourth quarter. It is then expected to ease over 2018, reaching 2.0% by the end of 2018.
- The National Living Wage will increase by 4.4% from £7.50 to £7.83 from April 2018.
- Rates for the National Minimum Wage will increase as follows from April 2018:
- rate for 21-24-year-olds increases by 4.7% from £7.05 to £7.38 per hour
- rate for 18-20-year-olds increases by 5.4% from £5.60 to £5.90 per hour
- rate for 16-17-year-olds increases by 3.7% from £4.05 to £4.20 per hour
- apprenticeship rate increases by 5.7% from £3.50 to £3.70 per hour
Tax and NICs
- In 2018-19 the personal allowance will increase to £11,850 and the Higher Rate Threshold will increase to £46,350. See HMRC tables.
- From April 2018, there will be no benefit in kind charge on electricity that employers provide to charge employees’ electric vehicles.
- A consultation looking at non-compliance with the IR35 legislation in the private sector will take place in early 2018. It will ‘take account of the needs of businesses and individuals who would implement any change’ and ‘draw on the experience of the public sector reforms’.
- A ‘discussion paper’ will be published (with no date commitment) as part of the government’s response to the Taylor Review.
Pensions and savings
- The lifetime allowance for pension savings will increase in line with CPI, rising to £1,030,000 for 2018-19.
- From 6 April 2018, employees on maternity and parental leave will be able to take up to a 12-month pause from saving into their Save As You Earn employee share scheme, increased from 6 months currently.
Company car tax
- The fuel benefit charge and the van benefit charge will both increase by RPI from 6 April 2018.
- The existing company car tax diesel supplement will increase from 3% to 4% from 6 April 2018 (see HMRC explanation).
- To boost lifelong learning, a National Retraining Partnership will be set up to help people adapt to the changing needs of the workplace.
- It’ll focus first on short-term action in sectors with skills shortages, initially focussing on construction and digital skills.
- £8.5m will be provided over the next two years to support Unionlearn.