Autumn 2018 Budget – Key Take-Homes for Employers and Candidates
The last budget before Brexit has come and gone – and the dust is finally settled. Philip Hammond proclaimed the end to austerity, promised more money for the NHS, took measures to address the housing crisis and announced a few changes to welfare.
But what was in it for employers and employees? In this post, we take a look at some of the key points from the budget, and explore the impact they will have on businesses and employment in the UK.
Wages Set to Rise
It was good news for employees – with both the National Minimum Wage and National Living Wage set to rise at a rate above that of inflation. Of course, this does mean that many businesses will have to pay their employees more, increasing personnel costs.
The increases will come in on 6th April 2019, and are as follows.
For workers over 25, the National Living Wage will go up from £7.83 to £8.21 an hour.
The National Minimum Wage will also increase across the board:
Apprentices will also see an increase in their earnings, from £3.70 to £3.90 an hour.
There is more positive news for low earners on the horizon, as the government looks set to increase the National Living Wage to £9 an hour by 2020.
Tax Cuts for Everyone
There was more good news for employees, with tax cuts announced for everyone.
From April 2019, the personal allowance (the amount you can earn before paying income tax) is going up £700 to £12,500 a year. We’re also set to see an increase for high paid workers, with the higher tax threshold rate being increased significantly to £50,000.
Ultimately, this should lead to people having more money to spend. For basic rate taxpayers, it should provide an annual boost of around £130. Higher rate taxpayers will benefit to the tune of £860 per year, with an extra £600 for top rate taxpayers.
However, changes to the National Insurance system will reduce the gains for higher and top rate taxpayers.
Universal Credit Payments – Work Allowance Increased
Philip Hammond also announced some changes to the Universal Credit Payment system – with a boost for working families that receive benefits.
The work allowance (the set amount families can earn before universal credit is reduced) will be increasing by £1000 each year:
Once the work allowance is exceeded, the universal credit will be reduced at the current rate (63p for every £1 earned.) In practice, this should provide a yearly boost of up to £630.
A Small Business Boost
Small businesses could reap a saving of up to £8,000 – thanks to a cut in business rates. Independent businesses with a rateable value under £51,000 will pay a third less than they are currently over a two-year period.
There was another (minor) boost for small businesses – who will now only have to pay 5% towards the apprenticeship levy (the cost of training an apprentice.) This is down from 10%.
Business Tax Changes
There were a couple of new taxes announced in the budget – including a green tax on companies manufacturing plastic that uses less than 30% recycled material. The expected tax on plastic cups was not introduced.
The other major tax announcement was the UK Digital Services Tax. This will be levied on profitable companies with global sales of more than £500m, at a rate of 2% on UK revenues from April 2020. This is aimed at major multinational tech companies, such as Amazon, Google and Facebook – and isn’t likely to affect many UK companies.
Other tax changes included:
Matching the right people to the right opportunities
Looking for a job? Want a step forward in your career? Need to find talented personnel with the skills, experience and personality to match your business? At Prestige Recruitment, we’re here to help – matching the right people with opportunities in businesses across Yorkshire, Nottinghamshire and Norfolk.