Budget – July 2015

The government delivered its first budget on the 8th July 2015 and it contained a number of points that are of importance to employers. The headline news was the introduction of the

National Living Wage aimed at those over 25 years of age and will be more than the National Minimum Wage which remains in place. The National Minimum Wage will increase to £6.70 in the autumn and the aim is for this to reach £8 by 2020. However the first increase in premium with the introduction of the National Living Wage will be 50 pence, increasing the total to £7.20 from April 2016.

Other points of interest concerned

Salary Sacrifice – the government outlined its intention to “actively monitor” the growth of salary sacrifice schemes recognising the increased popularity of these and the consequent cost to the exchequer.

Sunday Trading

The government is to consult on devolving powers on Sunday trading to city mayors and local authorities to give them more say over their local economies. The consultation will look at allowing local government to agree the extension of Sunday trading hours.

Apprenticeships

The government is committed to starting 3 million apprenticeships over the next five years and the funding for this to be put in the hands of employers. To fund the new apprenticeships, the government intends to introduce a levy on large employers. This will be used to support post-16 apprenticeships in England, and provide funding that can be used by individual employers to meet their apprenticeship needs.

Termination Payments

The government intends to consult this summer on simplifying the tax and NICs treatment of termination payments. The OTS made a number of recommendations in its report published in July 2014 relating to termination payments and these included the replacement of the current £30,000 exemption with a new income tax relief that is available in the case of statutory redundancy. To date this recommendation has not been implemented.