Chancellor Philip Hammond (pictured) delivered the Autumn Budget speech to the House of Commons on Wednesday 22 October 2017. Below is a summary of the key announcements that could impact employers’ pay and benefits strategies:
- The tax-free personal allowance will increase to £11,850 in April 2018, an increase of £350 from the current allowance of £11,500.
- The higher-rate tax threshold of 40% will also rise from £45,000 to £46,300 from April 2018, and will apply to anyone earning under the £100,000 tax threshold.
- The existing company car tax diesel supplement will increase from 3% to 4% in April 2018 This will only apply to diesel cars that do not meet the latest emissions limits.
- Fuel benefit charge and the van benefit charge for company cars will both increase in line with the retail prices index (RPI) from 6 April 2018.
- Employees that charge their electric vehicles at work will not incur a benefit-in-kind charge on the electricity used. The announcement is part of the government’s focus on electric vehicles, which includes a new £400 million charging infrastructure fund, an extra £100 million investment in the plug-in-car grant, and £40 million in charging research and development.
- On the recommendation of the independent Low Pay Commission (LPC), the national living wage will increase by 4.4%, taking the current minimum level of pay for individuals aged 25 and over from £7.50 an hour to £7.83 an hour The LPC estimates the increases to the national living wage will benefit over two million workers.
- The government has announced the introduction of an income tax and national insurance contribution (NIC) exemption for accommodation allowances for Armed Forces personnel.
- The government has announced that tax relief for employer premiums paid into life assurance schemes or certain overseas pension schemes will be modernised from April 2019.
