How will the Autumn Budget 2017 impact pay and benefits?

Philip-Hammond-Autumn Budget 2017

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‚Äôs 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.