Chancellor George Osborne delivered the 2015 Autumn Statement and Spending Review on 25 November, which included announcements that will impact the future of employee benefits.
Pensions
The next two phases of minimum pension contribution rate increases under auto-enrolment are to be pushed back to coincide with the tax year. The minimum contribution rate for employers was scheduled to rise to 2% from October 2017 and 3% from October 2018, but these increases will now come into effect from April 2018 and April 2019, respectively.
The government will maintain the triple lock, with the basic state pension rising to £119.30 a week from April 2016. The single-tier pension rate has been set at £155.65 a week, which will be available to those reaching pensionable age from April 2016.
The government confirmed that it is to remove the barriers to creating a market for secondary annuities to allow individuals to sell on their existing annuity income stream.
Tax-free childcare
The upper income limit for parents to take advantage of the government’s new tax-free childcare scheme is to be lowered from £150,000 to £100,000 a year.
Salary sacrifice
The government will continue to consider what action, if any, will be taken around salary sacrifice arrangements. It will gather evidence, including from employers, to inform its approach.
Company cars
The government will retain the diesel supplement in company car tax. There will be a three-percentage-point differential between diesel cars and petrol cars from April 2016 to 2021 when EU-wide testing procedures will ensure new diesel cars meet air-quality standards under strict real-world driving conditions.
Employee share schemes
The Finance Bill 2016 will introduce measures to simplify tax rules for employee share schemes. These technical changes aim to streamline and simplify aspects of the tax rules for tax-advantaged and non-tax-advantaged employee share schemes.
Sickness absence
The government will undertake a review of sickness absence in the public sector. It will subsequently consult on how to best reduce the impact of sickness absence on public service delivery, and will consider legislation where necessary.
