On 3 December 2014 the Chancellor, George Osborne, delivered his annual Autumn Statement. There was no big HR/Employment law Christmas presents, but there were a few changes affecting income tax and NICs which are worth sharing:
- Income tax allowances: The personal allowance for those born after 5 April 1948 will increase to £10,600 and the higher rate threshold will increase to £42,385 for 2015-16.
- Employer NICs to be abolished for young apprentices: with effect from 6 April 2016, no employers’ national insurance contributions will be payable on earnings below the upper earnings limit paid to apprentices who are under the age of 25.
- Umbrella companies and other employment intermediaries: The Government is currently carrying out an ongoing review of employment status and the use of employment intermediaries. As part of this review, the Government is planning to publish a discussion paper shortly to seek to restrict the use of such companies and intermediaries which currently enable workers to obtain tax relief on home to work travel to which they would not otherwise be entitled.
- Simplification of taxation of employee benefits and expenses: The Government is to implement the Office of Tax Simplification’s recommendations to simplify the taxation of employee benefits and expenses. It is expected that relevant provisions will be included in the Finance Bill 2015.