Budget 2016

This year’s Budget was delivered on 16 March 2016. The key points from an employment law perspective are as follows:

  • The government has confirmed its intention to extend shared parental leave to working grandparents. A consultation will be launched in May, which will also cover simplification of the existing regime.
  • The government will be considering whether to restrict the benefits that employers can offer through salary sacrifice schemes, due to a concern about their growing prevalence. Enhanced employer pension contributions, childcare benefits, and health-related benefits (e.g. the Cycle to Work scheme) will not be affected.
  • Employers paying the apprenticeship levy will receive a government payment equal to 10% of their monthly contributions, which they can invest in further training for apprentices.
  • From April 2018, termination payments that are subject to income tax on amounts in excess of £30,000 will also be subject to employer NICs (but the £30,000 exemption from income tax will remain, and the whole termination payment will remain outside the scope of employee NICs). Legislation will also be introduced to clarify the taxation of PILONs and damages payments, following a consultation to be carried out during summer 2016. The intention is to prevent manipulation of the £30,000 exemption.

Advertising guidance

The Equality and Human Rights Commission has published new materials for organisations who advertise jobs or services: guidancechecklistFAQs.

Minimum Wage

The following hourly rates of national minimum wage will apply from 1 October 2016:

  • 25+: £7.20 effective 1 April 2016 (the National Living Wage). This will not change in October.
  • 21 - 24: up 3.7% to £6.95.
  • 18 - 20: up 4.7% to £5.55.
  • <18: up 3.4% to £4.00.
  • Apprentices: up 3% to £3.40.