Now Jeremy Hunt has presented his autumn statement to Parliament, what do the planned tax rises and spending cuts mean for UK businesses?
The chancellor has announced several changes for the economy. Some will come into effect next year and others will be rolled out at a later date.
What’s in store for the coming year? Here are some key changes to be aware of…
1. National living wage will rise
From 1st April, national living wage will rise by a whopping 9.7%.
The new national minimum wage rates for UK workers will be:
- 23+ year olds - £10.42
- 21-22 year olds - £10.18
- 18-20 year olds - £7.49
- 16-17 year olds - £5.28
- Apprentices (aged under 19 or over 19 and in the first year) £5.28
So if you pay your staff on say 6th, you’d need to start paying their new rate from 6 April onwards.
Even if you already pay above these rates, keep an eye on any overtime. If staff work longer than usual, their average hourly pay could fall below the new legal minimum.
Plus, consider whether you deduct any costs – like uniform costs – from employee wages. And if you do, make sure you don’t slip under the minimum requirement.
2. More support for those out of work
Jeremy Hunt has vowed to knuckle down on benefit fraud and help those who have left the workforce to land another a job.
Since the pandemic, there’s been a surge of unemployment amongst the over-50s. That’s why now more than ever, it’s important to offer support where possible.
You could help by:
- allowing flexible working – to help parents, carers, and older workers manage their work-life balance
- addressing age discrimination in recruitment and beyond
3. National insurance is staying the same
The national insurance threshold is frozen until 2028. This may lead to rising business costs over the coming years as pay inflation brings more people over the threshold.
So, we might see an increase in workers wanting to reduce their hours to avoid paying higher taxes.
4. Energy bill relief until March 2023
The Energy Bill Relief Scheme means businesses will be paying less on their energy bills until March. From then, there will be a review, and the businesses most in need will be able to continue to receive support.
This scheme applies to:
- Businesses
- Charities
- Public sector organisations, like schools and hospitals
How should I prepare?
For some, rising national living wage will be good news. For others, the updates will bring a lot financial hardship.
It’s important to implement any changes in line with the law and update your payroll teams.
And as the cost of living crisis looms on, now is also a good time to consider how you can promote financial wellbeing in your workplace. You might be in a position where you have to make tough decisions for the sake of your business. If so, it’s important to take steps to support yourself and your workers at this difficult time. You can discover tips on how to save business costs here.
And, if as a final resort, you are considering making redundancies, get in touch for expert advice, so you can protect yourself from risk.
To speak to a HR professional today, call 0800 028 2420
