National Minimum Wage and National Living Wage
As announced in the Autumn Statement 2016, the National Minimum Wage (NMW) and the National Living Wage (NLW) will increase from April 2017. The government accepted all of the Low Pay Commission’s recommendations for the NMW, and the new hourly rates are outlined below.
| Apprentices | 16 and 17 | 18 – 20 | 21 – 24 | 25 and over | |
| National Minimum Wage | £3.50 | £4.05 | £5.60 | £7.05 | – |
| National Living Wage | – | – | – | – | £7.50 |
*Under 19, or 19 or over and in the first year of their apprenticeship.
The government has now aligned the NMW and NLW cycles so that any future increases in rates will occur in April each year.
Salary Sacrifice
As previously announced, income tax and employer NICs advantages will be removed with effect from 5th April where benefits-in-kind are provided through salary sacrifice or other optional remuneration arrangements. Transitional rules will protect employees who are in contractual arrangements before 6 April 2017 until the earlier of a variation or renewal of the contract or 6 April 2018, except for cars with CO2 emissions above 75 g/km, accommodation and school fees, for which the final date is 6 April 2021.
Employer-provided pensions and pension advice, childcare vouchers, employer-provided childcare and workplace nurseries, cycle to work schemes and ultra-low emissions cars with CO2 emissions not exceeding 75 g/km will be excluded from this measure.
Childcare
A new Tax-Free Childcare scheme will provide up to £2,000 a year in childcare support for each child under 12. Parents will be able to receive up to £4,000 for disabled children up to the age of 17. The scheme is being rolled out gradually from early 2017, starting with parents of the youngest children. All eligible parents will be able to access the scheme by the end of the year.
To qualify for Tax-Free Childcare, parents will have to be in work and each earning at least £115 a week and not more than £100,000 each per year. Unlike the current Employer-Supported Childcare scheme, self-employed parents will also be able to benefit. Parents will need to open an online account, which they can pay into to cover the cost of childcare. For every 80p paid in, the government will then top up the account with an extra 20p.
Later this year working parents in England will also be able to apply for an additional 15 hours of free childcare for three and four-year-olds, bringing the total to 30 hours a week.
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