Throughout the year we have seen several changes to National Insurance, Minimum Wage and benefits through mini budgets, initiatives from the government and demands from the employment sector. With the recent release of the Autumn Statement delivered by the new Chancellor of the Exchequer, Jeremy Hunt, what do the latest announcements mean for the bottom line of employers and employees?
Looking at some of the headlines and it did look bleak with Hunt saying that the economy is in recession, but more is going to be invested in public services such as an extra £2.3billion a year in Education and an increase of £3.3billion towards the NHS. There is of course the ever-growing worry of energy and food prices, however, the Chancellor did reassure us that households and businesses will be supported with extra help next year.
For workers across the board on a variety of salaries and wages, there are some notable changes not only in how much we take home each month but also in how we spend our money heating our homes and filling our cars. Some of the main items of note during the Autumn Statement included:
• The National Living Wage for workers over 23 will rise by 9.7% to £10.42 an hour. This will benefit over two million of the UK’s lowest-paid workers.
• Income tax and inheritance tax will be frozen for a further two years. This extends the current four-year freeze taking it up to April 2028.
• The top income level of £150,000 will be reduced to £125,140.
• The pension triple lock will be reinstated in line with September’s inflation rate of 10.1% and will come into force for the 2023-2024 tax year in April. This takes the state pension to £871 to keep up with inflation.
• If you drive an electric vehicle, from 2023 these will no longer be exempt from vehicle excise duty
For Employers and Companies
From the point of view of employers and companies, the Autumn Statement revealed that:
• Dividend allowances as well as the annual exempt allowance for Capital Gains Tax will be cut. Dividends currently at £2,000 will go down to £1,000 for the 2023/24 tax year, then £500 in 2024/25. Whilst Capital Gains Tax currently at £12,300 will more than half in 2023/24 to £6,000 and then decrease to £3,000 in 2024/25.
• Almost £14billion of tax cuts on business rates will be made, benefiting up to 700,000 companies.
• For smaller employers, the Employment Allowance which lets eligible employers reduce their National Insurance liability will be retained at the higher level of £5,000.
• For certain industries such as gas and oil that pay windfall taxes, on the whole, this will raise £14billion which includes a new temporary levy of 45% on electricity producers.
With ever-changing figures, numbers, cuts and benefits being announced by the government, keep posted to the Omega blog to see how these affect employers and employees in the future.
At Omega we support companies and candidates alike to find their perfect fit. If you’re looking to expand your team or take that step on the career ladder, we can help. Specialising in aviation, engineering, automotive, electronics, defence, scientific, oil and gas, logistics and manufacturing, check out our website for more details.
UK HEAD OFFICE
OmegaHouse,, , Bond'sMill,, Stonehouse,, Gloucester,T: +44 (0) 1453 827333 E: [email protected]
RuadoCavaconº96, , 4400-492VilaNovadeGaia, Porto,,T: +351 22 120 8559 E: [email protected]
Suite1217WestOne,, , 114WellingtonStreet,, , Leeds,T: 0113 203 1420 E: [email protected]