The following employment-related tax changes were announced by Philip Hammond in the Autumn Statement on 23 November:
Termination payments – with effect from April 2018 employer NICs will be payable on payments above £30,000 (but not employee NICs). The £30,000 exemption from income tax and NICs will be retained. However, the Government appears to have dropped the controversial proposal to tax certain “post-employment” and “expected bonus” payments as earnings, confirming that income tax will only be applied to the equivalent of an employee’s basic pay if their notice is not worked out.
Salary sacrifice – as predicted, the Government has confirmed that it will limit the benefits that attract tax and NICs advantages when provided as part of a salary sacrifice arrangement. The benefits that will continue to benefit from relief through salary sacrifice will be:
• Enhanced employer pension contributions to registered pensions schemes (and pensions advice).
• Childcare benefits (employer-supported childcare and provision of workplace nurseries).
• Cycles and cyclists’ safety equipment provided under the cycle to work scheme.
• Ultra-low emission cars.
The new rules will come into effect in April 2017. However, arrangements in place before that date will be protected until April 2018.
Employee shareholder status ESS) – the income tax and CGT reliefs associated with ESS will be abolished for ESS shares acquired in consideration of an ESS agreement made on or after 1 December 2016. For ESS arrangements entered into before 1 December 2016, the tax advantages will continue to apply. The Government has noted that the measures to remove ESS tax advantages are in response to evidence that ESS was being used for tax planning rather than the purpose for which it was originally set up. “At the earliest opportunity”, ESS will be withdrawn completely.
Following the recent decision of the Employment Tribunal in the Uber case (see our full article here), the Commons Select Committee on Business, Energy and Industrial Strategy has launched an inquiry into the future world of work, looking in particular at the status and rights of agency workers, the self-employed, and those working in the ‘gig economy’. For more information about the consultation please see here.
HMCTS has confirmed that Employment Tribunal decisions will be made publicly available in a new online database, due to go live at the end of 2016 or in early 2017. Decisions made before the commencement of the new system can be ordered by post in the usual way, but there are no current plans to add them to the database.