This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our privacy policy for more information on the cookies we use and how to delete or block them.
Article:

Employment taxes Budget round-up

29 November 2017

Following a plethora of employment tax changes in recent Budgets, it was welcome news that there were few major announcements in the Chancellor’s first Autumn Budget. However, as well as the proposed consultations on off-payroll labour and employment status there were some important changes buried in the detail of the Budget papers.

 

Benefits and expenses

There will be increases to the benefit in kind charges for both vans and cars. Fuel benefit charges will increase by RPI for 2018/19 onwards. The multiplier for the car fuel benefit charge will rise to £23,400 while for vans, the charge will move to £633. The van benefit charge will also increase by RPI from 6 April 2018 to £3,350.

For the car benefit charge, the Government has clarified which CO2 figures compatible with the existing test (the ‘New European Driving Cycle’ test) must be used until April 2020. The current legislation is unclear and has created uncertainty following the introduction of a new emissions test in September 2017. The appropriate percentage of car list prices have not changed from those announced in Spring 2017 but the diesel supplement will rise to 4% from April 2018 for diesel cars that do not meet the Real Driving Emissions Step 2 standard.

As well as providing extra government funding for charging stations for electric vehicles, the Chancellor confirmed that from April 2018, there will be no benefit in kind charge on electricity provided by employers when employees charge their electric vehicles at work.

An income tax and NICs exemption will be introduced for certain allowances paid to Armed Forces personnel for renting or maintaining accommodation in the UK private market.

From April 2019, employers will no longer have to check receipts when reimbursing employees for subsistence using benchmark scale rates. It was also announced that HMRC will work with external stakeholders to improve its guidance on employee expenses, particularly on travel and subsistence and for claiming tax relief on non-reimbursed employment expenses.

 

Training

During 2018, the Government will consult on extending the scope of tax relief currently available to employees who pay for their own work-related training. Despite discussion of relaxing the Apprenticeship levy rules so that a company could spend levy funds on training apprentices in other firms in its supply chain all the Government announced was that it will “continue to work with employers on how the apprenticeship levy can be spent”.  

As part of its housebuilding package, the Government intends to support the construction industry by investing £34 million to scale up innovative training models across the country; it will also make construction skills a focus for the National Retraining Scheme.

 

Minimum/living wage rate increases

Worker age

Apprentices

Under 18

18-20

21 -24

25 and over

Hourly rate from 1 April 2017

£3.50

£4.05

£5.60

£7.05

£7.50

Hourly rate from 1 April 2018

£3.70

£4.20

£5.90

£7.38

£7.83

 

Read our full Budget analysis.

 

Employer Essentials index