Business Changes Afoot in April 2018
National Living Wage and National Minimum Wage rates to increase
From 1 April 2018, the national living wage for employees aged 25 and over will increase to £7.83 per hour. The national minimum wage will increase to £7.38 per hour for workers aged 21-24, and to £5.90 an hour for workers aged 18-20. For workers who are aged 16-17, this will rise to £4.20 per hour, and for apprentices, the rate will rise to £3.70 an hour.
Dividend Allowance set to reduce
On 6 April 2018 the Dividend Allowance will reduce from £5,000 to £2,000 following the Chancellor of the Exchequer Philip Hammond’s decision to cut the Dividend Allowance in the 2017 Budget. The stated aim is to ‘address the unfairness associated with director-shareholders’ tax advantage’.
Increase in employers’ minimum auto-enrolment contributions
Currently the pension auto-enrolment legislation requires employers to contribute at least 1% on qualifying earnings. From 6 April 2018, employers may be required to increase the contribution they pay into their automatic enrolment workplace pension scheme.
Affected employers will be required to pay a minimum of 2% from this time, with a further increase to 3% set to take place from 6 April 2019. If the employer pays the same as the minimum total contribution then the member of staff will not need to pay any contributions, unless the scheme rules require a contribution.
If you would like to know how these changes will impact your business, please do not hesitate to get in touch with us on 01484 685413 or email email@example.com