Employment-related Budget news


Aspirations to "end low pay" and rises to the national living wage.

The government has announced that it will increase the national living wage (NLW) by 4.9% from £7.83 to £8.21 from April 2019, as well as continuing the new enterprise allowance (NEA) from April 2019 onwards. It has also outlined aspirations to end low pay.

The government has accepted all the Low Pay Commission's recommendations for the NMW rates to apply from April 2019:

  • The rate for 21 to 24-year-olds will increase from £7.38 to £7.70 per hour
  • The rate for 18 to 20-year-olds will increase from £5.90 to £6.15 per hour
  • The rate for 16 to 17-year-olds will increase from £4.20 to £4.35 per hour
  • The rate for apprentices will increase from £3.70 to £3.90 per hour

IR35 to be extended to the private sector

Since 6 April 2017 responsibility for operating off-payroll working rules, and deducting income tax, has been the responsibility of the relevant public sector body, or agency or third party supplying workers to public authorities.

In order to bring private sector organisations in line with public sector bodies and agencies, the government will reform the off-payroll working rules (IR35) in the private sector. This follows consultation, and IR35 will begin to apply to the private sector from April 2020 and will only apply to large and medium-sized businesses.

Personal allowances

The government has confirmed that the income tax personal allowance will be increased from £11,850 to £12,500 from April 2019. The higher rate tax band will change at the same time from £46,351 to £50,000.


The government will introduce a package of reforms to strengthen the role of employers in the apprenticeship programme, including making up to £450 million available to enable levy-paying employers to transfer up to 25% of their funds to pay for apprenticeship training in their supply chains.

Legislating the existing tax treatment of expenses for unpaid office holders

The government will legislate in the Finance Bill 2020 so that expenses paid or reimbursed to unpaid office-holders are exempt from income tax when incurred because of their voluntary duties.

This article is taken from HR Law - November 2018.


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