Below, we summarise the key points to come out of the Autumn Budget which affect employers.
The details of the previously leaked increases to National Living/Minimum Wage rates with effect from 1 April 2022 were confirmed in the Autumn Budget, with increases ranging between 4.1% and 11.9% across the different age groups.
The biggest winners were apprentices (under 19 or in their first year of apprenticeship) and also 21 and 22 year-olds. The revised hourly rates will be as follows from 1 April:
| Age range | National Living/Minimum Wage rates (£) |
|---|---|
| Apprentices | 4.81 |
| 16 – 17 years old | 4.81 |
| 18 – 20 years old | 6.83 |
| 21 – 22 years old | 9.18 |
| 23 years + | 9.50 |
The National Minimum Wage (NMW) ‘accommodation offset’ for employer provided accommodation has also been increased by 4.1% to £8.70 per day.
This inflation-bursting increase is a positive measure for employees, although this will be tempered by the introduction of the new Health and Social Care Levy of 1.25% from 6 April 2022 which was announced in September. The increase in National Living/Minimum Wage rates may not be such welcome news for employers, however, particularly as this coincides with the introduction of the employer Health and Social Care Levy contribution of an additional 1.25% of payroll earnings. The biggest challenge for many employers with the minimum wage rates being pushed ever higher is that this then puts pressure to increase wages across the entire workforce to maintain pay differentials between the different grades.
All other tax related measures affecting employers and employees were relatively low-key, namely:
- Inflationary increases to the car fuel, van, and van fuel benefit in kind charges from 6 April 2022
- Confirmation that company car tax emission bands will be frozen until 2024/25
- Pension top-ups to be introduced to the lowest paid employees for contributions paid from April 2024, producing a benefit of up to £53 a year to affected employees
- A new Scale-Up Visa scheme in Spring 2022 and new Global Talent Networks set up next year in the US and India, all of which are designed to make it easier for employers to attract talented workers from abroad.
