After the events of the General Election, we now begin to look at the actions that a Conservative Government wish to take over the next 5 years. Looking at the pre-election Manifesto and Budget pledges, we now have some understanding of the route Cameron is likely to take as Prime Minister and how these changes will affect the payroll and contracting sector. Tax & National Insurance
- It has been said that there will be NO increase in Income Tax and National Insurance.
- Personal Allowance rising to £11,000 in April 2016 with further increases to £12,500 by 2020.
- An increase to the Higher Tax Rate starting salary of £50,000 by 2020 from £41,900.
- Any employee working 30 hours per week on National Minimum Wage will not be required to pay Income Tax.
Employment
- Government to assist small businesses in taking on new workers through Employment Allowance.
- Public Sector companies with more than 250 employees will be required to allow employees up to three paid days to undertake voluntary work (Volunteering Leave).
- Zero Hour Contracts is a hot topic within the Government with exclusivity banned and guidance given to assist with the transparency of terms and rights surrounding Zero Hour Contracts.
- On going work will take place to tackle illegal workers and the exploitation of workers.
- It is thought that three million more apprenticeship opportunities will be created.
Pay
- Once approved by Low Pay Commission, an above-inflation rise on National Minimum Wage is to be supported.
- The disclosure of gender pay gap will be required by companies with over 250 employees.
Pension
- Triple lock on state pension is to be maintained, rising by the highest of prices, earnings or 2.5%.
- Tax relief on pension contributions for additional rate Taxpayers to be reduced, with the annual allowance slowly shrinking from £40,000 to £10,000 for workers earning £150,000 or more.
So let’s watch this space…