Budget 2017 – Employment Taxes

NIC reforms

Nothing new was announced on employment taxes as such but a reform to NIC was announced to “enhance the fairness of the tax system”.  As expected, given the increasing numbers of self employed individuals compared to employees, Philip Hammond made much of the fact that there is a large difference between the tax and NIC paid by an employee compared with that paid by a self employed person.  So the rates of Class 4 self employed NIC will rise from April 2018.  (See our NIC section for details).

Off payroll working in the public sector

Those who are affected will be well aware of the public sector changes to working through a personal service company from 6 April 2017.  No mention was made of this in the speech but the technical notes confirm that the change is going ahead.

Childcare

The new tax free childcare will be introduced from April 2017 after previous delays. This  will allow working families across the UK to receive up to £2,000 a year towards the cost of childcare for each child under 12. The scheme will be rolled out to all eligible parents by the end of the year. It replaces the current childcare voucher scheme and is open to both employees and the self employed.

Salary sacrifice

As announced in the Autumn Statement, Finance Bill 2017 will introduce legislation to remove Income Tax and employer National Insurance contributions advantages where benefits in kind are provided through salary sacrifice (subject to transitional rules for some arrangements). The changes have effect from 6 April 2017.


Disguised remuneration crackdown

As announced at Budget 2016, HMRC are committed to tackling the use of disguised remuneration schemes.  A variety of measures preventing the use of various schemes will have effect from 6 April 2017.  Legislation will be also introduced to prevent employers claiming a deduction when computing their taxable profits for contributions to a disguised remuneration scheme unless Income Tax and NICs are paid within a specified period. This will have effect for contributions made on or after 1 April 2017 (for Corporation Tax purposes) or 6 April 2017 (for Income Tax purposes).

 

<Nov 2017>
MTWTFSS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
17
18
19
20
21
22
23
24
25
26
27
28
29
30

Nov 19

No events today
I advised people last year to join Dodd & Co to undertake there accounts on the back of the service I receive. They are also extremely happy with the service you are providing, which shows you what a good job Andrew and his team are doing.
-- Adam Mawson