The full budget statement can be read by clicking this link. In this article, we have attempted to pick out pertinent points that would be of interest to small employers. Note that the information and links below are correct at the time of writing.
Personal tax-free allowance
The government announced in the 2014 budget that the personal allowance would increase to £10,500 from April 2015. The Chancellor increased this by £100 so that the personal allowance will now be £10,600 from April 2015. The full increase, which has been restricted in recent years will be passed on to higher rate taxpayers, so that the point at which higher rate income tax is paid will increase from £41,865 in 2014/15 to £42,385 in 2015/16. This means a basic rate taxpayer will be £120 better off from April 2015.
Employers are able to claim Employment Allowance to reduce the amount of Employers’ National Insurance Contributions (NIC) by up to £2,000. This has excluded people employing domestic workers, including care and support workers. From April 2015, Employment Allowance will be made available to households that employ care and support workers. This means, for example, that a family will be able to employ a care worker on a salary of up to £22,500 without needing to pay Employers’ NIC.
The Pay Pod will claim Employment Allowance automatically for all our clients, where applicable.
Employing young people
From 6 April 2015, Employers’ NIC will not be charged on the earnings of under 21s up to the Upper Earnings Limit for NIC, which will be £815 per week from April 2015. The Chancellor announced that the exemption from Employers’ NIC would be extended to any person under the age of 25 who is engaged as an apprentice from 6 April 2016. This will significantly reduce the costs of employing young apprentices.
The Pay Pod can manage your payroll and auto-enrolment allowing you to manage your business.
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