Taxes, childcare and wages: what’s changing in 2017?
It’s fair to say that 2016 was a pretty eventful year. There were plenty of world events that set the stage for big changes that will only begin to play out this year. 2017 marks a year of fresh approaches where a number of amendments to UK policy and law will come to a head, affecting large swathes of workers and business owners in the process.
Here’s a quick guide to highlight some of the new laws that are coming into effect during the next 12 months, from tax and wages to childcare and apprenticeships, which workers and businesses need to know.
The National Living Wage will rise this April
During the 2016 Autumn Statement, Chancellor Philip Hammond announced the next wave of changes to the UK National Living Wage which will take effect this April. The National Living Wage will rise by 4% from £7.20 to £7.50 on 1 April for over 25s. This will be a flat rate across the country so London workers will not receive a higher band of pay.
A new levy will be placed upon big businesses from April as part of an ongoing effort to increase the number of apprenticeship places across the UK. It’s hoped that around £3bn will be raised to create 3 million places from businesses with an annual salary bill of more than £3 million – less than 2% of all UK employers. The money raised will be given to businesses to offer apprenticeships and training for over 16-year-olds.
There are also government funding options for organisations with fewer than 50 employees. Click here to find out more.
30 hours of free childcare is coming this September
If all goes to plan, parents in England and Wales will enjoy 30 hours of government funded childcare from September. The scheme will be rolled out across the country for three and four-year-olds before making the transition to school. To be eligible, you’ll have to work more than 16 hours per week, and earn less than £100,000 a year.
Nurseries can choose to opt out of the scheme if they come under financial strain, which may make finding a nursery in the scheme more challenging.
Child tax credits are changing
Last year, the then Chancellor George Osborne announced that families will no longer receive financial help for more than two children. Existing claimants will still be able to claim for a third child or more, but anyone who has a third child or more after April 6 this year will not be able to receive additional tax credits for the extra child or children.
The next staging date for workplace pensions will be rolled out
The majority of UK businesses will be signed up to a workplace pension scheme by the end of the year. Deadlines and staging dates will come into force between February and November, and will be split depending on employee count of PAYE number.
Due to a delay in some of the increases in employer contributions, a 2% minimum is now due in April 2018, with the 3% minimum pushed back until April 2019.
Travelling to work may become more expensive
We know that rail commuters will be hit by another fare increase this year, but those who travel to work by car could also be hit, too. From April, all electric cars will be exempt from paying UK road tax, while every other vehicle will be charged based on CO2 emissions, which could result in hikes for some car owners. However, it only applies to new cars bought after April so if you already own a car you won’t experience any change.
Statutory pay is increasing
Statutory pay at work is increasing – the first time rates have risen since 2015. Maternity pay, paternity pay and statutory shared parental pay will increase to £140.98 - or 90% of average weekly earnings, whichever is less. Adoption pay will also increase to the same rate.
Statutory sick pay is also set to increase from £88.45 per week to £89.35 per week. All changes will come into force this April.
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