The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
The fuel duty rate will remain frozen for the seventh successive year, saving motorists around £130 a year compared to what they would have been paying under the pre-2010 escalator.
National Minimum Wage/National Living Wage
The government has accepted all the recommendations of the Low Pay Commission (LPC) regarding increased minimum wage rates. Following the alignment of the effective date for increases in the National Minimum Wage (NMW) and National Living Wage rates (NLW), all the following rates increase from April 2017: a 30p increase in the rate for over 25 year olds (the National Living Wage) from £7.20 to £7.50 per hour (equivalent to a 4.2% annual increase) a 10p increase in the rate for 21 to 24 year olds from £6.95 to £7.05 per hour (equivalent to a 3.2% annual increase) a 5p increase in the rate for 18 to 20 year olds from £5.55 to £5.60 per hour (equivalent to a 3.1% annual increase) a 5p increase in the rate for 16 to 17 year olds from £4.00 to £4.05 per hour (equivalent to a 2.8% annual increase) a 10p increase in the rate for apprentices from £3.40 to £3.50 per hour (equivalent to a 4.5% annual increase) a 40p increase in the accommodation offset from £6.00 to £6.40 a day (or from £42.00 to £44.80 a week).
In making its recommendations, the LPC noted that NMW rates increased in October 2016, and therefore the increases are lower than they would be on a full-year basis.
The LPC is tasked with recommending increases in the NLW that would achieve the government’s target of 60% of median earnings by 2020. In its Autumn 2016 report , published today, the LPC estimated that this level would be £8.61 using October 2016 data (reduced from estimate in the Spring report of £9.16).
National Minimum Wage enforcement
The government will invest an additional £4.3 million per year to strengthen NMW enforcement. This will fund new HMRC’s teams to proactively review those employers considered most at risk of non-compliance with the NMW. The government will also provide additional support targeted at small businesses to help them to comply; and a campaign aimed at raising awareness amongst workers and employers of their rights and responsibilities.
Non-domiciled individuals
The following reforms to the taxation of non-domiciled individuals make the tax system fairer for everybody:
As previously announced, the government will end the permanency of non-domiciled tax status. From April 2017, non- domiciled individuals will be deemed UK-domiciled for tax purposes if they have been UK resident for 15 of the past 20 years, or if they were born in the UK with a UK domicile of origin. As previously announced, non-domiciled individuals who have a non-UK resident trust set up before they become deemed-domiciled in the UK will not be taxed on income and gains arising outside the UK and retained in the trust. From April 2017, inheritance tax will be charged on UK residential property when it is held indirectly by a non-domiciled individual through an offshore structure, such as a company or a trust. This closes a loophole that has been used by non-domiciled individuals to avoid paying inheritance tax on their UK residential property. The government will change the rules for the Business Investment Relief (BIR) scheme from April 2017 to make it easier for non-domiciled individuals who are taxed on the remittance basis to bring offshore money into the UK for the purpose of investing in UK businesses. The government will continue to consider further improvements to the rules for the scheme to attract more capital investment in British businesses by non-domiciled individuals.
Off-payroll working in the Public Sector
Following consultation, the government will reform the off-payroll working rules in the public sector from April 2017 by moving responsibility for operating them, and paying the correct tax, to the body paying the worker’s company (PSC).
This reform aims to tackle the high levels of non-compliance with the current IR35 rules and will mean that those working in a similar way to employees in the public sector will pay the same taxes as employees.
In response to feedback during the consultation, the 5% tax-free allowance will be removed for those working in the public sector, reflecting the fact that workers no longer bear the administrative burden of deciding whether the rules apply.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
Page 230 of 588
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