Autumn Statement: What it means for HR

Autumn Statement: What it means for HR

The first and, it was revealed, last Autumn Statement by Chancellor of the Exchequer and MP for Runnymede and Weybridge, Philip Hammond is still being digested, but there were a few announcements that HR should keep an eye on.

Salary sacrifice scheme

The most obvious change is salary sacrifice schemes; pension contributions, ultra-low emission vehicles (ULEVs), cycle to work schemes, and childcare vouchers will not be impacted by the new rules.

Mark Groom, Tax Partner at Deloitte, says: “The impact of the changes will be greater on benefits with low statutory tax values, such as benefits that are exempt from tax, including workplace gyms, car parking, and death in service policies.

“A basic rate employee sacrifices £30 a month to use their workplace gym, currently a tax-free benefit. From April 2017, they will pay additional tax of £72 per annum, with their employer paying just under £50 per annum of National Insurance.”

Groom adds that cars, accommodation, and school fees provided before April 2017 will be taxed under the existing rules until April 2021.

However, the protection for most schemes will end in April 2018.

National Living Wage

The National Living Wage will rise from £7.20 to £7.50 from April 2017, as was widely predicted. This is undoubtedly good news for employees; but, as Karen Plumbley-Jones, Managing Associate at Bond Dickinson, attests, employers will be concerned about how this is funded.

She continues: "It will add to their concerns about rising costs - caused by the fall in the value of the pound, the forthcoming rates increases and the introduction of the apprenticeship levy – and the extent to which they can pass them on to consumers."  

Productivity

The Government has pledged a multi-billion-pound investment to improve productivity. This includes a £13million an initiative led by Sir Charlie Mayfield to help improve the quality of management in the UK, and £23billion for a Productivity Investment Fund.

Taxable personal allowance

Taxable personal allowance will rise to £11,500 in April 2017. It will rise to £12,500 by the end of this Parliament.

Ageing workforce

Hammond referenced the ageing workforce as something that will have to be handled by another parliament, although there is only so long the Government can wait.

Claire Hall, Chief People Officer at McDonald’s UK, has previously called on all businesses to harness the value older workers deliver: “Teams that include older people are fundamental to creating a happy and motivated workplace and to delivering a great customer experience.

“At McDonald’s we recognise that there is a pressing business need across sectors to recruit and retain older workers.”

Eileen Gregory, Head of International People at AdRoll, told us earlier this month that this can be done by: “Creating a work environment and culture in which staff from a wide range of backgrounds, cultures, and age profiles can come together, grow, and develop, both individually and collectively. We do that by fostering a people-first environment, encouraging and celebrating diversity, and having a wide and varied training programme to facilitate learning and development.”

A reaction round-up can be found here.

HR Grapevine also did a live update of the Autumn Statement which can be seen here.  


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