Reminder: Payroll changes ahead
From 1 April 2017, the statutory wage for employees in the UK is to increase. The change will mean that those aged 25 and over in receipt of the National Living Wage will see their hourly rate increase from £7.20 to £7.50.
Meanwhile, workers aged 21–24 will also see an increase of 10p from £6.95 per hour to £7.05, while those aged 18–20 will see their wages go from £5.55 to £5.60 per hour – an increase of 5p.
The rate for 16–17 years olds will also increase by 5p from £4 to £4.05 and the apprentice rate will rise by 10p to £3.50.
Failing to pay either the National Minimum Wage or Living Wage will result in a penalty of 200 per cent of the arrears owed to the worker, with a maximum penalty of £20,000 per worker.
Typically the penalty will be reduced by 50 per cent if the unpaid wages and the penalty are paid within 14 days.
An additional incentive to pay the correct wage is the Department for Business, Energy and Industrial Strategy’s publication of businesses that are in breach, as part of its campaign to ‘name and shame’ non-compliant employers.
The 2017/18 tax year will also see changes to the Personal Tax Allowance, which employees and employers should be aware of.
From April the Personal Allowance will increase from £11,000 to £11,500, while the Higher Rate Threshold will increase from £43,000 to £45,000. This change could have an impact on the tax employers and employees pay.