From 1 April 2016 employees that are 25 years old and over are legally entitled to receive a'National Living wage' of £7.20 per hour, seeing a 50p increase.
This new minimum pay rate is set to support the government’s vision of a 'higher wage, lower welfare, lower tax society.'
Those employers that don't comply will risk being named and shamed and tough penalties of up to 200% of arrears and a maximum of £20,000 per worker.
We would recommend you take action before this date and review whether or not you should be making any changes to your payroll. Make sure you also inform your employees of any changes in pay.
Other changes from April 2016
The personal allowance is set to increase to £11,000 from April removing more lower paid workers out of the tax bracket.
For employees under 25, the 'National Minimum Wage' will still apply, the rates will be rising to;
- £6.70 for 21s and over
- £5.30 for 18 to 20-year-olds
- £3.87 for under 18s
- £3.30 for apprentices (the rate applies to all apprentices in year 1 of an apprenticeship, and 16-18 year old apprentices in any year of an apprenticeship)
For further information on any topics covered in our blogs, or if you would like to speak to us about our pro-active Accountancy & Tax services, contact Brian or Caroline on 0845 303 1144 for a chat or email email@example.com.
Cooper Curtis Accountants have offices in Warwickshire, Birmingham and Manchester.
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Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.