The Autumn Statement and Spending Review – Key employment announcements

Following the Chancellor of the Exchequer’s Statement to Parliament, at the tail end of last year the government published its 2015 Spending Review and Autumn Statement setting out these plans in more detail. Key points of interest on the employment side include:

  • Apprenticeships levy. To be introduced in April 2017 at a rate of 0.5% of an employer’s paybill where this is £3 million or more, with the aim of delivering 3 million new apprenticeships by 2020;
  • Tax-free childcare scheme. An upper income limit of £100,000 per parent and a minimum weekly income level equivalent to 16 hours per parent (worked at the National Living Wage) to be eligible for participation in the scheme has been announced;
  • Helping sick and disabled people back to work. Increasing employment levels among people with disabilities and health conditions is a key part of the government’s aim to achieve full employment. In the last year, the number of disabled people in employment has risen by 70,000 to over 3.2 million. The government wants to improve links between health services and employment support to help employees return to work more quickly. It intends to expand the Fit for Work Service and to publish a White Paper in 2016 setting out reforms aimed at improving support for people with health conditions and disabilities.
  • Taxation of employee benefits. The following were announced:
    • A call for evidence will be published on the current tax treatment of employer provided living accommodation.
    • Legislation will be introduced, with effect from 6 April 2016, to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal
      services company.
    • The tax rules on employee share schemes will be simplified.
    • The government will gather further evidence on salary sacrifice arrangements to decide what action, if any, it should take regarding the growth of such arrangements.
  • Modernisation of the courts and tribunals system. The government has announced that it will invest “more than £700 million” in the courts and tribunals system “to modernise and fully digitise the courts, moving from a paperbased to an online system” in order to “create a swifter, more proportionate justice system, which will generate savings of approximately £200 million a year from 2019-20.”