Chancellor Philip Hammond (pictured) delivered his first and last Spring Budget speech to the House of Commons on Wednesday 8 March 2017. Below is a summary of the key announcements that could impact employers’ pay and benefits strategies:
- The government’s tax-free childcare policy will be rolled out to parents with children under the age of 12 from April 2017. The scheme will enable these parents to receive up to £2,000 a year per child to contribute towards the costs of childcare.
- From April 2017, the money purchase annual allowance (MPAA) will decrease from £10,000 to £4,000.
- The government will publish of a call for evidence on exemptions and valuation methodology for the income tax and employer national insurance contribution (NIC) treatment of benefits in kind (BIK), as announced in the Autumn Statement 2016.
- The tax registration process for master trust pension schemes will be amended to further align with The Pensions Regulator’s (TPR) authorisation and supervision regime.
- The government will publish a call for evidence around the use of income tax relief for employees’ expenses, including employees’ expenses that are not reimbursed by their employer, to increase understanding of this topic.
- A consultation on proposals to bring the tax treatment of employer-provided accommodation, board and lodgings up to date is to be launched by the government. The consultation will also consider when accommodation should be exempt from tax and when to support taxpayers during a transition.
- HM Revenue and Customs (HMRC) is actively monitoring national insurance (NI) employment allowance compliance after reports of some organisations using avoidance schemes.
- The government has committed to invest in developing, designing and manufacturing batteries to power the next generation of electric vehicles as part of a £270 million investment through the Industrial Strategy Challenge Fund.