Impact of the Autumn Statement -Employment Law and HR

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Posted in:Uncategorized|November 29, 2016 | Join the mailing list

Last week saw the Chancellor deliver the Autumn Statement and there were some points of note in relation to HR and employment matters.  We summarise the announcements briefly here:


Where an employee shareholder arrangement is agreed on or after 1 December 2016, the reliefs previously available in relation to income tax and capital gains tax will not apply.

This type of arrangement was introduced on 1 September 2013 and involves employees agreeing to waive some of their employment rights in return for shares in their employer’s business.  The tax reliefs will be abolished from 1 December 2016 and the government also announced its intention to close the employee shareholder status arrangement to new users “at the earliest opportunity”.


The following will be the only benefits that receive tax and national insurance relief when provided through a salary sacrifice arrangement:

although salary sacrifice arrangements that are already in place will remain protected until April 2018 (or April 2021 for cars, accommodation and school fees).

The national minimum wage and the national living wage will be increased from 1 April 2017 as follows:

The government also intends to strengthen its enforcement of the national minimum wage with an additional investment of £4.3 million each year.

Any employee called to give evidence in court will not be liable to tax on legal support received from their employer (whereas currently the tax relief only applies to support received by an employee in defending allegations against them).

In all public sector engagements of workers supplied by “personal service companies”, payments will be treated employment income and either the public sector engager or third party intermediary (if any) will be required to account for tax on those payments.  This takes effect from 6 April 2017.


As announced in the 2016 budget, employers will have to pay national insurance contributions on termination payments (except for the first £30,000, for which the current exemption from income tax and NICs will remain).

In a change to its proposals to apply income tax to certain “post-employment” and “expected bonus” payments, the government confirmed that income tax will be applied only to the equivalent of an employee’s basic pay for notice which is not worked.  However, this will be monitored and if there is manipulation, the government will act.

There was no further mention of measures in relation to termination payments, on which the government has consulted.  A consultation response and revised draft Finance Bill is expected on 5 December 2016.

To find out more about the issues raised in this post,  get in touch with our employment team or call +44 (0) 161 829 2599.

The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by berg or any of its partners or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

Image with thanks to Gov.Uk

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