Autumn Statement 2015 – Employee tax aspects

Other than the headline-grabbing apprenticeship levy, the Autumn Statement on 25 November 2015 has little of immediate interest on employee tax, but more is expected to emerge as the results of consultations are released in due course.

In more detail:

• Apprenticeship levy - In April 2017, employers with a payroll of more than £3 million will have to pay an apprenticeship levy of 0.5% of payroll. Further details have yet to be released, including how employers can take advantage of the training credits that will be “acquired” because of payment of the levy.
• IR35 - There is surprisingly no specific response on the consultation which took place this autumn on IR35 as a whole. However, the Chancellor did state ‘relief will be restricted for individuals working through personal service companies where the intermediaries legislation apples. This change will take effect from 6 April 2016.’ It remains to be seen what form these restrictions will take.
• Termination payments - The Government’s response to its consultation on termination payments is being delayed until the New Year, though there is no confirmation any change will take place.
• Job-related Accommodation - The Government will review the current tax treatment of employer-provided living accommodation.
• Travel Expenses - The Government has confirmed that it is to restrict tax deductible travel expenses where intermediary arrangements (eg service companies) are used.
• Others - While these are not specific proposals, the Government also says that it is keeping salary sacrifice arrangements under review and that any attempts to continue to use disguised remuneration arrangements not caught by current legislation will be counteracted by new legislation backdated to 25 November 2015.

Finally, the Government has also announced there will be greater cross-Whitehall discussion of common issues on employment status as well as better guidance on employment tax status. Work on reviewing the boundaries between self-employment and employment will continue, including the ideas of a statutory employment test for all purposes and alignment of the tax and National Insurance system for employment and self-employment.

Click here to go to HM Treasury's Autumn Statement site.