The latest budget announcements and how it affects employers

The new Chancellor of the Exchequer, Jeremy Hunt, delivered his Autumn Statement on 17th November 2022. Following this, it is anticipated there will be some impact on employers which we have summarised below:

Business Taxes

The National Insurance Contributions (NICs) threshold will be frozen until April 2028 and the Employment Allowance will be retained at its new, higher level of £5,000 until March 2026. This is expected to protect 40% of businesses from paying any NIC’s at all.

Living Wage

The new rate, for those over the age of 22 years from April 2023 will be £10.42.

The cost-of-living crisis

How to support employees and how to reduce your business expenses.

The cost-of-living crisis is as prevalent for employers and your employees alike, just for different reasons. Here are our top tips for supporting staff through the cost-of-living crisis:

1. Consider offering financial support in different ways such as salary sacrifice schemes, cycle to work schemes or travel ticket loans
2. Have financial well being conversations with employees to check that they are ok. You can signpost employees to external organisations such as debt management services, government funding sites, local council grants or employee assistance programmes
3. Support home workers to return to the office to save on household bills Offer flexible working arrangements to help staff reduce their expenditure on childcare and commuting expenses

Here are our top tips for reducing your business expenses during the cost-of-living crisis:

1. Where contracts allow, enforce or request that those in a resignation period take annual leave during any notice period to avoid paying for outstanding holiday as well as notice pay
2. Focus on retaining staff to avoid recruitment costs
3. Review and remove (where necessary) discretionary bonus payments
4. Consider the viability of pay increases and act reasonably to ensure your staff are compensated and receive an affordable increase in their pay
5. Reduce availability of overtime
6. Recoup costs from employees who have overtaken annual leave on termination from either final pay or by invoicing for monies owed
7. Include a shortage of work clause in your contract to allow staff to be placed on lay off or short time working on reduced pay if there is a reduction in work – you must consult with your workforce should you wish to introduce this or gain mutual agreement to such a change
8. Consider using settlement agreements to amicably end an employee’s contract if considerable time is being spent on lengthy management processes

At Centric HR we can help you implement these changes. For more information please contact us here.

Source CIPD HR Inform