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The Summer Budget

What does the Summer Budget mean for Employment Law

With George Osborne’s speech still ringing in our ears, we’ve put together features of the Budget 2015 most important in the world of employment law. It raises the following points for employers to note:

  • A new national living wage will be introduced for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020 - giving an estimated 2.5 million people an average £5,000 rise over five years
  • Corporation tax will be cut to 19% by 2017 and 18% by 2020
  • Cap on charges imposed by claims management companies and an increase in insurance premium tax to 9.5% from November
  • New apprenticeship levy for large employers
  • Climate Change Levy exemption for renewable electricity to be removed
  • National Insurance employment allowance for small firms to be increased by 50% to £3,000 from 2016
  • A consultation will take place on changing Sunday trading laws

So, in a bit more detail, how are these announcements from the Chancellor likely to affect your business...?

Business Taxes

The Government will continue its cut to corporation tax which will fall to 19% in 2017 and then to 18% in 2020 - which will make it one of the lowest rates of any major developed country. The Government will also introduce a new dividend allowance of up to £5000, but impose higher taxes on dividend income beyond that.

Compulsory National Living Wage

Perhaps the major announcement in the budget is that as of April 2016 companies will have to pay their workers who are over 25 years old at least £7.20 an hour -set to reach £9.00 by 2020. In order to help small businesses deal with this sudden increase to the national minimum wage, or living wage, they will have their national insurance bill reduced.

Apprenticeship Levy

Large businesses will have to pay an indefinite ‘apprenticeship levy’ to fund training for workers. Those who train a large number of apprentices will get back more than they pay in. Full details have not been announced, but this is an attempt to increase youth employment and to further develop the apprenticeship scheme.


Local authorities that take on a greater amount of devolved powers will be able to set their own Sunday trading laws. That’s likely to be an advantage to supermarkets and other large stores but it could pose a problem for convenience stores and smaller businesses. This could also commence industrial strife between the shop worker’s unions and management later down the line.

If you have any questions about how any of this could affect you personally, or you business, then please do not hesitate to call us on – 01159 985245 and speak to a member of our friendly team.