RECRUITERS EVERYTHING YOU NEED TO KNOW ABOUT THE 2018 BUDGET
INCOME TAX – PERSONAL ALLOWANCE AND HIGHER RATE THRESHOLD INCREASE
- The limit at which people start paying tax will be raised to £12,500 from 6th April 2019 in line with inflation.
- Higher rate tax threshold increased from £46,350 to £50,000 from 6th April 2019.
EMPLOYMENT – NATIONAL LIVING WAGE AND APPRENTICESHIP LEVY
- From 1st April 2018, National Living Wage will increase from £7.83 to £8.21
- Contributions of small companies to the apprenticeship levy to be reduced from 10% to 5%.
A review of any current internal staff or PAYE contractors will need to be performed to ensure that all PAYE staff and contractors are earning over the equivalent of £7.83 per hour for their employment. Any TBOS client currently contributions to the apprenticeship levy will notice a reduction in contributions.
INVESTMENT IN EDUCATION AND HEALTHCARE
- £20.5 million is being invested in the NHS over the next five years
- £2 billion is being invested in mental health services
- £10 million is being made available for air ambulances
- £10 million is being made available for mental health care for veterans
- £700 million to local councils for care for the elderly and those with disabilities
- A one-off bonus of £400 million to be made available to help schools
- £1.7 million in education programmes
With just over £22 billion pounds set aside for the NHS, the funds will be fed into the development of mental health services, air ambulances and state-of-the-art equipment. This will most certainly increase the demand for specialist skilled staff in emergency services, and even more so in mental health as an additional £10m has been on focused on veterans alone. The one off bonus for schools will help subsidise staffing solutions.
INVESTMENT IN SECURITY TRANSPORT AND INFRASTRUCTURE
- £420 million will be made available to tackle potholes, bridge repairs and other minor works.
- E -passport gates available to visitors from the US, Canada, New Zealand, Australia and Japan as well as EEA.
- £160 million for counter-terrorism police.
- £1 billion for armed forces
This is good news for any recruiters engaged in the provision of any services to the armed forces due to the increased investment provided. Additional funds to transport and infrastructure could also result in more opportunities presenting themselves in these sectors.
IR35 EXTENDED TO 2020
The Chancellor announced that the IR35 ‘off payroll’ rules will be extended to the private sector from April 2020. This will apply when clients are ‘large or medium’ sized businesses.
This is good news for contract recruiters in the private sector as the move to implement IR35 has been delayed a year allowing business to continue as normal for 2019.
Entrepreneurs relief has been amended in the 2018 budget by extending the qualifying period from 12 months to 2 years with the aim of encouraging longer term investment in business. While keeping the tax at 10% on any gains realised.
For any directors looking to sell their shareholding within a business while it is good news that the relief is still available at the rate of 10% directors will need to be mindful over how long they have held the shares prior to disposal to ensure they qualify for the relief.
BEER AND FUEL DUTY FROZEN
Great news for recruitment agencies covering business mileage and network meetings and events. The cost of beer, cider and spirits have frozen along with fuel. However, wine will have to be no longer on the menu as the tax on a single bottle of wine has gone up a whole 7p.
In preparation of the Budget and the upcoming Brexit, TBOS will be inviting our TBOS community to educational seminars and podcasts whereby our team of financial advisors can discuss first-hand the changes that will take place and how we intend to support them through the upcoming economic turn of events.
Looking for a new back-office solution for your recruitment agency? Thinking of starting a new recruitment agency?
The increase in personal allowance will result in lower paid workers being taxed less and should mean more money in your pocket each month. Lower rate tax payers will have an extra £130 per annum. Higher rate earners will also benefit in the increase to the higher rate tax threshold.