The Low Pay Commission (LPC) has published its 2016 Spring Report on the National Minimum Wage and the Government as accepted the recommendations, as follows:
Adult rate (21-24)
to increase from £6.70 to £6.95 (3.7%)
Youth Development Rate (18-20)
to increase from £5.30 to £5.55 (4.7%)
16-17 Year Old Rate
to increase from £3.87 to £4.00 (3.4%)
Apprentice Rate
to increase from £3.30 to £3.40 (3%)
The government has also confirmed that it will be aligning the cycle of the National Minimum Wage and the National Living Wage from April 2017. This means that the recommendations will last 6 months rather than the usual 12. There will be further recommendations in the Autumn on the level of all minimum wage rates (including the National Living Wage) from April 2017.
The Employment Allowance is increasing from £2000 to £3000 a year. To claim the allowance, the appropriate deductions need to be taken from the amount of Class 1 secondary National Insurance contributions payable to HMRC.
Class 1 National Insurance Contributions (NICs) for Apprentices under 25
If you employ an apprentice who is under the age of 25, who is working towards an apprenticeship in the UK which follows a government approved framework or standard, you may be eligible for zero-rate Class 1 National Insurance Contributions.
To apply, you must hold either a written agreement between yourselves, the apprentice and the training provider; or evidence of government funding for the apprenticeship. Any written agreement must give the government recognised apprentice framework or standard, and start and end dates for the apprenticeship.
National Living Wage
On 1 April 2016 the National Living Wage will become law when all staff aged 25 and over will be entitled to receive £7.20 per hour. This should take place in the relevant pay period on or after 1st April.
For example, if an employer’s monthly payroll period begins on 10 April 2016, the National Living Wage rate will apply from that date, because this is the first pay reference period that begins on or after 1 April 2016. The National Minimum Wage rate will apply for the period of 1 April to 9 April 2016.
