2018 Budget – A Summary

2018 Budget – A Summary

Philip Hammond presented his 3rd budget as Chancellor on Monday 29th October amidst a backdrop of the supposed end of austerity.  It highlighted a number of interesting points from a business/employment market perspective, not least that wage growth is at its highest in nearly 10 years.

The key points were as follows:

  • The personal allowance threshold for 20% tax will rise from £11,850 to £12,500 in April 2019 – this is a year earlier than planned.
  • The higher rate income tax threshold  for paying tax at 40% will to rise from £46,350 to £50,000 in April 2019.
  • National Living Wage will increase from £7.83 to £8.21 an hour from April 2019.
  • The contribution of small companies to the apprenticeship levy will be reduced from 10% to 5%.
  • Business rates bill for firms with a rateable value of £51,000 or less will be cut by a third over two years.
  • From April 2020, profitable technology companies with global sales of more than £500m will be liable for a 2% digital services tax on UK revenues.
  • Work allowances for universal credit will be increased by £1.7bn.
  • Delayed IR35 taxation changes could result in thousands of private-sector contractors facing higher tax and National Insurance bills from April 2020.

The REC (Recruitment and Employment Confederation) of which Intro Personnel is a proud member, has responded positively to the abovehttps://www.rec.uk.com/news-and-policy/press-releases/rec-full-response-to-the-chancellors-budget

A full summary of the budget can be found athttps://www.bbc.co.uk/news/uk-politics-46017125

Latest Employment News – EU Employment Migration

Latest Employment News – EU Employment Migration

July has seen interesting information released by the Office for National Statistics (ONS) about net EU migration and the effect on the UK job market. In the midst of continuing political and economic uncertainty about Brexit, there has been a fall in the number of EU citizens coming to the UK to look for work.  The Recruitment Employment Confederation (REC) stated that annual EU Immigration for work-related reasons (i.e. for a ‘definite job’ or ‘looking for work’) fell 19,000 from 160,000 in the year ending December 2016 to 141,000 in year ending December 2017.  This was driven by a decrease of 18,000 in EU citizens coming to the UK looking for work.  It is, however, important to point out that the number of people coming to the UK for a definite job (i.e. a confirmed employment opportunity)has remained relatively stable.

There continues to be a major shortage in the number of skilled people looking for work and, as employment is still the most common reason that people come to the UK, it will be interesting to see if this trend continues as we head towards March 2019’s exit date.

Further reading can be found at https://www.ons.gov.uk/ and https://www.rec.uk.com/

Intro Personnel is proud to be a member of the Recruitment Employment Confederation.

Starting Salaries Rise at The Fastest Rate Since 2015

Starting Salaries Rise at The Fastest Rate Since 2015

The latest REC (Recruitment Employment Confederation) monthly survey has shown that salaries for workers moving into new permanent roles in May increased at their fastest rate since 2015. This is a continuing trend from previous reports that have consistently shown an increase in the demand for skilled staff. Allied to this, there is a continued fall in the number of suitable candidates available, particularly in sectors such as engineering, manufacturing and IT.  Indeed, increases in engineering salaries were increasing above inflation wage rises.  Pay for people starting new temporary jobs also continued to rise. 

However, it is important to remember that final salary levels in the UK are also affected by the staff who are awarded pay rises to stay in their current jobs and this has always been an area that experiences slower rises than a new employee would expect when moving jobs. 

In wider economic news, this month has also seen that the latest figures from the Office of National Statistics (ONS) have concluded that manufacturing and construction output fell between February and April, with manufacturing experiencing at its fastest falling rate since 2012.  The National Institute for Economic and Social Research (NIESR) has also stated that growth between March and May 18 was just 0.2% which suggests that economic growth is still slow and has not yet “bounced back” as the Bank of England suggested that it would.

At Intro Personnel, we fully appreciate that all companies have budgets to work towards and that it is often not as simple as raising wages to attract a better calibre of employee.  Therefore, we would encourage clients to look at other ways of attracting people which could include offering flexible working hours and more opportunities to progress internally once a new employee proves themselves.  We would be happy to speak to any business that would like advice on this subject. 

Further reading can be found at https://www.rec.uk.com/, https://www.ons.gov.uk/ and https://www.niesr.ac.uk/

Intro Personnel are proud to be members of the REC. 

National Minimum and Living Wage Rises as of April 2018.

National Minimum and Living Wage Rises as of April 2018.

The National Minimum and Living Wage for workers within the UK has increased as of 1st April 2018. National Minimum/Living Wage is categorised in age ranges, please see a table below for the new NMW/NLW as from April 2018.

Year 25 and Over 21 to 24 18 to 20 Under 18 Apprentice
April 2018 £7.83 £7.38 £5.90 £4.20 £3.70

For more information or previous years rates, please visit https://www.gov.uk/national-minimum-wage-rates

Spring Statement – Job Market Impact?

Spring Statement – Job Market Impact?

It may not have been the longest speech that Philip Hammond delivered last week but it was a message of continued economic development with further future growth predicted.  The economy has grown for five consecutive years, and exceeded expectations in 2017, leading to the OBR (Office for Budget Responsibility) increasing their forecast for growth in 2018.  Employment has increased by 3 million since 2010, which is the equivalent of 1,000 people finding work every day.  Borrowing has fallen by three-quarters since 2010.  In 2009/10 the UK borrowed £1 in every £4 that was spent. The OBR expect that we will borrow £1 in every £18 this year and debt will start falling as a share of GDP next year.

It is still important to remember that the UK’s debt remains too high, equal to around £65,000 per household which makes the economy vulnerable to future shocks and future generations will feel the burden of this unfortunately.  The cost of debt interest payments is around £50 billion each year – more than the amount spent on the police and armed forces combined which is quite a sobering statistic.

With a falling level of inflation and an increase in wages, how does this impact on the employment market?

As our March mailer shows, next month has an increase in the National Living Wage.  This will impact on those businesses that employee staff on such salaries.  However, it is clearly good news for such staff that are currently on £7.50 per hour.  The unemployment rate is close to a 40-year low and the OBR predict there will be over 500,000 more people in work by 2022 which is good news.  There was further positivity for the manufacturing sector as it has apparently achieved the largest unbroken run of economic growth since the late 1960’s.  Hopefully this can continue amidst the national skills shortage in the UK.

Finally, the government has also invited small business to give their views on the impact of the current VAT threshold of £85,000 as some have expressed concerns that it has an impact on business growth.  For those interested in participating, the link for the survey is https://www.surveymonkey.co.uk/r/W7TLCZ7 and is open until 5th June 2018.

Further reading can be found at https://www.gov.uk/government/news/spring-statement-2018-what-you-need-to-know