Low Pay Commission

21st September 2016

National Minimum Wage: Increases from 1-Oct-16.
The Low Pay Commission today welcomed the Government’s acceptance of its recommendations for the rates of the minimum wage affecting workers under 25 and apprentices, to apply from 1 October 2016 – including:

  • its first recommendation for the effective new minimum wage for 21-24 year olds, where the Government agreed that it should increase by 3.7 per cent to £6.95 an hour.
  • an increase in the Youth Development Rate, affecting 18-20 year olds, of 4.7 per cent to £5.55 an hour.
  • an increase in the 16-17 Year Old Rate of 3.4 per cent to £4.00 an hour.
  • an increase in the Apprentice Rate of 3 per cent to £3.40 an hour.

For workers aged 25 and over, the Government is introducing the £7.20 National Living Wage – in effect a fifth minimum wage rate – from 1 April 2016. The LPC will make recommendations this Autumn on the rate of the National Living Wage to apply from April 2017, bearing in mind the Government’s ambition for the rate to reach 60 per cent of median earnings by 2020, subject to sustained economic growth. It will continue to advise on the other rates on its previous basis: protecting as many low-paid workers as possible without damaging jobs or the economy.

The key focus for these recommendations was the position of 21-24 year olds because – as a consequence of the introduction of the National Living Wage – this group effectively becomes a new age band within the minimum wage (the previous adult rate – applicable to workers 21 and over – now only affects these workers).

Structure, level and increases in the minimum wage:
Current level From April 2016 From October 2016 – April 2017 Increase
Adult rate (21+) NLW (25+) £7.20 £7.20 n/a
Adult Rate (21-24) £6.70 £6.95 3.7%
YDR (18-20) £5.30 £5.55 4.7%
16-17 Yr Old Rate £3.87 £4.00 3.4%
Apprentice Rate £3.30 £3.40 3%

 



 
Other items in Blogs
 
Victor Courdelle
15th October 2018 If HMRC Can’t Say, Who Can? – Records Required for ‘Cash Accounting for VAT’ Under MTD

Reference to VAT Notices 700/21, 700/22 and 731 suggests that a business using Cash Accounting for VAT under Making Tax Digital will be required to:- Maintain digital accounting records at transaction level: Keep a digital VAT account using Accrual accounting; Cross reference Monies Received and Paid against individual Sales and Purchase invoices within their digital…

Read More »

Thomas Carter
12th October 2018 How to choose a business structure

Are you thinking about setting up a business?  If so, one of the first decisions you will need to make is that of business structure. The main business structures are: sole trader, partnership, limited liability company, and limited liability partnership (LLP). Sole trader – This is the easiest set up, with very little in the way of red…

Read More »

Richard Alecock
11th October 2018 Why a start up business should complete a business plan

A business plan is a written document that describes your business. By committing your thoughts to paper, you can understand your business better and also map specific courses of action that need to be taken to improve your business. It covers objectives, strategies, sales, marketing and financial forecasts. A business plan can help you to:…

Read More »

Richard Alecock
11th October 2018 Making Tax Digital, VAT and newly registered businesses

All VAT registered businesses with a turnover over the current VAT registration threshold of £85,000 will be required to comply with the Making Tax Digital (MTD) record keeping and reporting requirements for VAT periods which start on and after 1st April 2019. Where a business is VAT registered but has turnover under £85,000 at April…

Read More »

Matilda Mawson
5th October 2018 Have you elected not to claim child benefit?

You may wish to consider the implication this could have on your state pension in later life. Following the introduction of the high income child benefit charge in January 2013 many new parents have decided not to make a claim for child benefit as their individual income is well above the threshold to be fully…

Read More »

Victor Courdelle
4th October 2018 Working With Award Winning Software

We are delighted to announce that two of our chosen software providers have just won national recognition in the 2018 Accounting Excellence Software Awards held in London on 20 September: Xero Accounts – Winner – Accountancy Excellence Awards 2018: Small Business Accounting Software of the Year, Practitioners’ Choice. Receipts Bank – Winner – Accounting Excellence…

Read More »