The new National Minimum Wage (NMW) rates were announced just ahead of the Autumn Budget. The hourly rate for the minimum wage depends upon an employee’s age and whether they’re an apprentice.
Current rates
| 21 and over | 18 to 20 | Under 18 | Apprentice | |
| April 2024 (current rate) | £11.44 | £8.60 | £6.40 | £6.40 |
The rates from 1 April 2025 will be as follows:
| 21 and over | 18 to 20 | Under 18 | Apprentice | |
| April 2025 | £12.21 | £10.00 | £7.55 | £7.55 |
Further information about the NMW can be found here.
4.11.24
If you are an employer, you may be affected by the changes to the National Minimum Wage (NMW). These come into effect from 1 April 2024. The hourly rate for the minimum wage depends upon an employee’s age and whether they’re an apprentice.
Current rates
These rates are for the National Living Wage (for those aged 23 and over) and the National Minimum Wage (for those of at least school leaving age). The rates change on 1 April every year.
| 23 and over | 21 to 22 | 18 to 20 | Under 18 | Apprentice | |
| April 2023 (current rate) | £10.42 | £10.18 | £7.49 | £5.28 | £5.28 |
From 1 April 2024, workers aged 21 and over will be entitled to the National Living Wage.
| 21 and over | 18 to 20 | Under 18 | Apprentice | |
| April 2024 | £11.44 | £8.60 | £6.40 | £6.40 |
Further information about the NMW can be found here.
10.3.24
If you are an employer, you may be affected by the changes to the National Living Wage (NLW). These come into effect from 1 April 2020. The hourly rate for the minimum wage depends upon an employee's age and whether they're an apprentice.
Firstly, The main rate for employees 25 and over is increasing from £8.21 p/h to £8.72 p/h.
Secondly, the rate for employees aged between 21 and 24 is increasing from £7.70 p/h to £8.20 p/h.
Thirdly, the rate for employees aged between 18 and 20 is increasing from £6.15 p/h to £6.45 p/h.
Fourthly, the rate for employees aged under 18 is increasing from £4.35 p/h to £4.55 p/h.
Fifthly, the apprentice rate is increasing from £3.90 p/h to £4.15 p/h (*).
(*) apprentices are entitled to the apprentice rate if they are either aged under 19, or aged 19 or over and in the first year of their apprenticeship. Additionally, apprentices are entitled to the minimum wage for their age if they are aged 19 or over, and have completed the first year of their apprenticeship.
Further information about the NLW can be found here.
If you are an employer and need help with running your payroll, please do not hesitate to contact us.
April is traditionally a time for change, as it signals the end of one tax year and the start of the next. We have identified 8 changes in April this year which may affect small business owners.
The personal allowance for the 2018/19 tax year is increasing to £11,850.
The marriage allowance is 10% of the personal allowance, therefore an increase in the personal allowance automatically translates to an increase in the marriage allowance. This is going up to £1,185.
The point at which taxpayers start to pay 40% tax is increasing from £45,000 to £46,350. This is especially good news for directors who can increase dividends declared. The tax on dividends for standard rate taxpayers is 7.5%. For higher rate taxpayers, it jumps up to 32.5%.
As highlighted in our recent blog, the National Living Wage (NLW) is increasing from the beginning of April.
Again this was covered by a recent blog. The rate at which employers and employees pay into a workplace pension increases from 6 April.
Directors tend to be paid a tax efficient salary which is driven by the lower earnings limit for National Insurance. As this limit is increasing, then the tax efficient amount can also increase. Please sit down, the numbers are mind blowing. For the 2018/19 tax year, the most efficient amount which directors can pay themselves increases from £680 p/m to £702 p/m. NB directors salary should be viewed as part of a remuneration package and there may be other factors which affect the level of salary taken.
From 6 April 2016, shareholders in limited companies have had a dividend allowance and paid dividend tax. The allowance for 2016/17 and 2017/18 has been £5,000. Any dividend income over this allowance is taxed at 7.5%. For the 2018/19 tax year, the dividend allowance is reducing to £2,000
In April 2017 the government started the slow eradication of mortgage interest relief for landlords. Under the old system landlords would pay income tax on their profits after mortgage interest had been deducted.
This is now being phased out. Last year you could only claim 75% of your mortgage tax relief, but this will fall to 50% from April this year. This means that you can only deduct 50% of any mortgage interest you have paid on buy-to-let properties from your profits when you are calculating how much income tax you owe. You will receive a 20% tax credit on the other 50% of your mortgage interest.
Again this has been covered here.
So there are the changes in April 2018. You may be affected by some of the changes, or all of the changes. The variety highlights how tax continues to get more complex, and the importance of getting advice in respect of your tax affairs, particularly if you have a business. If you need help with this, please don’t hesitate to get in touch.
If you are an employer, you may be affected by the changes to the National Living Wage. These come into effect from 1 April 2018.
The main rate for employees 25 and over is increasing from £7.50 p/h to £7.83 p/h.
The rate for employees aged between 21 and 24 is increasing from £7.05 p/h to £7.38 p/h.
The rate for employees aged between 18 and 20 is increasing from £5.60 p/h to £5.90 p/h.
The rate for employees aged under 18 is increasing from £4.05 p/h to £4.20 p/h.
The apprentice rate is increasing from £3.50 p/h to £3.70 p/h (*).
(*) apprentices are entitled to the apprentice rate if they are either aged under 19, or aged 19 or over and in the first year of their apprenticeship. Additionally, apprentices are entitled to the minimum wage for their age if they are aged 19 or over, and have completed the first year of their apprenticeship.
Further information can be found here.
If you are an employer you may be affected by the introduction of the National Living Wage. This is a legal requirement effective from 1 April 2016.
All employers are currently legally bound to pay the National Minimum Wage. In addition to this, if you have employees aged 25 or over (and not in the first year of an apprenticeship), the National Living Wage you must pay is £7.20 per hour.
The National Minimum Wage still applies for employees aged 24 and under, or employees aged 25 or over in the first year of an apprenticeship.
It is the intention of the Government that the National Living Wage will increase each year to be £9 per hour by 2020.
Details of the National Living Wage are here.
