Mini Budget Round Up – The Issues Raised for HR
Steve Herbert, Wellbeing & Benefits Director, Partners &, shares his thoughts on some of the issues raised for HR Benefits Leaders in today’s mini budget
NHS Announcement and it’s impact on the employee benefits landscape
With concerns rising about the NHS, Thérèse Coffey yesterday announced that patients should expect to get a GP appointment for non-urgent conditions within two weeks.
However this does raise questions.
Firstly, how does a member of the public know (or can be sure) that their condition is “non-urgent”?
Even if they are certain/sure that it is non-urgent, a period of up to 2 weeks is a lengthy wait for someone to carry on without diagnosis or support – during which time, the condition may be getting worse (leading to longer recovery time) and/or the employee might be unable to work, or more likely working at below their optimum level of productivity.
So, this really strengthens the appeal of employers offering their workers remote GP services, where access to an appointment is expected on the same day – or certainly within 24 hours. It’s also worth noting that there are not the same challenges to securing the appointment (for instance the 8am phone call battle with other patients) – and appointments can usually be better timed to suit the employees working patters too. In both cases this minimises the disruption to the working day and will keep productivity high. Good for employee and employer alike.
It is however worth pointing out that the problems are not of the NHS’s making. There are thousands fewer GPs since 2015, and (according to Radio 4 “Today” yesterday morning) 700 fewer even since the last General Election. Fewer GP’s means fewer appointments, but the scramble for appointments was apparent even before 2015. So this current staffing crisis has just made things worse.
National Insurance “Reversal” and it’s impact on HR
The Chancellor announcement today brings to an end an unsettling 12-month period of turbulence around National Insurance Contributions.
In September last year the then Prime Minister, Chancellor, and Health Secretary announced the new Health and Social Care Levy (HSCL) to start from April 2023. The levy was intended to provide funds to the NHS to tackle the waiting list backlogs, and also to solve the long-standing social care problem also. To generate quick revenues it was agreed to start the levy via an uplift of 1.25% to National Insurance payments in the 2022/23 tax year, with NI then dropping to previous levels in 2023 when the HSCL began.
This was legislated for, but in a seemingly late change of mind the then Chancellor Sunak lessened the impact of the rate rise by increasing the National Insurance threshold to match that of Income Tax in the current tax year. So late was that decision that the increased threshold did not take place until July this year. The new Chancellor has now announced that the uplift will be removed entirely from 6th November this year, although some workers may not see that enacted (owing to perceived problems in changing payrolls) until possibly early 2023.
The Health and Social Care Levy is now to be scrapped, with funding instead provided via general taxation.
Ultimately, this is good news for employees who will – from November – be paying less than they were in October, and actually less than they were last year also as a result of the increased NI threshold. It does however mean that employees will have faced three changes to their NI contributions in 1 year, which is unnecessarily confusing.
Employers will also be able to revert to last year’s NI rate, which will be useful given the other employment cost measures that so many are currently facing. That said, employers have had to pick up the tab of changes and communications throughout this 12 month rollercoaster of rate changes.
These changes may impact employer’s Salary Sacrifice schemes though, so care should be taken to check these schemes to ensure deductions and communications are all correct under the new rates just announced.
Personal Taxation
In addition to the more immediate changes around National Insurance, from April 2023 the basic rate of income tax will drop from 20p to 19p. The 45p additional rate of tax will be removed altogether.
The Chancellor also announced that for businesses in designated tax sites there will be a break in Employer’s National Insurance payment for some new employees. It’s not yet clear what that means, but this may complicate some salary sacrifice schemes.
Corporation Tax
The reversal of next year’s planned Corporation Tax has also been reversed, so that rate will remain unchanged. This will be welcomed by the business community facing many other cost pressures.
Banker Bonuses Removed
The finance sector has seen the cap on bankers bonuses removed. This will only impact employers in the financial sector.
