The U.K. Budget 2016 was announced in March 2016. It sets out a series of noteworthy employment-related measures, including the following:

• With effect from 1 April 2016, the new “National Living Wage” will be introduced for workers aged 25 and over at the rate of £7.20 per hour. The current National Minimum Wage rates set in October 2015 will continue to apply to those aged 24 and under.
• Also with effect from 1 April 2016, the penalty for non-compliance with the National Living Wage and National Minimum Wage will double to 200 percent of the underpayment owed to each worker (up to the current maximum of £20,000 per worker). Company directors can also be disqualified for up to 15 years for the non-payment of the National Living Wage or the National Minimum Wage.
• In May 2016, the U.K. government will launch a consultation on extending the Shared Parental Leave and Pay scheme to working grandparents.
• In summer 2016, the government is expected to publish the responses to the consultation on the simplification of the taxation of termination payments initiated in July 2015, as explained in our “Proposals to Simplify the Tax Treatments of Termination Payment” update last August. Legislation simplifying and tightening the rules on the taxation of termination payments is due to come into force in April 2018.
• The government is considering reforms to restrict the system of ”salary sacrifice” where an employee gives up part of his or her salary in exchange for benefits-in-kind (which are often subject to more favourable tax treatment). However, it has confirmed that this will not affect U.K. registered pensions, childcare and health-related benefits.