Every April the rates change for National Living Wage and the National Minimum Wage. Here are the new rates coming into effect from 1 April 2022:

• The National Living Wage, now for ages 23 and above - £9.50
• The National Minimum Wage for 21 to 22 year olds - £9.18
• For 18 to 20 years olds - £6.83
• For under 18's - £4.81
• For apprentices - £4.81

Apprentices are entitled to the apprentice rate if they're either:

• aged under 19
• aged 19 or over in the first year of their apprenticeship

Apprentices are entitled to the national minimum wage for their age if they both:

• are aged 19 or over
• and have completed the first year of their apprenticeship

Recently the new National Minimum Wage Rates were announced. These hourly rates are the minimum wage you should be paid depending on your age and whether you're an apprentice.

The rates from 1 April 2021 are:

• The National Living Wage, now for ages 23 and above - £8.91
• The National Minimum Wage for 21 to 22 year olds - £8.36
• For 18 to 20 years olds - £6.56
• For under 18's - £4.62
• For apprentices - £4.30

This represents a big increase for 23 & 24 year olds who were previously getting £8.20 under the National Minimum Wage rate for 2020, but have now been moved into the National Living Wage bracket.

The government has announced the biggest cash increase of the National Living Wage ever.#

From April 2020, the new rates are:

• The National Living Wage for ages 25 and above - up 6.2% to £8.72
• The National Minimum Wage for 21 to 24 year olds - up 6.5% to £8.20
• For 18 to 20 year olds - up 4.9% to £6.45
• For under 18's - up 4.6% to £4.55
• For apprentices - up 6.4% to £4.15

Further to these rises, the government has said it will press ahead with plans to allow workers over 21 to receive the National Living Wage by 2024 when it is set to reach £10.50 per hour.

These rates are still below the "real living wage" as calculated by the Living Wage Foundation which equates to £9.30 or £10.75 for those in London.

With effect from 6 April 2018 the minimum pension contribution rates for auto enrolment have been increased and they will increase again next year:

The minimum staff contributions depend on the amount paid into the pension by the employer, if the employer pays in more than the minimum, then the employee can pay in less to reach the total minimum level.

The National Minimum Wage (NMW) was first introduced on 1 April 1999 and since then has more than doubled. The rates of the NMW are set to increase again on 1 April 2018. Here are the rate increases.

The National Minimum Wage (NMW) was first introduced on 1 April 1999 and since then has more than doubled. The rates of the NMW are set to increase again on 1 April 2017. We take a look at the rate rises.

The Current National Minimum Wages rates are:​

Employers using the minimum wage as part of their pay policy can now budget for the year ahead on the basis that the next review (and likely increase) of the minimum wage will not be until April 2018, providing some certainty.

The 25 or over rate is actually known as the National Living Wage (NLW) and was introduced April 2016. The Government's target is for the NLW to reach 60% of median earning by 2020 (around £8.80 per hour) subject to economic growth.

Don't confuse NLW with the Living Wage

The NLW is completely separate to the Living Wage, which is calculated according to the basic cost of living in the UK. The NLW places a statutory duty on employers to pay the relevant rate, whereas the Living Wage is a rate of pay that employers can voluntarily choose to pay their workforce.

The Living Wage is set independently and updated annually by the Living Wage Foundation and has two separate rates. Since November 2016, the UK Living Wage is £8.45 per hour and the Living Wage for London, which covers all boroughs in Greater London, is £9.75 per hour. There is no penalty imposed on employers for not paying the Living Wage.

HMRC compliance activity is on the increase

You cannot contract out of paying workers the relevant minimum wage, even if a worker agrees to this in order to avoid losing their job or having working hours reduced. Any agreement made would be null and void. There are no excuses for underpaying workers what they are legally entitled to. No business is exempt from the minimum wage law, regardless of size or level of turnover. Employers must also be mindful that when seeking to take on new workers not to actively target younger people under the age of 25 in order to reduce employment costs, as this could lead to claims of age discrimination being made by potential workers.

The HM Revenue & Customs (HMRC) enforcement budget was increased from £13 to £20 million in April 2016, increasing the number of compliance officers available to investigate NMW complaints. An additional £4.3 million in enforcement funding was announced in the last Autumn Statement. The Government is also to spend £1.7 million on an awareness campaign to ensure workers know how much they are legally entitled to. Every call to HMRC is followed up by a compliance officer.

Furthermore, since October 2013, the Government has under its current naming policy issued a press release “naming and shaming” 687 employers for not paying the minimum wage, with total arrears of over £3.5 million paid to underpaid workers and total penalties imposed on employers of over £1 million. Compliance action on employers from HMRC is no idle threat.

What if the minimum wage is not paid?

Employers who discover they have paid a worker below the relevant hourly pay rate must pay any arrears immediately. If HMRC discovers that an employer has not been paying the correct rates, there will be a penalty imposed.

As part of an HMRC, check into whether the minimum wage has been paid or not, compliance officers can request that employers undertake a self-review of records before any visit takes place. This exercise has the advantage that if an employer discovers underpayments of the minimum wage as part of the self-review and subsequently pays all the arrears to their workers, then a penalty will not be imposed and the business will not be “named and shamed” by HMRC.

Penalties for minimum wage underpayment

The financial penalty is calculated as a fixed percentage of the total underpayments (unpaid wages owed to workers) shown on a notice of underpayment issued by HMRC. Different penalty percentages apply as follows for pay reference periods starting:

• 6 April 2009 to 6 March 2014 inclusive, the penalty is 50% of the underpayment shown on the notice with a minimum penalty of £100 per notice, for underpayments of £200 or less, and a maximum penalty of £5000 per notice
• 7 March 2014 to 25 May 2015 inclusive, the penalty is 100% of the underpayment for all of the workers included on the notice with a minimum charge of £100 per notice, for underpayments of £100 or less, and a maximum penalty of £20,000 per notice. More than one notice may be issued if there are workers or groups of workers with underpayments of £20,000 or more
• 26 May 2015 to 31 March 2016 inclusive, the penalty is 100% of the underpayment for each worker with a minimum charge of £100 per notice and a maximum charge of £20,000 per worker
• on or after 1 April 2016, the penalty is 200% of the underpayment for each worker with a minimum charge of £100 per notice and a maximum charge of £20,000 per worker.

All data correct as at 8 February 2017

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When it is time for you to begin auto enrolment, we can assess your workforce for eligibility, produce the letters that need to be sent to your employees and then arrange for the correct deductions to be made. We can then produce the necessary reports for pension providers to be uploaded.

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Last year the government introduced the Marriage Tax Allowance, which is a way for couples to transfer a proportion of their personal allowance between them.

So far supposedly 3.7 million of the 4.2 million eligible couples are not claiming the allowance and are missing out. You could be entitled to a tax break of £432 if you claim back last years allowance of £212 and this years allowance of £220.

Couples who can get the allowance must:

• be married or in a civil partnership
• both be born on or after 6 April 1935
• have one person who is a non-taxpayer - earns less than the personal allowance of £11,000 (2015/16 - £10,600)
• the other person must be a basic 20% rate taxpayer - earns between £11,000 and £43,000 (2015/16 £10,600 and £42,385)

So how does it work?

It is really quite simple, the non-taxpayer in the couple can either complete the application form at HM Revenue & Customs or call 0300 200 3300. You will need to know both of your National Insurances numbers.

Once you have applied and it has been accepted, there is nothing more to do, if both of you become taxpayers, then HMRC will make the necessary changes, otherwise the allowance will continue each year.