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From 1st April 2021 NMW rates will increase again, and the over 25 rate (the National Living Wage) will be extended to cover those aged 23 and over, representing a significant increase for existing 23 and 24 year olds. The new full NLW rate will be £8.91, up from £8.72 for this year.
On 1st April 2021 the national living wage (NLW) and national minimum wage rates (NMW) will increase. The new rates will be as follows:
- For those aged 23 & over – NLW rises to £8.91 per hour (Note this used to apply to only those aged 25 and over)
- For 21 and 22 year olds the rate will be £8.36 per hour
- For those aged 18 – 20 it will be £6.56 per hour
- For those under 18 it will be £4.62 per hour
- The apprentice rate will rise to £4.30 per hour.
Changes to the off-payroll tax legislation, IR35, which was due to be implemented in April 2020, have been deferred to 6 April 2021. This means HR should identify any self-employed consultants in their workforce who offer their services through a limited company (personal service company). They should use the government online tools to ascertain if there will be an obligation on the company to deduct income tax and national insurance contributions at source when paying the contractor. HR will also need to make clear in all consultant contracts whether they fall inside or outside IR35. The changes will only affect medium to large companies.