The National Living Wage (NLW) will rise to £10.42 from 1 April 2023, an increase of 92 pence or 9.7 percent!

In the autumn budget on the 17 November 2022, it was announced that the living wage would increase from £9.50 to £10.42 from 1 April 2023, but what does this mean for people on low income and how will it really help?

If you earn under £12,570 then you are likely to see an extra 92p in your pocket for every hour you currently work, but this will only affect people working around 100 hours a month or less.

What if you work full time?

Well, that 92p will naturally suffer tax and national insurance bringing the amount you actually receive in your pocket down to 63p after deducting 20% tax 18p and 12% national insurance 11p.

Although auto enrolment pensions are for the benefit of the individual you may see a further deduction of 5%, depending on how your pension payments are treated by your employer.

In conclusion you can always say that any pay rise is a real benefit to individual as it will cover some of the squeeze due to high inflation, however the 9.7% rise which is only 6.6% rise in your pocket for full time staff which is a far cry from the current inflation rates we are facing of 11.1%.

Related News Articles

CIS changes

HMRC announced they were making some minor changes to the CIS scheme from 6 April 2024, in that VAT failures are now counted when looking at whether a firm qualifies for gross payment status. In line with other taxes, minor failures will not count towards gross payment disqualification. “Minor failures” are: 3 late submissions of…

Navigating Tax Changes: High-Income Child Benefit Charge and Other Updates 

THE HIGH-INCOME CHILD BENEFIT CHARGE In an effort to reduce unfairness, the thresholds for the high-income child benefit charge (HICBC) will be increased from 2024/25. You may have to pay the HICBC if you are considered to have ‘high income’ and child benefit is being paid in relation to a child that lives with you,…

CIOT Responds to HMRC Regarding the Current Problems with R&D Tax Relief

In the summer of 2023, HMRC and the Chartered Institute of Taxation (CIOT) exchanged lengthy correspondence about the approach being taken by HMRC relating to R&D tax relief claim compliance checks. The CIOT expressed concern about a number of tactics being employed; HMRC’s response was to largely defend the measures being undertaken. Several months have…