 Photo by Towfiqu barbhuiya on Unsplash | This week the Chancellor delivered this year’s spring statement – this was initially intended to be a spending style announcement but following the price of energy increasing to high levels, it did include a little tax. Here is a summary of what to expect for the 2022/23 tax year – some of the things are not new but I thought it important to remind everyone! |
- An increase in the National Insurance threshold to £12,570 from 6th July
- The planned increases in National Insurance will continue from 6th April
- A planned increase in corporation tax from 2023 for some companies continues
- New temporary loss reliefs for companies and the ‘super deduction’ for qualifying capital expenditure continue
- The standard rate of Vat for hospitality resumes
- No changes in tax allowances
- Increased wages as previously published
Personal Allowances & National Insurance
 Photo by Kelly Sikkema on Unsplash | The point at which people will pay remains at £12,570 for 2022/23 and remains frozen until at 2026. Spouses and civil partners may transfer £1,257 of their personal allowance to each other. The point at which people pay higher rate remains at £50,270 for 2022/23. National Insurance will kick in at £11,809 - £12,570 from 6th April 2023. |
Confusingly, the child benefit threshold continues at £50,000.
Class 2 National Insurance at £3.15 a week) will continue to be collected as part of the Self Assessment process and now kicks in at £11,809 which is much higher than the previous limit.
Business Tax
Photo by Markus Winkler on Unsplash
- Corporation Tax will remain at 19% for companies with profits less than £50,000 and a tapered increase to 25% will be applied from April 2023 to 25%
- New Super Deduction Capital allowances on brand new plant and machinery for companies of 130% is available until 31 March 2023 but watch non March accounting periods that straddle 31 March 2023
- It was previously announced that the Annual Investment Allowance will remain in place until 31 December 2021
- Business asset disposal relief continues upto £1m for those thinking of selling or closing their company
- Just like in the 2008 financial crisis, a 3 year carry back of Corporation Tax Losses continues
- The electric car ‘sweet spot’ I’ve mentioned before continues with first year allowances being available
VAT Threshold
The VAT threshold will continue at £85,000 and the hospitality VAT rate increases to 20% so the price of a latte or a hotel might well increase!
The VAT threshold will continue at £85,000 and the hospitality VAT rate increases to 20% so the price of a latte or a hotel might well increase!
Employing People
Photo by Gabrielle Henderson on Unsplash
The employment allowance rises to £5,000 meaning small businesses only pay Employers NI after this point.
HMRC compliance activity on furlough claims will continue and accelerate and it is essential good records of the amounts claimed are maintained (for 6 years) including hours worked and the detailed calculations. HMRC have confirmed there will be some random compliance checks on businesses they expect to be ‘good’ as a sense check!
The National Minimum Wage and National Living Wage are set to increase on 1 April 2022. There continues to be high profile compliance activity so do check that you’re paying the right wages. Rates are published by HMRC:
https://www.gov.uk/national-minimum-wage-rates
Also it’s worth reviewing pension arrangements as these salary changes might mean that some employees become eligible for a pension scheme for the first time.
HMRC compliance activity on furlough claims will continue and accelerate and it is essential good records of the amounts claimed are maintained (for 6 years) including hours worked and the detailed calculations. HMRC have confirmed there will be some random compliance checks on businesses they expect to be ‘good’ as a sense check!
The National Minimum Wage and National Living Wage are set to increase on 1 April 2022. There continues to be high profile compliance activity so do check that you’re paying the right wages. Rates are published by HMRC:
https://www.gov.uk/national-minimum-wage-rates
Also it’s worth reviewing pension arrangements as these salary changes might mean that some employees become eligible for a pension scheme for the first time.
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