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Are you budgeting for the upcoming changes?

Statutory rate increases

In early January, the Department for Work and Pensions proposed what the new rates of pay will be for the annual increase in April. These are expected to be as follows:

The rates of Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay are expected to increase on 11 April 2022, from £151.97 to £156.66 per week.

The rate of Statutory Sick Pay is expected to increase on 6 April 2022, from £96.35 to £99.35 per week.

Furthermore, the National Living and National Minimum Wage rates will increase from 1 April 2022 as follows:

  • For workers aged 23 or over from £8.91 to £9.50 per hour.
  • For workers aged 21 to 23 from £8.36 to £9.18 an hour.
  • For 18 to 20-year-olds from £6.56 to £6.83 per hour.
  • For 16 to 17-year-olds from £4.62 to £4.81 per hour.
  • For apprentices in their first year or aged under 19 from £4.30 to £4.81 per hour.

National Insurance (NI) thresholds and new categories

The following chart outlines the new thresholds that will operate for 2022-23

Weekly Monthly Annual
Lower Earnings Limit (LEL) £123 £533 £6,396
Primary Earnings Threshold (PT) £190 £823 £9,880
Secondary Earnings Threshold (ST) £175 £758 £9,100
FUST £481 £2,083 £25,000
Upper Earning Limit (UEL) £967 £4,189 £50,270

Income tax information from April 2022

The allowances, rates and thresholds which will be effective from 6 April 2022 have been published.

Allowances, rates and thresholds from 6 April 2022
Personal Allowance £12,570.00 per annum  
PAYE Thresholds £242.00 per week  
£1,048.00 per month
Standard/Emergency tax code 1257L
Tax Code uplifts L / M / N n/a no change in personal allowance
Income Tax Rates – England and Northern Ireland 1 – 37,700 20% Basic rate
37,701 – 150,000 40% Higher rate
150,001 > 45% Additional rate
Income Tax Rates – Scotland 1 – 2,162 19% Starter rate
2,163 – 13,118 20% Basic rate
13,119 – 31,092 21% Intermediate rate
31,093 – 150,000 41% Higher rate
150,001 > 46% Top rate
Income Tax Rates – Wales 1 – 37,700 20% Basic rate
37,701 – 150,000 40% Higher rate
150,001 > 45% Additional rate
Higher rate threshold – England and Northern Ireland £50,270.00  
Higher rate threshold  – Scotland £43,662.00
Higher rate threshold – Wales £50,270.00

Reminder: Health and social care levy

Further to the above rate increases, from 6 April 2022, the new Health and Social Care levy will mean employees, employers as well as the self-employed pay a further 1.25% each, in tax from 6 April 2022.

The HMRC need to update their existing systems to properly process these additional funds. Therefore, temporary measures will be put in place which will result in a temporary increase to the main and additional rates of class 1 (A and B) and class 4 (self-employed) National Insurance contributions from April 2022.

These will revert to normal levels in April 2023. At this point the new identifiable Health and Social Care Levy will be in force and the 1.25% increase will instead be collected under the levy.

This new levy will be subject to the same reliefs, thresholds, and requirements of the qualifying NIC contributions.

For those employers who employee individuals over the state pension age, then they will not be affected by the temporary measures and will only become liable to pay the levy from April 2023.

Further information

For more information about the upcoming changes or to speak to one of our advisors, please Contact Us

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