01785 243276 admin@howardsca.co.uk

During Covid-19 we saw numerous tax and employment rule changes. The Government wanted to help businesses cope with its impact. Now, the worst seems to be over. So, several tax and employment rule changes take effect. 

 

Tax and employment rule changes 

Sometimes, regulations revert to those in place prior to Covid-19. Others reflect typical annual amendments. All come into force from April 2022. 

 

Health and Social Care Levy 

This affects employers, employees and the self-employed. Specifically, those with earnings and profits over £9,880 a year. From April 6, they pay an additional 1.25% in NICs. There are some exemptions from the additional charge. It depends on earnings. For example, armed forces veterans employed after they have left the services. Also, employees under 21 and in freeports and apprentices under 25. 

 

Dividend tax rates 

Tax on dividends over £2,000 rises by an additional 1.25%. 

 

Employment Allowance 

The Employment Allowance increases from £4,000 to £5,000. 

 

Minimum wage rates 

From April 1 the National Living Wage rises. Those aged over 23 receive £9.50 per hour. This is up 6.6% from £8.91 per hour. For younger workers, including apprentices, the National Minimum Wage also rises.   

 

VAT 

As expected, there are changes to VAT. From April 6 the reduced rate of 12.5% ends. During the pandemic this applied to hospitality, holiday accommodation and attractions. Now, the rate reverts to 20%. 

 

Working From Home Tax Allowance 

During the pandemic many people worked from home. The good news? You could claim the Working From Home Tax Allowance for the whole year. Even if you worked from home for just one day during that period. From April 6 the rules revert. Once more, the usual pre-pandemic criteria apply.  

 

Bikes 

Sometimes, employers provide staff with a bike for work purposes. Typically, this has been tax free. But what if you’re now classed as a home worker? The criteria are that most journeys are qualifying work journeys. Therefore, you no longer meet the benefit exemption. Unfortunately, employees in this position will have to pay tax to use the bike. 

 

Construction Industry Scheme 

New rules apply to Construction Industry Scheme contractors. They need to provide HMRC with their company UTR when claiming CIS deductions. 

 

Tax thresholds 

Unfortunately, there are no tax threshold rises in 2022-23. 

 

Advice 

Confused about tax and employment rule changes? Call our experts on 01785 243276.