Tax changes for health & social care
National Insurance contributions will increase by 1.25% for one year only for employees, employers and the self-employed from April 2022. This will cover both Class 1, (employee and employer), Class 1A and 1B and Class 4 (self-employed) National Insurance contributions.
From April 2023, a new ringfenced Health and Social Care Levy of 1.25% will be introduced which will apply to those who pay Class 1 (employee and employer), Class 1A and 1B and Class 4 (self-employed) National Insurance contributions and will also be extended to those over State Pension age who are in work. When the new Levy comes into effect, National Insurance rates will revert back to current levels.
The Levy will also apply to individuals above State Pension age with employment income or profits from self-employment above £9,568. The Levy will not be charged on pension income, and those over State Pension age who are neither in work nor self-employed. The Levy will be administered by HMRC and collected through the current reporting and collection procedures for National Insurance contributions, PAYE and Income Tax self-assessment.
Like National Insurance, Levy contributions will apply UK-wide, people will pay the same in England, Scotland, Wales and Northern Ireland.
From 2023 to 2024, Levy contributions will appear as a separate item on payslips. A generic message will also appear on some payslips in the next tax year (2022 to 2023).
Changes to National Minimum Wage from 1st April 2022
· National Living Wage for over-23s: From £8.91 to £9.50 an hour
· National Minimum Wage for those aged 21-22: From £8.36 to £9.18
· National Minimum Wage for 18 to 20-year-olds: From £6.56 to £6.83
· National Minimum Wage for under-18s: From £4.62 to £4.81
· The Apprentice Rate: From £4.30 to £4.81
Changes to Statutory Payments from 1st April 2022
· Statutory Maternity Pay – First 6 weeks 90% of employees average weekly earnings and then £156.66 per week for the remaining 33 weeks
· Statutory Sick Pay – From £19.27 per day to £19.87 per day
Reporting Benefits & Expenses Digitally
HMRC is encouraging employers to consider payrolling the expenses and benefits they pay to staff.
The advantages of payrolling expenses and benefits are that employers will no longer need to submit multiple P11Ds, and employees will be more likely to pay the correct tax due on their benefits during the tax year. Employers will still need to work out the Class 1A National Insurance contributions on benefits and complete a single P11D(b) form for the year.
You can payroll your benefits and expenses as long as you’ve registered with us before the start of the tax year. To use this method for the 2022 to 2023 tax year, you’ll need to register online before 6 April 2022.
Claiming working from home tax relief
Your employees may incur additional household costs if they have to work at home on a regular basis, either for all or part of the week. This includes having been told to work from home because of coronavirus. Additional costs include things like heating, metered water bills or business calls, that they can demonstrate have been incurred wholly, exclusively and necessarily as a direct result of working from home. They do not include costs that would stay the same whether they are working at home or in an office. If you, as their employer, don’t already reimburse your employees for these costs, they may be eligible to claim tax relief on them. They can claim quickly and simply using our online service, which is now open for claims that relate to periods up to 5 April 2022.
If you would like to discuss any of the above changes then please do not hesitate to contact firstname.lastname@example.org or your usual A.C.T. contact.