In this blog, we will share some important changes that are happening that could affect your business.
A new tax year is approaching and our payroll team are in the process of sending out the year end checks to our clients to ensure all of the information we hold for employees is correct. If you are a client, please check this and notify us of any changes ASAP. We ask that when employee information changes, we are notified straight away to ensure are files.
The Chancellor announced some changes at the end of March so we have made some corrections to this post to ensure its accuracy
Important Payroll Information for the Tax Year 2022—2023
As an employer, you need to be aware of changes to legislation and the tax and NI bands which occur every year. This is a summary of the main information you should be aware of.
NATIONAL MINIMUM WAGE
The minimum hourly rate you must pay your staff will increase from 1 April 2022. The changes to the rate is shown:
The thresholds at which National Insurance becomes payable is increasing. There are different thresholds for Employers and Employees.
Slightly different thresholds apply for different pay frequencies.
As part of his announcement, the Chancellor said that the threshold for employees at which NI becomes payable will increase to be in line with the tax threshold of £12,570.
National Insurance Contributions are changing from 6 April 2022. This will be spent on the NHS, health and social care in the UK. Contributions will increase by 1.25 percentage points
The increase will not apply if you are over the State Pension age.
The auto-enrolment thresholds have not changed meaning that an employee receiving a pay rise may exceed the threshold and need to be enrolled. Minimum contribution levels remain the same at a minimum total of 8% with an employer paying at least 3%. An employer can pay more.
There are a lot of rules covering Workplace pensions and how contributions are calculated. If further clarification is needed, ask our professional staff.
There is a re-enrolment process every three years and even staff who have previously opted out may be re-enrolled.
This is remaining at £4,000 maximum. For most employers this means they don’t have to pay the first £4,000 of Employer NI in the tax year.
The Chancellor announced that the Employment Allowance would increase to a maximum of £5,000 per year.
Employment Allowance is intended to compensate small employers for possible SSP (Statutory Sick Pay) payments they may be required to pay. HMRC does not reimburse sick pay.
The Personal Allowance isn’t changing. £12,570 is the amount which most people can earn without paying tax. Factors, such as other income, may affect this.
ADDITIONAL BANK HOLIDAY
As part of the Queen’s Platinum Jubilee Celebration an additional Bank Holiday has been announced for Friday 3 June 2022. Depending on your contract wording, you may have to pay this additional holiday so something to bear in mind.
MEET OUR PAYROLL TEAM