Main Business + Personal changes for the New Tax Year
With the new financial year comes many changes that would affect your personal and business finances. Here are some of the main ones you should know about.
Increase in National Living and Minimum Wage
The national living and minimum wages for workers is increasing from Friday 1st April 2022. The new rates were confirmed in the Octobers Autumn Budget. The increase of 6.6% to the national living wage should see an increase of £1,047 per year before tax.
|Rates from April 2022||Current Rate|
|National Living Wage||£9.50||£8.91|
|21-22 Year Old Rate||£9.18||£8.36|
|18-20 Year Old Rate||£6.83||£6.56|
|16-17 Year Old Rate||£4.81||£4.62|
Other increases in the minimum wages for employees and apprentices have all also increased by at least 4.1%.
Changes to National Insurance
National Insurance is going to rise by 1.25% for people within classes 1,4,1A and 1B. The classes in which you pay national insurance have remained. These increases will be taken out of your payslip as they are now, and most payroll software will work these changes out for you from the new financial year.
Dividend tax rates increase
The dividend tax rates for business shareholders are also rising by 1.25%, with a now basic tax rate of 8.75%. Higher and Additional rates are also increasing by the same amount, to 33.75% and 39.95% respectively. Find out more details here.
State Pension Rising
As of the 11th April 2022, the basic and full-rate state pensions are increasing in line with the consumer price index. This means the basic State Pension will increase to £141.85 per week and the full rate of the new State Pension will increase to £185.15. Find out more details here.
If you want to make sure your business stays up to date and compliant with all the HMCR changes, contact us today for a chat!