How much is the minimum wage, for years 2022/2023?
Minimum wage for 2022/2023 is dependent on the employees age:
Age Rates from April 2022
23 and over £9.50
21 to 22 £9.18
18 to 20 £6.83
Under 18 £4.81
Apprentice £4.81 if under 19 years of age, or over 19 years of age but in the first year of apprenticeship, otherwise refer to age bands.
What are the income bands for 2022/2023?
Income is split into the following bands and then tax is charged based on the band the income falls into:
Basic Rate £1 to £37700
Higher Rate £37701 to £150000
Additional Rate over £150000
What are the tax rates for the different income bands for 2022/2023?
Income is taxed at the following rates:
Basic Rate 20%
Higher Rate 40%
Additional Rate 45%
What are the rates of tax for dividends?
Dividend tax is as follows:
For dividends falling in basic rate 8.75%.
This has increased from 7.5% to capture what is otherwise known as the national insurance levy.
For dividends falling in higher rate 33.75%
For dividends falling in the additional rate 39.35%
The above rates of tax are charged on dividends above £2000. The first £2000 of dividend is tax free.
How much are the income tax allowances?
Personal Allowance up to £12570
The above rates do not apply to dividends. Personal allowance is decreased by £1 for every £2 income exceeds £100,000.
Marriage Allowance £1260
The income limit to claim Marriage allowance is £31400. It is reduced by £1 for every £2 of income that exceeds the limit.
Blind persons Allowance £2600
Rent a room relief £7500
What are the rates of tax for savings income?
Savings are taxed as follows:
Starting rate for savings 0%
Basic Rate 20%
Higher Rate 40%
Additional Rate 45%
What are the personal savings allowances?
Basic rate tax payers £1000
This is the amount basic rate tax payers can earn in savings income before paying tax on savings income.
Higher rate tax payers £500
This is the amount higher rate tax payers can earn in savings before paying tax on savings income.
What are the different national insurance rates?
Due to the 1.25% Health & Social Care Levy being collected through national insurance, national insurance has increased as follows:
Class 1 national insurance:
Lower earning limit £533 per month
Primary Threshold £823 per month
Secondary Threshold £758 per month
Employee (primary) class 1 contribution to upper earnings limit 13.25%
Employee (primary) class 1 contribution above upper earnings limit 3.25%
Employer (secondary) class 1 contribution 15.05%
Class 1A national insurance on benefits in kind 15.05%
Employers NI Allowance £5000
Self employed small profits threshold class 2 £6725
Below small profits voluntary contribution £3.15 per week
Above small profits threshold £3.15 per week
Self employed class 4 profit bands & national insurance rates:
Lower profits limit £9880
Upper profits limit £50270
Class 4 ni rate from lower profits limit to upper profits limit 10.25%
Class 4 ni rate above upper profits limit 3.25%
What is the corporation tax rate and what are the changes for next year?
Corporation tax increases from April 2023.
Small profits rate up to £50000 will remain at the current 19%
Profits from £50001 to £250000 tax will be tapered up to 25%
Businesses can carry back losses up to 3 years, to get corporation tax refunds quicker.
What are the rates of tax on capital gains?
Income tax basic rate payer 10%
Income tax higher rate payer 20%
Rates for individuals where a property is sold but it is not eligible for Private Residence Relief:
Income tax basic rate payer 18%
Income tax higher rate payer 28%
Annual exemption rate for individuals £12300
Full Tax allowance for investment in business equipment:
Super tax deduction for business investment meaning if you invest in business equipment, you can reduce your tax by 130% of the cost of the investment rather than the current maximum 100%.
Plant & machinery main rate 18%
Full expense special First Year Allowance 50%
Annual Investment Allowance £1 million
Mileage allowance tax free:
Car 45p for the first 10000 miles. 25p for each subsequent mile.
Motorcycle 24p per mile for all business miles
Cycle 20p per mile for all business miles.
When do I have to register for VAT?
VAT registration turnover more than £85000
VAT deregistration turnover drops below £83000
What are my next steps?
- Make sure your staff wages are in line with minimum wage from April 2022.
- Check your pricing, have you increased your prices in line with everything else that is going up?
- If there is anything you need further guidance on please get in touch, we are here to help.