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 you need extra advice or guidance from Accountants in Stafford, please get in touch and we will light your way.