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An overview of the changes to the tax rules for the coming tax year.

• Personal Allowance, National Insurance and Employment Allowance

The personal allowance is remaining at £12,570, and the higher rate tax threshold is remaining at £50,270.

From April 2022 the rate of National Insurance contributions you pay will change for one year.  The amount you contribute will increase by 1.25 percentage points.  This increase is also applied to Employer National Insurance contributions.

The National Insurance threshold for employees has increased to £12,570 (this was announced in the Spring Statement) and for employers to £9,100.

Employment allowance has been increased to £5,000.

• Dividend tax rates

Similar to the National Insurance rate rises, dividend tax rates are set to rise from April 2022.  New rates are as follows:

Income tax band	Dividend tax rate 22/23
Basic rate	8.75%
Higher rate	33.75%
Additional rate	39.35%

• Annual Investment Allowance

The Annual Investment Allowance has risen from £200,000 to £1 million for qualifying expenditure on plant and machinery from 1 January 2022 to 31 March 2023.

• Auto enrolment pensions

Contributions remain at 5% of pensionable earnings for employees and 3% of pensionable earnings for employers.  Some payroll schemes have now been auto-enrolled for three years so re-enrolment will take place.

• Minimum Wage

The National Living Wage and the National Minimum Wage increase in April 2022 to the following rates:

23 and over	21 to 22	18 to 20	Under 18	Apprentice*
£9.50	£9.18	£6.83	£4.81	£4.81

*The apprentice rate applies to those apprentices aged under 19, and those aged 19 or over who are in the first year of their apprenticeship.

• Capital gains tax reporting

Anyone who makes a capital gain after selling a property need to report the gain and pay the tax owed within 60 days ( this was previously 30 days).  This is still an incredibly tight window so if you are selling a second home or buy to let property please consult with us as soon as the property is put on the market for sale.

• Future tax changes on the horizon

Corporation tax rise – 1 April 2023

Currently all companies, regardless of the size of their profits, suffer corporation tax at the rate of 19%. It is a historically low rate, and it will continue to be effective until 31 March 2023.

After this date, a new higher rate comes into effect for companies with profits over £50,000. They will face a corporation tax rate of 25% – a significant increase.

All companies with profits below £50,000 will continue paying the 19% rate of corporation tax.

Depending on the circumstances, if a company’s profits lie between £50,000 and £250,000, it may be possible to claim some marginal tax relief to reduce the 25% rate.

Making Tax Digital for Income Tax for Self Assessment – 6 April 2024

From 6 April 2024 HMRC is requiring all sole traders and property owners with turnover of more than £10,000 to report quarterly through Making Tax Digital, together with a final report once figures for the year are finalised.  This is a significant increase in administration for small business owners.  For most businesses the most efficient way to deal with this will be using online accounting software such as Xero or Quickfile, together with a bank link pulling through bank transactions, for their bookkeeping.  JLA Accounting are here to ease you through this transition to a new, more regular, way of reporting.

If you have any questions about how any of these changes this impact you, please get in touch.

JLA Accounting Limited takes every care in preparing material to ensure that the content is accurate and up to date. However, no responsibility for loss for anyone acting from or refraining from acting as a result of this information can be accepted by JLA Accounting Limited.