Your Guide to the New Tax Year
April 7, 2022Categorised in: Laws & Regulations
The new tax year has arrived and with it there are several changes that businesses need to be aware of. These regulations have an impact on the payslips of your employees, as well as on your company’s wider business processes. So, whether you’ve Outsourced Payroll or do it in-house, here’s your guide to the new tax year.
The Big Changes
National Insurance Hike
Whilst it received fierce debate and opposition, the planned increase in National Insurance has come into effect from April 2022. This was part of the new UK-wide ‘Health and Social Care levy’, which increased the NI contributions of both employees and employers. This will appear on your staff’s payslips and, from April 2023, will need to be displayed as a separate 1.25% ‘tax’.
Other consequences that this hike might have for payroll include areas such as:
Minimum & Living Wage Increases
From the 1st of April, hourly wage rates increased for all age categories. The National Living Wage (for 23 years and over) went up to £9.50, whilst other National Minimum Wages rose to:
Thus, employers are likely to notice some payroll cost changes, whilst workers will see some payslip wage growth. There are no changes this year for pensions, however, so any business on a Pension Auto Enrolment Scheme will have nothing new to be made aware of.
Tax Codes & Employment Allowances
Nothing major has been altered in either of these areas for the new tax year, but businesses can now claim £5,000 in employment allowance, up from £4,000. Meanwhile, 1257L will remain the standard tax code for employees.
How does Payroll Outsourcing make new tax years easier?
Guides such as this aim to make the transition to a new tax year as simple as possible. However, the reality for many companies is usually different. Changes to payroll are often slow and inefficient due to the complexity involved in new tax legislation, and the time-consuming nature of this can hinder businesses.
This is where payroll services can help. Outsourcing a Business Process like payroll makes it significantly easier for your company to remain compliant with major changes between tax years. This allows you to focus on your business and can reduce costs as your payroll and other processes are managed more effectively.
Moreover, with HIVE360, we handle Payroll, Pensions, and Employee Perks. To see how we could help your business, book a free exploratory meeting today.
