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6th April 2022 – What is changing?

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As the crossover of yet another tax year is very much now on the horizon, there are several changes coming into effect as of 6th April 2022 that you should be made aware of.

These changes consist of a number of elements, including those to the National Minimum/Living Wage, National Insurance & Tax thresholds, acceptable Right-to-Work documents, and even the addition of a 9th bank holiday for 2022!

Below is a summary of each change that is happening in April this year, to keep you fully updated and informed!

National Minimum/Living Wage

The below table details the National Living Wage and National Minimum Wage increases that will take effect from 6th April 2022.

Wage Band

Current Rate

Rate from 6th April 2022

Age 23 and Over (National Living Wage)

£8.91

£9.50

Age 21 to 22

£8.36

£9.18

Age 18 to 20

£6.56

£6.83

Under 18

£4.62

£4.81

National Insurance Increases

Following the impacts of the coronavirus (COVID-19) pandemic, the government have introduced a new Health and Social Care Levy. This new levy is designed to raise funds to cover the NHS and Social Care shortcomings, and, for the tax year 2022/23, the levy will be covered by an increase in both Employees and Employers National Insurance contributions.

From 6th April 2022, National Insurance contributions for both Employers and Employees, will increase by 1.25%.

The increase will apply to:

–  Class 1 (paid by employees)

–  Class 4 (paid by self-employed)

–  Secondary Class 1, 1A and 1B (paid by employers)

 

Current Rate

New Rate

Employees National Insurance

12%

13.25%

Employers National Insurance

13.8%

15.05%

National Insurance thresholds for the tax year 2022/23

Employees National Insurance (Class 1)

Pay Cycle

Primary threshold

Upper level threshold

Percentage of NI on earnings between primary and upper level threshold

Percentage of NI on earnings above upper level threshold

Weekly

£190 per week

£967 per week

13.25%

3.25%

Monthly

£823 per month

£4,189 per month

13.25%

3.25%

Yearly

£9,880 per year

£50,270 per year

13.25%

3.25%

Employers National Insurance (Class 1, 1A and 1B )

Pay Cycle

Secondary threshold

Upper threshold

Percentage of NI on earnings between primary and upper level threshold

Percentage of NI on earnings above upper level threshold

Weekly

£175 per week

N/A

15.05%

N/A

Monthly

£758 per month

N/A

15.05%

N/A

Yearly

£9,100 per year

N/A

15.05%

N/A

Changes to acceptable Right-to-Work documents

From 6 April 2022 you will not be able to use your Biometric Residence Permit and Biometric Residence Cards to confirm your right to work or rent. You’ll need to prove your right to work online instead. You will still be able to use your BRP/BRC to confirm your identity, your right to study and your right to any public services or benefits.

Other upcoming changes to Right-to-Work

  • The share code which an individual has to obtain for employers to gain access to their right to work is currently only valid for 30 days from the 6th April 2022 this will be increased to 90 days.
  • When an individual using the Home Office online service looks to generate their share code the individual will be required to select the type of information depending on the reasoning: Right to Work or Right to Rent. Since 10th January 2022 all share codes will begin with a letter denoting the purpose of the share code and what it can be used for. Where a share code begins with the letter ‘W’, this will indicate that the share code has been generated by a prospective or existing employee to evidence their right to work. Employers will not be able to accept or use share codes which begin with the letter ‘R’ or ‘S’ as these are designed for other services.
  • As of 6th April 2022, employers can use Identity Document Validation Technology (IDVT) via the service of an IDSP to complete the digital identity verification element of Right to Work checks for British and Irish citizens who hold a valid passport or passport card.
  • Digital identity verification conducted by IDSP is the process of obtaining evidence of the prospective employees identity, checking that it is valid and belongs to the person who is claiming it.

Extra Bank Holiday for the Queen’s Platinum Jubilee

In June 2022 the UK government have announced that there will be an extra bank holiday in celebration of Her Majesties Platinum Jubilee. This means that there will be a total of 9 bank holiday days in 2022, as opposed to the usual 8.

This extra day will therefore be factored into our company costs for Umbrella employees.

Our current holiday accrual percentage is 12.07% and this is based on the statutory allowance of 20 days holiday plus 8 bank holidays.

However, in order to accommodate for the extra bank holiday this year, our holiday accrual percentage will be set at 12.56% and this will take effect for our Umbrella & PAYE employees from 6th April 2022.

The holiday year for our Umbrella & PAYE employees runs from 6th April – 5th April.

From 6th April 2023 the holiday accrual percentage for Umbrella & PAYE employees will return to the standard 12.07%.

We hope this information will be useful for you as we enter the new tax year. As always, please contact ADVANCE or your Client Relationship Manager on 01244 564 564 for any support you require.

ADVANCE

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