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!
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|
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:
|Current Rate||New Rate|
|Employees National Insurance||12%||13.25%|
|Employers National Insurance||13.8%||15.05%|
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|
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.
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.