Dividend income
The tax rates on dividend income over £2,000, will increase for the tax year 2022/23:
- Basic rate taxpayers, will rise from 7.5% to 8.75%;
- Upper rate up to 33.75% (from 32.5%)
- Additional rate up to 39.35% (from 38.1%).
These rates will apply across the UK. The addition of 1.25% is due to the introduction of the health and social care levy
** A 33.75% rate will also apply to ‘loans to participators’ within a closed company that are not repaid to the company within 9 months of the end of the accounting period.
National Living Wage (NLW) and National Minimum Wage (NMW)
The NLW& NMW will increase by 6.1% for individuals aged 23 and over to £9.50 per hour
from 1 April 2022.
Taking pension benefits
The minimum age at which most people can first access their tax-advantaged
pension scheme will be increased to 57 (from 55) with effect from 6th April
2028, this will affect those who are born after 6 April 1973.
Sales of UK property
Reporting and paying capital gain tax, the deadline is extended to 60 days for reporting and payment, where a transaction is completed on or after 27 October 2021.
Corporation Tax rate
This will remain at 19% until 31 March 2023. Then increase to 25% for companies with profits over £250,000, 19% for companies with profits of up to £50,000. Between £50,000 and £250,000 there will be a tapering on all profits of between 19% and 25%.
Capital allowances for plant and machinery
Qualifying expenditure on plant and machinery purchased between 1st April 2021 to 31 March 2023. Can claim:
• a ‘super-deduction’, providing allowances of 130% on new P&M purchases
Adjustments will also be required on the disposal of assets on which a super-deduction has been claimed
Making Tax Digital (MTD) for Income Tax
For sole traders and landlords with income over £10,000 are required to file income
tax self assessment (ITSA) information using MTD from the tax year 2024/25. General
partnerships will not be required to join the system until 6 April 2025.
At the same time that MTD for ITSA is introduced, new penalties for late filing and late
payment will apply to those within the new system.
Apprenticeship funding
In England, the government will continue to meet 95% of the apprenticeship
training cost for employers who do not pay the Apprenticeship Levy. The £3,000
apprenticeship hiring incentive payment (per new hire) has been extended by four
months to 31 January 2022.
Universal Credit
Two measures that will benefit Universal Credit recipients:
- reducing the taper rate (from 63% to 55%)
- increasing the Work Allowance by £500 a year.
These measures are intended to take effect not later than 1 December 2021.