TAX YEAR 2022/2023 – CHANGES AND RATES

per weekFrom April 2022, NI contributions and the dividend tax will be higher by 1.25%. The minimum wage and employment allowance are also growing. The income tax-free amount and the dividend tax-free amount are unchanged. What else will the fiscal year 2022/2023 bring – check out our BLOG.

Tax-free amount and income tax
As announced by the British government, the tax-free amount will remain unchanged until 2026. This means that for the next four years it will be £ 12,570. Only above this amount will you have to pay tax – 20%, 40% or 45%.
The rates, as well as the amount itself, remain the same, and so:
You will pay 20% of tax if in the tax year 2022/2023 your income is between £ 12,571 and £ 50,270
40% tax if your income is between £ 50,271 and £ 150,000
and 45% of tax if the amount is over £ 150,000

Minimum wage from April 2022
The tax year 2022/2023 is also an increase – by nearly 7% – of the minimum wage. This means that as of April, people aged 23 and over will earn £ 9.50 instead of the minimum £ 8.91 per hour worked.
The rates will also increase in other age groups and so the minimum wage in the tax year 2022/2023 will be:
for employees over 23 years of age – £ 9.50
people aged 21-22 – £ 9.18
employees aged 18 to 20 – £ 6.83
employees under 18 – £ 4.81
apprentices – £ 4.81
Employers will have to take into account not only higher salaries, but also higher payroll contributions.

Tax year 2022/2023 – changes in NI contributions
Changes, and more precisely the increase in the NI contribution applies to both employers as well as self-employed people and employees. In all groups, the rate will increase by 1.25%.
The good news is that you have increased the amounts above which you have to pay contributions. And so, from April, you will pay NI after exceeding:
for employees – £ 9,880 (in the tax year 2021/2022 it was £ 9,568) IMPORTANT! After 07/07 the amount increases – £ 12,570
for employers £ 9,100 (in tax year 2021/2022 it was £ 8,840)

NI rate in the tax year 2022/2023 for:
employers – 15.05% (was 13.80%)
employee – 13.25% (was 12%) up to £ 50 270. Above this, an additional 3.25% (was 2%) of income will be deducted from social security
sole traders rates will change twice

According to the announcement, the increase in NI contributions is only to apply for a year. Nevertheless, there is already information about the new premium „Health and Social Care Levy”. It is intended to cover employers, but also sole traders and employees.