VAT

VAT rate for hospitality and accommodation returned to 20% from 1st April 2022.

VAT REGISTRATION AND DE-REGISTRATION LIMITS

No changes to the current limits which are:-

  • Registration threshold remains at £85,000
  • Deregistration threshold remains at £83,000

PERSONAL TAX ALLOWANCE

For the 2022-23 tax year the personal tax allowance will remain at £12,570

CORPORATION TAX RATE

The main rate of corporation tax remains at 19% until 1st April 2023. It will then increase to 25% for profits over £250,000 and remain at 19% for profits under £50,000. Profits in between £50,000 and £250,000 will be based on 25% with marginal relief meaning the rates will fluctuate between 19% and 25% depending on level of profit over £50,000.

DIVIDEND TAX

Tax-free dividend allowance remains unchanged at £2,000.

Basic rate dividend tax has increased from 7.5% to 8.75%

Higher rate dividend tax has increased from 32.5% to 38.1%

NATIONAL MINIMUM WAGE – NEW RATES FROM 1st APRIL 2022

The new national minimum wage rates from 1st April 2022 are as follows:

  • £9.50 per hour – 23 yrs. old and over
  • £9.18 per hour – 21-22 yrs. old
  • £6.83 per hour – 18-20 yrs. old
  • £4.81 per hour – under 18yrs. old
  • £4.81 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.

EMPLOYMENT ALLOWANCE

The employment allowance has increased to £5,000 per year from 6th April 2022.

DIRECTORS SALARIES FROM APRIL 2022

Remain unchanged if you claim employment allowance then the suggested director salary should continue at £1,045 per month, if however, you are not eligible to claim employment allowance then the suggested director’s salaries should be increased to £735 a month.

HMRC – VAT MTD (Making Tax Digital)

All VAT returns from 1st April 2022 should be submitted digitally to HMRC using relevant accounting software.

HMRC – SELF EMPLOYED TAX RETURNS MTD (Making Tax Digital)

HMRC plan to bring in MTD for all self-employed and unincorporated landlords (with a property income or gross income over £10,000) from 6th April 2024. These submissions will now mean quarterly summaries of business income and expenditure will need to be submitted to HMRC via approved MTD software. We recommend that you start to plan and implement for this now, please feel free to call to discuss your options.