Is your business prepared for the new financial year?

As in previous years, there are changes to tax and National Insurance Contribution thresholds, National Minimum Wage and Statutory Payments.

Employee personal tax allowance remains at £12,570.00, giving individuals a starting tax code of 1257L.  Any further changes to tax codes will be informed by HMRC via P9 notice at the commencement of the tax year, or P6 throughout the tax year.

What are the tax thresholds for 2022-26?

England, Northern Ireland & Wales

ElementThresholdRate of Tax
Basic Rate£37,70020%
Higher Rate£150,00040%
Additional Rate£150,000+45%

Scotland

ElementThresholdRate of Tax
Starter RateAbove PAYE threshold – £2,16219%
Basic RateFrom £2,163 – £13,11820%
Intermediate RateFrom £13,119 – £31,09221%
Higher RateFrom £31,093 – £150,00041%
Top Rate£150,000+46%

What are the new National Insurance codes introduced in 2022/23?

There have been 5 new National Insurance codes introduced in 2022/23, 4 of which relate to Freeport status.

These are letters F (Freeport), I (Freeport – married women/widows reduced rate), L (Freeport Deferment) and S (Freeport State Pensioner).

The fifth new NI code is V, which can be used for Armed Forces Veterans with as little as one day’s service when they enter civilian life and begin work.  It can only be used for the first year of employment, be that with one employer for the full 12 months, or with several employers in that 12-month period.

What are the new National Insurance thresholds for 2022/23?

Below are the NI thresholds for 2022/23.  Please note that following the Spring Statement in March 2022, the Primary Threshold (the level at which an employee will be subject to National Insurance Contributions) has increased and from Month 4/Week 14 of the tax year, will be the same threshold as the personal tax allowance.

 WeekMonthYear
Lower Earnings Limit£123£533£6,398
Primary Threshold 06/04/2022 – 05/07/22£190£823£9,880
Primary Threshold 06/07/2022 – 05/04/23£242£1048£12,570
Secondary Threshold£175£758£9,100
Upper Earnings Limit£967£4,189£50,270

What is the new National Minimum Wage for 2022/23?

From 1st April 2022 the rates will be increased as follows:

 2022-23% Increase
Aged 23+£9.506.6%
Aged 21-22 inclusive£9.189.8%
Aged 18-20 inclusive£6.834.1%
Aged 18£4.814.1%
Apprentices aged under 19£4.8111.9%
Apprentices aged over 19 (First year of Apprenticeship only)£4.814.1%

Statutory Payments for 2022/23

From Sunday 3rd April, the statutory weekly payments will change.

Sick pay

Sick pay is now at £99.35 per week.

Maternity pay

90% of employee’s average weekly earnings for the first 6 weeks, followed by 33 weeks at £156.66 or, if this is lower, 90% of the average weekly earnings.

Paternity pay

£156.66 for 2 weeks or, if this is lower, 90% of the average weekly earnings.

Adoption pay

90% of employee’s average weekly earnings for the first 6 weeks, followed by 33 weeks at £156.66 or, if this is lower, 90% of the average weekly earnings.

Shared Parental Pay (ShPP)

£156.66 for 2 weeks or, if this is lower, 90% of the average weekly earnings.

Parental Bereavement Pay

£156.66 or, if this is lower, 90% of the average weekly earnings.

The rate of recovery of Statutory Maternity, Paternity, Adoption, ShPP and Bereavement Pay from HMRC remains at 92% if Class 1 NIC’s are greater than £45,000.  If less, then employers may claim 103%.

Student Loan threshold from 6 April 2022

Plan 1: The threshold will be £20,195 per year.

Plan 2: The threshold will remain at £27,295 per year.

Postgraduate Loans: The threshold will remain at £21,000 per year.

Plan 4: The threshold will be £25,375 per year.

Employment Allowance

In the Spring Statement in March 2022, the Chancellor increased this Allowance to £5,000. Eligibility rules apply.

Statutory Redundancy Pay

The maximum weekly threshold for England, Scotland and Wales is set at £571.

The maximum weekly threshold for Northern Ireland is set at £594.

How can I prepare my organisation for the new financial year?

Our expert team will be able to assist you with any queries you have to ensure your employee information is up to date.