Writing our latest blog post comes with the caveat that the following five tax changes for the 2022/23 tax year are subject to future change. 

That’s because we’re in the midst of a living costs crisis, exacerbated by Russia invading Ukraine and the effects that’s having on oil and gas prices.

Put simply, we are all facing a big squeeze on our finances in 2022/23 and the Government has a history for performing U-turns on policy.

That leaves the door open for late change and, even though there’s no Spring Budget as it stands, that could always change at the 11th hour. 

So, bear that in mind if you read this in a few months’ time and think ‘what on earth are Stapletons on about’ – it was accurate at the time of writing. 

National Insurance to increase

All National Insurance contributions (NICs) rates are set to rise by 1.25 percentage points from 6 April 2022. 

This increase will fund the development of a health-and-social-care levy, which will contribute to NHS funding and ease the social care crisis.

Whether you’re an employee, employer or self-employed, the increase will be added to your NICs bill in 2022/23. 

The NICs lower-earnings limits will rise in line with September 2021’s rate of inflation, as measured by the Consumer Prices Index – 3.1%. 

Dividend tax rates to rise

For directors and shareholders who earn money from dividends in 2022/23, all three dividend tax rates are also set to rise by 1.25 percentage points from next month. 

Dividend tax applies on the amount to receive above the £2,000 annual dividend allowance, and ties in with your income tax bands. 

If you’re a basic-rate taxpayer, you’ll pay tax on dividends at 8.75%. Rates of 33.75% and 39.35% apply in the higher and additional-rate bands.

Like the NICs increase, the proceeds of the dividends tax increase will also go towards the health-and-social-care levy. 

Business rates

Last month, we wrote about business rates for bricks-and-mortar retailers. This business tax applies on non-domestic properties. 

The good news is the business rates multiplier will not increase in line with inflation. Instead, it has been frozen and will remain at the 2021/22 levels. 

Retail, hospitality and leisure firms can benefit from a 50% discount to their business rates bill from 1 April 2022, up to a value of £110,000 per premises.

That should be a big help to businesses like pubs, music venues, cinemas, restaurants, hotels, theatres, and gyms. 

Capital gains tax reporting

This actually came into play late last year, but it’s worth a reminder to raise awareness of the obligations for owners of additional residential property. 

You’ve got 60 days to report and pay capital gains tax on disposal of UK residential property. The clock starts ticking from the completion date.

This could catch out buy-to-let landlords, second homeowners, and accidental landlords. Feel free to read more about it here

Inheritance tax reporting

New rules came into force on 1 January 2022 about whether or not an estate can be classed as an ‘excepted estate’. 

Beneficiaries of ‘excepted estates’ might not have to report the estate’s value – if there’s no inheritance tax to pay or for other reasons.

To discuss any of these upcoming or existing tax changes for 2022/23, contact us on info@stapletonsaccountants.co.uk or call 01363 773191.

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