Statutory rate increases
In early January, the Department for Work and Pensions proposed what the new rates of pay will be for the annual increase in April. These are expected to be as follows:
The rates of Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay are expected to increase on 11 April 2022, from £151.97 to £156.66 per week.
The rate of Statutory Sick Pay is expected to increase on 6 April 2022, from £96.35 to £99.35 per week.
Furthermore, the National Living and National Minimum Wage rates will increase from 1 April 2022 as follows:
- For workers aged 23 or over from £8.91 to £9.50 per hour.
- For workers aged 21 to 23 from £8.36 to £9.18 an hour.
- For 18 to 20-year-olds from £6.56 to £6.83 per hour.
- For 16 to 17-year-olds from £4.62 to £4.81 per hour.
- For apprentices in their first year or aged under 19 from £4.30 to £4.81 per hour.
National Insurance (NI) thresholds and new categories
The following chart outlines the new thresholds that will operate for 2022-23
| Weekly | Monthly | Annual | |
| Lower Earnings Limit (LEL) | £123 | £533 | £6,396 |
| Primary Earnings Threshold (PT) | £190 | £823 | £9,880 |
| Secondary Earnings Threshold (ST) | £175 | £758 | £9,100 |
| FUST | £481 | £2,083 | £25,000 |
| Upper Earning Limit (UEL) | £967 | £4,189 | £50,270 |
Income tax information from April 2022
The allowances, rates and thresholds which will be effective from 6 April 2022 have been published.
| Allowances, rates and thresholds from 6 April 2022 | |||
| Personal Allowance | £12,570.00 | per annum | |
| PAYE Thresholds | £242.00 | per week | |
| £1,048.00 | per month | ||
| Standard/Emergency tax code | 1257L | ||
| Tax Code uplifts | L / M / N | n/a no change in personal allowance | |
| Income Tax Rates – England and Northern Ireland | 1 – 37,700 | 20% | Basic rate |
| 37,701 – 150,000 | 40% | Higher rate | |
| 150,001 > | 45% | Additional rate | |
| Income Tax Rates – Scotland | 1 – 2,162 | 19% | Starter rate |
| 2,163 – 13,118 | 20% | Basic rate | |
| 13,119 – 31,092 | 21% | Intermediate rate | |
| 31,093 – 150,000 | 41% | Higher rate | |
| 150,001 > | 46% | Top rate | |
| Income Tax Rates – Wales | 1 – 37,700 | 20% | Basic rate |
| 37,701 – 150,000 | 40% | Higher rate | |
| 150,001 > | 45% | Additional rate | |
| Higher rate threshold – England and Northern Ireland | £50,270.00 | ||
| Higher rate threshold – Scotland | £43,662.00 | ||
| Higher rate threshold – Wales | £50,270.00 | ||
Reminder: Health and social care levy
Further to the above rate increases, from 6 April 2022, the new Health and Social Care levy will mean employees, employers as well as the self-employed pay a further 1.25% each, in tax from 6 April 2022.
The HMRC need to update their existing systems to properly process these additional funds. Therefore, temporary measures will be put in place which will result in a temporary increase to the main and additional rates of class 1 (A and B) and class 4 (self-employed) National Insurance contributions from April 2022.
These will revert to normal levels in April 2023. At this point the new identifiable Health and Social Care Levy will be in force and the 1.25% increase will instead be collected under the levy.
This new levy will be subject to the same reliefs, thresholds, and requirements of the qualifying NIC contributions.
For those employers who employee individuals over the state pension age, then they will not be affected by the temporary measures and will only become liable to pay the levy from April 2023.
Further information
For more information about the upcoming changes or to speak to one of our advisors, please Contact Us
