| National Insurance U-Turn |
| In April 2022 Class 1 National Insurance (NI) contributions increased by 1.25p in the pound, this has now been reversed by the Government from 6 November 2022. This may impact some of your clients who use Payroll, rest assured the QuickBooks product will automatically be updated to reflect these changes. Increases to Class 1A, Class1 B and Class 4 National Insurance Contributions have also been reversed by 1.25p in the pound. This increase in National Insurance was the first step towards introducing the Health and Social Care Levy, an initiative that has now been scrapped. Income Tax reduction The Government will cut the basic rate of income tax to 19% from April 2023 (One year earlier than previously communicated). Meanwhile, the 45% additional rate of income tax will be abolished for England, Wales and Northern Ireland taxpayers (Different rates and thresholds for Scotland apply). Instead there will be one single higher rate of income tax of 40% from April next year. Corporation tax increase scrapped During the Spring Statement, the former Chancellor announced an increase in the main rate of Corporation tax, rising from 19% to 25% in April 2023. This tax increase has now been cancelled and will not take place as scheduled. |
| Any other news in the business sector? |
| Whilst the news around Income Tax, National Insurance and Corporation Tax is the headline business news, there are further updates you may find interesting when speaking to clients: – The IR35 reforms of 2017 and 2021 will be repealed on 6 April 2023 – This means Agency workers (Contractors) providing their services via an intermediary will once again be responsible for determining their employment status, and paying the appropriate amount of tax and National Insurance contributions – The Annual investment allowance amount will remain at £1m indefinitely – Start-up companies will now be able to raise up to £250,000 under the Seed Enterprise (SEIS) scheme that gives tax relief to investors. From April 2023 the criteria for entry has been widened, meaning more companies are eligible – The amount of shares that can be optioned to employees under the Company Share Option Plan (CSOP) has been doubled from £30,000 to £60,000. This increase will be introduced from April 2023 |