Important Money Changes for 2022

Posted in General on 6th January 2022 by Jackson Stapleton

As you may be aware, there will be many financial changes this year. The key changes that may effect the clients of our practice are detailed below.

The National Minimum Wage will see an increase in April by the following amounts:

• National Living Wage for over-23s: from £8.91 to £9.50 an hour
• National Minimum Wage for those aged 21-22: from £8.36 to £9.18
• National Minimum Wage for 18 to 20-year-olds: from £6.56 to £6.83
• National Minimum Wage for under-18s: from £4.62 to £4.81
• The Apprentice rate: from £4.30 to £4.81

The state pension will increase by up to £5.50 a week from April 2022 after September’s inflation of 3.1%.

From April 2022, all employees, employers and the self-employed will pay an extra 1.25p more in National Insurance for every pound they earn.

• If you earn £20,000, you’ll pay an extra £130
• If you earn £30,000, you’ll pay an extra £255
• If you earn £50,000, you’ll pay an extra £505
• If you earn £80,000, you’ll pay an extra £880
• If you earn £100,000, you’ll pay an extra £1,130

Dividend Tax will rise by the following:

• Basic rate taxpayers – 7.5% to 8.75%
• Higher rate taxpayers – 32.5% to 33.75%
• Additional rate taxpayers – 38.1% to 39.35%

Tax Thresholds will remain frozen by the following amounts:

• The personal allowance will stick at £12,570 in April, and every year until 2025/26
• The higher rate threshold will be frozen at £50,270
• The capital gains tax annual exempt amount remains at £12,300
• The pension lifetime allowance is still £1,073,100
• The inheritance tax nil rate band is £325,000, and the residential nil rate band £175,000
• Plus everything from ISA allowances to the annual gifting allowance, the high-income child benefit tax charge and the savings allowance remain the same

There will be a change in the state pension rules for British citizens who move to live in, or move between, an EU or EEA country or Switzerland. They will no longer be able to count time lived abroad in the following countries towards their state pension:

• Australia (before 1st March 2001)
• Canada
• New Zealand

This doesn’t affect those who continue to live in the UK, or are living in the EU, EEA or Switzerland by December 31st 2021.

If you have any questions then please do get in touch.