If your business is looking ahead and planning for 2022, it’s important to know about a range of changes to taxes that have been announced by the Government. From increasing National Insurance contributions to VAT cuts for tourism and hospitality, we take a look at the Government tax changes in 2022 you need to know about.
1) National Insurance contribution increase
On the 7th of September, Prime Minister Boris Johnson announced a rise in National Insurance payments, despite opposition from many sides, in order to cover the increasing costs of health and social care. The NHS has been under immense pressure during the pandemic, so all employees over 18 and earning more than £184 a week, or self-employed people earning more than £6515, will pay an extra 1.25% in National Insurance contributions.
2) Limit on VAT cut for hospitality and tourism
The hospitality and tourism sector has been hit hard by the pandemic and lockdown, so the Government reduced their VAT payments. After September 2021, the reduced VAT rate was increased to 12.5% and in March 2022 it will return to the standard VAT rate, so it’s important to make sure you budget for this.
3) Rise in dividend tax
Another new tax increase is on dividend tax, which will also rise by 1.25%. This means that investors will have to pay more on the profits they make from company shares, whether they pay basic, higher or additional rate income tax. This could also affect business owners who pay themselves by dividends, so it is worth getting tax advice if this affects you.
Contact us today
If you need help with your business finances or tax returns, Highwoods & Associates are here to help. For specialised tax advice and experienced accountants you can trust, call 0207 979 2000 today.
Image by geralt via Pixabay