HMRC released its final Employer Bulletin for 2021 in December. The full bulletin is still available, and it highlighted several key points:
National insurance increase
Changes to tax take effect from April 2022. For one year, National Insurance contributions will increase by 1.25 per cent for all employees, employers and the self-employed. The government then plans to apply a
Health and Social Care Levy of 1.25 per cent in April 2023 that will apply to those who pay Class 1, Class1A and 1B and Class 4 National Insurance contributions.
The levy will apply in England, Scotland, Wales and Northern Ireland, and is intended to fund a £12bn boost to NHS and social care services in the UK.
Reporting benefits and expenses in real time
Employers who wish to payroll benefits can sign up now for the 2022/2023 tax year. This removes the need to submit P11D returns for almost all benefits.
Employers must register with HMRC before the deadline of 6 April 2022.
Category M National Insurance
Category M no longer applies once an employee reaches 21 years of age.
HMRC advises that it is the employee’s age at the time of payment that should be considered when determining what NI category should be used. For example, category M should not apply if an employee turns 21 in a tax month but is paid later in the month.
To discuss any of the issues raised by the HMRC bulletin in more detail, please contact Simon Balaam.