ICAEW's Tax Faculty's provides a summary of the announcements on employment taxes in the Autumn Budget 2021.
2022/23 |
2021/22 |
|
|---|---|---|
Lower earnings limit |
£123 per week |
£120 per week |
£533 per month |
£520 per month | |
| £6,396 per year | £6,240 per year | |
Primary threshold |
£190 per week |
£184 per week |
£823 per month |
£797 per month |
|
£9,880 per year |
£9,568 per year |
|
Secondary threshold |
£175 per week |
£170 per week |
£758 per month |
£737 per month | |
£9,100 per year |
£8,840 per year |
The class 1 national insurance upper earnings limit and upper secondary thresholds are aligned with the income tax higher rate threshold which is frozen at £50,270 from 6 April 2021 until 5 April 2026.
Health and social care levy
Fuel benefit and van benefit charges
The van benefit charge and fuel benefit charges for cars and vans will be uprated by the September 2021 CPI of 3.1%.
2022/23 |
2021/22 |
|
|---|---|---|
Van benefit charge |
£3,600 |
£3,500 |
Car fuel benefit multiplier |
£25,300 |
£24,600 |
Van fuel benefit charge |
£688 |
£669 |
Since April 2021, the van benefit charge for zero-emission vans will be £nil.
National living wage and national minimum wage
Following the recommendations of the independent Low Pay Commission, hourly rates of national living wage (NLW) and national minimum wage (NMW) will increase as follows:
2022/23 |
2021/22 |
|
|---|---|---|
| NLW – aged 23 and over | £9.50 |
£8.91 |
| NLW – aged 21 and 22 | £9.18 | £8.26 |
| NLW – aged 18 to 20 | £6.83 |
£6.56 |
| NLW – aged 16 and 17 | £4.81 |
£4.62 |
| NLW – apprentices | £4.81 |
£4.30 |
Accommodation offset rate |
£8.70 |
£8.36 |
NLW and NMW rates increase from the beginning of the first pay period starting on or after 1 April.
For further details and tips on how to avoid bear traps, register for ICAEW Tax Faculty’s webinar on 29 November 2021 at noon to be presented by Kate Upcraft: "National minimum wage: avoid being named and shamed - it’s not a low pay or software problem".
Disaster planning
Power to make temporary modification to taxation of employment income
To enable the government to quickly and effectively to support taxpayers, HM Treasury will be given the power to make regulations, under ministerial direction, to provide income tax and NIC relief on specific employee expenses or benefits-in-kind (BiK) for a period of up to two tax years in the event of a disaster or emergency of national significance.
This will enable the government where appropriate to:
- Exempt BiK of a specified description from income tax.
- Change the qualifying conditions for exemptions on BiK.
- Exempt specified reimbursements from the charge to income tax.
- Provide relief for specified expenses.
ICAEW welcomes that the government is streamlining its disaster planning in this regard as the ad hoc COIVID-19 easements, while most welcome, led to a great deal of uncertainty for employers and advisers.
ICAEW trusts that the development of this package will incorporate some streamlining of the benefits and expenses rules to bring them in line with how many employees work in this digital age.
Find out more:
Tax Faculty
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
Budget webinar
The Tax Faculty reflected on the Chancellor's announcements in this essential webinar. Freely available, watch the recording to find out what the Autumn Budget 2021 could mean for you and your clients.
More on Autumn Budget 2021
Read the rest of the Tax Faculty's summary of the tax related announcements in the Autumn Budget on 27 October 2021.
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