Yesterday in the House of Commons, Prime Minister Boris Johnson stood up and outlined his plans for how the government are going to pay for the many reforms required for social care and the NHS across the UK.
Whilst the Conservatives had promised in their last manifesto that they would not increase taxes, today it was announced that they would be doing just that, with Mr Johnson saying that the “global pandemic was in no-one’s manifesto”.
It was announced that from April 2022, National Insurance contributions (NICs) for working age employees, self-employed and employers will increase by 1.25% and be added to the existing NHS allocation.
Then, from April 2023, the 1.25% Levy will be formally separated out (detailed separately on the employee’s payslip as such) and will also apply to individuals working above State Pension age. NICs rates will return to their 2021-22 levels.
Dividend Tax will also be increased by 1.25% from April 2022. This means that, if base dividend tax rates were to stay the same for 22/23 as they are now for 21/22, the new rates would be:
* First £2000 dividends remain tax free
* Dividends falling in the basic rate tax band would increase from 7.5% to 8.75%
* Dividends falling in the higher rate tax band would increase from 32.5% to 33.75%
* Dividends falling in the additional rate tax band would increase from 38.1% to 39.35%
Mr Johnson said that these increases would lead to £12billion a year for the next three years for frontline services, but Labour leader Sir Keir Starmer said that the measures were a “sticking plaster”.
PaperRocket Accounting provide accounting and tax services to professional contractors, freelancers, and small businesses working in the UK.
We offer our clients a flexible choice of fixed fee monthly packages which cover all of their accounting and tax needs (so no hidden costs or surprise bills!). All of our accounting packages include a monthly subscription for a cloud accounting software subscription provided by the awarding winning FreeAgent.
Each of our clients is given their own dedicated qualified accountant with unlimited access in person, telephone, or by email.
We pride ourselves on our client satisfaction and customer service and were awarded ‘Best Contractor Accountancy’ firm 2020 in The Contracting Awards and ‘Welwyn Hatfield Business of the Year 2019’ in the SME Hertfordshire awards.
To find out how we can help you please get in touch now.