National Insurance hike: Expert discusses effect on businesses
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
April marks a new financial year for businesses, and this year, it brings the start of an avalanche of new monetary challenges for the entire UK with it. Alongside soaring energy prices, fuel costs and inflation increases, employers and employees are due to face even more financial woes as new levies and taxes are enforced.
The 2022/2023 tax year has seen 1.25 percent added to the current National Insurance rate, bringing the figure a typical employee would pay from 12 percent of their weekly earnings to 13.25 percent.
PayDashboard recently conducted some research surveying over 2,000 people in the UK and found 84 percent to be considerably worried about their finances, and 40 percent to have received little to no financial advice or support from their employers.
Independent job dashboard CV-Library found that out of 4,000 workers surveyed, a majority 75.1 percent of UK professionals are now considering a new job purely because of the cost of living, with 69.1 percent saying salary is now the main driver.
These statistics paint an incredibly dire picture of the current financial state of the UK, however, there are a number of schemes and strategies employers and employees can claim to ease the financial burden.
Laura Hughes at PayDashboard said: “There are many ways that employers can help. They must start by clearly outlining the big things that will impact their workers’ bottom line pay in 2022, such as the Health & Social Care Levy.
“However, there are allowances, and tax breaks that employers and employees are entitled to help them claim some of this money back. Unfortunately, so many are unaware of this and we need to do more to educate and support our workers.”
Express.co.uk spoke to the experts to find out what these are.
Government schemes and tax relief
If you’re eligible, making use of the Government’s schemes to help with rising living costs is a good start.
Greg Wilson, founder of energy comparison website Quotezone.co.uk said: “There are many schemes out there, including the Warm Home Discount and Winter Fuel Payments scheme, that should make bills a little easier to pay. These schemes are targeted to both the elderly and those on a low-income, providing support to the most vulnerable demographics.”
The Warm Home Discount scheme allows those eligible a one-off payment of £140 off their electricity bill for winter 2021 to 2022.
The Winter Fuel Payments scheme provides those born on or before September 26, 1955 with between £100 and £300 to help with heating bill costs.
The Government will also be introducing an energy bills rebate in October, reducing energy bills for households across the country by £200, to be paid back over the course of five years.
There is also an option to claim tax relief for additional household costs if you have to work from home on a regular basis. This can cover gas and electricity, metered water, as well as for business calls and internet access.
Mr Wilson said: “HMRC are offering relief worth £312 per year with no need to provide receipts or factor in any complicated calculations.”
Council tax rebate warning as scammers attempt to cash in [ANALYSIS]
When will Working Tax Credit recipients be moved to Universal Credit? [EXPLAINED]
Households warned over £150 council energy rebate scam [INSIGHT]
Spend to save tax
Salaries fall into four tax brackets depending on how much you earn annually.
If your income falls above one of the tax thresholds, you might want to consider reducing your tax liability through tax-efficient spending.
Martin Gurney, tax expert at Haines Watts Swindon said: “There are several ways you can do this, such as making pension contributions; tax-efficient investments; or Gift Aid charity donations.”
A personal allowance transfer
Another option for further tax relief is to look into a personal allowance transfer.
The personal allowance is a portion of your wages that are completely untaxable, and this Financial year, the amount you can earn untaxed is £12,570.
Mr Gurney said: “Where your spouse or civil partner does not use all of their Personal Allowance, consider jointly electing to transfer an element to you – if you are a basic rate taxpayer – to reduce your family tax burden.”
The Marriage Allowance lets you transfer £1,260 of your Personal Allowance to your husband, wife or civil partner – Recent data indicates that up to 2.4 million qualifying UK couples are missing out on this.
If eligible, the Marriage Allowance can reduce your tax by up to £252 in the tax year (April 6 to April 5 the next year).
Don’t be taken in by online sites making the tax claim for you. Most tax breaks, including the marriage allowance and working from home, are very easy to claim yourself and you don’t need to do a self-assessment tax return.
Ms Hughes said: “There are companies out there who will offer to assess you and make the claim for you for free.
“But they commonly keep 30 to 50 percent of your tax reclaim as their fee. So before you use a managed service like this, investigate what is required and whether you are willing to do it yourself in order to keep more of the cash.”
Source: Read Full Article