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2022 Spring Statement - payroll changes

Article ID
12263
Article Name
2022 Spring Statement - payroll changes
Created Date
14th April 2022
Product
IRIS PAYE-Master, IRIS Payroll Business, KashFlow Payroll, IRIS Earnie IQ, IRIS GP Payroll, IRIS Bureau Payroll, Earnie
Problem

The 2022 Spring Statement introduced three points that affect payroll as below:

  • From April 2022, the annual Employment Allowance, available to certain eligible businesses, will be increased from £4,000 to £5,000
  • From 6th July 2022, the primary threshold at which individuals begin paying National Insurance will be aligned with that of income tax at £12,570
  • In 2024, the government will reduce the basic rate of income tax from 20% to 19%

Resolution

Last updated 14/04/2022

Employment Allowance

Since this change takes effect from the start of the 2022/2023 tax year, we are in the process of updating our payroll products. You need to install the update prior to completing tax month 1/week 4 to ensure the correct default annual Employment Allowance of £5,000 is used in the payroll.

The updates are now available, watch out for a prompt via your software.

Alternatively, you can download the updates from www.iris.co.uk/update.

The Employment Allowance update is included in the following versions (or higher):

  • PAYE-Master: v22.11.0.3
  • GP Payroll: v2022.11.3
  • Earnie: v22.11.2
  • Earnie IQ: v22.11
  • Payroll Business: v22.11.3
  • Bureau Payroll: v22.11.3

Where you have set the amount to £4,000 for any employers, this will be updated to allow for the increased cap. If this is not correct, then please make the required changes.

National Insurance 

The increase of the National Insurance primary threshold to £12,570, does not take effect until 6th July 2022. As such, we have not amended the products in the current mandatory patch. This change will be implemented in the products in the coming months after which we will issue updated versions of the products before July 2022.

NOTE: Until we introduce the changes, Directors’ annual National Insurance will calculate on the current threshold. HMRC expects this. Once we implement the change, the national insurance due from the Directors, including possible rebates, will correct accordingly.

Tax Rate changes in 2024

We will continue to follow the progress of this announcement and amend the payroll software as per legislative requirements at the right time

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