National Minimum/Living Wage and Pensions
The Government through the budget confirmed they are continuing with their policy for 2022/23 in respect of the National Minimum Wage parliament plan. As such, we see continued increases in all rates with the National Living Wage increasing by 6.6%.
We are now at the Second stage with NLW applying to 23-year-olds and above and there is a further reduction due to the age for NLW reducing further to 21 and this announcement is expected next year. The governments plan is to review NLW targeted at two-thirds of median wage by 2024 (£10.33).
The Low Pay Commission is also to review the exemption from minimum wage entitlement for live-in domestic workers which are often used as a loophole and the LPC have recommended its removal.
Below are rates for 2022/23 from the 1st of April:
Student Loans
2021/22 was the first year with all four plans in place including plan 4 for Scotland. Usually, we would expect to see general increases across the plans and theses have been confirmed for Plan 1 and 4.There is however a review on the other two schemes which will affect possibly lowering the threshold to commence payments. Some media see’s plan 2 possibly aligning to plan 1, so Payrollers need to keep an eye on further updates to confirm rates to apply in 2022/3. The known changes are shown below:
Pensions
It has already been confirmed that the government will temporarily removal the Triple Lock for State Pension increases in 2022/23. This is due to the irregular variance due to the pandemic which could have meant an out-of-scope higher increase than normal – possible up to 8%.
For 2022/23 therefore, it will be increased by the higher of CPI or 2.5% and then it is expected to return to the Triple Lock in 2023/24.
It was also confirmed in the 2020 budget a Call for Evidence on Pension Tax Relief administration which looked at issues for low earners paying via NPA and RAS pension schemes. The issue itself is based on the £10,000 pension threshold versus the personal allowance meaning in certain circumstances the individual could receive an incorrect reduced level of relief.
The output from the CfE has now released with top ups due to the anomaly being paid from 2024/25. There are a number of options in respect of how the refund will be administered and these will be available in due course.
Cars and Vans
Already confirmed through the budget, Company Car and Van Benefit charges will increase by CPI – so, 3.1%:
- The flat-rate van benefit charge will increase to £3,600 from £3,500
- The multiplier for car fuel benefit charge will increase to £25,300 from £24,600
- The flat-rate van fuel benefit charge will increase to £688 from £669
- Zero emission goods vehicles and vans will remain at zero percent
Rishi Sunak also confirmed in the budget fuel rates and Duties will be frozen for a further year but there has been no confirmation around private mileage but expected to remain unchanged.
2022/23 see’s the final increase to the NEDC and WLTP schemes for the calculation of company car tax rates, bringing them in line with each other as shown below in the two charts.
These charts and percentages will now remain the same for a further 2 tax years after which a full review will be performed in 2025/26.
