February 2022
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66<br />
Wanstead Village Directory<br />
Are you and your business ready for the year ahead?<br />
There are significant changes taking place<br />
in <strong>2022</strong>, which could affect the costs of<br />
running a business and the time taken to<br />
manage the administration of your tax<br />
and accounting.<br />
Many of these changes are due to take<br />
place in April, around the beginning of the<br />
new tax year and so business leaders in<br />
Wanstead and South Woodford need to<br />
act now to prepare for them.<br />
MTD for VAT<br />
The final stage of Making Tax Digital for<br />
VAT takes place this year and will require<br />
all VAT registered businesses to comply<br />
with the new digitised tax system from<br />
April – whether they are above the £85,000<br />
registration threshold or below it.<br />
Businesses new to the MTD regime must<br />
follow strict rules, including using HMRCcompliant<br />
software to report and record<br />
VAT information quarterly.<br />
The latest HMRC data shows that only a<br />
third of VAT-registered businesses with<br />
taxable turnover below £85,000 have<br />
voluntarily signed up to MTD for VAT<br />
ahead of April <strong>2022</strong>.<br />
National Insurance Increase<br />
The Government announced a 1.25<br />
percentage point increase to National<br />
Insurance Contributions (NICs) from April,<br />
which will affect employees, employers and<br />
the majority of self-employed workers.<br />
For a typical basic rate taxpayer earning the<br />
current UK median income for this group of<br />
£24,100, they will have to pay an additional<br />
£180 a year, while for those earning the<br />
median higher rate income of £67,100, they<br />
would have to pay an additional £715.<br />
Dividend Tax Rate<br />
If you operate a business, you can use the<br />
tax-free dividend allowance of £2,000. Any<br />
dividends over this amount will currently<br />
be taxed at different amounts depending<br />
on your marginal rate. You should be aware<br />
that from April these rates will also increase<br />
by 1.25 percentage points.<br />
Here to help<br />
These are just a few of the significant changes<br />
affecting businesses in the year to come.<br />
Act now to save tax, maximise<br />
dividends in the current tax year<br />
and manage the upcoming hike to<br />
National Insurance.<br />
To find out how we can support you, get<br />
in touch with our Partner Jay Gandesha<br />
by calling 020 8477 0023 or emailing<br />
jay@davisgrant.co.uk<br />
To advertise, call 020 8819 6645 or visit wnstd.com
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