Here we have detailed all of the critical dates, deadlines, and changes that small business owners need to be aware of for the coming year.
As a sole trader, you will pay your income tax and National Insurance liabilities in two separate stages, known as ‘payments on account’. These are payments in advance towards your tax bill.
By the 31st of January 2022, sole traders will need to pay:
- The balance of any tax for the year 2020/21 is due
- The first payment on account of tax for the year 2021/22 is due
By the 31st of July 2022, you will need to have paid:
- The second payment on account of tax for 2021/22 is due
Then by the 31st of January 2023:
- The balance of any tax for the year 2021/22 is due
- The first payment on account of tax for the year 2022/23 is due
If you have issues or difficulties, you can contact HMRC for Time to Pay or set up a payment plan. You do have to pay interest if you are late with any payments, so set up a payment plan as soon as possible.
You must file your 2021-22 Self-Assessment tax return before the 31st of October 2022 following the end of the tax year for a paper return. And then the 31st of January 2023 following the end of the tax year for an online return.
Key dates for UK VAT
31st of March 2022:
- All VAT deferred in the period to June 2020 (under COVID reliefs; deferred initially to March 2021) must be paid in full.
The 1st of April 2022:
- The temporarily reduced rate of 12.5 per cent for specific hospitality and attractions supplies (under COVID reliefs) will cease, making such supplies subject to standard rate (20 per cent) VAT again.
- UK VAT returns for periods starting on or after this date must be Making Tax Digital (MTD) compliant for all UK VAT-registered businesses.
- UK VAT returns for periods starting on or after this date fall under the new penalty regime for late returns and/or payments.
Your deadlines may vary depending on your VAT return period and whether you do quarterly, monthly, or annual returns.
For January 2022:
- The UK is planning to require complete customs controls for all goods coming into mainland UK from the EU (although some controls are postponed until the 1st of July 2022).
National minimum wage and statutory rates
National Minimum Wages
From the 1st of April, the national minimum hourly rates will increase:
- For 23+ rate will increase from £8.91 to £9.50
- For 21-22, rates will increase from £8.36 to £9.18
- For 18-20, rates will increase from £6.56 to £6.83
- For under 18s rates will increase from £4.62 to £4.81
- Apprenticeship wages will increase from £4.30 to £4.81
Statutory rate changes
The following statutory rate increases will apply from the 11th of April 2022:
- Statutory Sick Pay (SSP) will be increased weekly from £96.35 to £99.35.
- Statutory Maternity Pay and Paternity Pay and Statutory Adoption Pay will increase weekly from £151.97 to £156.66.
- Lower earnings limit will also increase from £120 to £123.
To be entitled to these statutory payments, the employee’s average earnings must be equal to or more than the lower earnings limit.
- On the 6th of April 2022, you must update employee payroll records for the new tax year.
- On the 19th of April 2022, you must submit your final full payment summary and employer payment summary for the year ended on the 5th of April 2022 and pay any tax/NIC due for the year.
- On the 31st of May 2022, you must give a P60 to all employees on your payroll who are working for you on the last day of the tax year.
- On the 6th of July 2022, you must have submitted a report of employee expenses and benefits.
- On the 19th of July 2022, you must submit payment of Class 1A NICs by post, the 22nd of July 2021 if paid electronically.
National Insurance Increase
The government has announced that they will be increasing taxes to cover the cost of health care and social services. The 1% tax, which is split between employee contributions as well as employer’s side (with more funds going towards employees), takes effect on April 2022 – giving employers time notice so their pay scales can adjust accordingly; this also includes National Insurance payments due increased by 25bps for one year only!
This increase in National Insurance contributions will apply to:
- Class 1 (paid by employees)
- Class 4 (paid by self-employed)
- Secondary Class 1, 1A and 1B (paid by employers)
If you’re working and earning less than the National Insurance primary threshold or lower profits limit, then there is no cost for your coverage. But if an employer pays more in total earnings above this secondary level, they will pay a percentage of those additional wages based on how much each worker earns throughout their careers with them
This increase does not affect those over the State Pension age.