If you are worried that you may not be able to pay your Self Assessment tax return before the 31st January deadline, it may be worth looking into whether you can set up a payment plan.
HMRC have a monthly payment plan called ‘Time to Pay’ to assist customers with meeting their obligations. If you owe less then £30,000, you can use the affordability checker on GOV.UK to help you figure out the best arrangement for yourself.
Unless you have a reasonable excuse, the penalties for failing to complete your Self Assessment on time can be large. Nearly 44,800 have already used ‘Time to Pay, to sort their tax bills so if you feel you could benefit from this, use the link below to find out more.
Read More27 million workers will have more cash in their pocket this year thanks to a yearly tax cut that came into effect on 6th January.
The main rate of National Insurance has been cut from 12% to 10%, reducing National Insurance by more than 15%. For the average salaried worker earning £35,400 per annum, this equates to a saving of £450 a year and £1,000 for a household with two average earners.
This is the largest cut to the current personal tax system since July 2022 when the National Insurance personal allowance increased from £9,880 to £12,570, allowing workers to hold onto an extra £2,690 tax free and taking 2.2 million workers out of paying tax altogether.
To mark the tax cut, HMRC have also launched an online tool to help people understand how much they can save in National Insurance this year.
Read MoreNew rates of the National Living Wage (NLW) and National Minimum Wage (NMW) come into force on 1 April 2024. These follow the recommendations set by the Low Pay Commission (LPC) this autumn.
The new NLW and NMW rates are set out below. The NLW currently applies to all workers aged 23 and over and from 1st April 2024 this will be extended to all workers over the age of 21.
| Rate from April 2023 | Increase (£) | Increase (%) | |
|---|---|---|---|
| National Living Wage (21+) | £11.44 | £1.02 | 9.8% |
| 18-20 year old rate | £8.60 | £1.11 | 14.8% |
| 16-17 year old rate | £6.40 | £1.12 | 21.2% |
| Apprentice rate | £6.40 | £1.12 | 21.2% |
| Accommodation offset | £9.99 | £0.89 | 9.8% |
The report details the LPC’s prediction that the NLW will achieve the Governments 2019 target of being equal to two-thirds of the median hourly pay for those aged 21 and over.
This also marks the largest ever increase to the minimum wage in cash terms and the first time the NMW has increased by more than £1.
Read MoreHMRC interest rates are set in legislation and are linked to the Bank of England base rate. There are 2 rates:
The late payment interest rate encourages prompt payment. It ensures fairness for those who pay their tax on time.
The repayment interest rate compensates taxpayers fairly, when they overpay, for loss of use of their money.
The current late payment and repayment interest rates applied to the main taxes and duties that HMRC currently charges and pays interest on are:
The Self-Assessment deadline for the 2022 to 2023 tax year is 31 January 2024 but there are many benefits to filing earlier.
Self-Assessment customers could take advantage of four key benefits when filing their tax return early, HM Revenue and Customs (HMRC) has revealed.
The Self-Assessment deadline for the 2022 to 2023 tax year is 31 January 2024. Customers who file early will have more control over their financial affairs and beat the January rush.
The four benefits to filing early are:
New rates of the National Living Wage (NLW) and National Minimum Wage (NMW) come into force on 1 April 2023. These follow recommendations made in the March 2023 by the Low Pay Commission (LPC). To mark the uprating, this report looks ahead at the implications of the incoming rates and the LPC’s remit for the year ahead.
The new NLW and NMW rates are set out below. The NLW applies to all workers aged 23 and over.
| Rate from April 2023 | Current rate (April 2022 to March 2023) | Increase | |
|---|---|---|---|
| National Living Wage (23+) | £10.42 | £9.50 | 9.7% |
| 21-22 year old rate | £10.18 | £9.18 | 10.9% |
| 18-20 year old rate | £7.49 | £6.83 | 9.7% |
| 16-17 year old rate | £5.28 | £4.81 | 9.7% |
| Apprentice rate | £5.28 | £4.81 | 9.7% |
| Accommodation offset | £9.10 | £8.70 | 4.6% |
The report sets out the LPC’s latest projections for the NLW rate required in 2024 to reach the target of two-thirds of median earnings. Our central estimate of the on-course rate of the NLW for 2024 is £11.16, within a range of £10.90 to £11.43.
Read MoreThe rates of National Insurance contributions (NICs) for both employees and employers are unchanged for 2023/24. The National Insurance Class 1 rate on expenses and benefits for 2023 to 2024 is 13.8%.
You can only make National Insurance deductions on earnings above the lower earnings limit.
| Class 1 National Insurance thresholds | 2023 to 2024 |
|---|---|
| Lower earnings limit | £123 per week £533 per month £6,396 per year |
| Primary threshold | £190 per week £823 per month £9,880 per year |
| Secondary threshold | £175 per week £758 per month £9,100 per year |
| Freeport upper secondary threshold | £481 per week £2,083 per month £25,000 per year |
| Upper secondary threshold (under 21) | £967 per week £4,189 per month £50,270 per year |
| Apprentice upper secondary threshold (apprentice under 25) | £967 per week £4,189 per month £50,270 per year |
| Veterans upper secondary threshold | £967 per week £4,189 per month £50,270 per year |
| Upper earnings limit | £967 per week £4,189 per month £50,270 per year |
Deduct primary contributions (employee’s National Insurance) from your employees’ pay through PAYE.
| National Insurance category letter | Earnings at or above lower earnings limit up to and including primary threshold | Earnings above the primary threshold up to and including upper earnings limit | Balance of earnings above upper earnings limit |
|---|---|---|---|
| A | 0% | 12% | 2% |
| B | 0% | 5.85% | 2% |
| C | nil | nil | nil |
| F (Freeport) | 0% | 12% | 2% |
| H (apprentice under 25) | 0% | 12% | 2% |
| I (Freeport – married women and widows reduced rate) | 0% | 5.85% | 2% |
| J | 0% | 2% | 2% |
| L (Freeport – deferment) | 0% | 2% | 2% |
| M (under 21) | 0% | 12% | 2% |
| S (Freeport – state pensioner) | nil | nil | nil |
| V (veteran) | 0% | 12% | 2% |
| Z (under 21 – deferment) | 0% | 2% | 2% |
You pay secondary contributions (employer’s National Insurance) to HMRC as part of your PAYE bill.
Pay employers’ PAYE tax and National Insurance.
| National Insurance category letter | Earnings at or above lower earnings limit up to and including secondary threshold | Earnings above secondary threshold up to and including Freeport upper secondary threshold | Earnings above Freeport upper secondary threshold up to and including upper earnings limit, upper secondary thresholds for under 21s, apprentices and veterans | Balance of earnings above upper earnings limit, upper secondary thresholds for under 21s, apprentices and veterans |
|---|---|---|---|---|
| A | 0% | 13.8% | 13.8% | 13.8% |
| B | 0% | 13.8% | 13.8% | 13.8% |
| C | 0% | 13.8% | 13.8% | 13.8% |
| F (Freeport) | 0% | 0% | 13.8% | 13.8% |
| H (apprentice under 25) | 0% | 0% | 0% | 13.8% |
| I (Freeport – married women and widows reduced rate) | 0% | 0% | 13.8% | 13.8% |
| J | 0% | 13.8% | 13.8% | 13.8% |
| L (Freeport – deferment) | 0% | 0% | 13.8% | 13.8% |
| M (under 21) | 0% | 0% | 0% | 13.8% |
| S (Freeport – state pensioner) | 0% | 0% | 13.8% | 13.8% |
| V (veteran) | 0% | 0% | 0% | 13.8% |
| Z (under 21 – deferment) | 0% | 0% | 0% | 13.8% |
More than 2.1 million couples currently benefit from Marriage Allowance, but HM Revenue and Customs (HMRC) estimates that thousands more couples are missing out because they don’t realise that they may be eligible.
Customers earning less than £12,570 a year can transfer up to £1,260 of their Personal Allowance to their higher-earning partner, to reduce the amount of tax they pay. They can backdate their claim to include any tax year up to 6 April 2018, which could be worth up to £1,242 in tax relief.
Those who are eligible can apply at GOV.UK for free and keep 100% of their claim. Successful claims will result in a reduction in the amount of tax paid by the higher-earning partner.
Read MoreThe £6 billion tax cut will see the level at which people start paying National Insurance rise to £12,570 – lifting 2.2 million people out of paying any personal tax and ensuring people get to keep more of the money they earn.
The threshold change means that 70% of UK workers will pay less National Insurance, even after accounting for the Health and Social Care Levy that is funding the biggest catch-up programme in NHS history and putting an end to spiralling social care costs.
The last major personal tax cut of today’s magnitude was nearly ten years ago, when the income tax personal allowance increased by £1,100 in 2013. Today’s threshold change is more than double that, as working people are now able to hold on to an extra £2,690 free from tax.
Read MoreNew rates of the National Living Wage (NLW) and National Minimum Wage (NMW) come into force on 1 April 2021. These follow recommendations made in the autumn by the Low Pay Commision (LPC). To mark the uprating, this report looks ahead at the implications of the incoming rates and the LPC’s remit for the year ahead.
The new NLW and NMW rates are set out below. The NLW applies to all workers aged 23 and over. This will come down again to 21 by 2024.
| Rate from April 2022 | Current rate (April 2021 to March 2022) | Increase | |
|---|---|---|---|
| National Living Wage | £9.50 | £8.91 | 6.6% |
| 21-22 year old rate | £9.18 | £8.36 | 9.8% |
| 18-20 year old rate | £6.83 | £6.56 | 4.1% |
| 16-17 year old rate | £4.81 | £4.62 | 4.1% |
| Apprentice rate | £4.81 | £4.30 | 11.9% |
| Accommodation offset | £8.70 | £8.36 | 4.1% |
These increases mark the first step on the path to the Government’s target of an NLW set at two-thirds of median earnings by 2024. This report sets out the latest pathway to that target, based on projections of average pay growth. We are currently consulting on the NLW and NMW rates to be introduced from April 2023.
Link: The National Minimum Wage in 2022
Read More