Statutory Parameters for 2022/2023 Tax Year

The breakdown of all UK statutory parameters for each tax year can be found here.

Tax Bands/Tax Rates

The tax rates for England/Northern Ireland, Wales and Scotland have not changed from the previous tax year.

The tax bands for England/Northern Ireland and Wales have not changed from the previous tax year.

The tax bands for Scotland have changed.

Emergency Tax Code

The Emergency Tax Code of 1257L has not changed.

Tax Code Uplift

There is no tax code uplift for 2022/23 tax year.

National Insurance Thresholds/Rates

The National Insurance Thresholds have changed. Please refer to Statutory Parameters for Each Tax Year page for details. The breakdown of the thresholds has changed due to the introduction of FUST threshold for Freeport National Insurance. In the table below, it shows the parameter values for each threshold and percentage rate used for weekly frequency. The Statutory Parameters for Each Tax Year link shows Monthly and 2 Weekly breakdown.

To fund the NHS and social care across the UK, the National Insurance contributions have been increased by 1.25% for both employee and employer contributions. The table below demonstrates the percentage values that will be charged for the thresholds of pay (using a weekly frequency) for the different National Insurance Categories.

This table gives an example of what the increase will mean in monetary terms comparing to 2021/2022 tax year.

Student Loan/Postgraduate Loan

The percentage deduction rates have not changed. Plan Type 1 and 4 threshold values have changed.

Statutory Payments

Statutory Payments have changed.

When you download the new tax year and import the statutory parameters, FastTrack360 will automatically up-rate existing statutory values against payees who have SMP/SAP/SPP/ShPP payments determined for the new tax year.  This is currently not available for Statutory Parental Bereavement Pay as these values are applied directly in the pay batch.

For SSP, during the pay batch process, the FastTrack360 will determine the change in the daily SSP rate when a sick period spans the 2 tax years.

Apprenticeship Levy

Apprenticeship Levy of 0.5% and annual allowance of £15000 has not changed.

Employment Allowance

Employment Allowance of £4000 has not changed.

Pension Thresholds

Pension threshold parameters has not changed from 2021/2022 tax year.

Veteran National Insurance

Following on from 2021-2022 where employers were given additional relief for recruiting veterans from the armed forces, the HMRC has provided a separate National Insurance category to use so that the relief to employer National Insurance can be given directly in the payroll. If a veteran is employed, there is significant cost saving for the employer for the first year of the veteran’s civilian employment. The table below gives an example of the savings comparing A category to V category:

Please refer to this page to obtain more information about the qualification for operating veteran National Insurance. The information below describes the changes in FastTrack360 for using the newly provided category.

Product Changes

Payee Screen - HMRC Details

If you have an existing payee who is a veteran already on the payroll, you would have used an age appropriate NI category in tax year 2021/2022. The HMRC has now supplied the category of ‘V' so that you can claim relief directly in the payroll. In order to operate the category of ‘V’, you will need to add a new validity period in the HMRC Details section of the payee record for the first pay period of the tax year. Then, in the NI Category list, select 'V’.

When selecting the category of 'V', a new field will display labelled First Civilian Employment Date. This field must be entered when selecting this particular category.

If you have a new payee join your organisation who is a Veteran, when you add their payee record, you will need to select the category of 'V' manually and then add their First Civilian Employment Date.

Pay Period Close

The pay period close in the Pay Group maintenance screen has the functionality to update a payee’s NI category based on their age as at the next period’s pay date. This has been enhanced to update the payee’s NI category to an age appropriate category at 1 year anniversary of the payee’s first civilian employment date.

Claiming for 2021/2022 tax year

If you have recruited a veteran in tax year 2021/2022, you can claim this relief directly via the HMRC by writing a letter to include:

• The reference (heading) ‘Overpaid NI contributions’

• Their employee’s name, date of birth and National Insurance number

• An explanation that they are reclaiming Veteran’s relief

• The period they have overpaid in

• Confirmation that they are claiming for a qualifying veteran and retain evidence to show this (HMRC may request to see this evidence at a later date)

• The account number, sort code and account name for the bank account where they want their refund to be paid

Claims for one employee to be sent to:

HM Revenue and Customs

National Insurance Contributions and Employer Office

BX9 1AN

Claims for more than one employee to be sent to:

HM Revenue and Customs

National Insurance Contributions and Employer Office

BX9 1BX

Freeport National Insurance

As part of the government’s work to ‘level up’ and boost economic activity across the UK, they aim to create up to 11 Freeports in locations across the UK. English Freeport locations were selected through a fair, open and transparent competitive process, which ran from November 2020 to February 2021. In March 2021, it was announced that, subject to completing the necessary authorisation processes, the following locations would become Freeports:

• East Midlands Airport

• Felixstowe & Harwich including the Port of Felixstowe and Harwich International Port

• Humber including parts of Port of Immingham

• Liverpool City Region including the Port of Liverpool

• Plymouth & South Devon including the Port of Plymouth

• Solent including the ports of Southampton, Portsmouth and Portsmouth International Port

• Thames including the ports at London Gateway and Tilbury

• Teesside including Teesside International Airport, the Port of Middlesbrough and the Port of Hartlepool

The government remains committed to establishing at least one Freeport in each of Scotland, Wales, and Northern Ireland as soon as possible. For more information about Freeports, please refer to the .Gov.uk website.

Freeports will have different customs rules than the rest of the country and will be innovative hubs, boost global trade, attract inward investment and increase productivity. In doing so, the government wants Freeports to generate employment opportunities to the benefit of some of our most deprived communities around the UK. The government has announced that Employer National Insurance Contributions (NICs) is to be included in the wider Freeports initiative and a reduction in the rate of employer NIC’s will be applied for all Freeport based businesses i.e., employers located within a prescribed geographic area and only for employees who are working in that area. This change in rate would see all employers based within and employing people working within the Freeport geographic area, apply a zero-secondary rate of employer NICs for such employees’ earnings above the secondary threshold up to and including a new Freeport Upper Secondary Threshold (FUST). Balance of earnings above FUST would be charged at 15.05%.

• The employer is located in the Freeport area

• The payee has an employment start date from 06/04/2022

• Workers are working more than 60% of their time in this area

• The time limit is for a period of up to 36 months

• This also applies to Deemed Contractors

The relief will be delivered by introducing four new Freeport NIC category letters:

• F - (standard category letter)

• I - (married women & widows entitled to pay reduced NICs)

• S - (employees over the state pension age)

• L - (employees who can defer paying 13.25% NICs and pay only 3.25% because they are already paying it in another job)

These new category letters mirror existing NIC category letters A, B, C and J. If an Employer has an employee for which they would use a different NIC category letter (e.g., Mariners), they will be able to contact HMRC at the end of the tax year and a manual process will be in place to enable overpaid employer NICs to be claimed back. However, it is envisaged that such cases would be extremely rare, due to the eligibility criteria.

Where several different NIC Category letters could be applied, the employer has discretion to choose the NIC Category letter which provides most benefit. For example, if a Freeport employer hired a new worker, who was also a Veteran, various category letters may apply. It would be for the employer to select which category letter is most beneficial to them. Employee categories B, C, I, J, L, S will take priority over other employer reliefs, after first ensuring any employee reduced rate category is given priority.

Here is a table to show the difference in the employer contribution when a Freeport is in operation comparing to other National Insurance categories:

Product Changes

Payee Screen - HMRC Details

The National Insurance category list will now include the NI categories of:

• F

• I

• S

• L

When first creating a payee, the system will apply the NI category based on the payee’s date of birth. You can then override the determination should you wish to apply a Freeport category. The system will validate if the payee’s employment start date is on or after 6 April 2022. There is no further validation on the correct selection of these categories.

The HMRC are not anticipating that payee’s NI categories will fluctuate as they are basing these rules that the payee is going to be working in a Freeport area for 60% of their working time. However, FastTrack360 does enable you to change the NI category between the standard age categories and Freeport categories but the management of this is manual. If a payee changes age from 20 to 21 and they are on a Freeport category of ‘F', the system will not change them to an ‘A’ category as the user has overridden the determination by applying the 'F’ category.

Pay Batch - Wage Costs

Within the Wage Costs stage of the pay batch process, the threshold values now include FUST so that users can see the breakdown for the employer contribution. The HMRC deduction stage will not show FUST as this is not relevant for the employee contributions.

Open

Period Close

At the moment, as a Freeport National Insurance Category does not expire for 36 months, the period close procedure will not automatically change a payee who is on a Freeport category to another age dependant category. In a future tax year end release, this will be addressed to meet the requirement to expire the category after 36 months.

Health and Social Care Levy - Payslip Message

As highlighted in the Statutory Parameters 2022/23 section, the amount of National Insurance employees and employers make is increasing. This is to help fund the NHS and social care. The HMRC has requested for employers to output a message on payslips for 2022/2023 tax year, where possible, to inform payees of the uplift to contributions. The HMRC has provided a suggested message of:

1.25% uplift in NIC funds NHS, health & social care.

This has automatically been applied to the Pay Company > Payslip Message field in your application similar to the screenshot example below.

Open

It is your decision if you wish to output this message onto your payslips or whether you wish to change it to another message. You are free to remove the message from this section. Please be aware of the following regarding this payslip message:

• It will only display if you have included payslip messages and Pay Company Payslip row in your document format. See an example below in the document format configuration screen:

• If you also have payslip messages in your document format for contractor self bill invoices, the message would also be output.

• If this is the case, and you wanted to output the message to your PAYE employees only, an alternative approach would be:

  • Remove the payslip message from Pay Company > Payslip Details > Payslip Message that has been applied above.

  • Go to your payslip template for your PAYE payees.

  • Click on Payslip Message to highlight the section.

  • In the right hand panel click the plus symbol in Rows/Columns to add another item.

  • Click on the folder to edit the newly created item. This will open up the Field Properties

  • Give it a name e.g. HMRC Message

  • Click on Item.

  • Click on the ellipsis button (3 dots) against the Database Field. This will open another pop up screen.

•  

  • Enter the required message in the Text Before field.

  • Click Ok which will close the pop up.

  • Click Ok which will close the Field Properties.

  • Click Save to save the changes. You can preview the output to see your message.

Scottish Earnings Arrestment Parameters

The Scottish Earnings Arrestment parameters are changing from 6 April 2022. The parameters will be: