A Finance Act 2022 employer update for advisers and their clients. This update includes measures from the Finance Act and the mini-budget, also considering other topical issues for employers and employees.

A guide for subscribers.

Finance Act 2022 received Royal Assent on 25 February 2022. The Chancellor held his mini-budget on 23 September 2022. This was followed by a  Fiscal Statement on 17 October 2022 and Autumn Statement on 17 November 2022. This update includes measures from the Finance Act and subsequent statements as they apply to 2022-23, also considering other topical issues for employers and employees.


Changes to National Insurance 

There have been three key changes to National Insurance announced that affect the 2022-23 tax year which will have a significant impact on payrolls. See the National Insurance tab for full details.

Tax codes

  • The basic PAYE tax code is set at 1257L for employees. This gives an employee a personal allowance of £12,570 for the year. This is the same as for 2021-22.

See What is the 2022/23 PAYE tax code? and PAYE Codes: Starters/leavers & 0T code

PAYE Settlement Agreements: a new digital version of the PSA1 form

  • HMRC has redesigned the PSA1 form following feedback from employers. 
  • A digital submission route has also been introduced which will allow employers to submit one form for all employees regardless of their location.
  • If using the paper PSA1, employers may have to complete more than one form depending on where employees live.

See PAYE Settlement Agreements

Payment deadline and calculation reminder

  • Tax and National Insurance owed under a PAYE Settlement Agreement (PSA) must be paid by 22 October after the tax year to which the PSA applies (19 October if you pay by post).
    • Late payments may result in penalties and/or interest being charged.
  • Employers must send their calculations to HMRC even if there is no amount due to pay.
  • If HMRC approves a PSA before the start of a tax year, employers can include any expenses and benefits contained in the agreement.
    • If the agreement is approved after the start of the tax year, employers might need to report some items separately.

See Employer Bulletin: August 2022

Employers PAYE: introduction of variable payment plan

  • From 3 October 2022 (previously 19 September 2022) employers will be able to take advantage of a new variable Direct Debit payment plan.
  • The service can be accessed through Pay employers’ PAYE or directly through the business tax account and the employers' PAYE service.
  • A new link ‘Set up a Direct Debit’ will be introduced and this will allow employers to set up a Direct Debit instruction, authorising HMRC to collect directly from their bank account based on their return submissions.

See Employer Bulletin: August 2022 

Construction Industry Scheme (CIS)

From April 2022

  • Limited companies must enter their Corporation Tax Unique Taxpayer Reference (CT UTR) or COTAX reference number in a new Employer Payment Summary (EPS) field to claim credit for CIS deductions as a subcontractor.
    • Any EPS submissions which include a claim for CIS deductions, but do not include the CT UTR will be rejected.

See CIS: Contractors and Subcontractors


Salaries & National Insurance Contributions (NICs)

  • For discussion of the optimal monthly or weekly salary that can be paid by an employer without incurring a liability for employer or employee National Insurance Contributions, see Salary 2022/23 (avoiding NICs) which incorporates the changes to NICs rates announced in September 2022  (see National Insurance tab).

 PAYE deadlines


National Living Wage (NLW)

From April 2022

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