Small business advice: the legal changes in 2022

Brexit, Spring Statements, tax rules… in our latest small business advice blog we cover the legal changes arriving in 2022.

This year is proving to be a busy one for lawmakers as they announce revisions and new policies across several key areas. This means small businesses need to keep abreast of what’s going on so they can plan for the potential financial implications.

Here is our rundown of what you need to know…

Employment allowance

In his Spring Statement, Chancellor Rishi Sunak announced that employment allowance relief, which allows small businesses to lower their National Insurance contributions, will rise from £4,000 to £5,000. This is effectively a tax cut of up to £1,000 for half a million small businesses.

Plastic packaging tax (PPT)

All UK businesses handling plastics, whether they are manufacturers, importers or consumers, must pay tax on any packaging that doesn’t contain at least 30% recycled plastic. This includes companies that purchase plastic packaging or goods in plastic packaging. Applicable from 1 April, the tax rate is £200 per metric tonne of plastic packaging.

Importing goods

Much of our small business advice centres around the effects of Brexit. From 1 January 2022 businesses need to pre-warn the relevant authorities when they import food, animal and plant products from the EU into Great Britain. The rules are designed to protect the UK from foreign pestilence.

Companies involved in importing these products into Great Britain need to register with the Government using the import of products, animals, food and feed system (IPAFFS). To find out more, please click here. Failure to comply could mean your goods incur extra tariffs or penalties.

The new legislation does not apply to businesses in Northern Ireland importing goods from the EU as the country is in a sanitary and phytosanitary zone with the Republic of Ireland.

Any other goods can still be imported freely from Irish ports, and you do not have to make your customs declaration for 175 days. If goods come into Britain from other EU states, you will no longer be allowed to delay import customs declarations.

The intention is that most businesses will make declarations and pay any tariffs at the point of import, or will employ a customs agent to handle the process. To make importing easier, you can apply to HMRC for special authorisation status, which will take around 60 days.

The final development on importing and exporting involves the need, from 1 January 2022, for a valid declaration and customs clearance when moving goods between Britain and the EU. If your paperwork is not correct, the goods will not be allowed to leave the port (except in Ireland).

For specific details on any of the above, you can visit the Government website.

National Security and Investment Act 2021

Effective from 4 January 2022, the new legislation requires companies or investors wishing to buy UK businesses in sensitive fields, like defence and energy, to gain Government approval. Aimed at defending national security, the act follows similar laws in the USA and Australia.

If you are planning to expand your operation in the near future, you need to be aware of this new law. 

Tax Changes

There are a host of new tax changes coming into play from 6th April, including a ‘Health and Social Cate Levy’ and you can find more information on this and the National Insurance, dividend and corporation tax changes in our recent blog: Key Tax Changes for the New Tax Year. For more information specifically around National Insurance, please visit this blog: National Insurance increase: quick guide for small business owners.

National Living Wage

April 1 also saw the National Living Wage rise from £8.91 to £9.50 for those aged 23 and over. For full details of the national living and minimum wages for the current year, please read our recent blog on this: Everything you need to know about the National Minimum Wage increase.

Changes were also made to the statutory payments for maternity, paternity, adoption, parental bereavement and sickness.

Do you need help?

If you require small business advice, you can contact our friendly financial experts on 0845 606 9632 or email team@thesmartaccountants.co.uk


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