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UK Law Changes that Founders need to know

If you’re a business owner, you’ll be aware of the pressure of deadlines. It can often seem like endless deadlines are looming over you, whether they be for tax returns or payroll dates. To add to the pressure, there are several UK law changes in 2022 that you need to be aware of in order to remain legally compliant.

To make it easier for you, we’ve put together a list of all the new legislation in 2022 you need to be aware of, as well as key accounting dates to ensure you don’t miss anything off your list.

UK Law Changes 2022

First of all, let’s explore some of the law changes due to take place in 2022 as these are likely to impact you in some way in the coming months.

Employment bill

The biggest piece of new legislation in 2022 is likely to be the Employment Bill which was first announced in December 2019. Although the official legislation hasn’t been published as of yet, it’s expected that the following measures will be rolled out in the latter half of the year.

Vulnerable workers

Firstly, vulnerable workers will be afforded more protection following the coalition of three existing labour legislation bodies. Once collated, the organisation will expand its remit to ensure vulnerable workers are aware of and receive the funding and employment protection afforded to them.

Tips and service charges

Existing legislation and the statutory Code of Practice will be amended to ensure that employees keep 100% of the tips and service charges they accrue at work. Businesses will no longer be able to withhold such monetary benefits from the workers who have earned them.

Carers

Employees who have caring responsibilities outside of work will be entitled to a week of unpaid leave under the new Employment Bill when it comes into force.

Neonatal leave

Similarly, if you have any employees who have a baby in neonatal care, they will be entitled to one week of leave per week their baby is in neonatal care, up to 12 weeks. Any employees who have been with you for more than 26 weeks and who earn more than minimum wage will be entitled to the statutory rate of parental leave pay during their neonatal leave.

Pregnancy redundancy protection

There is already redundancy protection in place for pregnant employees; however, under the new legislation 2022, this protection will be effective from the day they notify their employer of their pregnancy and will last for six months after their baby is born.

Variable hour contracts

Any employees who are employed on zero-hours, unpredictable hours, or variable hours contracts will be able to request a stable and/or more predictable contract after they complete 26 weeks of employment.

Sexual harassment

The government is expected to – and has already promised – that it will bring in new laws relating to sexual harassment in the workplace. As an employer, you will have a legal duty to proactively prevent sexual harassment in the workplace. This may involve hosting seminars and enforcing stricter punishments on those who are deemed to be in breach of sexual harassment rules.

In addition to this, it’s expected that the government will include third-party harassment in its updated policy. This means customers or suppliers must also adhere to the statutory Code of Practice, and you have an obligation as an employer to act if they don’t.

Commercial Rent (Coronavirus) Bill

If your business was forced to close for the duration of the pandemic and due to loss of income you couldn’t pay for your commercial rent, you were protected through the forfeiture process. This was compounded by the Commercial Rent Arrears Recovery legislature, but following changes to the Coronavirus Act 2020 and most restrictions now being lifted, the protections afforded to employers are now coming to an end.

Instead, new pandemic-related rent arrears rules will be introduced through the Commercial Rent (Coronavirus) Bill which is set to come into force on 25 March 2022. If this applies to your business, you can learn more about the expected changes here.

Winding-up petitions

In a similar way to being protected from eviction, businesses were also provided with creditor protection for the duration of the pandemic if they found themselves in financial difficulty. As the pandemic draws to a close, the protection offered through the Corporate Insolvency and Governance Act 2020 is also coming to an end, meaning that because normal trading conditions are once again present, creditor action restrictions are also being lifted.

Unhealthy food promotion

Does your business have more than 50 employees and sell unhealthy/junk food? If so, from October, you will no longer be able to promote BOGOF or 3 for 2 deals on high sugar, salt, or saturated fat items in high traffic store areas. This means you won’t be able to promote a buy one get one free offer on packs of sweets in areas like the tills, store entrance, or at the end of aisles.

This also applies online, and if you provide free refills on fizzy/sugary drinks, this will also be banned when the new rules come into force.

While we’ve got you, how’s your payment process?

An issue we experience all too often is businesses struggling with their processes for payments. This is why we teamed up with Pleo and Telleroo, to explore how you can fix a broken payment process. Don’t miss this School of Startups event!

Watch now

Accounting deadlines

Now that we’ve covered the main UK law changes in 2022, let’s take a look at some other key dates for your diary: accounting deadlines.

VAT deadlines 2022

There are a number of VAT deadlines you need to be aware of this year, with the first being if you’re a UK registered VAT company, you need to make sure your VAT returns are filed digitally – no matter your turnover. The last day you can sign up for this is 1 April, though HMRC recommends you should do it earlier.

If your business is hospitality or attraction based and you’ve been paying a reduced VAT rate of 12.5%, it will increase to the normal 20% on 1 April.

If you deferred your VAT payment up to June 2020 to March 2021, this will be payable by 31 March 2022.

Aside from these dates, you need to ensure you submit and pay your usual VAT returns at the correct time for your business (this will depend on whether you pay your VAT monthly, quarterly, or annually).

Customs controls

January saw the introduction of full customs controls for goods being shipped from the EU into the UK; however, previously postponed certification and checks on agri-food and plant imports will come into force at the start of July.

National Minimum Wage increase

On 1 April, the National Minimum Wage will increase, meaning you will need to assess your payroll and make changes accordingly before this date. The changes are as follows:

· Apprenticeship – increasing from £4.30 to £4.81

· Under 18 – increasing from £4.62 to £4.81

· 18-20 – increasing from £6.56 to £6.83

· 21-22 – increasing from £8.36 to £9.18

· 23+ (National Living Wage) – increasing from £8.91 to £9.50

If you have any employees earning the minimum/living wage, you will need to update your payroll systems to reflect this.

Interested to learn more about how you can make your payroll process simpler, more efficient, and easier to update at times like this?

We recently helped Beam with their payroll process to make it faster, easier, and hassle-free. You can learn more about how we did this and how we might be able to help you by reading our case study.

Read now

National insurance increase

In April, National Insurance is increasing by 1.25%. In 2023 it will be known as the Health and Social Care Levy. This increase applies to people below the state pension age who exceed the National Insurance Primary Threshold/Lower Profits Limit.

Dividend tax increase

Income tax on dividends will also increase in April by 1.25%, meaning if you earn any money from dividends, you will need to ensure you save more money for your due tax.

Statutory rate payments

All statutory payments will be increasing as of 11 April. Under the new legislation, statutory sick pay (SSP) will increase from £96.35 to £99.35.

In addition to this, the following statutory payments will also increase, with all of them going from £151.97 per week to £156.66 per week:

· Statutory adoption pay

· Statutory maternity pay

· Statutory maternity allowance

· Statutory paternity pay

· Statutory shared parental pay

Employees are only eligible for the above entitlements if they meet the lower earning limit. From 11 April, this will increase to £123 from £120 per week.

Payroll registration

By 6 April, you must have completed your payroll registration for every employee on your payroll. This means you need to curate a payroll record for every worker, ensure their tax code is correct for the new tax year (commencing 6 April), and ensure their correct tax code is inputted on your payroll software.

Full Payment/Employer Payment Summaries

All tax, NICs, and Full Payment and Employer Payment summaries must be paid by 5 April – the end of the tax year. You have until 19 April to pay Class 1A NICs electronically.

Send out P60s

You need to have issued P60 forms for your employees by 31 May.

Send HMRC P11D forms

Do you provide your employees with benefits like interest-free loans, company cars, or even childcare vouchers? If so, you need to make sure you send your P11D forms to HMRC by 6 July.

How Accountancy Cloud can help

There are a lot of UK law changes in 2022 to get to grips with, and there are even more accounting deadlines you need to be aware of. Keeping on top of all this as well as running your business can be tricky, but that’s where we can help.

Our team of accounting experts are on-hand to ensure you never miss an accounting deadline with our state-of-the-art accounting software, online accounting, CFO and R&D services. We want to help you run your business as smoothly as possible, and our accounting software allows us to do just that.

To find out more about how we can help you hit the upcoming 2022 accounting deadlines and automate your systems, please get in touch with us.

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