April 2022 Tax Increases – Should I Pay Bonuses Before They Come into Force ?


As you will be aware, changes to the tax rules, designed to increase funding for the NHS, will begin to take effect in April 2022.  

With just a few weeks to go business owners need to consider what impact the changes will have on their business and personal tax positions – and decide whether they should take any action.

What’s changing?

National Insurance

All classes of National Insurance contributions (including employers) will increase by 1.25% from April 2022.

This will mean a reduction in take home pay for most employees and increased payroll costs for employers.

Dividend Tax

From April 2022, dividend tax rates will increase by 1.25%. 

Basic rate taxpayers will have to pay tax at 8.75% rather than the current 7.5%.

Higher rate taxpayers will see the rate of tax they pay rise from 32.5% to 33.75%, with additional rate, tax payers rate of tax, increasing to 39.6%.

The £2,000 dividend allowance, to which everyone is entitled, will remain unchanged.

Further Information

If you would like more information, please contact Peter Robertsonhello@dixcartuk.com or your usual Dixcart UK contact.

The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.