As we reach the end of 2021, we look ahead to 2022 and explore some of the changes that businesses can expect.
Following two years grappling with the pandemic, Omicron is bringing further uncertainty. That said, businesses are continuing to recover, rescale and expand, and with the economy bouncing back, 2022 should be a year of growth. Here is a list of changes that may affect your business in the year ahead to help you prepare.
Changes to EU customs controls
Delayed declarations will end, and full declarations will be required.
Prenotification requirements for products of animal origin, low risk animal by-products not for human consumption, and high-risk food not of animal origin come into force. More details available here.
Changes to the Recovery Loan Scheme
The scheme will only be open to small and medium sized enterprises
The maximum amount of finance available will be £2 million per business
The guaranteed coverage that the UK Government will provide to lenders will be reduced from 80% to 70%
The scheme is open until 30th June 2022. More details available here.
Further changes to EU customs controls
Eligible businesses in England receive 66% off business rates bills for the remainder of the 2021/2022 tax year – up to a total value of £2 million for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties. However, from 1st April businesses will be required to pay 100% of their business rates bill.
Eligible businesses in the devolved nations receive 100% off business rates bill for the remainder of the 2021/2022 tax year. From 1st April businesses will be required to pay 100% of their business rates bill.
Please note that the details on business eligibility and rates of relief differ between the devolved nations, specific detail can be found in the following the links;
Rate of VAT for hospitality returning to 20%
Plastic packaging tax (PPT)
A new tax will apply to plastic packaging that is manufactured in, or imported into, the UK that does not contain at least 30% recycled plastic.
This tax will affect all UK manufacturers of plastic packaging, importers of plastic packaging, business customers of manufacturers and importers of plastic packaging, and consumers who buy plastic packaging or goods in plastic packaging in the UK that does not meet the minimum threshold of at least 30% recycled plastic.
The rate of PPT will be £200 per metric tonne of plastic packaging.
Manufacturers and importers of less than 10 tonnes of plastic packaging per year will be exempt from this tax.
Plastic packaging containing at least 30% recycled plastic or any packaging which is not predominantly plastic by weight will not be subject to this tax. More details available here.
Making Tax Digital for VAT will be extended
Making Tax Digital (MTD) is the UK Government’s 10-year strategy to transform the tax system so that it is more effective, more efficient and easier for taxpayers to get their tax right.
Under MTD, businesses must keep digital records and use a third-party, HMRC approved software to submit their tax returns to HMRC. There is a wide variety of HMRC approved software to choose from, including some that are free to use.
Rise in The National Living Wage (NLW)
National Insurance Contribution increase
Further changes to customs controls from 1st July
The recovery from the Covid pandemic, as well as adjusting to the UK’s evolving relationship with the EU are likely to continue to dominate the business agenda in 2022. The transition to net zero and digitalisation of business practices are likely to be important themes throughout 2023, with businesses who plan for upcoming changes likely to have a head start and find this period of transition more manageable.