New rules and regulations small business owners need to know in 2022
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Posted: Tue 4th Oct 2022
There are several new rules and regulations small business owners need to be aware of in 2022. Here's a summary. We are keeping this post updated.
1 October: Right to work checks
To help businesses during the COVID-19 pandemic, the government relaxed rules around checking employees' right to work and allowed businesses to do the checks via a video call with scans of documents.
That concession was removed on 1 October and businesses now need to return to carrying out manual in-person checks on original documents or use the Home Office online service. For employees who are British and Irish citizens, businesses can use a digital identity service provider to carry out digital document checks using identification document validation technology (IDVT).
Relevant resource:
Government's right to work checks guidance
1 April: Making Tax Digital for VAT
The government launched its Making Tax Digital initiative in 2019. It aims to transform the tax system and make it more efficient.
Since April 2019, businesses with sales over the £85,000 VAT threshold have been required to submit their VAT returns to the government digitally. From 1 April 2022, businesses that charge VAT but have a taxable turnover below the £85,000 VAT threshold must also submit their VAT returns digitally using Making Tax Digital-compatible software. There are some exemptions.
From 1 November 2022, businesses can no longer use their existing VAT online account to file quarterly or monthly VAT returns. Businesses that file annual VAT returns can use their VAT online account until 15 May 2023.
To comply, businesses must sign up to Making Tax Digital. Businesses must also keep certain VAT records digitally.
Relevant resources:
1 April: Plastic Packaging Tax
From 1 April 2022, a new tax of £200 per tonne applies to plastic packaging manufactured in, or imported into the UK, that does not contain at least 30% recycled plastic.
The tax affects 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.
Manufacturers and importers of less than 10 tonnes of plastic packaging per year are exempt.
Relevant resources:
1 April: VAT for hospitality sector returned to 20%
The temporary 12.5% VAT rate for goods and services provided by businesses in the hospitality, holiday accommodation and attractions sectors, that was introduced due to the impact of coronavirus, returned to the pre-pandemic rate of 20% on 1 April 2022.
Businesses need to update menus, websites and other places where prices are displayed.
1 April: National Minimum Wage/National Living Wage
From 1 April 2022, the following National Minimum Wage and National Living Wage hourly rates apply:
National Living Wage (23+): £9.50 (6.6% increase)
21-22 year old rate: £9.18 (9.8% increase)
18-20 year old rate: £6.83 (4.1% increase)
16-17 year old rate: £4.81 (4.1% increase)
Apprentice rate: £4.81 (11.9% increase)
Relevant resource:
Discovery calls with advisers are for Enterprise Nation members only. Join for free.
April: National Insurance and dividends tax increase
UPDATE: During his mini-Budget speech on 23 September, chancellor Kwasi Kwarteng announced that the National Insurance and dividends tax increase will be scrapped from 5 November 2022.
On 1 April 2022 a 1.25 percentage points increase was introduced for class 1 primary (paid by employees), secondary class 1, 1A and 1B (paid by employers) and class 4 (paid by the self-employed) National Insurance Contributions (NICs). Dividend tax also increased by the same amount.
The change is to fund increased health and social care costs. From April 2023, it will be legislated as a separate 1.25% ‘health and social care levy’ and NICs and dividend tax will return to 2021/22 levels.
Many business and employee groups have called for the increase to be dropped due to concerns over the cost of living crisis. Chancellor Rishi Sunak has refused to do that but he announced in the Spring Statement an increase to the threshold under which no National Insurance is paid from 6 July 2022. It is now £12,570 and matches the income tax threshold.
UPDATE: During his mini-Budget speech on 23 September, chancellor Kwasi Kwarteng announced that the National Insurance and dividends tax increase will be scrapped from 5 November 2022.
Relevant resources:
Discovery calls with advisers are for Enterprise Nation members only. Join for free.
6 April: Employment Allowance increases to £5,000
As Rishi Sunak announced in the Spring Statement, the Employment Allowance, which allows businesses to reduce their employer National Insurance contributions (NICs), increased from £4,000 to £5,000 from 6 April 2022. The government says this means businesses will be able to employ four full-time employees on the National Minimum Wage without paying employer NICs.
Relevant resources:
24 March: Return of statutory sick pay (SSP) waiting days
With the closure of the Coronavirus Statutory Sick Pay Rebate Scheme, the three-day waiting time for paying SSP was reinstated for coronavirus-related SSP on 24 March 2022. SSP is no longer payable from day one of coronavirus-related absences.
Related resource:
Employer guide to statutory sick pay
1 January: Importing goods from the EU to Great Britain
Since the end of the Brexit transition period, the government has been phasing in changes to customs regulations. Until 31 December 2021, businesses importing goods into Great Britain from the European Union (except Ireland) had 175 days to submit a full customs declaration after physically importing goods. The ability to delay declarations ended on 1 January 2022. Businesses must now meet full customs requirements with most having to make declarations and pay relevant tariffs at the point of import.
If you’re importing animal products, you must also be prepared to submit pre-notifications via the import of products, animals, food and feed system (IPAFFS).
Relevant resources:
Importing goods into the UK: What small businesses should know
Watch a webinar: A conversation with the government's director of UK exports
Watch a webinar: A small business checklist for completing customs declarations
Discovery calls with advisers are for Enterprise Nation members only. Join for free.
1 January: Border controls
On 1 January 2022, new rules were introduced which require ports and other border locations to control goods moving Great Britain and the EU. This means that unless goods have a valid declaration and have received customs clearance, they will not be able to be released into circulation, and in most cases will not be able to leave the port, except from in Ireland.
Goods may be directed to an Inland Border Facility for documentary or physical checks if these checks cannot be done at the border.
Businesses must also submit an "arrived" export declaration if the goods are moving through one of the border locations that use the arrived exports process.
If businesses do not follow the correct process, the new systems will not permit your goods to leave the country and they will be turned away as they will not hold export clearance.
1 January: Rules of origin
The UK's deal with the EU means that goods imported or exported to or from the EU may benefit from a reduced rate of customs duty under rules of origin. Throughout 2021, businesses have been allowed to export goods to the EU using tariff preference and get supplier declarations afterwards. Following a change on 1 January 2022, you must now have supplier declarations (where required) at the time you export your goods.
Relevant resources:
1 January: Commodity codes
Commodity codes are used worldwide to classify goods that are imported and exported. They are standardised up to six digits and reviewed by the World Customs Organisation every five years. Following the end of the latest review, the UK codes changed on 1 January 2022.
Relevant resources:
More Brexit-related changes
New customs controls on imports were due to come into force in July 2022 but the government has announced they will no longer be introduced. In a press release, the Cabinet Office said:
"Russia's illegal invasion of Ukraine, and the recent rise in global energy costs, have had a significant effect on supply chains that are still recovering from the pandemic.
"The government has therefore concluded that it would be wrong to impose new administrative requirements on businesses who may pass-on the associated costs to consumers already facing pressures on their finances."
The government now plans to introduce the controls at the end of 2023.
Controls no longer being introduced for EU goods in July 2022 are:
A requirement for sanitary and phytosanitary (SPS) checks currently at destination to be moved to a Border Control Post (BCP)
A requirement for safety and security declarations on EU imports
A requirement for health certification for further SPS imports
A requirement for SPS goods to be presented at a BCP
Prohibitions and restrictions on the import of chilled meats from the EU
Relevant resources:
1 March: Smoke free rules in Wales
New smoking rules came into force in Wales on 1 March 2022. All hotels, guesthouses, inns, hostels, self-contained/temporary holiday accommodation and members’ clubs must now be smoke-free and can no longer offer designated smoking bedrooms.
Owners needed to convert any smoking accommodation/designated smoking bedrooms to smoke-free by 1 March. It is now against the law to smoke in these areas and a fine could be imposed.
Relevant resources:
4 January: National Security and Investment (NSI) Act
New rules were introduced on 4 January 2022 that require businesses and investors to tell the government about an acquisition that could harm the UK's national security. The government can then scrutinise and intervene in certain acquisitions. It can also impose certain conditions on an acquisition or, if necessary, unwind or block it.
Relevant resource:
1 October: Restrictions on promotion of high fat, salt and sugar (HFSS) products
This rule does not yet apply to the smallest businesses but we are including it for reference.
Promotions on food and drinks high in fat, sugar and salt (HFSS) in medium and large retailers have been restricted in England and Wales since 1 October 2022.
Medium and large businesses, including those with 50 or more employees, cannot have multibuy promotions such as 'buy one get one free' or '3 for 2' offers on HFSS products.
Less healthy promotions can no longer be featured in key locations, such as checkouts, store entrances, aisle ends and their online equivalents. Free refills of sugary soft drinks are also prohibited in the eating-out sector.
As part of the regulations, the government has provided local authorities with the option of issuing civil penalties for non-compliance.
Relevant resources:
24 March: Commercial Rent (Coronavirus) Act 2022
These regulations introduce a legally binding arbitration process for eligible commercial landlords and tenants in England and Wales who have not reached an agreement over non-payment of rent due to the impact of the coronavirus pandemic.
The law applies to commercial rent debts of businesses including pubs, gyms and restaurants which were mandated to close, in full or in part, from March 2020 until the date restrictions ended for their sector.
Relevant resource:
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