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With a new year upon us, it is useful to have a clear picture of the key dates for your finances lying ahead in 2022. Since the cost of living is rising (inflation) and COVID-19 continues to pose challenges to the UK economy, staying ahead of these deadlines can help you put more money back into your pocket. Below, our financial planning team at WMM outlines the key deadlines currently known for the coming 12 months. We hope you find this useful and invite you to contact us if you’d like to discuss your own investment strategy.
The self-assessment deadline
For those who need to fill out a tax return (“self assessment”) for the previous tax year, the 31st January is the last opportunity to file (online). If you earn any self-employed income, or if you earn any income not taxed at source – e.g. from dividends – then this must be done soon. Bear in mind that missing the deadline would usually lead to a £100 fine, or up to £900 if put off indefinitely (potentially more if you have additional tax to pay, as you’ll be charged interest). HMRC have announced, for the second year in a row, they are waiving the late filing fee as long as you file online by 28th February 2022.
Interest rate decision
The Bank of England (BoE) met in December 2021 and decided to raise interest rates back up to 0.25%, in an attempt to “cool down” rising inflation. The BoE is expected to meet again in early February to see if further action needs to be taken. If interest rates are pushed up higher, then this is likely to increase monthly costs for those with a variable-rate mortgage. Many are expecting a rise to be announced, but analysts have been proven wrong before. We suggest keeping in contact with your financial planner to ensure you are prepared for whatever outcome.
Ofgem energy price meeting
You likely noticed that your energy bill cost more in December 2021 than in previous years. If this happened, it is likely because Ofgem – the body regulating UK energy prices – put up the maximum threshold that companies could charge customers. Ofgem is expected to meet once more in early February, and it is widely predicted that the threshold could be raised again. This would, sadly, put further strain on household budgets amidst a higher inflationary environment. Prepare yourself by reviewing your discretionary spending budget in the coming weeks.
2021-22 tax year end
The end of the financial year happens on 5th April. From the next year, your allowances refresh and most unused allowances (e.g. ISA allowance, capital gains tax allowance) will be lost. As such, make sure you review your allowances this January and February to make sure you get the most from any tax benefits – such as those for your pension.
National Insurance Contributions (NIC) rise
In 2021, the Government announced the introduction of a rise in NICs and dividend tax to assist paying for health and social care spending. This will be formally introduced at the start of the new 2022-23 tax year, in April. For many workers and investors, this will represent a reduced monthly income. Here, you may wish to consult your financial adviser or planner to see if the impact can be mitigated through good planning (e.g. utilising the aforementioned allowances).
Other key changes
The 6th April will also see the introduction of an increase in State Pension payments – although less than would have been expected had the “Triple Lock” system not been suspended last year. However, the weekly income should rise at least in line with inflation. Later in the year, there should be another Budget from the government – likely in the Autumn. The “mortgage guarantee scheme” introduced in 2021 is scheduled to end in 2022, which could close a window for prospective property buyers with smaller deposits.
Interested in finding out how we can optimise your financial plan and investment strategy? Get in touch today to arrange a free, no-commitment consultation with a member of our team here at WMM.
You can call us on 01869 331469