Tax Increases from April 2022: What You Need to Know

Woman Uses Calculator

It’s the end of year tax season! 

We’re here with a run-down on a couple of updates affecting your earnings in the new tax year, particularly regarding national insurance contributions and dividend tax changes due to come into effect from April 6th 2022.  

These changes were announced as part of the government’s 2021 autumn budget to address funding gaps within the NHS and social care services and the impact of the coronavirus pandemic with a further tweak to national insurance thresholds following last week’s spring statement.

What does this mean?  

From April 6th 2022, employers, employees and the self-employed will now pay an additional 1.25% more for national insurance. Any dividends will also be subject to a 1.25% increase.   

Although the 1.25% increase will initially be introduced as a temporary increase in national insurance contributions from April 2022, it will be designated as a separate tax from April 2023 under a new Health and Social Care Levy banner. From April 2023, National Insurance contributions will be brought down to current levels. 

In response to concerns over the cost of living crisis, the recent spring statement announced that national insurance thresholds would rise to £12,570 from July 6th 2022, meaning you will pay national insurance contributions on less of your overall earnings. This staggered approach from the government in implementing the higher threshold after the tax year starts to allow time for payroll software to accommodate these changes.  

National insurance changes

Employee Class 1 NIC’s (Main/higher rate)Employer Class 1 NIC’sSelf-employed Class 4 NIC’s (Main/higher rate)
2021/22 rates12% / 2%13.8%9% / 2%
2021/22 earnings/profits thresholds£9,568 per year£8,840£9,568
2022/23 rates13.25% / 3.25%15.05%10.25% / 3.25%
2022/23 earnings/profits thresholds
(6/4/2022 to 5/7/2022)
£190 per week
£823 per month
£9,880 per year
£175 per week
£758 per month
£9,100 per year
£190 per week
£823 per month
£9,880 per year
2022/23 earnings/profits thresholds
(6/7/2022 to 5/4/2023)
£242 per week
£1,048 per month
£12,570 per year
£175 per week
£758 per month
£9,100 per year
£242 per week
£1,048 per month
£12,570 per year

Dividend tax changes

Basic RateHigher RateAdditional Rate

How will it affect you?

National insurance is the tax paid by employees and the self-employed on earnings and profits above a certain threshold. Your national insurance contributions depend on your employment status and how much you earn.  

Therefore, the impact of the upcoming changes will largely depend on how you freelance, whether you take on work on a PAYE basis (incl. through an umbrella), through your own limited company or as a sole trader. 

PAYE freelancers

Employee NI contributions on your payslip will increase from 12% to 13.25%. Employer’s NI will also be going up from 13.08% to 15.05%, and how this will impact production budgets depends on the individual end client. 

If you are employed via an umbrella company, please note that your assignment rate will be subject to a total increase of 2.5% to account for both employee and employer NI increases.  

Limited company freelancers

You can earn £2,000 tax-free for any income from dividends. The rate basic taxpayers pay on income will rise from 7.5% to 8.75%;  the upper rate becomes 33.75% (from 32.5%) and the additional rate 39.35% (from 38.1%).

Depending on the salary you pay yourself through your company, employee and employer’s class 1 national insurance in line with the latest thresholds will become due. These changes will also affect any inside IR35 payments subject to PAYE tax and national insurance.  

Sole traders (if you are registered as one outside of your work with us)

Thresholds for self-employed people are set for the tax year as a whole. The 2022/23 Lower Profits Limit (LPL) for Class 4 NIC will be determined by apportioning £9,880 from April to July and £12,570 from July to the end of the year. The resultant figure is £11,908, above which Class 4 NIC will be payable on business profits (Source: APSCo).

The accrual of state pension benefits for self-employed people depends on paying Class 2 NIC (a weekly charge depending on how many weeks you are registered as a sole trader within the tax year). Those with profits between the Small Profits Threshold and the LPL will not be required to pay Class 2 NIC for 2022/23 but will still earn credit for the year (Source: APSCo).

We hope you found this summary useful. Managing taxes when self-employed can be a daunting affair, particularly when handling multiple income streams, and it is always best to seek advice from a tax professional/accountant.  

If you’re looking for clarity regarding rates and how agencies like us would process your work, don’t hesitate to contact a team member, and we will do our best to help!

Guide to Freelancer Insurance

Having adequate insurance protects you and your business should unexpected events or claims arise. The adage of “hope for the best, prepare for the worst” holds true when it comes to business insurance—it makes good business sense, and many clients expect you will have this in place. 

Why do I need it? 

Whether you work through an agency or independently, you operate a business providing a high level of skill and expertise to end clients. With that comes the risk that you could be held liable for any errors or mistakes that adversely affect an end client. 

It is essential to manage these risks in the event of any claims made against you, however unfounded they may be. You should also consider cover for claims from third parties, and it is mandatory to have employer’s cover if you have employees.  

What type of cover do I need?

There are several types of insurance products available on the market. You must hold professional indemnity and public liability for any work through Blueberry. The type of insurance you take out will ultimately depend on the kind of work you do and your annual turnover. Many end clients will specify the type and levels of coverage required as part of their contractual requirements. Professional indemnity is often the bare minimum outlined.  

As a professional in the creative industries:

Professional indemnity covers you for professional negligence claims, errors or omissions, confidentiality breaches or copyright infringement. Professional indemnity also works on a “claims-made” or retroactive basis, meaning your policy must be in force at the time of the claim and cover you for work carried out in previous years.

Public liability covers you for any accidental damage to property or injury to a person due to your professional actions, whether working on your own or a client’s premises. 

Employers’ liability covers you against claims from employees during working hours (only applicable if you have your employees).

You may also wish to cover your kit with business equipment damage cover or contents insurance.

How much will it cost?

This will depend on what constitutes adequate insurance in light of your work and the business you run. Insurance advisors are best placed to guide you on this and can offer bespoke packages tailored to your needs.  

For a quotation, you can speak with Kingsbridge Contractor Insurance. They provide a 10% discount to Blueberry contractors. Please note that there is no requirement to obtain your cover through Kingsbridge should you wish to source cover elsewhere. If you are a member of a professional membership body such as BECTU or IPSE, you may be able to avail of similar discounts through their insurance partners. 

Rosa Lykiardopoulos is ready to push the boundaries of storytelling in design and animation

If there is someone whose work we’ll never have enough of, it must be Rosa’s. In the days leading to International Women’s Day (8th March), we met to talk about her post-production journey, career struggles, and favourite projects.

Rosa Lykiardopoulos is a resourceful senior Motion Graphic Designer, Compositor, Animation Director, illustrator, and Photoshop Artist. Her magnetic style, strong instinct for storytelling, and multilingual skills—combined with an incredible eye for detail and excellent technical knowledge—make her an indispensable collaborator. Rosa’s work has been featured in books, magazines, galleries and festivals. Past clients include Nike, Pepsi, Marvel, Cartoon Network, BBC, BT Sport, BT TV, Sainsbury’s, Motorola and many others.

Did you always want to pursue a career in post-production?

I started post-production a bit by chance. From very early on, I knew I wanted to do animation. I was very inclined to stop motion, but I bought a computer and started playing with a software called POSER. I don’t think it even exists anymore. My boyfriend was working for a Sports Post Production company. He told me they were looking for after effects animators to join the design team. He got me an interview, and they asked me if I knew After Effects. And I said yes! Although I didn’t have a clue how to use it. Somehow I got the job (some things are meant to happen!), so I ran home and spent the weekend doing tutorials!

Where did you train?

I’m entirely self-taught. Since studying film direction at Eliseo Subiela’s film school in Argentina, I planned to specialise in stop motion films. But life took me in a different direction, and now I love post-production.

How did you get your break in the industry?

Although I had already worked in post-production in Argentina, my clients and experience weren’t enough for the London market when I came to the UK. So it took me a good two years of working in restaurants to survive and applying to jobs through Until one day, the miracle happened, and I got my first London job. A breakfast TV show for Channel 4 where the GFX were prepared the same morning before going live. Starting time: 3 am! After that, I got the opportunity to join Blueberry, and I haven’t stopped working since then. It’s been 18 years.

Are there any women in post who have inspired you?

Yes, Klaudija Cermark. I worked with her at AMV BBDO. She worked in the London industry for ages and even wrote a book, “How to get into and survive Film and TV Post Production.”

How much creative control do you have when working on a project?

It depends on the project. Some are entirely structured from start to finish. Storyboard, assets provided, brand guidelines, and so forth. Others are the total opposite—and the best ones for me! I am currently working on lots of music videos: editing, grading and adding FX. It’s probably one of my favourite things to do. Maybe it is because I am not working for massive clients yet, but every project is in my hands for now. And I have complete creative freedom, which is a dream come true for us designers.

What attracts you to a project?

If it’s animation, I am in! Otherwise, it depends on the creative freedom, the client (it’s not the same working for NIKE as for a local supermarket!), and how much time they give me to work on it.

Are there any particular types of projects you’d love to work on?

Yes, animation ones! The ones that have some kind of animated story or animated characters. I like to tell stories through my work. I do corporate videos when I have to do them, but I am keener to work on projects with some kind of message or story. And I like to work on sports promos, as usually the sports producers are looking to try new styles and are very open to pushing the boundaries. And, of course, keep editing music videos. I would love to work for a prominent Latin artist like J Balvin.

What advice do you have for other women pursuing a career in post-production?

Let’s do it!

See more of Rosa’s work in illustration, animation, and design on her website, or learn about her personalised children’s posters. Interested in working with Rosa? Visit her Blueberry profile and reach out to us!