Legislation
Tax changes & allowances
Date
6 April 2023
Summary
Reduction of the additional rate earnings threshold
- The biggest announcement for tax was the reduction of the additional rate earnings threshold.
- Top 45% additional rate of income tax will be paid on earnings over £125,140, instead of £150,000 (from 6 April 2023).
- This won’t affect Scotland.
Income tax personal allowance
- The personal allowance will remain frozen at £12,570.
- The threshold at which individuals become liable for the higher rate of 40% will remain at £50,270, in both cases until April 2028.
National Insurance contributions
- The National Insurance contributions secondary threshold will be fixed at £9,100 from April 2023 until April 2028.
- This adds a further two years on previous plans.
- It is on top of the indefinite delay to the basic rate of tax reduction that was scrapped as part of the growth plan roll back.
Allowances
-
Dividend allowance will be reducing from £2,000 to £1000 next year. This will half again in April 2023 to £500.
- The tax-free allowances for capital gains tax will reduce from £12,300 this year to £6,000 in FY 2023/24 and will be cut in half again in FY 2024/25 to a value of £3,000.
- Marriage allowance for 2023/24 will increase to between £4,010 and £10,375.
- Blind persons allowance has been increased to £2,870.
Payroll Legislation Guide
July – August 2024 | Election edition Do you know the dates of all the complex payroll legislation changes? Are you aware of what you need to do to ensure your business…