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
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 is compliant? Many UK businesses aren’t aware…