Chancellor Jemery Hunt announced the Autumn Budget and we have outlined key points below:
Income Tax
Income tax rates for 2023/24 will remain the same, but there will be a change in the additional rate taxable income amount:
Taxable Income
Personal Allowance £12,570 20%
Basic Rate £12,571 + 40%
Higher Rate £50,271 + 45%
Additional Rate over £125,140
*Additional rate income tax will be paid on earnings over £125,140 (was £150,000). This will mean that those already paying tax at 45% will pay an extra £1,243 in 2023/24.
Allowances and thresholds
Income tax personal allowance will remain at £12,570
The basic rate limit will remain at £37,700
The higher rate threshold will remain at £50,270
*This has been frozen until April 2028
Dividends
The dividend allowance is being halved from £2,000 to £1,000 from 6 April 2023. It will be halved again to £500 from 6 April 2024.
The dividend rates remain unchanged:
Basic rate taxpayers 8.75%
Higher rate taxpayers 33.75%
Additional rate taxpayers 39.35%
National Insurance
The additional 1.25% increase in national insurance for social care has been SCRAPPED.
The additional rate for NI in 2022/23 for employees, employers and self-employed was removed from November 2022.
National insurance thresholds will remain at the current 2022/23 amounts until April 2028.
Captial Gains Tax
The capital gains tax annual exempt amount is being cut from £12,300 to £6,000 from 6 April 2023, and to £3,000 from 6 April 2024.
The CGT rates will remain the same:
Basic Income Tax band you will pay 10% on your gains (or 18% on residential property)
Or you will pay 20% (or 28% on residential property) on any amount above the basic tax rate.
Inheritance Tax
The freeze on both the nil rate band (NRB) and residence nil rate band (RNRB) has been extended for an additional two years. The NRB will remain at £325,000 and the RNRB at £175,000 until April 2028.
Corporation Tax
Corporation tax will increase to 25% from April 2023 for profits in excess of £250,000 as originally planned.
From April 2023 smaller profited companies below £50,000 will continue to pay the current rate of 19%
For businesses with profits between £50,000 and £250,000 are subject to a tapered rate.
National Minimum Wage
April 2022
23 and over £9.50
21 to 22 £9.18
18 to 20 £6.83
Under 18 £4.81
Apprentice £4.81
April 2023
23 and over £10.42
21 to 22 £10.18
18 to 20 £7.49
Under 18 £5.28
Apprentice £5.28
Other Key Points
-There were no changes announced to the pension tax relief. However, the reduction of the threshold for additional rate tax to £125,140 will see more high earners benefit from tax relief at 45% on their pension savings.
-Electric cars, vans and motorcycles are to pay road tax from April 2025.
-Increased funding for schools in 2023 and 2024
-NHS budget increased in the next 2 years by £3.3bn
-Help for energy bills to be extended, although less generously