No changes to Personal Allowances, (the amount you can earn before you pay tax) so kept at £12,570 and will be frozen at this level until 2028. Income tax thresholds, the point at which you pay taxes of 20% and 40%, have been frozen and extended further to 2028. However, for those in the additional rate of tax at 45p which was for those who earned more than £150,000, this threshold has been reduced to £125,140. If you earn more than £150,000 now, you can expect to pay £1,200 more per year in tax. This is from April 2023.
Similarly to income tax, National insurance thresholds have been frozen for a further 2 years, until 2028.
At present, the first £2,000 of dividend income each year is tax free. This will reduce to £1,000 from April 2023, and then reduce further to £500 from April 2024.
At present, the first £12,300 of any Capital Gain is free of tax; this is called the Annual Exemption. From April 2023, the Annual Exemption will reduce to £6,000 and then a further reduction in April 2024 to £3,000.
From April 2023, State Pension will increase by the rate of inflation (inflation is 11.1% today) but will likely be lower in April. The biggest increase in the State Pension payment ever.
Our thoughts
Anthony Burrell is the Tax Director at Golding Accountancy, specialising in personal tax, compliance, and tax planning. He works closely with business owners and landlords, helping them navigate complex tax rules and ensure they pay the right amount of tax. Anthony is particularly experienced in advising property investors. Outside the office, he is a dedicated West Ham supporter and has been a Season Ticket holder for over 40 years. Anthony often recommends Dext to clients for simplifying bookkeeping and financial processes.
