On 17/11/22 the chancellor, Jeremy Hunt, delivered the governments’ plan to tackle the cost of living crisis and rebuild the UK economy. Here’s a summary of the key points affecting our clients:
Personal Tax
- The income tax personal allowance, £12,570 and higher rate tax threshold, £50,270 are frozen until April 2028.
- The 45% higher rate of income tax threshold is lowered to £125,140 from £150,000
- The tax-free dividend allowance will be reduced to £1,000 in 2023/24 and to £500 in 2024/25
- The proposed cut to dividend tax announced in the September mini budget has now been scrapped. Dividend tax will now remain at 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and the additional rate will be 39.35%.
- The tax-free allowance for Capital Gains Tax (CGT) will reduce in 2023/24 from £12,300 to £6,000 and to £3,000 in 2024/25
- Inheritance Tax (IHT) thresholds frozen until April 2028 – the nil-rate band will continue at £325,000 and the residence nil-rate band at £175,000
National Minimum Wage and National Insurance
| From April 2023 | Currently | |
| National Living Wage | £10.42 | £9.50 |
| 21-22 Year Old Rate | £10.18 | £9.18 |
| 18-20 Year Old Rate | £7.49 | £6.83 |
| 16-17 Year Old Rate | £5.28 | £4.81 |
| Apprentice Rate | £5.28 | £4.81 |
- National Insurance thresholds are frozen until April 2028
Business Tax
- VAT registration threshold will remain at £85,000 until March 2026.
- Corporation Tax will increase to 25% for companies with more than £250,000 in profits. Companies with profits below £50,000 will pay the small companies’ rate of 19%. Profits between £50,000 and £250,000 will be taxed on a sliding scale between 19%-25%.