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INCOME TAX

• The rates of 20% (basic)/40% (higher)/45% (additional) will remain unchanged.
• The thresholds will stay as £12,570 personal allowance and £37,700 the basic rate band BUT the additional rate will decrease from £150,000 to £125,140 which is the amount when a person’s personal allowance is down to nil.

DIVIDEND TAX

• The dividend allowance (the effective zero-rate band) will reduce from £2,000 to £1,000 for 2023/24 and then to £500 for 2024/25.
• The dividend rates for the 2023/24 tax year are 8.75% (within basic rate band), 33.75% (within higher rate band) and 39.35% (in the additional rate band).

CAPITAL GAINS TAX

• The annual gains exemption which is currently £12,300 will reduce to £6,000 2023/24 and £3,000 2024/25. This is the amount of gain you can have without paying any capital gains tax.
• The Capital Gains tax rates remain the same at:
  • 18% or 28% on gains from residential properties
  • 10% or 20% on gains from other chargeable assets

Note the 18% or 10% apply if your gain is within your basic rate band i.e. total income including the gain is less than £50,270.

NATIONAL INSURANCE CONTRIBUTIONS

22/23 was an unusual year with a lot of change in Government and a lot of meddling with NI rates.  Hopefully 23/24 will be a lot smoother.

THRESHOLDS PER YEAR	2022/23 *	2023/24
Class 1 employees
Lower earnings (LEL)	£6,396 (0% to PT)	£6,396 (0% to PT)
Primary threshold (PT)	£12,570 to UEL: 12%	£12,570 to UEL: 12%
Upper earnings limit (UEL)	Above £50,270: 2%	Above £50,270: 2%
Annual for directors	£12,570 to UEL: 12.73% Above £50,270: 2.73%	£12,570 to UEL: 12% Above £50,270: 2%
Class 1 employers
Secondary threshold (ST)	Above £9,100: 13.8%	Above £9,100: 13.8%
Classes 1A and 1B	14.53%	13.8%
Self employed
Class 4 (main)	9.73%	9%
Class 4 (additional)	2.73%	2%
Class 2 (per week)	£3.15	£3.45
Class 3 (per week)	£15.85	£17.45

*Rates and thresholds from 6 November 2022

CORPORATION TAX

• The rate of corporation tax will increase for those companies who have profits over £50,000 from 1 April 2023. The new rates are as follows:
  • Profits of £50,000 or less remain at 19%
  • Profits of over £50,000 but below £250,000 will get the profits within this band taxed at a marginal rate of 26.5%. The profits up to £50,000 will be taxed at 19%.
  • Profits over £250,000 will have all of the profit taxed at 25%.
• If your company yearend is not aligned with the 31 March financial year then the profits will be apportioned between the two financial year it covers and the tax rate applied accordingly.

CAPITAL ALLOWANCES

• The 130% super deduction capital allowance on the purchase of new equipment such as computers, desks etc. will end on 31 March 2023. This is only available for limited companies.
• The Annual Investment Allowance (AIA) will remain at £1 million.

If you have any questions on this article and how it affects you and your business, please get in touch.

JLA Accounting Limited takes every care in preparing material to ensure that the content is accurate and up to date. However, no responsibility for loss for anyone acting from or refraining from acting as a result of this information can be accepted by JLA Accounting Limited.