April seems a long way off when you’re still trying to make it to the end of Dry January, but the new tax year will see a number of changes that could impact clients.
So in this guide I’ve outlined the 2023/2024 tax rates at a glance. These include:
Income tax
One of the biggest changes for taxpayers made by Chancellor Jeremy Hunt was lowering the starting level for additional-rate income tax to £125,140. From April 6, this change will push an estimated 250,000 taxpayers into the highest tax bracket.
Cuts for capital gains and dividend tax allowance
The capital gains tax exemption will drop dramatically from a £12,300 limit to £6,000. It will drop even further to just £3,000 in 2024.
Meanwhile, the tax threshold for dividends is also being slashed from £2,000 to £1,000 (falling further still to £500 from April next year).
Inheritance tax
The nil rate band will remain frozen at £325,000 until 2028 ensuring that the record breaking rise in the level of tax paid will continue to be broken.
Pension schemes allowances
The annual allowance for 2023/24 is to remain at £40,000. Where pension funding exceeds the annual allowance in a tax year it can be offset against any unused annual allowance from the previous three tax years.
National Insurance
The government controversially increased National Insurance rates last year to pay for health and social care. The levy was abolished by Kwasi Kwarteng, and no further changes are on the cards for the next financial year. Employees will pay 12% on earnings between £12.570 and £50,720 and has dropped back down to 12% and 2% on anything over £50,270.
Take a look at the PDF for full details.
