While the majority of the 2023/24 tax rates were released in the autumn, some changes involved unwinding the announcements of Mr Hunt’s predecessor. With inflation and cost of living concerns foremost for the majority of individual and business taxpayers, the Chancellor needed to balance longer-term economic imperatives with perhaps shorter-term political concerns.
The key tax changes you should bear in mind for 2023/24 are:
• Most main tax allowances and reliefs remain frozen at their 2022/23 levels, with the exception of the reduced threshold for additional rate taxpayers, which is cut to £125,140 for 2023/24.
• For Scottish taxpayers, the higher and top rates of tax increase by 1% to 42% and 47%, respectively.
• The headline grabbing change to the pensions lifetime allowance, which will be abolished from April 2024 after the lifetime allowance charge is removed from April 2023.
• Further on pensions, the annual allowance will increase by 50% to £60,000 from 2023/24 and the money purchase annual allowance will rise from £4,000 to £10,000 from 2023/24.
• The dividend allowance for 2023/24 is cut from £2,000 to £1,000.
• The capital gains tax exempt amount is reduced from £12,300 to £6,000 for 2023/24.
• The corporation tax increase announced by Rishi Sunak when he served as the Chancellor pushes the rate to 25%.
• Companies investing in new plant and machinery in the three years from 1 April 2023 can claim a first-year allowance of up to 100% of expenditure.
If you have any questions about how the new tax rates from 6 April will affect you, as well as measures from the Spring Budget, please get in touch. The Gilberts Tax Tables for 2023/24 can be found here.