The key announcements from the November 2022 budget are summarised below. If you would like to discuss any of the points and its practical implications for you and your business, please get in touch.

Personal Tax Bands

Personal Allowance – will remain the same at £12,570 and the higher rate threshold will also remain at £50,270 until 5 April 2028.
Additional Rate Tax – the 45% tax rate threshold has been reduced to £125,140 (was £150,000) from 6 April 2023.
There will continue to be a marginal rate of tax at 60% of earnings between £100,000 and £125,140.
Income Tax will remain at 20% (£12,571 to £50,270), 40% (£50,271 to £125,140) and 45% (over £125,140).
National Insurance – the threshold for paying National Insurance will remain at £9,568.
Married Couples Allowances will be increased by 10.1% from 6 April 2023

Employers - ·Employment Allowance – will remain at £5,000, and Employers’ National Insurance contributions start rate will remain at £9,100 until 5 April 2028.

National Living and Minimum Wage is being increased from 1 April 2023 to:

Aged 23 or over £10.42 per hour
21 – 22 year olds £10.18 per hour
18 – 20 year olds £7.69 per hour
16 – 17 year olds £5.28 per hour.

Corporation Tax

As from 1 April 2023, the Corporation Tax Rates will be:

Profits of £0-£50,000 = 19%
Profits between £50,001 - £250,000 = a marginal rate between 19%-25%.
Profits above £250,001 = 25%

Dividends

The tax-free dividend allowance (currently £2,000) will be reduced to £1,000 from 6 April 2023 and reduced again to £500 from 6 April 2024.

The tax rate on dividends remains the same and is currently:

Basic rate taxpayer 8.75%
Higher rate taxpayer 33.75%
Additional rate taxpayer 39.35%

Capital Gains Tax

The annual tax-free element for Capital Gains Tax (Annual Exemption) has been reduced as follows:

Current Year (2022/2023) £12,300
2023/2024 £6,000
2024/2025 £3,000

The tax rates for CGT will remain the same at 10% for basic rate taxpayers, and 20% for higher/additional rate taxpayers (18% and 28% for gains on residential properties).

Other News

Vehicle Road Tax will be payable on electric cars from April 2025.
Business Rate bills will, from 1 April 2023, be based upon current property revaluations – this is the first revaluation since 2017. The multiplier rates will remain at their current levels of 49.9p or 51.2p. However small businesses who lose eligibility for Rate Relief will find protection via the Supporting Small Business Scheme.
Inheritance tax nil rate band of £325,000 will remain until April 2028, along with the residence band of £175,000.
Pension and Benefits will rise in line with inflation.