You thought your 31 January 2023 personal tax bill was bad...?
From 6 April 2023, things are about to get a whole lot worse.
Now is the time to start planning.
First the bad news.
Here are the key tax changes coming in from 6 April 2023:
- 45% additional rate income tax kicks in on income from £125,140 (currently £150,000) - this lower threshold also applies to dividend income (taxed at 39.35%)
- worth noting that the £125,140 threshold is exactly in line with the full taper away of the personal allowance (£12,570 down to £0), so those with earnings in excess will be hit with an effective rate of 55%! Oh, and dividends are not deductible for corporation tax, which also increases to 25% from April 2023!
- dividend allowance will be halved from £2,000 (now) to £1,000. Then set to be halved again to £500 from 6 April 2024
- capital gains tax (CGT) allowance will be reduced to £6,000 (currently £12,300) and to £3,000 from 6 April 2024
- not a change necessarily, but don't forget that the £50,000 - £60,000 threshold is still in play for those in receipt of Child Benefit whereby it is repayable in full where one parent's income exceeds £60k.