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Tax Rates and Allowances

This Content Was Last Updated on November 23, 2023 by Jessica Garbett

 

The main tax rates as they apply to our clients.

Note this table is not updated NI changes in Autumn Statement 2023.  To recap the Autumn Statement provided for:

  • 2% cut in Employees NI from 6th January 2024
  • 1% cut in Self Employed Class 4 NI from 6th April 2024
  • Abolition of Class 2 NI for the Self Employed from 6th April 2024.
Income TaxNote2023/24 £2022/23 £2021/22 £
Personal allowanceTax free (see below)12,57012,57012,570
Basic rate band20%
England and Wales1 / 737,70037,70037,700
Higher rate band40%87440112,500112,500
Additional rate45% balancebalancebalance
Personal allowance is abated at £100,000 of income, at the rate of £1 of allowance for each £2 of income over £100,000
Savings and DividendsNote2023/24 £2022/23 £2021/22 £
Savings starting rate60%0%0%
Savings starting band6 5,000 5,000 5,000
Personal Savings Allowance - Basic Rate Taxpayers 1,000 1,000 1,000
Personal Savings Allowance - Higher Rate Taxpayers 500 500 500
Personal Savings Allowance - Additional Rate Taxpayers - - -
Savings are otherwise taxed at normal Income Tax rates - http://www.whitefieldtax.co.uk/tax-on-savings/
Dividend Allowance 2,000 2,000 2,000
Dividend Tax - Basic Rate Taxpayers8.75%8.75%7.5%
Dividend Tax - Higher Rate Taxpayers33.75%33.75%32.5%
Dividend Tax - Additional Rate Taxpayers39.35%39.35%38.1%
Prior to 16/17 the taxation regime for dividend differed - see http://www.whitefieldtax.co.uk/tax-on-savings/
National InsuranceNote2023/24 £2022/23 £2021/22 £
Lower earnings limitper week123123120
Primary thresholdper week242229184
Secondary thresholdper week175175170
Upper earnings limitper week967967967
Employees rateClass 1212.00%12.73%12%
Class 1 surcharge2.00%2.73%2%
Employers rateClass 1313.80%14.53%13.8%
Class 1A413.80%14.53%13.8%
Self employedClass 2 - per week £3.453.153.05
Class 2 - Small Profits Threshold 6,725 6,725 6,515
Class 4 - %9.00%9.73%9%
Class 4 - due on earnings over and less than 12,570 11,908 9,500
50,270 50,270 50,270
Class 4 - surcharge - due on earnings over2.00%2.73%2%
50,270 50,270 50,270
Corporation TaxNote2023/24 £2022/23 £2021/22 £
Main Rate25.0%19.0%19.0%
Small Proifits Rate19.0%n/an/a
Small Profits Rate applies to profits brlow £50,000. Where profits over £50,000 the full rate applies to all profits, but
there is Marginal Small Companies Releif on profits up to £250,000 which smooths the transition into full rate.
For most companies this gives a rate of 26.5% between £50,000 and £250,000.
Capital Gains TaxNote2023/24 £2022/23 £2021/22 £
Annual exemption 6,000 12,300 12,000
Standard CGT rateGains in BR tax band10%10%10%
Gains in HR or AR tax band18%18%18%
Residential Property (own home remains exempt)20%/28%20%/28%20%/28%
Entrepreneurs CGT rate10%10%10%
Inheritance TaxNote2023/24 £2022/23 £2021/22 £
Exempt Amount 325,000 325,000 325,000
Tax rate 40%40%40%
VATNote2023/24 £2022/23 £2021/22 £
Registration Threshold 85,000 83,000 82,000
Deregistration Threshold 83,000 81,000 80,000
VAT rate20%20%20%
Flat rate threshold 150,000 150,000 150,000
1. Rates are applicable to earned income and savings outside the savings allowance.
2. Rate applies to income per week between primary threshold and upper earnings limit - on income between lower earnings limit and primary threshold the rate is 0% but there is still a credit for state benefit entitlements.
3. Applicable to all earnings over secondary threshold.
4. Applicable to benefits in kind
6. Abated £ for £ as income exceeds Personal Allowance plus Savings Allowance. The Allowance only benefits tax payers with earned and dividend income below £18,570 (2023/24)
7. Scottish and Welsh tax rates not reflected. Check online.