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 Tax		Note	2023/24 £	2022/23 £	2021/22 £
Personal allowance	Tax free (see below)		12,570	12,570	12,570
Basic rate band	20%
England and Wales		1 / 7	37,700	37,700	37,700
Higher rate band	40%		87440	112,500	112,500
Additional rate	45%		balance	balance	balance
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 Dividends		Note	2023/24 £	2022/23 £	2021/22 £
Savings starting rate		6	0%	0%	0%
Savings starting band		6	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 Taxpayers			8.75%	8.75%	7.5%
Dividend Tax - Higher Rate Taxpayers			33.75%	33.75%	32.5%
Dividend Tax - Additional Rate Taxpayers			39.35%	39.35%	38.1%
Prior to 16/17 the taxation regime for dividend differed - see http://www.whitefieldtax.co.uk/tax-on-savings/
National Insurance		Note	2023/24 £	2022/23 £	2021/22 £
Lower earnings limit	per week		123	123	120
Primary threshold	per week		242	229	184
Secondary threshold	per week		175	175	170
Upper earnings limit	per week		967	967	967
Employees rate	Class 1	2	12.00%	12.73%	12%
	Class 1 surcharge		2.00%	2.73%	2%
Employers rate	Class 1	3	13.80%	14.53%	13.8%
	Class 1A	4	13.80%	14.53%	13.8%
Self employed	Class 2 - per week £		3.45	3.15	3.05
	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 over		2.00%	2.73%	2%
			50,270	50,270	50,270
Corporation Tax		Note	2023/24 £	2022/23 £	2021/22 £
Main Rate			25.0%	19.0%	19.0%
Small Proifits Rate			19.0%	n/a	n/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 Tax		Note	2023/24 £	2022/23 £	2021/22 £
Annual exemption			6,000	12,300	12,000
Standard CGT rate	Gains in BR tax band		10%	10%	10%
	Gains in HR or AR tax band		18%	18%	18%
Residential Property (own home remains exempt)			20%/28%	20%/28%	20%/28%
Entrepreneurs CGT rate			10%	10%	10%
Inheritance Tax		Note	2023/24 £	2022/23 £	2021/22 £
Exempt Amount			325,000	325,000	325,000
Tax rate			40%	40%	40%
VAT		Note	2023/24 £	2022/23 £	2021/22 £
Registration Threshold			85,000	83,000	82,000
Deregistration Threshold			83,000	81,000	80,000
VAT rate			20%	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.