Earlier today the current Chancellor announced the latest Autumn Statement. Unlike the “fiscal event” announced 55 days ago by the previous Chancellor, this was a tax raising and cost cutting announcement.
The headline changes
The key personal tax headlines from the Autumn Statement are as follows:
- The additional rate income tax band will start at £125,140, down from £150,000. This is the point at which you start to pay 45% on earned income and savings income and 39.35% on dividends.
- The income tax personal allowance of £12,570 will be further frozen until April 2028.
- The dividend tax free allowance will be reduced from the current £2,000 to £1,000 in April 2023 and to £500 in April 2024.
- The CGT annual exempt amount is being cut from the current £12,300 to £6,000 for 2023-24 and to £3,000 for 2024-25.
As previously announced, the 25% corporation rate for companies with profits over £250,000 will be introduced from April 2023.
How we can help
The lowering of the additional rate threshold and the reduction of the dividend and CGT allowances mean that you may pay more tax in 2023-24 and 2024-25 than you would be doing so in 2022-23.
You may want to think about bringing forward asset sales, remittances of foreign income and gain or the declaration of dividends from your companies into 2022-23 if that allows you to take advantage of your higher allowances and thresholds this current tax year.
Our year end tax planning booklet provides some useful insight on tax planning opportunities which you might want to consider, download your copy by clicking this link.
Please contact us if you want to discuss appropriate tax planning for your personal circumstances.
