From April 2023 the additional rate of tax will be decreased to 40% from the current 45%. This means that there will be just one rate of higher income tax, which is 40%. The additional rate of tax applies to income over £150,000. (Note that on 3 October 2022 there was a U-turn on this decrease, and additional tax will remain).
From April 2023 the basic rate of tax will be decreased to 19% from the current 20%.
National insurance contributions will be cut by 1.25 percentage points from November 2022.
From April 2023 the dividend tax rates will decrease by 1.25 percentage points. This means that dividends will will be taxed from April 2023 as follows:
- Basic rate tax on dividends will be 7.5% (8.75% for the 2022 / 23 tax year)
- Higher rate tax on dividends will be 32.5% ((33.75% for the 2022 / 23 tax year)
To see more from HMRC on these changes please check out the HMRC website.
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