Tax Year 2022/2023
As it’s the new tax year here are some of the changes that will apply from today.
Dividend Allowance
The Tax-Free Dividend Allowance for the 2022/23 tax year remains at £2,000. Dividend tax rates increased by 1.25% for the 2022/23 tax year, as shown below.
The rate of tax to be paid on overdrawn Directors Loan Accounts under s455 of the Corporation Tax Act 2010 is the dividend Higher Rate. From April 2022, the s455 rate will increase from 32.5% to 33.75%.
Corporation Tax
Corporation Tax payable on company profits remains at 19% for the 2022/23 tax year, but the top rate will increase to 25% from April 2023. From then, there will be a new small profits rate of 19% for companies with profits of less than £50,000 with a tapered increase to the rate as profits increase. Businesses with profits over £250,000 will pay the main rate of 25% from April 2023.
Tax bands and limits
The personal allowance (the tax-free amount you can earn) will remain at £12,570 for the 2022/2023 tax year. Alongside this, the basic rate limit (the 20% tax bracket) will stay at £37,700. This means you’re able to earn up to £50,270 before crossing the higher level of tax threshold.
State Pensions increase
State Pensions will rise by 3.1% in 2022/2023. Those on the full new single-tier State Pension will receive £185.15 a week, up from £179.60. Those on the basic State Pension will go up from £137.60 a week to £141.85.
National Living Wage increase
The National Living Wage for people aged over 23 will go up by 6.6% to £9.50 per hour. There will also be increases to the National Minimum Wage for those aged under 23.
No Change to ISA limits
The amount you can save in a Junior ISA or Child Trust Fund will remain at £9,000 per child in the 2022/2023 tax year. Meanwhile, the allowance for ISAs will stay at £20,000.
What next?
If you feel that you will be affected by these changes or just want to talk about anything relating to the new tax year, then please contact us via email (info@accountsandreturns.co.uk) or call on 01926 400055
