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SPRING
STATEMENT 2023
TAX RATES AND ALLOWANCES |
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Income tax rates: England,
Wales & Northern Ireland (non-dividend
income) (note 1)
|
2023/24 |
2022/23 |
0%
starting rate for savings only |
Up
to £5,000 |
Up
to £5,000 |
|
20% basic rate tax
|
£12,571-£50,270 |
£12,571-£50,270 |
|
40% higher rate tax |
£50,271-£125.140 |
£50,271-£150,000 |
|
45% additional rate tax |
Above £125,140 |
Above £150,000 |
Note
1: The Welsh Government has made a commitment
not to raise Welsh rates of income tax. Therefore,
Welsh taxpayers will continue to pay the same
rates as their English and Northern Irish
counterparts.
The income tax bands will remain frozen until
tax year 2028/29. |
|
Scottish rates of income
tax (non-dividend income) (note 2) |
|
19% starting rate |
£12,571-£14,732 |
£12,571-£14,732 |
|
20% basic rate tax |
£14,733-£25,688 |
£14,733-£25,688 |
|
21% intermediate rate tax |
£25,689-£43,662 |
£25,689-£43,662 |
|
42% higher rate tax (41% for 2022-23) |
£43,663-£125,140 |
£43,663-£150,000 |
|
47% top rate (46% for 2022-23) |
Above £125,140 |
Above £150,000 |
|
Note 2: Scottish taxpayers pay the same
tax as the rest of the UK on dividends and
savings interest.
|
|
Income tax rates (dividend
income) |
2023/24 |
2022/23 |
|
Dividend allowance (note 3) |
£1,000 |
£2,000 |
|
Dividend ordinary rate (for dividends within
basic rate band) |
8.75% |
8.75% |
|
Dividend upper rate (for dividends within
higher rate band) |
33.75% |
33.75% |
|
Dividend additional rate (for dividends
above higher rate band) |
39.35% |
39.35% |
|
Child benefit/guardian’s
allowance rates (notes 4 and 4a) |
|
|
|
Higher rate (eldest or only child) (per
week) |
£24.00 |
£21.15 |
|
Other children |
£15.90 |
£14.00 |
|
Guardian’s allowance per week |
£20.40 |
£18.00 |
Note 3: The dividend allowance will be reduced
to £500 from April 2024.
Note 4: an income tax charge will apply to
taxpayers with ‘adjusted net income’
exceeding £50,000 in a tax year, when
child benefit is also received by them or
their partner. The charge will reduce the
financial benefit of receiving child benefit
for those with income between £50,000
and £60,000. The benefit will be removed
completely for taxpayers with income above
£60,000.
Note 4a: from January 2021,no child benefit
payments are made in respect of children living
overseas.This will apply to EEA migrants arriving
in the UK under the new immigration system.
|
|
Personal allowances |
2023/24 |
2022/23 |
|
Personal allowance (note 5) |
£12,570 |
£12,570 |
|
Dividend allowance |
£1,000 |
£2,000 |
|
Maximum married couple’s allowance
for those born before 6 April 1935 (note
6) |
£10,375 |
£9,415 |
|
Married couple’s allowance –
minimum amount |
£4,010 |
£3,640 |
|
Micro entrepreneur’s allowance (property
or trading income) |
£1,000
each
|
£1,000
each |
|
Income limit for personal allowance (note
7) |
£100,000 |
£100,000 |
|
Income limit for married couple’s
allowance: born before 6 April 1935 |
£34,600 |
£31,400 |
|
Blind person’s allowance |
£2,870 |
£2,600 |
|
Rent-a-room relief |
£7,500 |
£7,500 |
|
Transferable/shareable tax allowance for
married couples and civil partners (note
8) |
£1,260 |
£1,260 |
| Personal
savings allowance for basic rate taxpayers |
£1,000 |
£1,000 |
| Personal
savings allowance for higher rate taxpayers |
£500 |
£500 |
|
2023/24 |
2022/23 |
|
Personal savings allowance for additional
rate taxpayers |
£0 |
£0 |
Note
5: from 2016/17 onwards, all individuals
are entitled to the same personal allowance,
regardless of the individual’s date
of birth. This allowance is subject to the
£100,000 income limit, which applies
regardless of the individual’s date
of birth.
|
|
Note 6: this allowance
is reduced by £1 for every £2
of income in excess of the income limit,
but married couple’s allowance will
not reduce below £4,010. |
|
Note 7: personal
allowances are subject to the £100,000
income limit, which applies regardless of
the individual’s date of birth. The
individual’s personal allowance is
reduced where their income is above this
limit. The allowance is reduced by £1
for every £2 above the limit, down
to zero. |
|
Note 8: this allowance is available to married
couples and civil partners who are not in
receipt of married couple’s allowance.
A spouse or civil partner who is not liable
to income tax, or not liable at the higher
or additional rates, can transfer this amount
of their unused personal allowance to their
spouse or civil partner. The recipient must
not be liable to income tax at the higher
or additional rates.
If the couple marry or register a civil
partnership, they will get the allowance
on a pro-rata basis for the rest of that
tax year. If one of them dies or there is
a divorce or separation, the allowance continues
until the end of the tax year.
|
|
National insurance |
2023/24 |
2022/23 |
|
Lower earnings limit, primary class 1 (per
week) (note 9) |
£123 |
£123 |
|
Upper earnings limit, primary class 1 (per
week) |
£967 |
£967 |
|
Apprentice upper secondary threshold (AUST)
for under 21s/25s |
£967 |
£967 |
|
Primary threshold (per week)
From 6 April 2022 to 5 July 2022
From 6 July 2022 to 5 April 2023
|
£242 |
£190
£242
|
|
Secondary threshold (per week) |
£175 |
£175 |
|
Employment allowance (per year/employer) |
£5,000 |
£5,000 |
|
Employee’s primary class 1 rate between
primary threshold and upper earnings limit
(note 9)
From 6 April 2022 to 5 November 2022
From 6 November 2022 to 5 April 2023
|
12% |
13.25%
12%
|
|
Employee’s primary class 1 rate above
upper earnings limit
From 6 April 2022 to 5 November 2022
From 6 November 2022 to 5 April 2023
|
2% |
3.25%
2%
|
|
Married woman’s reduced rate between
primary threshold and upper earnings limit
From 6 April 2022 to 5 November 2022
From 6 November 2022 to 5 April 2023
|
5.85% |
7.1%
5.85%
|
|
Married woman’s rate above upper
earnings limit
From 6 April 2022 to 5 November 2022
From 6 November 2022 to 5 April 2023
|
2% |
3.25%
2%
|
|
Class 2 rate (per week where profits are
above lower profits limit threshold |
£3.45 |
£3.15 |
|
2023/24 |
2022/23 |
|
Employer's secondary class 1 rate above
secondary threshold (note 9)
From 6 April 2022 to 5 November 2022
From 6 November 2022 to 5 April 2023
|
13.8% |
15.05%
13.8%
|
|
Class 2 small profits threshold (per year)
|
£6,725 |
£6,725 |
|
Class 3 voluntary rate (per week) |
£17.45 |
£15.85 |
|
Class 4 lower profits limit |
£12,570 |
£11,908 |
|
Class 4 upper profits limit |
£50,270 |
£50,270 |
|
Class 4 rate between lower profits limit
and upper profits limit |
9% |
9.73% |
|
Class 4 rate above upper profits limit |
2% |
2.73% |
|
Class 1A/1B NIC |
13.8% |
14.53% |
|
Note 9: The national insurance thresholds
for all classes will be maintained until
April 2028 at the current level. The government
will fix the level at which employers start
to pay Class 1 Secondary NICs for their
employees (the Secondary Threshold) at £9,100
from April 2023 until April 2028.
|
Pensions |
2023/24 |
2022/23 |
|
Annual allowance (note 10) |
£60,000 |
£40,000 |
|
Lifetime allowance (note 11) |
n/a |
£1,073,100 |
|
Money purchase annual allowance (note 12) |
£10,000 |
£4,000 |
|
Note 10: the annual allowance is a limit
to the total amount of contributions that
can be paid to a defined contribution pension
scheme and the total amount of benefits
that you can build up in a defined benefit
pension scheme each year, for tax relief
purposes.The annual allowance is increased
from £40,000 to £60,000 from
April 2023.
Since 6 April 2016, individuals with a high
income have had a tapered annual allowance,
where for every £2 of adjusted income
over a threshold, an individual’s
annual allowance is reduced by £1.
From 6 April 2020, the tapered annual allowance
applies for individuals with ‘threshold
income’ of over £200,000, and
‘adjusted income’ of over £240,000.
From April 2023, the annual allowance will
be £10,000 (increased from £4,000)
for individuals with total adjusted income
(including pension accrual) over £312,000.
Note 11: The Lifetime Allowance charge will
be removed from April 2023 before the Allowance
is abolished entirely from April 2024.
Note 12: Money purchase annual allowance
is increased from £4,000 to £10,000
which applies if you have already started
drawing a pension.
|
| Reliefs
and incentives |
2023/24 |
2022/23 |
|
Enterprise Investment Scheme (EIS) –
maximum (note 13) |
£1,000,000 |
£1,000,000 |
|
Venture Capital Trust (VCT) – maximum |
£200,000 |
£200,000 |
Note 13: from 6 April 2018, the annual limit
is doubled to £2m, provided that any
amount over £1m is invested in one
or more knowledge-intensive companies.
| Reliefs
and incentives |
2023/24 |
2022/23 |
| Seed
Enterprise Investment Scheme (SEIS)
– maximum (note 14) |
£200,000 |
£100,000 |
| Enterprise
Management Incentive Scheme (EMI) –
employee limit up to the value of £250,000
in a three-year period |
£250,000 |
£250,000 |
| Social
Investment Tax Relief (SITR) –
maximum |
n/a |
£1,000,000 |
| Income
tax relief on EIS schemes |
30% |
30% |
| Income
tax relief on VCT schemes |
30% |
30% |
| Income
tax relief on SEIS schemes |
50% |
50% |
| Income
tax relief on SITR schemes (relief expires
on 5 April 2023) |
n/a |
30% |
Note 14: capital gains tax reinvestment
relief may also be available for investments
made up to 50% of the amount invested.
|
Individual
Savings Account (ISA) |
2023/24 |
2022/23 |
|
ISA (NISA) annual limit |
£20,000 |
£20,000 |
|
Junior ISA investment annual limit –
under 18, living in the UK |
£9,000 |
£9,000 |
|
Child Trust Fund annual limit |
£9,000 |
£9,000 |
|
Lifetime ISA annual limit (note 15) |
£4,000 |
£4,000 |
|
Note 15: to open a Lifetime ISA, you must
be 18 or over but under 40. Contributions
can be made until the age of 50. The government
will add a 25% bonus to the savings, up
to a maximum of £1,000 per year. The
lifetime ISA limit of £4,000 counts
towards the annual ISA limit.
|
|
Capital gains tax |
2023/24 |
2022/23 |
|
Basic rate tax payer |
10% |
10% |
|
Higher rate tax payer |
20% |
20% |
|
Rate on sale of residential property –
basic rate tax payer |
18% |
18% |
|
Rate on sale of residential property –
higher rate tax payer |
28% |
28% |
|
Annual exemption – individuals/trusts
for disabled persons (note 16) |
£6,000 |
£12,300 |
| Annual
exemption – other trusts |
£3,000 |
£6,150 |
| Business
Assets Disposal Relief lifetime limit (note
17) |
£1,000,000 |
£1,000,000 |
| Investors’
Relief lifetime limit |
£10,000,000 |
£10,000,000 |
Note 16: The annual exemption amount for
capital gains tax for individuals will change
to £3,000 from April 2024.
Note 17: Business Assets Disposal Relief (formerly
Entrepreneurs’ Relief) lifetime limit
was reduced from £10m to £1m for
disposals made on or after 11 March 2020.
| Capital
gains tax |
2023/24 |
2022/23 |
| Business
Assets Disposal Relief /Investors’rate |
10% |
10% |
| Chattels
exemption |
£6,000 |
£6,000 |
|
|
Inheritance tax |
2023/24 |
2022/23 |
|
Single person’s nil-rate band |
£325,000 |
£325,000 |
|
Single person’s 40% band |
over £325,000 |
over £325,000 |
|
Residence nil-rate band (RNRB) –
maximum (note 18) |
£175,000 |
£175,000 |
|
Reduced rate (note 19) |
36% |
36% |
|
IHT rate (for chargeable lifetime transfers) |
20% |
20% |
|
Married couples or civil partnerships allowance
nil-rate band |
£650,000 |
£650,000 |
|
Gifts to charities |
Exempt |
Exempt |
| Small
gifts to same person |
£250 |
£250 |
| General
gifts - annual exemption |
£3,000 |
£3,000 |
| Wedding
gifts to children |
£5,000 |
£5,000 |
| Wedding
gifts to grandchildren |
£2,500 |
£2,500 |
|
Wedding gifts to any other person |
£1,000 |
£1,000 |
|
Note 18: the RNRB is available in respect
of a main residence given away to children
(including adopted, foster or stepchildren).
Any unused nil-rate band transfers to the
deceased’s spouse or civil partner,
even where death predates the availability
of the additional threshold. It applies
in addition to the existing nil-rate band
(NRB) or threshold (currently £325,000)
if the individual and estate meet the qualifying
conditions.Inheritance tax nil-rate band
and residence nil-rate band – thresholds
are maintained at the current level until
April 2028.
Note 19: the estate can pay inheritance
tax at a reduced rate of 36% on some assets
if you leave 10% or more of the net value
to charity in your will.
|
Business
property relief |
2023/24 |
2022/23 |
|
Business or interest in a business and
transfersof unquoted shareholdings |
100% |
100% |
|
Taxation of trusts |
2023/24 |
2022/23 |
|
Accumulation or discretionary trusts: |
|
|
|
Trust income up to £1,000 –
dividend type income (note 20) |
8.75% |
8.75% |
|
Taxation of trusts |
2023/24 |
2022/23 |
|
Trust income up to £1,000 –
all other income |
20% |
20% |
|
Trust income over £1,000 –
dividend type income (note 20) |
39.35% |
39.35% |
|
Trust income over £1,000 –
all other income |
45% |
45% |
|
Interest in possession trusts: |
|
|
|
Dividend-type income |
8.75% |
8.75% |
| All other income |
20% |
20% |
Note 20: trustees do not qualify for the dividend
allowance. This means trustees pay tax on
all dividends depending on the tax band they
fall within.
|
Corporation
tax |
2023/24 |
2022/23 |
|
All profits and gains (excluding determination
agreements and diverted profits) (note 21) |
|
19% |
|
Small profits rate (companies with profits
under £50,000)
Main rate of corporation tax (companies
with profits over £250,000)
|
19%
25%
|
|
|
Limits for marginal
relief |
£50,000
-
£250,000 |
n/a |
|
Standard fraction for marginal relief |
3/200 |
n/a |
|
S.455 tax on loans made by close companies
to participators |
33.75% |
33.75% |
Note 21: From April 2023, the main rate is
increased to 25% for business profits made
by the company over £250,000. Companies
with profits between £50,000 and £250,000
will pay tax at the main rate reduced by a
marginal relief providing a gradual increase
in the effective corporation tax rate.
|
Capital
allowances |
2023/24 |
2022/23 |
|
Main writing-down allowance (reducing balance) |
18% |
18% |
| Special
rate writing-down allowance (reducing balance) |
6% |
6% |
| Structures
and buildings allowance (SBA) |
3% |
3% |
| Full
expensing (main rate plant and machinery)
(note 22) |
100% |
n/a |
| Full
expensing (special rate plant and machinery)
(note 22) |
50% |
n/a |
Note 22: Full expensing allows the deduction
of 100%/50% of the cost of certain plant and
machinery from the profits before tax. This
measure is effective from 1 April 2023 to
31 March 2026.
| Motor
cars if CO2 > 1/km but does not exceed
50g/km) |
18% |
18% |
| Motor
cars if CO2 > 50g/km |
6% |
6% |
| First-year
allowances (FYA) – New and unused
motor cars if CO2 emissions are 0 g/km
or car is electric (note 23) |
100% |
100% |
Note 23: From April 2021, the thresholds
for FYA will be reduced from 50g/km to 0g/km.
Main rate of 18% capital allowance will be
applicable for business cars with CO2 emissions
not exceeding 50g/km. Business cars with CO2
emissions exceeding 50g/km will be eligible
for writing-down allowanceat the special rate
of 6%.
| Capital
allowances |
2023/24 |
2022/23 |
| Small
pool write-off where written-down value
(WDV) is £1,000 or less |
100% |
100% |
| FYA
for electric charge points |
100% |
100% |
| Annual
investment allowance (AIA) (note 24) |
£1,000,000 |
£1,000,000 |
| AIArate |
100% |
100% |
Note 24: Annual Investment Allowance has been
confirmed at a permanent rate of £1
million from 1 April 2023.
|
Research
and development tax credit rates |
2023/24 |
2022/23 |
|
SME rate |
186% |
230% |
|
Research and development (R&D) SME
payable credit (note 25) |
10% |
14.5% |
|
Research and development expenditure credit
(RDEC) scheme |
20% |
13% |
|
R&D Intensive SME payable credit (note
26) |
14.5% |
n/a |
| Film/high-end
TV/videogames tax credit (note 27) |
25%(34%) |
25% |
| Animation
and Children’s tax relief (note 28) |
25%(39%) |
25% |
|
Open-ended investment companies and authorised
unit trusts |
20% |
20% |
Note 25: for accounting periods beginning
on or after 1 April 2021, the amount of SME
payable R&D tax credit that a business
can receive in any one year will be capped
at £20,000 plus three times the company’s
total PAYE and NICs liability.
Note 26: a company is considered R&D intensive
where its qualifying R&D expenditure is
worth 40% or more of its total expenditure.
Note 27: the rate will be increased from 25%
to 34% from 1 January 2024.
Note 28: the rate will be increased from 25%
to 39% from 1 January 2024.
|
| Patent
box |
2023/24 |
2022/23 |
|
Patent box |
10% |
10% |
|
VAT |
2023/24 |
2022/23 |
|
Standard rate(note 27) |
20% |
20% |
|
Reduced rate |
5% |
5% |
|
Zero rate |
0% |
0% |
| VAT |
2023/24 |
2022/23 |
| Flat
rate of VAT on gross turnover (for limited
cost trader) |
16.5% |
16.5% |
| Normal
scheme registration threshold |
£85,000 |
£85,000 |
| Deregistration
threshold |
£83,000 |
£83,000 |
| Cash
and annual accounting scheme – maximum
to join |
£1,350,000 |
£1,350,000 |
| Cash
and annual accounting scheme – exit
threshold |
£1,600,000 |
£1,600,000 |
|
Flat-rate scheme – maximum allowed
to join |
£150,000 |
£150,000 |
|
Flat-rate scheme exit threshold |
£230,000 |
£230,000 |
| |
Annual
tax on enveloped dwellings (ATED) |
2023/24 |
2022/23 |
|
More than £0.5m but not more than
£1m |
£4,150 |
£3,800 |
|
More than £1m but not more than £2m |
£8,450 |
£7,700 |
|
More than £2m but not more than £5m |
£28,650 |
£26,050 |
|
More than £5m but not more than £10m |
£67,050 |
£60,900 |
|
More than £10m but not more than
£20m |
£269,450 |
£118,600 |
|
More than £20m |
£244,750 |
£244,750 |
|
March 2023
ACCA LEGAL NOTICE
This is a basic guide prepared by ACCA UK's
Technical Advisory Service for members and
their clients. It should not be used as
a definitive guide, since individual circumstances
may vary. Specific advice should be obtained,
where necessary. |
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