New Tax Year 2022/23
The 2022/23 tax year begins today, 6 April 2022 and ends on 5 April 2023.
Each new tax year has the potential to bring an element of change to individual taxes and business taxes. Over the course of the year, Chancellor Rishi Sunak has announced numerous tax updates which take effect from 6 April.
However, Sunak also announced that a number of allowances will remain frozen for the duration of 2022/23.
National Insurance contributions
From 6 April 2022, National Insurance contributions will increase by 1.25% as part of a plan to raise funds for the NHS and health and social care.
Employees annual earnings above £9,880 will be liable for 13.25% National Insurance contributions. Furthermore, earnings above the higher threshold of £50,270 will pay a rate of 3.25%.
However, from 6 July 2022 the NI threshold for employees will increase from £9,880 to £12,570 in line with the rate at which income tax is paid.
Employers will also pay an extra 1.25% in National Insurance contributions, increasing the main rate to 15.05%.
Dividends
From 6 April, the annual dividend allowance will remain at £2,000 however, the dividend tax rates will increase by 1.25%.
The new dividend rates for 2022/23 are:
Band | 2022/23 | 2021/22 |
Basic rate taxpayer | 8.75% | 7.5% |
Higher rate taxpayer | 33.75% | 32.5% |
Additional rate taxpayer | 39.35% | 38.1% |
Allowances
Last year, the Chancellor announced that a number of allowances are to be frozen until 2025/26.
The income tax personal allowance, capital gains annual exemption and inheritance tax nil rate band have all been frozen for 2022/23.
Allowances | 2022/23 | 2021/22 |
Basic personal allowance | £12,570 | £12,570 |
Rent a room relief limit | £7,500 | £7,500 |
Trading income allowance | £1,000 | £1,000 |
Property income allowance | £1,000 | £1,000 |
Pension Contributions annual allowance | £40,000 | £40,000 |
Lifetime allowance | £1,073,100 | £1,073,100 |
Capital Gains Tax | 2022/23 | 2021/22 |
Individual annual exemption | £12,300 | £12,300 |
Basic and starting rate taxpayers | 10% | 10% |
Higher and additional rate taxpayers | 20% | 20% |
Trust annual exemption | £6,150 | £6,150 |
Trust rate | 20% | 20% |
Inheritance Tax | 2022/23 | 2021/22 |
Nil rate band | £325,000 | £325,000 |
£1 – £325,000 rate | 0% | 0% |
Over £325,000 rate | 40% | 40% |
Register for Self-Assessment
If you need to submit a tax return and have not already registered for self-assessment, you must register by 5th October 2022 for the 2021/22 tax year.
The 2021/22 self-assessment tax return deadline for online filing is 31 January 2023 however, if you wish to submit a paper version, the deadline is 31 October 2022.
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